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For years, personal finance experts have recommended cutting the cable cord and using streaming services to save money. According to a recent study by bill payment service doxo, which uses payment data from more than 7 million consumers across 97% of U.S. ZIP codes, people are listening.
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Although consumer spending was up 6% year over year, largely due to inflation, cable and internet bills were down. The average U.S. household spends $1,122 a year on cable and internet (compared to $1,141 last year) as consumers shift spending to over-the-top (OTT) and/or streaming services, according to the report.
“With this category remaining relatively flat amid national inflation, our data suggests consumers are reallocating funds to OTT and streaming services,” said Jim Kreyenhagen, vice president of marketing and consumer services at doxo.
In an exclusive email interview, he told GOBankingRates: “Consumption of streaming content has never been higher, thanks in large part to over-the-top (OTT) platforms and content offering more choice and increased consumer appetite and consumption.”
American households that pay for cable and Internet face an average bill of $114 per month. In total, Americans spend $146 billion a year on cable and Internet. But that’s only 2% of consumers’ household bills, indicating there may be better ways to save money by evaluating other household expenses.
For example, doxo data shows that Americans pay a total of $853 billion a year for mortgages, $616 billion for rent, $493 billion for car loans, $399 billion for utilities and $250 billion for their car insurance. Mobile phone subscriptions represent $166 billion a year.
GOBankingRates spoke to finance experts for advice on how to save money in these areas. And yes, these streaming services could be on the chopping block if you’re looking to tighten your purse strings.
Consider refinancing your mortgage
Mortgage payments are one of the biggest items on the doxo list for many families. Even though interest rates have gone up over the past few months, you can still save money by refinancing.
“Just like when looking for a loan to buy a home, those looking to refinance should evaluate the options of a range of lenders and mortgage providers and do their research to ensure that a refinancing makes sense to them,” says Robert Heck, vice president of mortgages. on Morty’s online mortgage marketplace.
He pointed out that Morty is online pricing tool gives buyers and homeowners access to a wide range of financing options and the most competitive rates. “Rather than having to manually contact and speak to different lenders, consumers can customize and compare options and view rates in real time. It reduces the time and energy needed to shop while providing the same competitive advantage,” he said.
If a re-fi doesn’t make sense because you bought your home when rates were historically low, you might consider a cash re-fi – and use the money you took out of the equity in your house to consolidate higher interests. debt, especially as credit card rates continue to rise.
Reduce your home and auto insurance rates
Home and auto insurance also offer opportunities to save money. Steve Lekas - CEO and co-founder of Branch, a cutting-edge insurance agency – told GOBankingRates that on average, customers can save 16% by bundling their home and auto insurance policies. “The reason insurance companies are able to offer deep discounts for bundling is simple: Bundled customers have lower claims costs,” Lekas said. “Not to mention that it’s easier for them to serve one customer with two fonts than two customers with one each.”
When shopping for new insurance policies, you can also inquire about other lines of coverage that may provide you with greater peace of mind. “Customers can often customize their policy with coverages that accurately reflect their lifestyle through options such as: umbrella, valuables, home sharing, carpool insurance, life insurance and renter’s insurance. The more customers are able to bundle, the more they are likely to save,” Lekas said.
Shop for a new mobile operator
Mobile operators have recently offered savings on trading in old devices. Often you can save money by switching mobile phone providers. But before you jump ship, ask your current company if they have a better deal for you.
Whether you’re making a phone call or heading to a smartphone retailer, you’ll want to have as much knowledge as possible to negotiate. “In general, the best way for consumers to understand whether or not they’re getting the best deal is to know how much they should or could pay their bills,” Kreyenhagen said.
doxoINSIGHTS provides a database of national and regional averages in the most common household bill payment categories, including mobile phone bills. You’ll find detailed infographics for 50 states (and more than 4,000 cities and towns), Kreyenhagen explained. “If consumers are armed with accurate data on how much their neighbors are paying, they will be much better equipped to negotiate, whether using a bill negotiation tool or contacting their suppliers directly.”
Control your utility expenses
Some of the highest annual bill increases were in the utilities category, Kreyenhagen pointed out. Fuel oil and propane costs have increased by 28%, natural gas by 11% and electricity by 5%, according to recent data from Doxo.
However, consumers can control some of these costs by changing their behavior slightly or making minor improvements to their homes. “While most bills force consumers to negotiate or hunt for a better deal, utility bills can be reduced by adjusting home life to reduce energy use,” Kreyenhagen said. “For example, consumers can install home features to improve insulation or install smart power strips or energy-efficient light bulbs to reduce energy costs. Smart devices should also be considered to help monitor and reduce usage and ultimately save money.
Spend Cord Cutting Savings Wisely
Although doxo does not collect data on streaming services and OTT spending, Kreyenhagen said Americans are making these services an increasingly large part of their household budget. “As the availability of OTT platforms continues to explode, consumers continue to opt for streaming services to consume content, with 93% of consumers planning to increase their streaming options (or change nothing at all). their existing plans),” he said.
But just because you’re saving on cable and internet doesn’t mean you should go out and double your household spending on other media consumption — or anything else, for that matter.
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“If you’ve recently cut cable spending, it’s a smart move to immediately reallocate those funds to your future, whether that’s paying off debt or growing your savings, before mindlessly spending the money elsewhere,” said Kreyenhagen. “If you chose a lower plan or cut the cord entirely, you should try to set aside the same amount of what the full bill would have been for each month. Rather than transferring that saved money to buy new shoes (or whatever your guilty pleasure), you can leverage your savings to improve your overall long-term financial health or by using reallocated funds to help pay other categories of bills that have gone up.”
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