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Downgrade Your Expenses

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University GymHow many fixed expenses do you have each month? We have about half a dozen – mortgage, utilities, cable & internet, Netflix, insurance, and the gym. Of those, three are mostly non-negotiable (mortgage, utilities, insurance). For cable & internet, Netflix, and the gym, we’ve considered downgrading our services to reduce their expense.

Over the last few years, our preferences and our life circumstances have changed the things we enjoy in our free time. When we first moved to the area, we would enjoy going out to bars and clubs to drink and dance the night away. Nowadays, we prefer going to someone’s house or to a lounge for a more casual night out. As our preferences changed, where we chose to spend our time changed.

We didn’t, however, apply this to the things we paid for each month. Here’s a perfect example I see with many young professionals. When you’re younger and have more free time to watch television or movies, the premium Netflix package probably made sense. $16.99 for three DVDs out at a time seems like a good deal if you watch a movie every few days. As your preferences change and your desire to watch movies diminishes, consider downgrading the plan to one that fits your needs and save a little money.

Cable and high speed internet is another service package that may be worth degrading. How important is it for you to have the fastest internet speeds your provider offers? If it’s crucial, then paying for it is worth it. If it’s not, consider reducing it and saving the difference.

Finally, you might want to downgrade your gym membership when you know you won’t take full advantage of it. I generally go to the gym less frequently in the summer than in the winter, instead opting to take our beagle Tobey on a walk. You know your habits, adjust your services to match your needs.

If you have any novel suggestions or want to share your experience, let us know in the comments. I chose the low hanging fruit but there are certainly other services out there we are overpaying for.

(Photo: abraj)

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29 Responses to “Downgrade Your Expenses”

  1. zapeta says:

    Don’t forget to evaluate your cell phone usage and options to see if you can reduce your costs there.

    Also, a lot of people forget about insurance costs. You can save a lot by shopping around for auto and homeowners/renters insurance every year or two.

    • Shock says:

      When my wife transitioned from a working a job to SAHM, we cancelled the data plan on her phone. That saved us $30 a month.

      Raise your insurance deductible and your premium goes down. Get all the discounts.

  2. Neil says:

    Yup, I ran through this with my cable bill when I bought a house. From $41 to $0. No gym membership either – I get my exercise by way of an active commute.

    Cell phones were the big one. When I first got a cell phone, I signed up for one of those “sign a contract, get a free phone” things. They kept upping the cost of features (voicemail, call display), and by the time the contract expired, it was $45/month. I switched to a pay-per-use provider that includes all the features I could possibly use at no cost whatsoever, and now spend about $15/month. Yes I had to pay $80 cash for the handset, but in less than 3 months I was ahead of the game.

    • Shock says:

      I cancelled my cable TV and bought a home theatre computer (HTPC) and an indoor HD antenna. I get all the local channels in HD and most cable shows can be found on the internet, iTunes store or on DVD. Windows Vista Media Center has a built in DVR and the TV websites have queues that store new episodes of shows and email you when available, usually the day after the show aired. I save over $90 a month not having cable. I had the upfront cost of the HTPC, but that pays for itself overtime from the cable savings.

  3. Yana says:

    Our living expenses are about as low as they can be. We have AT&T DSL, at Express level, which is the fastest that can be had in our specific location. I’d started with the lower speed level at $14.95 monthly, but AT&T raised that price to $19.95. At that point, I cancelled Caller ID and got a lower priced phone service plan (limited local calling), and AT&T allowed me to get the next speed level for the new price. A couple of months ago, the price of the DSL went up to $22 monthly, and last week to $25. That set me off, and I was thinking of switching to more expensive cable, because at least then you have speed. But I called AT&T’s retention dept, and also mentioned that I’d cancelled Caller ID the last time they pulled something like this. They offered me $5 off the DSL for a year, and Caller ID for half price for two years. I took the offer, because my phone is of very limited use without Caller ID. It should be free, like on cell phones, and no way would I pay $9.95 for it ever.

    This DSL is not very fast, and I’d value it at $14.95. I’m not going to be willing to pay more for these things later, so I’m preparing for the possibility of change later on – I would have to buy a cable modem at the least, to switch to cable internet.

    Another thing I do to minimize expenses is to pay certain things by the year, not the month, like auto insurance.

    • Shock says:

      Your cable bill is negotiable. I called and got a lower price, just for asking, and my service wasn’t downgraded.

