Cutting Back the Nice-to-Haves
I could hear my mailman struggling to get a certain envelope through my mail slot recently. It was the credit card bill and I knew it was bad when it finally landed like a brick on the floor.
So my husband and I sat down and analyzed every line of our credit card statement. What we discovered was about $200 in monthly expenses that we could do without. Everything from a Netflix subscription that barely gets used to more than $100 a month in dry cleaning. While Shop To It is a blog about the act of purchasing, it has evolved into a blog about the act of making the smartest purchases. Together as blogger and reader we've debated everything from the best grocery deals and the true savings at warehouse shopping clubs to the best places to board our pets and who has the best deals on photo processing.
This first blog post of the year will hopefully be another great debate on the art of figuring out the must-haves and the nice-to-haves. Here are a few tips on what I learned from my own experience of trimming the nice-to-haves:
Tip #1: Analyze every line of your most recent credit card statement. Make a list of all the items that appear there every month. I'm talking about things like gym memberships, movie rental subscriptions and dry cleaning.
Tip #2: Set some rules for yourself before you start slashing some of those monthly expenses. Our children's activities, like my daughter's weekly art class, were hands off.
Tip #3: Ask yourself which of those monthly expenses are key to your survival and which are just a waste. You'd be surprised how easy it is to forget about expenses that just live with you without being too obvious. For example, my husband and I realized we don't take advantage of our Netflix membership enough. Our $10 a month subscription was cut, which will save us $120 in 2009. I cut the e-mail and Internet service on my cell phone, saving $30 a month or $360 a year.
Tip #4: Pinpoint the stores on your credit card statement where you're spending the most money. Go on a fast from those stores for a few weeks. I'm banned from Target during January because I'm one of those people who walks in with the intention of just buying toilet paper but ends up with $100 worth of additional items.
Tip #5: Shop around for cheaper services. It's so easy to just stick with a retailer because it's part of your routine. For years we've used the same dry cleaner for its convenience but I called others near our house and found a place that charges $1 less per shirt and $5 less per suit. (My motivation to find a cheaper dry cleaner was not only driven by saving some dough but by my husband's suggestion that I start ironing his shirts.) Also, call your phone company and cable provider to see if you can get a cheaper rate. You may have signed up for a premium package during a promotion period and not even realize that you're paying for channels or phone coverage that you never use.
One of my New Year's resolutions is to continue cutting our monthly expenses. The goal is to eliminate at least $20 per month. That could mean buying more generic products than name-brand. Or stopping myself from adding a magazine to my pile of groceries at the check-out line. And asking myself if I really need that 10th tube of lipstick. What are your New Year's resolutions? What have you done to cut your monthly expenses?
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