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Minimizing Monthly Expenses: A Key to Financial Freedom

Your regular monthly expenditures are the key to controlling your consumption.

In an earlier blog post, My Story of Frugality, Breaking My Economic Dependence on My Job, I described how I paid off my mortgage and slowly but surely lowered my expenses, allowing me to accept an early retirement offer. The key is to bring your spending in alignment with your values. I followed the program outlined in Your Money or Your Life, where I wrote down every penny I spent—and from there developed spending strategies that worked.

My monthly expenses were the biggest challenge to control. This post explains how I handled these routine items—and suggests ways you can lower them. Basically, I think extra carefully about any expense that will occur on a regular basis. If I receive a tempting offer, I calculate what it will cost me for the entire year. Unless there is a significant discount, I do not use automatic debits and/or credits.

Here are some specific strategies that might apply to you:

Negotiate with monthly service providers for lower costs. Most people believe this to be impossible, but here are some strategies that have succeeded for me and my friends:

  • Find a competing offer. Tell the service provider that you will leave for a competitor. Some companies will match the offer. One company offered me a $10 gift card each month for six months.
  • Explain that you need to cut back on your expenses. After a layoff, I called my local phone company. A representative lowered my phone expenses by $40 a month without cutting services. She found sneaky billing “errors,” services that could be bundled, and other interesting tricks. 

Obtain a cell phone plan that charges by the minute. It’s a cost-effective approach for now, but I’ll switch to a monthly contract if my cell phone bill goes above the cost of a monthly plan for three months in a row.

Exercise at home and save on gym membership. A monthly gym membership would be in accordance with my values, because of the sense of community gyms provide. Most gyms require you to sign up for a year or more, though I did try two gyms using month-to-month plans. In the end, it was better for me to exercise at home in the morning. This also saves the environmental impact of my driving.

In short, make clear decisions about what you will spend routinely. Pay particular attention to utility and communication costs. Each month, make a choice about the expense. Should you continue it? Can it be lowered? If there is a contract, put a note in your calendar or a reminder in your software, so you can be aware of its end date.

I just made a tough decision: to remove a dedicated land line, which I used for a fax machine. I struggled with it month after month. I knew I didn’t need it, but I liked having it. And a lot of my stationary still has that number printed on it. 

Last week, I bit the bullet and cancelled it. The savings was only $15 a month, but month after month, it will add up. And, more importantly, any money that is not usefully spent should not go to large companies such as the phone company.

Big corporations know how to exploit our human weaknesses. Their advertising “offers” ensnare us into signing up for repetitive monthly bills that automatically come out of our credit or debit accounts. They become part of the background of life. We forget the expenses are there. 

But those expenses slowly but surely remove money from our pockets and into moneybags that might not meet our approval. It becomes a barrier to our financial freedom. Don’t let this happen to you.

Dale S. Brown works on a portfolio of projects that empower people both in personal growth and political power. She lives in Washington, D.C. and is a guest blogger for the Center for a New American Dream. She blogs about how frugality financially empowered her, enabling her to take an early retirement at age 50 and live on her income.  

 

Earlier posts from Dale S. Brown:

Making the Potluck a Success in Today’s World

My Story of Frugality: Breaking My Economic Dependence on My Job

Spending Strategies: How Frugality Helped Me Cut Costs and Gain Freedom from Work

Are You Being Frugal, or Just Plain Cheap?

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Comments

I want to thank everyone for your comments. It made me feel good- and well connected that so many of you responded and found the article useful. I especially wante to thank Vanessa Krejcir for her story about the family member who works for Comcast. She mentioned that her family member found it difficult to deal with angry customers who threatened to cancel their services unless they got lower rates. I wanted to clarify that you need to respect the person who you negotiate with. Treat them well. Ask and don’t demand. We should not be adding more anger to the world. The individuals who answer the phone could be our friends or family member. You want them to be happy because they help you. I often say, “Can you do me a favor and…?” or “Would you consider…” or “It sounds like you don’t have the authority here, can you let me talk to your supervisor?”

Posted by Dale S. Brown at April 21, 2012 at 10:32pm

The little things add up, it’s definitely a good idea to keep your monthly budget lean and resist the temptation to make impulse purchases

Posted by Juan M at March 28, 2012 at 7:09pm

Usually when I go shopping, I end up buying stuff that I would hardly use, just because it is “only 5 dollars”. At the end, all the five dollars adds up, and I’m there wondering how I’m broke so fast. Saving little money everyday, and realizing what you actually need would definitely help me stay financially stable.

Posted by Krishtina Adhikari at March 27, 2012 at 11:41am

It’s always good to go through your monthly budget and cut out the fat, the things you can go without. And it is pleasing at the end of the month to look back and see all of the money you have left over due to cutbacks on unnecessary impulse buying.

Posted by Dillon at March 27, 2012 at 10:33am

Being a college student, its difficult to control my spending habits especially when I am out with friends. Spending opportunities approach me everyday and its hard to control when you are out with friends who are buying things all the time. One way I’ve learned to keep tabs of my spending habit is by limiting how much cash I carry on me and keeping the rest in my savings account. I would only use the money in my savings if absolutely necessary. Doing this also limited how many times I would go out and eat as opposed to buying groceries and cooking myself. Cooking on my own in my apartment has helped me saved tons of money.

