Cut the Slack, Pocket the Savings

Cut the Slack, Pocket the Savings!

So here’s how I put $3,380 back into my pocket this year and forever with minimal work.

Let’s talk about ‘bills’ for a second. I’m talking about those pesky periodic bills.  Yes, everyone has them. Some bills are necessary and to some degree inevitable and an unavoidable part of life (i.e. utility, taxes, insurance, etc.). On the other hand, we all have those often unnecessary bills that siphon away our hard earned cash like clock-work, often paid automatically and forgotten.

In the past, I didn’t mind paying for certain creature-features that I perceived to bring me comfort: like cable, cell phone, internet, car, dining, memberships to this or that, you name it. I worked hard so I wanted to enjoy it. Comfort, however, comes at a price in the form of a monthly bill.

Shortly after the time I nearly inflated my lifestyle, I took a good hard look at my monthly spending. I reviewed every bill I paid to see where I can reduce or eliminate.  I knew that if I want financial independence I had to shift my priorities. I had to reduce my level of consumption. It was simple math. I’ll reduce my consumption, free up cash, and then increase my savings rate to get me closer to my goals (savings rate calculator).

So I took a hard look at all my recurring bills. I used a spreadsheet to see it all in one place with the monthly and yearly amount (see below). One by one, I decided on which bill was a necessity and which not, which to reduce and which to completely eliminate forever.

How I made $1,126/hr

After a few hours of work, in total, I’m now saving $3,380 a year, forever. That’s $281.67 a month, extra, that goes back into my pocket to save.

Another way I like to think about it: All said and done, I probably spent about three hours total. So, you could say I made $1,126.67 an hour in just year one.  Because every year after that, I don’t have to lift another finger and it’s like I’m getting a royalty check for $3,380 with interest, in perpetuity.  Sounds good to me!!

Questions to Ask Yourself

Truthfully, it isn’t that hard. Just make the decision to do it. The hard part is being honest with yourself (and/or spouse), but the questions are simple:

Questions to Ask
  • Is this something I really need or want? (how to identify need vs want)
  • What if I try to eliminate this bill for 6-12 months and live without it as a trial run?
  • How much money would I save every month, year, 5-years? or In perpetuity?
  • Is this service or product really worth the money I’m paying for it?
  • How could I substitute it and pay less?
  • Are there any competitors who might offer similar services/products for less?

 

You get the picture.

The Breakdown

So here’s how I put $3,380 back into my pocket this year and forever with minimal work. A breakdown of each expense, which one I eliminated or reduced, and the total yearly savings.  It all adds up to something amazing!

savings-bills-3380
Saved $3,380 a year, forever!!

 


Comcast Cable TV (eliminated)

I’m officially a cord-cutter.  I know lots of people have done this already and with good reason. Look at the yearly total above: $1,560. That’s a lot of money.

It’s equivalent to 800 cups of Starbucks tall drip coffee at the current price. (I’ll talk about Starbucks and coffee in another blog) It’s no wonder people are cutting the cord.

Cable TV (especially Comcast/Xfinity) is such a joke. Their customer service stinks and they always over promise and under deliver. In terms of programing, you don’t get a choice of channels to subscribe so instead they force you to get and pay for 100’s of channels most never watch, for 100’s of dollars. So inflexible!

Thankfully, these days people have a way to substitute their entertainment. We have more real choices: online movie streaming services, YouTube, FREE over-the-air (OTA) local HD channels, you really don’t need cable to entertain your family.

Think about it: Netflix has amazing content for $8.99 a month—the money I saved cutting the cord can pay for nearly 174 months, or 14.5 years, of Netflix service. With the first year savings alone!

Cut Cable = 14.5years Netflix

Here’s What I did to Replace Comcast Cable TV:

  • Bought an OTA indoor antenna to receive local HD channels
  • Bought an Xbox One game console with Kinect 
  • Bought Hauppauge Digital TV Tuner to connect OTA to Xbox
  • Bought Inteset INT-422 Remote Control pre-programmed for Xbox
  • Shared Netflix account (free)
  • Amazon Prime Movies (free)

I can’t say enough about the performance of the Xbox One as an entertainment console. I run all my streaming and entertainment apps on it: Netflix, Amazon, YouTube, Music, etc.  The experience is seamless. Xbox made the transition from cable super easy.  With the TV tuner attached, you get free onscreen TV guide service for all OTA channels in your area. You can pause live TV, rewind/fwd live TV.  You can’t record a shows yet, but I hear they’re working on it.

In my opnion, the remote control from Inteset is a must have. It’s way better than the Xbox remote. The Inteset remote is universal so you can control other devices, and it comes pre-programmed for the Xbox console.

