Expense Creep: How to Avoid Getting Nickel-and-Dimed on the Essentials

Photo (cc) by redjar

Have you ever noticed how certain expenses slowly creep up while your pay usually stays flat? Most of the time, it’s hard to even find the source of the escalation. Consumers tend to get alarmed by sharp jumps in prices and are spurred to act only when a single increase is large enough to offend. But by 1 percent here and $2 there, it seems like certain items and services are always on the uptick, flying just low enough to go unnoticed by our budget radars.

It’s a curious phenomenon that warrants a bit of sleuthing. Which are the primary culprits in this gradual, death-by-a-thousand-cuts expense escalation? And, perhaps more importantly, what can consumers do about it individually and collectively?

If you’re tired of being nickel-and-dimed without so much as a head nod or a thank you, it’s time to sharpen your focus. Here are the products and services most likely to drain your coffers one drop at a time.

1. Cable TV and Internet rates

Few things in modern life arouse more profound confusion and red-faced frustration than cable TV and Internet services. Different Internet connection speed options, cable companies with ever-changing participating networks, and temporary premium channel promotions — it’s enough to make anyone long for the good old days when the only choices were CBS, NBC, ABC and PBS.

Consumers have to develop hawk-like vision to not only read the fine print on Internet and cable TV contracts, but to understand the fluid terms and conditions that seem to be the hallmark of so many cable TV and Internet providers. There’s no magic bullet to keep this particular expense from creeping northward. The best strategy is to monitor your monthly invoices closely for billing errors, understand all your charges and why they’re applied (and when you don’t understand, call to get answers), and take advantage of free promotions only if you’re disciplined enough to proactively cancel them before you get hit with an automatic charge.

2. Credit card annual fees

Do you read every communication your credit card company sends you? I don’t. Usually, I only pay attention to my monthly statements and, I’m embarrassed to say, I’ve missed new annual fee announcements more than once. Pay close attention when your previously free credit card imposes an annual fee or when that introductory offer on your card ends. Even though some fees entitle cardholders to nice extras like travel insurance, rewards points, or free upgrades at hotels, I try to avoid them . Annual fees tend to offer far more advantages to card issuers than they ever do to cardholders.

If an annual fee pops up on your card, don’t be afraid to call and flex a bit of consumer muscle. Sometimes card companies will waive the fee for one year or for the lifetime of your account if you threaten to cancel. It makes sense: Continuing to pull in 12 percent to 19 percent in interest from a creditworthy customer is worth forgoing an $80 annual fee. For more information on credit card fees and strategies for avoiding them, check out this piece on Finance For Yuppies.

3. ATM fees and other bank charges

If you’re unfortunate enough to need cash when you’re away from your bank-affiliated ATM, you’ll more than likely incur two separate fees — one from the issuing bank and one from your own bank. These fees are subject to change (read: increase) from both ends and can range from $2 to $4 per transaction.

If you’re a longtime customer at your bank, don’t often access cash at nonaffiliated locations, and don’t mind making a couple of calls, at least one side of the charge might be refunded. Also, some banks offer fee-free transactions regardless of the ATM you use. This privilege is typically reserved for premium account holders; check with your bank to see if it offers such a benefit.

4. Health insurance rates and copays

Though health insurance costs rose just 4.1 percent for employers in 2012, most businesses still struggle to provide affordable coverage to their workers. To help share the burden, companies choose plans with higher copays or require employees to pay a larger share of the premiums. As costs slowly creep higher, our paychecks get smaller in a cycle that’s hard to avoid.

Consumers can help balance cost increases in a couple of ways. First, leverage pretax medical savings account funds to help cover copays. Second, try to schedule medical procedures to take full advantage of coverage once your annual deductible has been reached.

5. Shrinking value for your dollar

One of my favorite sites, Consumerist.com, has a recurring content feature dubbed Grocery Shrink Ray. “Shrink ray” refers to products that get repackaged and, in the process, get a slight quantity reduction. From cereal to toilet paper and from chili to sunscreen, a fancy new label can sometimes mean a few trimmed ounces.

I include the shrink ray phenomenon here because a gradual reduction in what consumers get for their money equals a gradual increase in their expenses. Buyers can push back by learning what products are involved, sharing that information with friends and family, and contacting manufacturers to express their displeasure.

Knowing what to look for is half the battle in beating back expense creep. Most consumers slip into autopilot when it’s time to pay the monthly bills and only notice major changes in prices, not the minor tweaks that eventually add up. With these types of charges, vigilance wins — paying close attention to all charges, asking questions, pushing back, and being willing to take a stand and cancel services when the occasion calls for it are all strategies that can keep expense creep at bay.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
15 of the Most Outrageously Overpriced Products
15 of the Most Outrageously Overpriced Products

Retailers mark up products by hundreds of times their cost — but you don’t have to pay the premium.

5 Simple Steps to an Awesome Retirement
5 Simple Steps to an Awesome Retirement

The path to your dream retirement begins with these five steps. How many have you already taken?

8 Products That Make It Easier to Get Fit
8 Products That Make It Easier to Get Fit

Amazon reviewers give high marks to these tools that can help you get in shape without a gym.

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.