Monthly Cash Drains
A lot of people seem to be interested in the piece on surviving without television. I genuinely prefer not to have cable television now, and am happy that I made the shift. It also helps to save money. Digital cable around here is about $65 per month or $780 a year. Over a decade, if the money were saved and placed into an investment or account earning 5%, this would add up to over $10,000. I can think of a lot of things that I would rather have $10,000 for, including a retirement fund. Monthly recurring bills can add up pretty quickly. Here are some other examples:
–Expensive cell phone plan — as people design cooler phones and apps, the monthly rates also continue to go up. At $99 a month, the cost of some unlimited plans, this comes to $1188 a year. Reinvested at 5% as above, over a decade this would be $15,373. If a phone is essential, explore cheaper options, including group rates or combined plans.
–Gym membership — several gyms nearby have regular rates at $75 a month which include some time with the trainer and ability to bring guests. Over a decade, with reinvestment, this comes to $11,646. If you end up going rarely, you might see about if vouchers make more sense over a monthly pass.
–Netflix — seemingly cheaper than the above options, you can get unlimited movies for $8.99. This stil adds up and over a decade would be: $1396.
If you looked at these together: cable, cell phone, gym membership and netflix. The total bill for these recurring monthly items would be nearly $250 a month. Over a decade, with reinvestment, this totals to $38,508. See how compound interest (and monthly cash burn) can add up.
shared at Frugal Friday
We always try to minimize our monthly bills. It really does help the budget go farther.
my husband just got rid of his cellphone completely, because his work now pays for his phone! this saves us about $50 a month!
Jennifer, indeed, it adds up quickly.
cassie, good job.
A note on gym membership: There are some areas of the country (like mine) where (free outdoor) exercise is pretty tough in winter (running, walking, etc.) While of course a gym membership is pretty useless if you don’t use it, the $50 we spend monthly will hopefully save us from vastly more expensive health related issues in the future.
This post is a great reminder to try to keep our monthly bills lower. I have not yet had the courage to call and try to negotiate for lower bills i.e, cellphones, satellite, etc. I am in Canada, and I just don’t hear of people doing this with much success. I guess it can’t hurt to ask though.
Great post.
ldh, good point on health. With medical bills being the top reason for bankruptcy, things that improve health, like exercise and eating well are good preventative measures. The main thing for gym membership is to actually take full advantage of it.
Theresa, I don’t know the situation in Canada, but often times the service provider may have a package that is suited to your needs and cheaper (like fewer minutes or less channels), or combined services. We have internet and mobile with one provider and receive a discount. Doesn’t hurt to ask.