Originally, I wasn’t going to buy the Kinect but since it was a steal during a Black Friday sale I decided to get it.  The Xbox Kinect adds voice control . You don’t really need this in my opinion, but it’s still cool. I wasn’t expecting much but I was pleasantly surprised. All I have to say is “Xbox On!” “Xbox Turn Off”  “Xbox watch TV” “Xbox go to Netflix” “Xbox go to Amazon”  It’s truly amazing and it works flawlessly for me.

Since I’m not a gamer, can’t comment on that part.  I use the console as my entertainment console, like a “cable box” for TV, and streaming player, all in one. Highly recommend!

As for OTA, beware, cable companies want to charge you for basic, local TV content. In my opinion, it’s best not to waste your money. Instead get an Over-the-Air (OTA) indoor/outdoor TV antenna and you can stream local HD channels straight to your TV via Xbox. In total, with my indoor antenna, I get something like 38 channels. I only watch 4 local HD network channels, but that’s okay cause it’s free!  I bought the ClearStream 4V indoor/outdoor HDTV Antenna-70 mile range.


AT&T Cell Phone (eliminated/replaced)

I’m savings $1,062 a year by moving over to Cricket Wireless.

The savings alone was enough to motivate me. The service is very reliable and works great for me. AT&T actually owns Cricket and they’re on the same network, essentially. Porting my number over was instantaneous, and I used my current phone.

I have the group plan with four people for a total monthly cost of $100 (tax included), which works out to $25 each because of their savings structure for group plans (see below).  Each person gets 4-GB of 4G LTE to use independently along with unlimited talk and text.

Best part, if you hit your data limit, Cricket throttles your speed instead of charging you for overages.

As for data plans, you have several options including unlimited-data at LTE speeds. The group plan gives you a discount for every line up to five lines.   See below:

Cricket Group Plan Savings per Line
Cricket Group Plan Savings per Line

 

Here’s what you should know if you decide to go with Cricket Wireless:

  1. Buy the SIM card on Amazon: It’s only $4.99 on Amazon vs $10 online at Cricket or the Store.
  2. Do not buy the SIM card or activate your phone at a Cricket Wireless Store—they charge you an activation fee in store. If you do it online it’s free and super easy.
  3. You can bring your own phone.

The absolute worse thing that can happen is that you don’t like the service and you find another, or go back to the original. That was my thinking.

The best thing that can happen is that you save a lot of money, like I did.


Auto Insurance & Home Insurance (reduced)

It’s good practice to check periodically to make sure that you’re not over insured.

For auto insurance, I’m saving $220 every year. I have a 11-year-old car with a KBB value below $3500. I still had full coverage on the car which doesn’t make sense. It was over insured. So I reduced coverage by dropping the comprehensive coverage and keeping only liability with $3500 uninsured/underinsured motorist protection.

For Home insurance, I increased the deductible—the amount I have to pay first in the event of a claim. Increasing deductible can save you money, but think about what you’re willing to pay or can afford out-of-pocket if you needed to.


Auto Club Membership (eliminated)

Triple-A (AAA) auto club membership: emergency roadside service. I had this for a long time. It was on set-it-and-forget-it. I really only liked it for the towing service. However, when I thought about how often I actually used the emergency services compared to what I paid over the years, it works out to be cheaper to just pay for the emergency towing service when or if it ever happens.

Cars today are so reliable, if you take care of them, you may never need services like AAA emergency auto club. By the way, I have Geico for auto insurance and they have similar emergency road side services for much cheaper—something like $5 for six months.


Broadband Router Rental (eliminated)

I’m saving $114 a year.  My ISP (internet service provider) charges me $9.50/month as a rental to use their router. This is default by most providers I’ve dealt with. What they might not tell you is that you can use your own router in place of theirs, and it works just fine. With the money you save eliminating the monthly rental fee, you can buy yourself a really nice router.  I personally have the TP-Link Archer C8 and love it. You may already have a router available, like I did.


Bottom Line

You don’t have to go very far to save money. Look at your current spending and eliminate the fluff.  Be honest with yourself in terms of what you need vs. what’s just nice to have.

Put it on paper or a spreadsheet and total up the yearly savings to make it more real.  When I saw that I could eliminate over $3k a year in bills, it felt different than just thinking about it.

Finally, compare your savings to something real. For example, how many years of Netflix service you can get if you cut cable bill. Or, better yet, how much you could be making if you invested your savings, or put it into a CD with interest, compounded over X amount of years.

Resist the urge to splurge with the money you save, though. This is your opportunity to pay yourself first. It’s about financial independence.

What experiences do you have? Any other ways you’ve saved money on recurring bills?

 

New Post Alerts

 

 

 

 

 

 

Save

Save

Save

Save

Save

Save

Leave a Reply

Your email address will not be published. Required fields are marked *