This is post #14 from the 30 Day Personal Finance Challenge: Boost Your Financial Health with a Daily Tip!
We have all made rushed and impulsive financial decisions. Today’s tip is to look back and re-evaluate your choices. Be brutal, be honest, and cut these money leaks! Ask yourself:
What am I paying but I:
– seldom or never use
– don’t have the time for
– don’t enjoy using?
First start with all the subscription services*, which draw money from your account on a monthly basis and you don’t even notice them.
Where are the costs hiding?
- Online video subscription services – do you really watch Netflix, Amazon Instant Video, Hulu, Sky, HBO Go?
- Music streaming services – Spotify, Apple Music, Slacker Radio, Pandora, etc.
- Magazine subscriptions – professional, hobby, personal, etc.
- Audiobook subscriptions – Audible, AudioBooks, etc
- Insurances
- Mobile apps
- Gym and sport activities memberships – are these living up to your expectations? Is their schedule accommodating your schedule? Did you use to enjoy them but after a couple of years, they’re boring the crap out of you?
I had to cancel my gym/sports memberships twice. The first time I had just moved to Berlin, Germany and I got myself into a yearly premium gym membership. It would have been fine if I ever went there…
The second time was after 2 years of kickboxing classes, I discovered that a plain gym is giving me much more flexibility – I could go any time of the week. During the second year, I felt bored and unmotivated, but it never came to my mind that to look for alternatives. It was only when I decided to go on sabbatical and I knew I won’t be in town, that I decided to cancel the kick-boxing class. - Food/ingredients boxes – recently these have become very popular. They send you all the ingredients to cook a meal at home. I haven’t tried them myself. But I have friends who received them once or twice and then canceled. The service was only creating more hassle – first, they had to choose which recipe they wanted, then they needed to be home to receive the delivery, and then cook it.
If you have already started tracking your expenses, you would have found out some of these little sneaky money eaters. Look even closer! Check all automatic transfers from your banking account in the last year.
The yearly payments are the trickiest – we pay them once and then we forget about it. For me, these were the international travel insurance and the Amazon Prime subscription.
Next step is to look for alternatives. Youtube has replaced the TV long ago. There are plenty of documentaries, how-to videos, there is no need to sell you Youtube…
A simple Google search brought me to the OpenCulture project which brings together high-quality cultural & educational media for the worldwide lifelong learning community. Here is their humble collection of content:
- 1,200 Free Online Courses
- 1000+ MOOCs
- 1,150 Free Movies
- 700 Free Audio Books
- 800 Free eBooks
- 200 Free Textbooks
- 300 Free Language Lessons
- 150 Free Business Courses
- Free K-12 Education
I am curious to know what are your findings. Post it as a comment below!
Happy de-cluttering and freeing yourself from all these unneeded obligations!
*Disclaimer: I am not saying that you should not buy insurance. Or that you should stop all your FUN! By all means, have fun! But be honest with yourself and clean your subscriptions as much as possible. We have only 24 hours a day, and we can only do, watch, read, listen to a limited amount of content. Sometimes choosing between so many options can be frustrating.
Totally with you Kate!
I also find that very often, it is possible to re-negociate the contracts for our utility bills. This is the kind of stuff that everyone hates doing but that can be so worthwhile!
I just called Vodafone who sneakily ended a 2-year “Rabbatsaktion”on my contract, and realized I’ve been charged 5€ per month extra since November last year. It’s only 5€ per month you might think, but a quick 10-min phone call with them got me to save 60€ for the year to come. I guess I could do the same for my gas and electricity bill – it all adds up.
In any case, I sure will try: “if you don’t ask, you don’t get!” – and all it takes is a little bit of daring and a phone call.
Caroline, you are absolutely right! Negotiating is something I also need to start doing more often. It takes some courage, though – kudos to you for actively going for it!
In fact this goes with everything! I’m not always in the mood to try and negociate stuff but the few times I tried turned out to be quite effective, be it a piece of clothes where one shoulder strap was slightly coming off and only required a few sewing stitches (got myself 10% off for that) or negociating an extra orange for free in my bag at the local bio street market because of my lovely smile 😀
It doesn’t always work, but when it does, it feels so rewarding!
I also like to hunt for discounts, I hate paying full price for stuff – but I’m getting off topic here 🙂
‘Don’t pay for what you don’t need’ might be another good approach to be left with more money to invest for the future.
I try to do that by thinking about next Tuesday. Before making a major purchase I think about Tuesday. I take the time to consider what I’ll be doing from morning to night this coming Tuesday. Then I ask myself “How will the purchase affect me on Tuesday?”
This simple exercise – thinking about time use on a specific day – helps me make less biased predictions about how much any one thing will influence my happiness. Often I end up not buying that stuff because it does not have a high enough “stuff-to-joy-ratio”.
Hi Tacomob,
That’s a great tip! Do you also apply it to non-material stuff?
I have been training my purchasing resistance muscle for a while now. I almost never get tempted buying material goods.
What I can hardly resist is buying books, online courses, experiences and, coaching services. I feel overwhelmed after a while because there’s only a certain amount I can consume and there is so much more out there to learn!
Hi Kate,
The best things in life aren’t things. They are experiences. That’s why I would not cut down too much on spending on experiences.
Books are great – as long as you get around to actually reading them, right?
There are a lot of free online courses available. I have done many on Coursera. I definitely do see courses as an investment and not just a purchase.
Well, I have never paid on coaching services (always tried to find a pro bono mentor). As such I cannot comment whether that is a good way to spend / invest your money.