The fastest way to save money. Also, there’s cake.
Let’s say you’re tired of having hardly any cash left before the payday. Let’s say you want to save some money but don’t feel like switching to beans and Ramen noodles. Say no more – I’ve got you covered! Not only that, but there’ll be cake at the end. (No, really.)
When was the last time you actually looked at your bank statement and checked where your money is going? I do that every month, but I’m pretty sure most people aren’t like me. (If they were, this blog wouldn’t be needed!) I’d bet your checking account or credit card has at least one recurring monthly charge that can be either cancelled or lowered without changing your standard of living.
Here is how you can save money from the comfort of your own home, and fast. The first step might be the most tedious: open up your checking account and credit card statements for an entire month, and have a good hard look. After you set aside the usual stuff (groceries, gas, Starbucks, going out, etc) you’ll be left with recurring charges. Write them all down. You’ll probably end up with a student loan payment, rent/mortgage, car payment, car insurance, your cellphone, cable bill, some streaming platforms (Netflix, Disney+), etc.
Next step: separate those recurring charges into two groups. The first group is for the hard-to-negotiate stuff you can’t do much about, like your monthly car payment, rent, or mortgage. The second group is for everything else: these are the charges that you can (hypothetically) cancel or lower to save money in the long term, and still live just fine.
Now that you’ve found what exactly leeches your hard-earned cash, and which of those charges aren’t hard to deal with, let’s sort them out. If you have multiple streaming services, I’m not going to judge you, but I will ask you this: are you actually using all of them? Personally, I like to have just one at a time: rotating them keeps things interesting and helps save money. (Right now, it’s Disney+, and I’m binge-watching their entire Futurama collection.) If you can’t remember the last time you actually used any of your streaming services, why not cancel them? You can always reactivate them later on if you’d like. What is your default state? Do you pay for services you don’t use, or do you live without them and turn them on only when needed?
Ditto for other services like Spotify or YouTube Premium. If you’re actually using them, great. If not, why keep them? Once you get through your media-related monthly charges, let’s see if we can lower some of the more serious, less negotiable ones. Unless you’re a very interesting individual, chances are you have a phone plan. (If you live without a phone, please message me: I’d love to learn more.) Log on to your phone plan’s site and see what you’re actually paying for. More often than not, you’ll be able to save money by cancelling some add-ons you don’t use, or upgrading to a better plan for less money.
Ditto for your cable package if you have one. (Do make sure to read the fine print, though, or your attempt to save money might backfire.) Saving cash on your car insurance might be trickier, but it’s not impossible. Log on, dig around on their site, and see if you qualify for any discounts. I know that shopping for car insurance is nobody’s idea of fun, but maybe poke that bear twice a year, and see if there’s a better deal out there.
Lastly, there are recurring charges you’ve completely forgotten about. They may be embarrassing, they may be small, but they’ll add up to a lot of money over time, so why not pull the plug? Here’s a personal example from yours truly: a while back, I found a strange $10/month charge on my checking account. I looked back and realized I’ve had it for years, but it was so tiny and inconspicuous that I didn’t even notice it. It turned out to be an adult site I had only the vaguest recollection of. I don’t remember why I signed up for it, let alone why I never cancelled it, but it kept mooching my money. $10 a month may not seem much, but it’s $120 a year, or $600 over five years, or a whole lot more than that if you carry it your whole life. My sole consolation is that my money went to support a small American business, as opposed to, say, lining a giant bank’s pockets with overdraft fees. (Make sure to disable the overdraft fees on your bank account; you’ll thank me later.)
On top of everything else, you might have an ongoing monthly gym fee even though you stopped going ages ago. To make things worse, there’s usually a much larger annual renewal fee as well. I used to be a gym rat, going several times a week after work, but then the pandemic happened… I managed to cancel the pricey fancy gym near my work, but forgot all about my previous, smaller gym. Too bad they didn’t forget about me. If you’re an avid reader, you might remember the “dumb recurring expense” of $11.30 I mentioned back in October during my $1,000-ish budget breakdown. Well, I didn’t quite get around to canceling it… One of my Christmas presents was a surprise $44.07 charge from Planet Fitness – their annual renewal fee. The gym branch is in another city, and their phone went straight to voicemail. I had to resort to a handwritten letter sent by certified mail, but they finally cancelled that membership. That’s not the best outcome (I could’ve done that ages ago) but I did manage to save money on all the future charges.
I practice what I preach: so far this month, I’ve cancelled my gym membership. ($11.30 x 12 + $44.07 = $179.67 saved per year. Hooray for home workouts!) I’ve also lowered my phone bill by cancelling the international call plan (my whole family uses WhatsApp at this point) and upgrading my phone plan for a lower monthly cost. (I signed up for that plan three years ago, and in a shopping mall, no less. Not one of my wisest decisions.) The end result is $14 a month saved on my phone bill, which amounts to 12 x $14 = $168 per year. I’m pretty sure I can find an even better deal than that if I compare other companies’ offerings. All in all, I managed to save money with less than an hour of work: my total savings were $347.67 per year, or $1,738.35 over the course of five years. (I love a good five-year plan, but that’s probably the Russian in me.)
The money you’ll save by doing this may not seem significant, but it’ll add up over time. Let’s say you’ve managed to save just $20 a month. Think of your favourite low-cost thing in the world: beer, or bacon, or books, or Starbucks double-mocha frappuccino. Imagine how much more of that stuff you can buy with the money you’ve saved, and that’ll help you conceptualize those savings. That is your gift to your future self, forevermore, forsooth. You didn’t just save money, you’ve freed up more of your resources and gained a little bit more freedom. As you already know, time is money: think how much you make per hour after taxes. (Let’s say it’s $12.) Think how much money you’ve just saved. (Let’s say it’s $24 per month.) That means you used to work two hours each month just to pay for the subscriptions you’ve just cancelled. Your work week won’t get any shorter, but now the money from those two hours is yours to deal with as you wish, as it rightfully should be.
Finally, there are two important caveats: first, don’t just replace your cancelled subscription service with another one. You’re free to do that, of course, but if you just add a new monthly subscription on a whim, you’ll end up in the same money-leeching cycle. And secondly, don’t blow all that money you’ve just saved on one huge purchase. Remember how I said there would be cake? It’s cake time! Go and treat yourself to something you enjoy. You’ve managed to save money, so let’s celebrate. Get a bottle of wine, or a nice meal at your favourite diner – whatever makes you happy. Positive reinforcement is important. Just make sure you actually cancel your subscriptions before you celebrate – no celebrating until the deed is actually done, eh?
Financial discipline isn’t easy. It can be especially hard if you’re new to personal finance, if you have a lifetime of bad habits to undo. That’s the price of living in a consumerist society: capitalism is nice, but there are some mighty gruesome side effects. Here is hoping this post helped you, and you’ll use your newfound savings to make your life more fun.
I always love to hear from my readers: what was the most embarrassing recurring charge you’ve ever had to cancel? Any stories of great triumph and/or awkwardness? Sound off in the comments and share your tale!