To enthuse you before we begin, here’s an example of the hundreds of tweets I got after talking about it on This Morning a few days ago… Louise tweeted: “Literally a five minute check on my online banking and found a phone bill I was paying for a phone I don’t own anymore and a subscription that I don’t even think I receive any more! Just cut out about £100 a month! Thank you, Martin!”
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There are three types of regular payments
Most of you will be familiar with two of them, but the third type is the tricky one.
- Direct debits. Typical use: Energy & utilities. You give a firm your bank details and permission to debit your account when necessary, and it decides what to take and when, yet you’ve a right to ask the bank to stop it – but do check you’re out of contract first.
Standing orders. Typical use: Regular payments to people. Here you set up an automated instruction to pay a firm or person a fixed amount, and you set the frequency. Cancelling is easy via your bank.
Recurring payments. Typical use: Subscriptions, payday loans, or pornography sites. These used to be known as continuous payment authorities – where you give a debit or credit card number and the firm can take payment when it feels fit. Yet they look just like single transactions so they’re tougher to spot.
It’s generally easier to cancel these via firms themselves, but sometimes they play hardball – since 2009 you’ve had a right to cancel with the bank, though some staff wrongly say you can’t.
Don’t be suckered in to keep payments you don’t actually want
Many people may find it hard to decide which payment to keep and which to cut.
And especially with subscription services, they know there’s a powerful psychology here. Companies use what I call the ‘inertia dividend’.
We’re naturally pre-disposed to not liking to lose something that we have.
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Many wouldn’t sign up for a movie service that they don’t really need if they had to pay for it, but would for a free month’s trial, so go in with a view to cancelling it when it ends, but at that point they become accustomed to it and now getting rid of it means a loss – and we don’t like loss.
The lust for such things doesn’t bounce back like elastic.
We tend to feel the loss of a service far more potently than the joy at its gain in the first place.
So, be brutal with yourself, especially at a time like now.
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Deciding what to keep and what to lose
It’s often a fight between logic and instinct. Here are a few points to help:
1. The obvious ditch – where you’re paying for something pointless. Like council tax on an old home or insurance for old long forgotten mobiles.
If this happens always try and see if you can get the money back (you don’t always have a right to it though).
2. Things you don’t need but do want, ask is it worth it? If not, cancel or try and find something cheaper. As Jo said: “Sorted my bills in Jan & cancelled the gym (went twice in 2019), saving £300/yr.”
3. Things you definitely need – can you do it cheaper and get the same. Check if it’s a good price online or via comparison sites and consider haggling.
If it’s not good value use it as a spur to switch whether it’s energy bills, broadband, water bills or more look, at what you can do to save. Full help for all of those at www.moneysavingexpert.com/moneymakeover
Martin Lewis is the Founder of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip
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