      I pay my life insurance premium annually.

  4. It’s a good time to evaluate if refinancing works for your situation. We recently refinanced and are saving over $100 per month.

  5. Caitlin says:

    I ended up cutting my cable entirely. As you said, our preferences changed and how we spent our time changed. Why pay $75/mo for something we didn’t use very often? So we stopped.

  6. PA Mom says:

    Funny you should mention this. My husband and I were just discussing it yesterday. We currently pay for Cable TV, TiVo on 2 sets, and Netflix. Our local cable company has started running ads saying they’re going all digital by the end of the year and we’ll need to get a converter box. First one is free, each additional one is $2.95 a month.

    Once I started researching the specifics of getting things to work properly between cable, TiVo and the digital converter box, I started to get really annoyed by the lack of support from either company to help customers sort things out. (They both referred us to the other company’s website.) So annoyed in fact, that I decided I’d rather consider dropping both cable TV and TiVo in favor of Netflix and watching shows online rather than over cable.

    Out of curiosity, I did a cost analysis and by dropping both cable and TiVo, we’ll save $855.24 per year. We’re planning to buy a large flat panel monitor (used, price around $200) and hook it up one of our computers where the TV currently stands so we can stream TV shows from free online sites and movies/shows from Netflix and also watch DVD’s from the same setup.

    We can’t be the only people thinking about this, so it’s got me wondering…with more and more people watching for free TV online or through services like Netflix, will cable TV and satellite TV eventually just die out like VHS tapes? Will computers eventually replace TV sets?

    Anyway, I’m glad the cable company decided to go all digital and try to charge us more money for no additional channels. It forced us to take a look at what we were spending on these services.

    We turned off our landline phone (Vonage) a few months ago and haven’t missed it. Next we’ll be looking at cell phone service options. And the last, and biggest one…we’ve got the house on the market and are planning to drastically downsize (or hopefully eliminate) our mortgage.

    • Shock says:

      I cancelled my cable TV and bought a home theatre computer (HTPC) and an indoor HD antenna. I get all the local channels in HD and most cable shows can be found on the internet, iTunes store or on DVD. Windows Vista Media Center has a built in DVR and the TV websites have queues that store new episodes of shows and email you when available, usually the day after the show aired. I save over $90 a month not having cable. I had the upfront cost of the HTPC, but that pays for itself overtime from the cable savings.

      I haven’t had a landline phone since 2001. I just don’t see the need to have a phone tethered to your house. Mobile is the way to go.

      • Kat says:

        I am curious which indoor HD antenna are you using? I’m in a process of learning to cut the cord with Dish also.

  7. Chuck says:

    Definitely look into pre-paid wireless, instead of a contract cell phone. Page Plus Cellular has an unlimited usage plan for $40/mo or pay-as-you-go plans can cost as low as 6 cents per minute or $2.50 per month. (No I don’t work for them.)

    • poscogrubb says:

      I’ve looked into pre-paid with Verizon Wireless and it’s not worth it for our calling pattern. We’re not willing to switch carriers since many of our oft-called family members are on Verizon Wireless.

      However, I am trying out Skype with an unlimited plan ($2.95 per month or less when paid in bulk) for calling people not on Verizon Wireless as a way to avoid upping our minutes after dropping the landline.

  8. Yana says:

    I don’t work for PagePlus either, but discovering it was the best thing ever for saving money on cell phone service. We get new multi-feature (non-SmartPhones) phones on eBay, and activate with PagePlus.

  9. People I know are tied to their tv set because of Netflix, it’s not just the expense, they became movie hostages!

  10. daemondust says:

    I’ve had pretty good luck talking the cable company (here Comcast, formerly Insight) to add “new customer only” promotions on my account. Might help that I’m in a college town, so account churn is probably pretty high here and they want to keep at least a few people constant.

  11. My husband and I keep debating whether or not we should cut our cable bill further. We’ve already gotten rid of the movie channels, but we sometimes want to cut it even more.

  12. Patrick says:

    I never get the fact that so many people get expensive gym memberships when they rarely go. Either make the high expense a motivation to get you to go, or reduce the expense.

  13. Marcie says:

    We cut newspapers and magazines – with all of the conten that’s on the web now, it hardly seems like subscribing to something for $ when you can get it for free!

    • Shock says:

      I haven’t subscribed to a magazine in years. Most newspapers and magazines have blogs that contain the printed stories plus online only content, all for free.

