Expose Monthly Expenses and Save

It’s been all over the news lately that Netflix is raising its monthly subscription costs. We’ve been a Netflix member for years, and I rarely gave much thought to how much it cost each month. But as they increase their barrier of entry/access, it did give me pause to decide if paying for access to their content is worth it.Netflix Official Logo

In this case, we say yes because their offerings continue to improve.

We especially enjoy Netflix original content such as “The Crown,” along with the many other options offered by the service, so the additional $2 per month ($12.99/month) we will start paying next month is well worth it.

It seems there is some kind of a psychological +/- $10 cost barrier that most companies offering subscription services have discovered – if it’s $9.99 a month or less, most customers will justify the added expense. After all, that’s equal to a couple of cups of coffee each week.  For example, we also pay $7.99/month for Hulu and Amazon Prime works out to be $9.92/month.

Verizon is famous for this nickel and diming. If you want to add “Smart Family” service? That will be an extra $9.99. How about “Premium Voicemail” for $2.99 or add Insurance for that new, very expensive iPhone – well that will run you $13.00 per month.

As these monthly subscription services have grown over the years, I decided that it was time to evaluate them. I created a simple spreadsheet and outlined what we spend as a family on subscription services, and what I spend each month in support of my business.

It’s quite eye-opening, and we recently made one significant change while identifying some smaller changes that need to be made over time.

When I determined what we were spending on Verizon Fios for phone, internet, and TV connectivity, it added up to over $2,000 annually. Ironically, around the same time I started filling in my spreadsheet, a Comcast sales person knocked on my door.

Courtesy of Was Street JournalWhen we compared what Comcast was offering against our current Verizon services we determined we could save almost $50 a month by switching.  It took us a few weeks to decide because, based on past experience, these changes can be painful. As it turned out, Comcast made it surprisingly painless. (And my husband is enjoying the voice-activated remote as well!)

The one negative is that we had to give up the home phone number we have had for over 30 years, but who uses their home phone anymore anyway? In our house, it’s rare. I would’ve happily eliminated the home phone line altogether if it wasn’t part of the “package” from Comcast. On the positive side, the robocalls were non-existent for a few weeks.

We are also SiriusXM subscribers – both online and in our cars. This annual subscription renewed last month, and the increase in cost felt outrageous to me. I made one phone call and explained I was unwilling to pay the amount of the increase, and voila, there just happened to be a special promotion running that day that would allow me to renew at the previous year’s rate (insert sarcasm). Making that one call saved us over $140 for the year.

I’m using the same process for reviewing my monthly business expenses, and I’ve identified a few areas of overlap. For example, I pay $9.99 a month (that “magic” amount again!) for a premium Dropbox account and I also spend just over $10 a month for a G Suite account and $2.99 for extra storage space on iCloud.

Some of the features, such as cloud storage and file sharing capabilities, overlap. So, I plan to eliminate Dropbox when I get everything moved over to Google Drive and iCloud, and save another $120 a year.

By intentionally reviewing every subscription service expense it’s forcing me to make some decisions. The process has been fairly simple:

  • First, by including all these expenses in a simple spreadsheet, the monthly payments are right there in black and white. All of a sudden, the money spent becomes very real.
  • Second, it’s forcing me to look at each subscription and evaluate the value we’re receiving along with identifying any areas of overlap that can be reduced.
  • Third, although it may be easier just to pay these relatively small expenses each month rather than go through the process of elimination, by reviewing each cost on an annual basis, it quickly confirmed for me that it’s worth the effort to reduce and simplify.

When was the last time you created an inventory of your monthly family or business expenses? Are you still getting the value you’re paying for out of each subscription expense? If you are unsure, it may be time to re-evaluate.

Let me know how you approach reining in these monthly expenses by leaving a comment below.

Ta-Da Tip Of The Month

As a small business owner or the one who pays the monthly household bills, continually adding recurring expenses that have little or no value to your home or business operations can really take a toll on your bottom line. Evaluating these expenses is a process that can take some time and effort, but in the long run, can really pay off.

Here are some suggestions to consider:

  • Next time you pay your monthly bills, take a moment and make a list of your recurring expenses
  • The use of debit/credit cards and automatic payments have increased dramatically, and these statements should be reviewed every month. Ideally, you should keep all your receipts and match them to your statements each month. You would be surprised how often errors such as double charges or wrong charges can happen.
  • When was the last time you reviewed Uber or Lyft receipts? Are they accurate?
  • Do you take advantage of family sharing opportunities for services like Netflix, Hulu, Amazon Prime, and others? Make sure other family members aren’t paying for the same services you are if you’re allowed to share.
  • Are you subscribed to multiple music services? Pandora? Spotify? iTunes match? If so, is there enough value in each of them?

When you finish your well-ordered subscription inventory – let me know what you decided to eliminate, and how much you can save. TaDa!

8 comments to Expose Monthly Expenses and Save

  • Keith

    Thank you for such an informative article.
    In today’s world, we are separated from using cash, therefore, we as a society spend more because we don’t view credit or debit cards as cash! Lack of connection. The upcoming generations will suffer in my humble opinion!!

    • I agree with you, Keith. I think that missing connection caused by automatically paying bills online, or using a debit card the majority of the time, is contributing to unnecessary spending. That’s why I believe it is important to stop and evaluate expenses every once in a while. Glad you found this informative.

      • LJ

        I am writing down all expenses in a notebook-cash, credit cards, etc. and see what monthly expenses look like. I find that when multiplying a monthly expense-which seems small-by 12, it really gives pause. I had a smart handyman install an antenna and got rid of cable and just pay $50/mo for internet. Happy day and I still get lots of channels. He said it is his most requested service.

        • LJ that is really interesting. I think the cable companies are pricing themselves out now that there are viable alternative options. Good for you for making what I would call a major, cost saving, change!

  • Andrea Novakowski

    Diana, thank you for a great article and a reminder about our invisible expenses!

    • Andrea – Thanks for the feedback. Many of these expenses really are invisible, aren’t they? That’s a great way to describe them! We think we “need” all of these services until we evaluate and discover alternatives.

  • Janet Levangie

    Diana, My credit card company will send me (or I can look for the information by going to my credit card ‘s website)to get a copy of the previous year’s purchases I made on my credit card. The information was very enlightening…

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