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Financial Wellness

8 Ways to Lower Your Internet Bill

We all need a reliable internet connection. We use it for all sorts of tasks, such as remote work, streaming our favorite shows, online gaming or video chatting with family.

Some internet providers are cheaper than others, but you can still expect to pay a pretty penny for high-speed internet. According to the market research and consulting firm Parks Associates, data from April 2022 shows that U.S. households spend an average of $116 a month on home internet. To keep your budget in check, here are eight ways to lower your broadband costs and monthly bills.

1. Examine your internet bill

Before you can find ways to save, you'll first need to know what you're currently paying. This is where the tricky part comes in. Read the bills from several previous months, and try to understand what your internet service provider is actually charging. What download speed are you supposed to receive, and do you have a data cap? If so, are you staying within that data limit, or do you typically incur overage fees? It's important to see how much you pay for internet speed and data usage. You may be surprised at how many fees can be eliminated if you ask. Having this info at hand will be key when it's time to negotiate with your provider.

2. Check your speed needs

A gigabit broadband connection is an internet service that offers a maximum connection speed of 1 gigabit per second (Gbps); or 1,000 megabits per second (Mbps) or 1 million kilobits per second (Kbps). Do you need gigabit internet? Let's be honest: while most of us like the idea of having the fastest internet speed available, we probably don't need it. A fast internet package is probably near the top of your priority list if you work from home and have others in the house (whether several roommates or a family). But that could still mean you can lean on a 500Mbps plan vs. jumping right to a full gigabit tier or even a multigigabit plan.

If it's just you and a roommate or spouse, or you're not working remotely and using your internet service for little more than email and checking a few sites, you may want to consider lowering your internet speed even more. Perhaps you can hop down from a 500Mbps plan to a 200Mbps tier. This could be an easy way to reduce your bill without impacting the quality of your internet experience.

3. Minimize devices, if you can

Our homes have become increasingly filled with connected devices, including smart TVs, phones, gaming consoles, voice assistants, smart thermostats, security cameras, smartwatches, etc. The more smart home gadgets you have, the more they'll consume your bandwidth. If you're the only one in your household, you can better manage these so they don't eat up your data cap or start to bring down your home's overall speed. Fewer devices mean you might avoid paying data overage fees and get more effective internet service.

4. Explore low-cost internet options

You can also reduce your spending on your home internet is to find out what discount programs might be available. Start your search with government programs to help eligible customers cut costs. Lifeline is a program that offers assistance to low-income households. You'll get just over $9 monthly off your broadband bill if you're eligible. Every little bit counts!

If you qualify for Lifeline, you'll also be eligible for the Affordable Connectivity Program, a government subsidy from the Federal Communications Commission that provides a discount of $30 a month off your internet service.

Plus, in addition to the discounts from those federal programs on any internet plan from the more than 1,600 participating ISPs, you can also couple those subsidies with providers' low-cost plans, almost all of which are $30 or less. That means you could get your home internet service for free. In the past, that might have meant paltry speeds of 10Mbps or less, but now many providers have committed to offering low-cost plans with a minimum of 100Mbps download speed. That's a significant difference.

5. Research available competitors

Once you know all the facts, it's time to shop around. Many competitors are vying for your business. Some have aggressively entered the home internet space with their 5G home internet products. Other providers will happily give you an introductory rate less than you currently pay. Before signing up, get an idea of your monthly costs when you switch your internet service to a new provider. Compare what you're paying now to what you'll pay for the next month, six months and year. Along with that, what's the cost after the promo plan ends? Consider your long-term use as well. With the competitive landscape out there, try to avoid signing any long-term contracts unless you know for certain that you're getting the best possible rate at your address.

6. Consider using your own equipment

Some internet providers charge an extra monthly fee for renting a modem and router. Sometimes it's just an extra $5 per month, but some ISPs charge as much as $15 monthly. In the long run, it could prove cheaper to buy your own, which might even boost your speed and performance. You can buy a top-rated modem and router for less than $200. Keep in mind that some providers won't offer support or troubleshooting for your personal hardware.

7. Bundle your broadband 

Obviously, your internet connection isn't the only household service you pay for. You could pay less by bundling your internet with other services. These days, internet providers such as Verizon, Xfinity, Optimum, Cox, and Spectrum all offer cell phone plans alongside their usual Wi-Fi packages. 

8. Negotiate with your internet provider

If you've had the same provider for a few years, they are more likely to work with you on lowering your bill. Many will ask the same questions such as can you lower your internet speed, or can you increase your internet speed? They will often try to lure you to a higher speed by offering better promos and a better cost per Mbps. 

Do your research on the competition. If you mention offers from competitors you've come across, your customer service rep may give you a deal. Knowing about competing offers gives you an advantage: Your provider knows you can move on to another ISP if you don't like what you currently have or what's offered. Ask to be connected to the Customer Retention Department, where they might just give you loyalty discounts that are sizeable.

Ask your current provider if any promotions are available for new customers. If so, you would also like to receive them. If you haven't found a deal that works for your budget (or you've run into an inflexible sales agent), it's all right to end the call and try again later or plan to end service with that provider.

Don't be afraid to cancel your service. It may take some time to close one account and open another, but saving a significant amount is worth it. Remember, though: It's not just about the promotion period. Otherwise, you may need to negotiate your bill this time next year when the promo rate is over.

Resources: CNET; Nerdwallet; Parks Associates