One of the many ways that those of us on a limited income can free up money is to re-evaluate current expenses. We can actually increase disposable income on our own by cutting expenses in certain areas. One of the best ways to do that is to re-evaluate those pesky monthly expenses. Now, I’m not talking about utilities and the like (although they certainly deserve their own review). I’m talking about those regular, automatic debit types of expenses that we pay.
Obviously these expenses differ from person to person. In my case, past expenses have included cable, security, cell phones, newspaper, lawn care, magazines and gym memberships just to name a few. Some of these expenses remain, but it’s always good to challenge ourselves to see what we can eliminate-to “delutter” our expenses if you will. Often it just takes some though to priorities to decide which expenses to keep in the budget.
• Decide if you are using the service enough to justify the expense. I work out in an outside pool, live in a warm climate, and walk for exercise. I only need indoor exercise access for a few months. It makes more sense to use my city facility on an as needed basis rather than join a gym. It may make sense to do a money breakdown and find out how much say, a single visit to your workout facility is costing you at your current usage rate. I have not renewed my AARP membership because for me the expense was not justified-I get better discounts on most things through other techniques.
• Does the service give value to your life? I will shortly be a single gal living alone. Cable TV is important to my quality of life, so while I am willing to down grade, I am unwilling to eliminate this service. On the other hand, my land line affected my life in no way (I use my cell phone for personal and business calls) so eliminating a land line was worthwhile, and an easy step to take.
• Have your priorities or intentions changed since you signed up for the service? If so, acknowledge it and move on. Every year millions of folks join gyms with the intention of working out three or more days a week, and eventually usage trickles down to almost nothing. If this is you, rethink your commitment.
• Can you find a cheaper alternative that is equally satisfying? In the case of the above mentioned personal workout, my city facility is $100 per year. So even if I needed indoor workouts, a gym would not be a necessity. If it weren’t for my addiction to watching sports, I would get a box for about $50.00 and stream shows and movies through Netflix, as many of my friends do.
• Is the expense necessary to your well-being or security? While those expenses are rare, think long and hard before chopping them. Every year I whine and whimper as I fork over my annual AAA fee. However, I’m a woman traveling cross country alone who knows how to gas up the car and not much more. So even though I have not used the benefits in a few years, I’m unwilling to take the risk of a breakdown after dark on a two lane road.
• If you cannot eliminate the expense, can you cut it or downgrade? In my case I was unable to cut down the newspaper completely, but arranged to move to Wednesday, Thursday, Friday and Sunday. I downgraded my cable to the most basic options.
• If you are looking to add a new expense, try it out first. Most services have trial offers, trial memberships and the like.
• Find out the costs of cancellation. Although I was willing to cut my cable much earlier, I would have paid a hefty fee for changing before this January. By the same token, if you are looking to add a phone or a membership, make sure you are aware of early cancellation fees and the like.
Recently I’ve freed up income. I’ve cut both cable and cell phone use by over a third, and eliminated a land line. I’ve downgraded my newspaper and eliminated all magazine deliveries. I’ve eliminated all memberships except for AAA, and I’ve cut other costs. I’ve still got a few to review. Am I physically able to fertilize, weed and trim my own lawn? Do I really need a security system when I live in a nice neighborhood with the barking dog from hell? These are questions still to be answered.
Finally, by evaluating and trimming these expenses, I’ve become more aware of priorities, and should further cuts need to be made, know which items could be cut further. I can live without cable but not without Internet access and I can read the paper online if I had to, for example.
Have you reviewed expenses lately?