  14. brooklyn money says:

    I use my gym a lot, but when it’s nice I run at the track near my house. I didn’t go to the gym for three months straight this year. I now know there’s a program whereby I can put my membership on hold and just pay a small monthly fee instead of the $85 I pay now (I live in NYC and my gym is not even fancy).

    I also plan to cancel my personal cell phone and just use my work one for all calls (this is permitted by my employer). Never had a land line to start with.

  15. John says:

    Wow $85 a month for gym membership is pricey for me. My wife and I pay $20 a month for gym membership….. thats for BOTH of us. Which includes access to weights, cardio machines, tanning beds, and massage chairs.

  16. Chris says:

    Why do so many people pay for yard service when they have all the tools and time to do it themselves…this is some of the little excercise I get.

  17. PA Mom says:

    This is a follow-up to my earlier post.

    We’ve decided to do away with our cable completely. After looking at all the options and doing a cost-analysis, we’ve decided it will be cheaper long-term to get rid of the TV/entertainment center, replace that with a desk/table from Freecycle (cost=$0), and put in a computer with a large flat panel monitor. We’ll use sites like Hulu and indivdiual TV stations to watch our favorite shows, plus continue to subscribe to Netflix and stream shows/movies through this computer.

    We can’t do away with high speed internet…need it for cyber school and a home-based business…but we don’t “need” cable any more. At this point, it’s just a habit/convenience, one we’re willing to break.

    Disadvantage: We’ll actually have to pay attention to when our shows are airing rather than rely on TiVo to catch them for us. Ok, so it’ll be a little more “work” to watch TV…definitely worth it to save $$$ each year.

    Savings:
    No more paying for cable
    We won’t have to pay extra to get HD boxes when they convert (before the end of this year)
    No more paying for service to 2 TiVo boxes
    Can downgrade our Netflix subscription

    Cost:
    Computer (we won’t need a high-tech computer, so can get a used one for this purpose)
    Monitor (probably the most expensive part of this switchover as we’ll want something on the large end, but still affordable used)

    The savings of not paying for cable & TiVo will more than offset the cost of setting up the computer/desk in less than a year’s time.

    Bonus:
    We’ll have an extra computer in the house to use for things other than TV and extra desk space for the business.

    Additional comment:
    We were looking at the Roku box for Netflix, but decided it wasn’t worth it since it’s not multi-purpose. It allows you to stream approx 17,000 (and growing) shows/movies from Netflix directly to your TV, but since you can do that with a computer already, we didn’t think there was any benefit (for us) to getting a Roku.

    On the home front, that new law Obama just signed giving second/third/fourth/etc time buyers a tax credit should help stir more interest in housing, so we’re hoping to have the house sold soon. There are several houses available in our vicinity that would net us a MUCH cheaper mortgage (probably 80% smaller than our current loan) with more property, so there’s the potential for saving thousands on housing each year after we move.

  18. saladdin says:

    I have a house phone at 19.99 month and make/receive 3-5 calls a week. I have never owned a cell phone and am thinking of getting a prepaid to act as a house line. I will not be carrying it with me at all. I live in a ATT area. Anyone know of any good deals for ATT or TracFone? I will not use it for anything except phone calls. Even caller ID is not required.

    saladdin

  19. PA Mom says:

    Has anyone looked at Skype as an option for a home phone/land line? Practical/feasible/worth it?

  20. CT Gal says:

    I was wondering about cutting a landline. But the only problem is that 911 does not work on cell phone. Someone told me that 911 cannot find your location like they can on a landline.
    Is it worth paying $25/month just in case of emergency. I’m very worried and wondering if this is a fear tactic by phone companies to keep an antiquated technology and keep paying?

    • reducereuserecycle says:

      That is not correct. 911 used to have to use triangulation to find people calling from a cellphone, which didn’t pinpoint their exact location. The FCC made it a requirement for all cellphones to be E911 compliant(which means that 911 can exactly locate the caller. All cellphones sold in the last four or five years are E911 compliant.

  21. echidnina says:

    We’ve got pretty low expenses in our household. No cable, no landline, no magazine subscriptions. We do spring for the high-speed internet, however. After all, time is money, and I do a lot of valuable things on the internet. Paying bills, checking my bank account, researching for homework – it’s valuable for me to pay an extra $10 a month in order to not waste time waiting for things to load. So I don’t always go for the cheapest option, it’s just a matter of evaluating what I do need and what I don’t.


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