The Cost of Utilities
Just when you think you've got your financial situation pretty well under control, you start getting these pesky little bills. Nothing too big—$30 here, $19 there. When you add them up, though, you've got some significant expenses.
We're talking utilities: heat, electricity, cable TV, water, telephone, and gas. Make sure you have a clear understanding of what your rent includes before you move into an apartment. Some landlords include heat, water, and electricity with the rent; others don't. You don't want to work out a budget and then be surprised when un-expected bills start coming in each month.
Ever since Thomas Edison invented electricity, people have been paying for it. Electric bills can be pretty daunting, especially if you're paying your own electric heat and/or air conditioning.
If you pay your electric bill, ask your landlord to show you the meter. Check the connections to make sure you're paying for only your electricity, not for you and your landlord who lives on the first floor.
Dollars and Cents
When ordering phone service, consider carefully whether you really need call waiting, caller I.D., and other extras that the telephone representative will try to talk you into buying. These costs can add up fast on your monthly bill.
We could write a chapter comparing the qualities of various phone companies. But you no doubt hear more than you need to about various plans every time you turn on your TV or radio and perhaps several times a week from phone solicitors. Every company will offer you a deal to come on board, but when you're tempted, try to look at the big picture as far as your phone bill is concerned.
Compare the costs for basic service and get the lowest one. A great way to get started is to check out SmartPrice.com, which offers a comparison of plans from various phone companies. Then control your costs by limiting long-distance calls and other extras. If you have a cell phone, and chances are very good that you do, consider whether you really need an additional phone. A growing trend is all cell all the time, with no traditional “land line.” If you have a good cell phone plan, you might want to think about whether your cell might be the only phone you need. However, consumer advocates warn that, as cell phone use continues to increase, the demand for service might outweigh suppliers' ability to provide service, causing the quality of service to deteriorate.
I Want My MTV and CNN
People can spend hours debating the pros and cons of TV, but there's no arguing about one thing—watching TV has gotten expensive. Even basic cable service can cost upward of $40 a month. Throw in a couple of premium channels, and your bill can be well over $50. If you're looking to cut expenses, cut out a premium channel and you'll save about $100 a year. If you're looking to really cut expenses and have a lot more reading time, opt to go without cable.
The Cost of Staying In Touch
Charges or utilities can add up, there's no question about it. In addition to the basic electric, phone, and cable, keep an eye on what you're spending in some other areas:
- Internet connection. Whether you're using a dial-up, ADSL, or cable con-nection, you're no doubt paying for your Internet connection. Different Inter-net service providers offer various plans and rates, so shop around to make sure you're not buying more than you need. If you only spend a couple of hours a month online, it makes no sense to buy an unlimited plan.
- Cell phones. There are as many plans as there are types of phones, so look around carefully to make sure you have what you need, and not more. And if you plan to use the phone while you're driving, consider getting a system that allows your hands to remain free.
- Pagers. Unless you're a brain surgeon or have a job that keeps you away from the office, this expense is probably one you could do without.
The fewer bills you have to pay each month, the more money you'll have to put in a mutual fund, use for a vacation, or pay off your college loans. It's easy to overlook these monthly charges, but when you add them all up, you might be surprised at how much you're spending.
More on: Family Finances
Excerpted from The Complete Idiot's Guide to Personal Finance in your 20s and 30s © 2005 by Susan Shelly and Sarah Young Fisher. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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