Unfortunately bill payments are a part of everyday adult life, whether it is your mobile phone bill, your electricity bill or your car insurance bill they all need paying and they are all going to cost you money.
One thing I always look at when making bill payments is the payment frequency. Many companies allow you to pay your bills either monthly, quarterly, half yearly or annually. Often there can be big discounts available if you are prepared to pay the yearly cost up front instead of the monthly price. In some instances the discount can be as much as 10-15%.
Obviously paying bills yearly involves a much larger upfront cost, but if you can save 10-15% across even only a handful of your bills then over the course of your lifetime you are going to save a significant amount of money.
As an example – our private healthcare bill is around $2800 per year, but the monthly cost is $250. Now $250 per month might seem a lot more palatable than $2800, but it works out to be $3,000 per year $200 or 7% more expensive.
$200 over the course of an entire year might not sound like a lot of money, but this is only 1 bill… Anyone who has been reading my blog for any amount of time will know that I like to think long term when it comes to money, and I also expect to easily be able to make 3% per annum on any money that I am able to save.
If I continue to save $200 per year on this one bill and also get a return of 3% PA on my money, then in 30 years time I will have saved just over $9,500 just from this 1 bill. If I extrapolate that out to all the bills where I get a discount for paying yearly instead of monthly then I expect to be able to save significantly more than this.
Do you pay bills yearly or monthly? Do you get any discounts for paying yearly over monthly?