When the pandemic hit with the stay-at-home orders, many people were knocked out of work. The world economy is now officially in recession, and most households are facing lean times. I’m one of the lucky ones in that I can work from home, and my client committed to keeping us consultants employed. But there is still the uncertainty of the future, both for my family, and many others.
One of the outcomes of this recession was that many people cut back on unnecessary spending. I’m including expenses as one of my areas of life to edit, because I have found that I shifted my spending, and I’m not sure I want to go back to the way it was.
Editing expenses is not just about cutting back. It’s about assessing whether the expense is really giving you a good return on your money, or whether it is the right service to use.
The thing I didn’t realize is that I am often paying for things that I don’t use or need. If I am aware of such services, and I’m not using them, I then feel like I should “do something about it”, which becomes another open loop.
Expenses for Editing
The first thing you will want to do is make a list of your regular expenses.
Here are some expenses that crop up in my life:
- Mortgage
- Car payment
- Magazines
- Phone
- Cell phone
- Streaming video (Netflix, Amazon Prime, Hulu, Disney+, ShowTime)
- Internet
- Security system
- Lawn fertilizer service
- Pest control
- Amazon Kindle Unlimited
- Google Play Music
- Gym
- Newspaper
I found all of our repeating charges by looking at our bank statements.
Evaluating Each Item
There were a lot of expenses on that list that we weren’t conscious of. By going through our statements, I found that we were being charged double for Amazon Prime. We were also paying monthly for LinkedIn Pro (for my husband) and a couple of subscription services that we had forgotten about.
For each item, I asked the following questions:
- Are we using the item?
- Are we using the item regularly?
- What is the return on investment (ROI) for the item?
- Is there a way to lower the cost?
- Is there a cheaper alternative?
- Is this level of item best serving our family?
Here is what we ended up doing:
An Example of Reducing
This is an actual example, so you can see the various ways we reduced expenses.
- Mortgage We have a really good interest rate, but with rates so low, we considered refinancing. It is still on the table, but not something we are actively pursuing because of the shortness of our remaining loan. A lot of my friends, though, are taking advantage of the rates, and knocking hundreds of dollars off each month without having to extend the length of the loan.
- Car payment. Most people don’t realize that you can also refinance a car to take advantage of lower interest rates. I didn’t know it myself until I started working at a credit union. If I didn’t have a 0.1% rate on my car loan, I would probably be looking at doing this.
- Magazines. I have whittled my subscriptions down to three, and let my membership in IEEE lapse (partially because of the overwhelming amount of periodicals that come with membership). The ones that come in, I have to read before the next issue comes in, or the old one gets recycled. I’ve also stopped buying magazines in the grocery, because there is little in them other than pictures.
- Phone We still have a home line, mainly because of my daughter being in school. However, with her graduation, we are considering dumping the line. This will not save much, as our internet is bundled with phone. However, our phone company offers discounts to veterans, so my husband is looking at reducing our bill that way. Once we know what that price will be, and how it plays out with our internet, we will decide.
- Cell phone We have three phones on our cell plan. Our carrier discounts heavily for veterans, so by walking into the store with his Navy discharge papers, we saved $60 per month. (T-Mobile, in case you are wondering)
- Streaming video (Netflix, Amazon Prime, Hulu, Disney+, ShowTime) We watch almost no commercial television, and we don’t have cable. When the isolation started, we started watching more television. At that point we had Netflix, Amazon Prime (which I get for the shipping), Hulu and Showtime. We added Disney+ because of the programming. My husband realized he didn’t watch Showtime, so he cancelled that and we agreed to subscribe to BritBox instead. That saved us $5 a month. Hulu might be next on the chopping block unless husband/daughter can come up with a valid reason to keep it – we don’t watch it. All of this is still far cheaper than the “basic” cable in our area which starts at $79 per month.
- Internet Our internet is fiber bundled with our phone. We will also be asking for a discount on that based on the carrier’s veterans benefits.
- Security system We had been in a 5 year contract with a security system at $70 a month. I counted the minutes until that contract expired, knowing I could go with Simplisafe with no contract for $30 a month. When I called our security firm to tell them we were leaving, I was honest about the reason. They gave me an offer I couldn’t refuse: going forward, $25 a month, for a 1 year initial contract and a price hold after that.
- Lawn fertilizer service All the lawn service seemed to be doing was feeding the weeds. We decided to do it ourselves. That’s $25 a month.
- Pest control. We live in the South. Near a river. That means ants, “water bugs”, wasps/yellow jackets and termites. This is well worth not having to deal with these critters. While there are other pest control firms in the area, we like the way our provider is careful of chemicals and aware of helpful insects and amphibians in our yard.
- Amazon Kindle Unlimited I am a reader. I prefer to read on my Kindle, rather than paper books. My library doesn’t have much of a selection of ebooks, so I use Kindle Unlimited. Most of what I read comes from there, and I have read some wonderful series for free (Inspector David Graham, Lady Armstrong).
- Google Play Music My husband is a music buff, and loves Google Play. They are closing down, though, in favor of YouTube music, which he is not happy with. So he has decided to move over to Amazon Prime music, for a small monthly savings.
- Gym I have a gym membership. It is great when I am healthy. I was going regularly on weekends before the shutdown. However, even though my gym is open, I don’t feel comfortable going back, and a broken toe is precluding a lot of exercises. (You would be surprised how much you use your toes to lift things). So I am cancelling this membership in favor of Youtube videos and a wonderful free program called FitOn.
- Newspaper My husband was subscribing to a DC newspaper. He decided that it was better to do his own gathering of news, and has started using various domestic and international sources to get a better picture of what is going on.
The Results
All in all, we were able to knock almost $200 in monthly expenses off the block, and there are still more coming. This does not include the services we weren’t using at all – those came to almost $100 a month themselves.
In the end, I feel much better about our expenses. For the ones that we kept, I feel better for having examined them. Not only do I know what we are using, but I also know where to start cutting things should further cutbacks be necessary.
Over To You
When was the last time you looked at your expenses, hidden or not? Would you be served by examining each and adjusting things to save money?
