Non-Essential Expenses…Why Wait to Save Money?

Sometimes Hollywood accurately portrays real life. I was watching a movie where several people had lost their jobs as their employer was “cutting costs”. A couple of the individuals who were affected made the comment to their spouse’s that they would have to cut out the non-essentials. Unfortunately, I’ve heard this same reaction from friends going through the same ordeal.  

I can’t help but wonder why were they ever paying for non-essentials? Why not cut them out before you lose your job, and save the money. If you do lose your job, the saved money would really come in handy.  

So, I’ve come up with a list that you may or may not consider non-essential items. I’m just trying to get you to think about ways to save money without changing your lifestyle. A good mental exercise is to imagine that you get laid off from work. What are the first things that you would cut?

1.      Unused gym memberships – The gym I go to is packed in January and starts to thin out in February. By March, it’s back to its old self. Many people don’t cancel because they are too lazy to go to the gym and fill out the form. This could be costing you $400 to $1000 per year.

2.      Cable/Satellite TV with Premium Channels – It’s easy to spend over a $1000 per year to watch television. Many people comment that they only watch about 12 channels, yet they are paying for over 200 channels, plus premium channels. With Redbox charging about a dollar to rent a DVD, it’s hard to justify paying for the premium “movie” channels.

3.      Weekly Haircuts – Really? At $30-$40 a pop, this translates to $1500 to over $2000 per year. I bet you can stretch out the frequency to every 2 months without anyone really noticing.

4.      Cell Phones – Easily $1000 per year. Carriers will sell you everything under the sun, need it or not. If you don’t talk a lot on your cell, consider using a pre-paid plan. Also, scrutinize the features that you are paying for, and see if you are really using them.

5.     Dry Cleaning – Ok, I’m not telling you to wash your suit. But most men’s shirts can be put through the washer and dryer.  Think about have many shirts you have dry cleaned over a year and ask yourself if it’s worth it. This goes for jeans too.

6.     Eating Out – When I council people about how to save money, I ask them to list their expenses. Almost 100% of the time, they are shocked by how much they spend over a year’s time on restaurants. If you eat out for lunch every day, it really adds up. If you spend $10 a day, 5 days a week, 52 weeks a year, then your lunch tab is $2,600. If you ate out every other day, you could cut out $1,300.

7.      Designer Coffee – If your employer offers free coffee, you really don’t have to swing by Starbuck’s every day.  $4 per cup times 5 days per week times 52 weeks per year equals $1040. Even if you did it every other day, you could save over $500.

8.     Afternoon Soda – If you buy a soda from a vending machine, it’s probably costing you 75 cents to a dollar per can. If you buy from a grocery store, it’s about 33 cents per can. Buy a 12 pack and put a can in the break room fridge.  It’ll be nice and cold by the time the afternoon comes around. You can save about $100 a year.

9.      Land Line – A lot of people have started to get rid of their land line because they use their cell phone almost exclusively. If you feel that you need a land line, look to see what options you are paying for. The last time I looked, caller-id was $12 month ($144 per year).  It cheaper to just let answer machine pick up and decide if you want to talk.

10.   Insurance deductible – One of the biggest knobs for adjusting the cost of either auto or homeowners insurance is the deductible. If you have your deductible set to $250, you probably can save a few hundred dollars a year by raising the deductible. Put the money you save in a savings account to pay for the higher deductible, in case you have a claim. By the way, if you’ve had the same insurance carrier for several years, you probably can save even more money by checking out the costs of other carriers. Fifteen minutes on the phone might save you several hundred dollars per year.

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