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Save Money: Eliminate Vices, Subscriptions, and Luxuries
By Molly's Brother | August 1, 2006
Let’s face it: We live in a country where it’s far too easy to spend money. But for those of us who have less disposable income than others, it is important to increase our savings by decreasing our spending. It is vital to know where and how you can convert your expenses into savings. You can arrive at a better understanding of your expenses by tracking your spending (It is generally suggested that you track your spending for 30 to 45 days). As you do, you can identify and eliminate some trouble spots immediately.
Send Those Vices Packing
Behaviorally, this is arguably the most difficult area. Financially, however, this is the easiest area to flesh out extra cash. Let’s break this down in a couple of ways. Smokers: Let’s say you spend $5.00 a pack. And if you are a pack-a-day smoker, your smoking 7 packs a week. Even a pack-a-day smokers have heavy weeks and light weeks. Let’s assume you buy 6 packs a week. 6 packs X $5= $30/week. Over the course of the year, that comes out to just over $1400 annually. Similarly, if you have a habit of visiting the Coke machine at the office multiple times throughout the day, you could eliminate that activity and find extra savings there. (That’s a savings of nearly $700 a year, assuming a soda costs $0.75 and that someone visits the coke machine four times a day, five days a week). As isolated instances, these seem like underwhelming amounts. But if you discover other vices you could eliminate, you’ll find even more money you can save.
Cancel Those Subscriptions
Subscription services and membership fees are probably a large drain on our monthly budgets. Especially for those of us who are on automatic pilot when it comes to dealing with personal finance issues. Often times I hear friends complain that they have “no money” and they don’t know how they’re going to be able to afford [insert necessary bill here]. However, often times these complaints are lobbed towards me as said friend is flipping through his magazine that just arrived in the mail. Or chatting to me via his home computer which is hooked up to DSL. Or he’s on the phone, surfing through every possible channel he receives via his satellite.
The point I am making is this: If you don’t use it or don’t need it, then cancel it. This includes but is not limited to: cable, satellite, you Tivo/DVR payments, iTunes purchases or your monthly subscription to Yahoo! Music, your DSL line, your subscription to the New Yorker or US Weekly, that account that is languishing on Match.com that you meant to update six weeks ago, and even your gym membership that you’ve paid in full for the last ten months even though you haven’t seen an elliptical trainer in six months. You have your own subscriptions/memberships that you might be able to eliminate. Just look a little deeper and think a little longer and you’ll find out which ones you’ll be able to live without.
Curb the Conveniences
I poke around on the internet and I see all these sites that urge people to cook food once a week (some sites even have tips on how to cook once a month). What? I can barely even cook once a day. There is a gem of truth that we could glean from these sites: Even if you can’t cook once a week, it is helpful to plan ahead. How many times have I, after a busy day at work, remembered with slump shoulders that I didn’t take anything out of the freezer earlier in the morning to thaw for dinner. I then decide to stop by the grocery store and pick up one of those pre-cooked chickens that sat under the heat lamps all afternoon. At a slightly more expensive cost. When you are trying to save money, these things add up.
Late return fees to Blockbuster, prepackaged meals, coffees on-the-go, ordering in for the third night in a row because you’re too tired to cook–all of these are conveniences we are used to that could turn into big savings over time. Planning ahead will save you money and time.
Your Savings Will Grow
By tweaking our spending and reigning in our habits and expectations, we can easily find “extra” money to dump into our savings, making them grow dollar by dollar by dollar.
Topics: Personal Finance, Spending Log |
August 2nd, 2006 at 5:08 am
Wow, I can’t believe some of the radical things that you are proposing. Giving up cable TV?, TiVo!?!?!?!? I almost spit coffee all over my keyboard. You’re right that it’s easy to cut out expenses for entertainment and some of the luxuries in life, but I also think that you have to ask yourself how will you be spending your money if you don’t have TV? If you pay $10 to see a film 3 nights a week, is that really better then paying Netflix $18 a month for the same thing? I think that it’s important to reign in spending and the monthly fees really are much more expensive then people realize, but sometimes boredom can be much more expensive then just cutting out entertainment costs.
My helpful finance tips, do 2 things. First call your credit card company (we know that we all have them) and ask them to lower your interest rate. This can count for a lot. Second look at the average number of minutes you spend on a cell phone and if it’s less then 500 per month, then switch to a prepaid plan. This makes a lot more sense because you’ll pay less for your minutes and you’ll avoid the USF and E911 charges associated with monthly cellular service.
August 2nd, 2006 at 7:07 am
I absolutely agree with you. You have to figure out if eliminating one thing (cable TV) will beget even more expenses (spending more money going out). I’m just trying to illustrate all the options available to people who are trying to save money. Maybe someone has cable who doesn’t really need it. Or someone–like me–has TiVo and finds that his life is even more stressful because of all the programs waiting for him to watch.
Thank you for your comments. Helpful stuff.
August 3rd, 2006 at 9:15 pm
Great post. Tracking your budget by writing what you spend down is a critical first step in reigning in those expenses. My wife and I just started this month getting control of our budget by tracking it and sticking to a strict budget. We already have a habit of saving but it feels great to have cotrol over what you spend to increase those savings.
August 3rd, 2006 at 9:51 pm
Andrew, I completely agree. It is a great feeling having control over what you spend to increase the savings. Press on!
August 10th, 2006 at 6:26 pm
OK, I’m a newbie and I know I have to get started but I must admit I’m absolutely overwhelmed by all these suggestions and where to start, including getting my family to “buy”into any of these. It makes me want to find a corner to assume the fetal position and just rock. I KNOW I need to do SOMETHING to make the income meet the outflow, but… but… but… (covers head and ducks)
August 10th, 2006 at 6:36 pm
Honestly, I know there’s a lot of information. I think you should start with the Personal Finance 101 tab.
And in no time, the family will end up following your lead.
September 6th, 2006 at 5:55 pm
[…] Here’s why: It’s a totally unnecessary expense that I want to eliminate. I stood in the hallway of the public storage warehouse and looked into that tiny, cramped closet filled with bankers boxes, lamp stands, a couple TVs, and a mattress. With a scowl on my face and hands on my hips, I’m thinking “Why the F do I still have this storage unit?” (I was angry, so you can imagine that the “f” stands for something more than “fudge.”) The answer quickly came to me: laziness. […]