This is a guest-post from Tim Ellis, author of Seattle Bubble, a blog and forum dedicated to real-estate market conditions in the Seattle area. Tim is a long-time GRS reader. Previously on GRS, Tim has written about renting vs. buying, renting in a new city, setting homebuying priorities, and gaming without breaking the bank.
Recently my wife and I sat down for the first time in a couple of years to review and update our budget. Since last adjusting our spending and saving plans I had gotten a new job, we bought a house, and we adopted a baby, so it was definitely past time to take a new look at the big picture of our finances.
The Unwelcome Discovery
Most of the adjustments we made were typical and fully expected—mortgage payments, baby supplies, and so on. However, one item in particular jumped out at me as I was going through our regular monthly bills: Our monthly Vonage telephone bill was way higher than I remembered it being.
I logged onto my account to try to figure out what was going on and sure enough: Since early 2009 our bill had gone from around $17 to over $30—a 68% increase! How did this happen without me noticing earlier? Let's start with a little background.
The Critical Error
All of our other monthly bills (water, electricity, cable, mortgage, etc.) get paid manually every month as they comes in. Many of them have an auto-pay option, but I prefer to spend the five minutes that it takes to pay them myself each month so I can keep better control over exactly when money comes out of my accounts, and so I notice if the bill is different than I expected it to be. However, our Vonage bill was the one exception to this rule. Way back in 2003 when I signed up for Vonage, for reasons I can't recall anymore I gave them my credit card number, set the bill to auto-pay, and more or less stopped thinking about it. That was my critical error.
Sure, each month when I would pay off our credit card balance I would track all of the items that went into that month's bill, but since most of the items on there were non-recurring purchases, my mind was never in “bill pay” mode where I was watching for unusual increases. Little did I know that while I wasn't paying attention to my bill, Vonage had increased my base service rate by 33% ($5) and added four new taxes and fees to my bill.
So what have I learned, and what am I going to do about it?
The Moral of the Story
Pay attention to your monthly bills! Paying close attention to your bills is the only way to make sure that they're not being jacked up for no good reason.
Sure, auto-pay is convenient, but by not noticing this jacked-up bill earlier I have spent over two hundred dollars more than I needed to for basic phone service. That's an expensive convenience. If you can use auto-pay and still keep close tabs on your bills every month, great! As always, do what works for you.
Lots of people these days have switched to cell phones for everyone in the house instead of having a “home phone.” We have a cell phone, but still prefer the benefits of having a phone that never drops calls, doesn't need to be charged every night, and rings in multiple places throughout the house when someone calls.
For basic home phone service, we've cancelled our Vonage account and ported our phone number to an Ooma Telo device ($208 at Amazon, $180 when I picked one up at my local Costco, and occasionally just $150 on Woot). Ooma provides basic VOIP phone service for as little as a couple bucks a month in taxes. It costs us a bit up front, but with around $27 a month in savings, we'll break even in just seven months.
You have probably read it on these pages before, but it is absolutely true that nobody cares more about your money than you. If you want to avoid throwing away your money on an inflated bill for months on end like I did, you need to keep an eye on your bills and figure out what's up as soon as you notice any changes. It never pays to let your guard down when it comes to your money.