Personal Finance is Not a Destination, it's a Journey

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You've heard the phrase:

Life is not a Destination, it's a Journey

And like life, the road to financial independence doesn't lead you to a destination but instead just takes you on a road leading to a place you'd rather be but never actually getting you there.

Each junction on this road can also be considered a decision making time, a time when you can re-evaluate and a time to look back and figure out what you want to do to keep moving forwards. Forwards of course means heading towards your goals because if you didn't have goals you wouldn't know which way to was the right way to go.

Re-Evaluating Your Outgoings

In this post, I'd like to just concentrate on one particular aspect of these junctions and that is about re-evaluation. In fact even more specifically, re-evaluating your monthly outgoings like bills and suchlike.

Back in one of my first posts, I mentioned in my article on budgeting that I'd been doing various things over the years such that I was spending less on various things. Some of the bigger items I had cut down on were:

  • rent (by moving to a smaller flat)
  • travel (by moving closer to work)
  • food (by not buying as many take-aways and making my own food)
  • lots of other little bits and pieces

A few months after that, I also took some steps to make my monthly outgoings even less. I ended up selling my car and instead buying a bike for travel. That action in itself saved me over $250 a month, which is about $3,000 a year.

Can't be bad.

Spring Clean your Outgoings

Even though it's coming into Autumn in this hemisphere, for most of the internet world it is now coming into spring. As well as spring cleaning your house it is as good a time as any to also spring clean your monthly outgoings. This can be done in two ways.

You may want to turn and toss every single little thing but mostly you can just give things a quick dusting to make sure you've still got what you expect. In some cases, you just need to review what kind of plan you're on whether it's electricity, phone or subscription services.

I am currently going through a bit of a spring clean and I figure that by the end of it, I'll be saving well over $1,000 a year extra. Let me go through some of the things I've done in the past couple of months and a few more things on the table in the next couple.

  • stopping my DVD mail subscription service
  • switching electricty/gas providers to a cheaper option
  • switching banks (to one with lower mortgage interest and less charges)
  • changing credit card (to one with no fees and lower interest - not that I'd pay them any)
  • stepping my internet usage plan to one with a lower price
  • changing my home firewall machine from one drawing 100-150W to one which draws 5W
  • switching my home/contents insurance to a cheaper supplier/option
  • turning off my normal phone and getting a VoIP phone number instead

By doing all of these things, I suspect I can save upwards of $1,000 every year and quite possibly closer to $2,000.

For a start there's a $250/yr saving with switching energy suppliers and a $300/yr reduction by switching to a lower internet plan.

If I get rid of my phone, that's a $420/yr difference, minus about $120/yr for a VoIP phone, that's still a $300/yr saving.

I suspect I'll also save about $360/yr on home/contents insurance and realistically my bank fees/credit card fees will be lower by about $100/yr or more.

Just totting that up, that's a yearly saving of $1,300 without even lifting a finger (ok, I have to phone a few people but not much more than that).

See What You Can Do

If you've been living frugally for a while you might have already done all of these things and more, especially if you've been settled into one house for a while. In which case, maybe you don't need to review your situation.

However, it doesn't hurt to go through each of these things every so often just to see if something can be done. Let's say a new competitor is now supplying energy to your vicinity, it would be a shame to miss that opportunity.

Even just shaving off a little at the top of each and every bill you get can save you a significant amount of money per year. Add 10, 20 or even 30 years worth of compound interest on top and those small insignificant amounts start to add up to some serious money in the future.

So far my increase in savings have been well worth the effort I have had to put in and there are still more of those things on the list for me to go through and switch around or reduce. Overall, I'm pretty pleased already.

What other bills can you think of which can be easily reduced by either cutting back on a plan or switching supplier?

Labels: banking, insuring, saving

Inserted: 2009-02-25 01:15 (1 year, 5 months ago)

1 Comment

1. Manshu

Its a good idea to re-evaluate stuff you pay money on every once in a while. That creates a kind of outlook when you are always alert to new ways of saving money and that is really helpful in the long haul.

Inserted: 2009-02-28 00:18 (1 year, 5 months ago)

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