Posted by Alex Vien at March 27, 2012 at 1:42am

This blog was very interesting and very informative at the same time. I learned a lot about what i can do to save money for the future and how important it is for me to do so. It also shows that minimizing expenses is just as important as saving money. In the future i will look for new ideas to benefit myself financially.

Posted by Andrew at March 26, 2012 at 10:20pm

Minimizing monthly costs can add up quickly. I reccommend using a pre-paid cell phone if you do not use the phone alot! Find ways to cut back on use of electricity, water, and other things and it will add up quicly, while also helping the environment.

Posted by Brian Corcoran at March 26, 2012 at 10:06pm

It’s always good to go through your monthly budget with a fine-toothed comb. Think up ways to cut back in each little area, that you don’t think you’d miss. You’ll be surprised how much can be saved by cutting back just a wee bit everywhere. By maintaining and following a budget that’s comfortable, you can really save!

Posted by Kurt at March 26, 2012 at 8:42pm

I am graduating from college in the Spring and I am trying to look for ways to save more money and change my spending habits and so this blog was helpful to me! The one thing I would say though is that I have a close family member who works for Comcast and this person—who already has a difficult job working for such a horrible corporation is only bogged down more when angry customers call up with threats to cancel their service unless they get a lower rate. I know everyone wants lower rates, needs them, I do too, but I think that a much more responsible way of going about trying to lower your costs is to cut services…Like you mentioned about the fax machine, get rid of the things you don’t need—that includes channels that you barely watch or things that you can watch online. I think that it’s kind of the American way to hold on to things thinking that one day we will need them or use them again…In the case of services it’s important to remember you can always get them again! The companies will always accept you so don’t worry about taking a break! Thanks for the tips on how to live sustainably and affordably!

Posted by Vanessa Krejcir at March 26, 2012 at 8:03pm

I agree that savings do add up, but I never really thought about how 15 dollars a month could truly add up in a year or even two years. I always dismissed things like that by thinking that I just won’t go to a restaurant one time and I can save the same amount in one day rather than one month. I will definitely be re evaluating my month to month finances from now and to see where I can save some more money.

Posted by Phil Kim at March 26, 2012 at 6:12pm

I have also been concerned about minimizing my monthly expenses since moving off campus. I have started taking public transportation to the grocery store even with access to a car. I have realized that I need to stop spending money at Dunkin Donuts and start making my own coffee.

Posted by Shane Coogan at March 26, 2012 at 2:41pm

I can relate to this article and I definitely agree with it. My family used to spend money on useless stuff. For example, my family used to have subscription to netflix. $8-$10 a month is not a bad thing, however, we also spend that much money on several different items every single month, which we don’t even use as much. So $10 each for about 10 useless item a month automatically means that we are spending $100 for things that does absolutely nothing to us. We also used to spend a lot of money on food. Re-evaluating and cutting down our expenses have really made a huge difference

Posted by Arogya Khadka at March 26, 2012 at 2:40pm

I think this is a great article because it forces people to control their mindless spending and really cut down on unnecessary expenses. Many times I find myself falling victim to this habit as many Americans do. I have many times re-negotiated my parents cable and phone bill as it was too high. By doing so I saved my parents the hassle of calling themselves as well as lots of money every month.

Posted by Richard Al-Husseini at March 26, 2012 at 2:23pm

I Found an old set of weights at a yard sale and now use them instead of paying for a monthly gym membership. It doesn’t save me too much per month but it adds up!

Posted by BrianH at March 25, 2012 at 9:42pm

I loved this article! I had no idea that you could bargain with service providers for lower rates. Many people do not realize how much things like gym memberships add up because we focus on the “low monthly rate.” After a year, this rate turns into a lot of wasted money.

Posted by Andrea at March 25, 2012 at 8:37pm

I believe that savings every bit of money counts.

Posted by Tammi at March 25, 2012 at 7:01pm

This is definitely something that I want to do since paying monthly bills isn’t fun. Knowing that there are strategies that can be exploited to help reduce my expenses is very helpful.

Posted by Dave at March 25, 2012 at 6:25pm

It’s very interesting to read about different ways to cut back on costs. I’m a student and am always trying to find new ways to cut back, save money and have money for school as well as more necessary expenses. thank you for sharing your tips!

Posted by Annie Moy at March 25, 2012 at 5:25pm

I did not know that that I could use persuasive techniques to get better deals on monthly payments. It is great to know that this sometimes works because telephone, cable, and internet companies charge so much money for often crappy service. Soon I will try and haggle with them to lower my costs and increase me speech craft and mercantile skills.

Posted by Renato at March 25, 2012 at 4:52pm

This entry was very interesting! My dad is making me get my own phone bill when my contract is up in 2 months. I will definitely look into my different options such as paying per minute, because I will admit I text more than talk on the phone. I’m actually going to tell my dad to make sure he isn’t paying for minutes that we don’t use, although he is very careful with his money as well so I’m sure he isn’t!

Posted by Nicole Murphy at March 23, 2012 at 10:04pm

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