It occurred to me recently in my Dec income roundup how sucky I’ve been at frugality as of late. It seems like in particular many of the auto-renew subscriptions that I have floating out there that I don’t track that just seem to sneak up on me each month/ year and takes the pound of flesh due them.
Like Amazon Prime.
I don’t think about it. And I probably don’t buy more than $99 in shipping each year from Amazon. Yet I let it auto-renew each year.
My rationale is that aside from liking prime + 2 day shipping when I do buy stuff, I’m an AMZN shareholder, and at a market cap of $361Bn and my share value of roughly $20k, which makes me approximately a 000005% owner of the company. But that’s a bit of a cop out.
In the spirit of frugality, I’ve decided to take a hard look at my discretionary (ie not mandatory like health care) recurring expenses and bucket it into one of three categories:
- Can do without this – While I’m sure I like it, I can do without it. A great example is The Walking Dead. I enjoyed the first free show this season on AMC, but in order to watch the latest I’d have to pay like $40 on Amazon. However, if I’m patient, I can wait til it comes out for free or close to free later, and make do with watching other shows in the meantime.
- Use a free alternative – There are often lots of free alternatives out there to what I’m voluntarily paying for, so that’s a no-brainer. As long as the free alternative isn’t costing me more in time or aggravation, it makes sense to leverage free alternatives which may have some drawbacks, but would be acceptable.
- Keep it – If I can’t do without it, or find a free alternative, I’ll keep it.
So here’s my accounting of my recurring expenses and how I’ll move forward. Many of these are small business related, so your mileage may vary.
This has been the bane of my existence since I don’t understand it and it just sucks money out of my account. Each year I ante up for Quickbooks Online which frankly I have no idea how it works still, and then pay a bookkeeper to use it for me. The subscription I paid yearly, but works out to $21/mo. The bookkeeper is hundreds each month.
Decision: Use a free alternative – I’ve decided to DIY bookkeeping using Wave Accounting. Wave is totally free. That’s a savings of $21/ mo on the Quickbooks and about $150/mo on bookkeeping. Sure there’s extra time involved, and I’m not exactly overflowing with free time, but my business isn’t so complex that I can’t figure it out.
Total Yearly Savings: $2,052
Time Tracking (Yearly)
As a freelancer I need to track my time so I can bill people. I was referred last year to Harvest time tracker, which is essentially a service I pay for monthly that acts as a glorified clock. If there’s a service that’s begging to be cut, it’s this subscription.
Decision: Can do without this. It’s up in Feb, so just cancelled the autorenew as I’m writing this.
Total yearly Savings: $129
Amazon Prime (Yearly)
This is a bit tricky. I don’t use the 2 day shipping that much, so the savings there isn’t really worth it. I also like watching some of their Amazon Prime shows, which is pretty nice. And as mentioned, I’m a 000005% owner of the company, which makes this an indulgence I’ll keep this year
Decision: Keep it.
Total yearly Savings: $0
Proposal Software (Yearly)
Whenever I get new clients, I have to do a proposal. And the key to big sales is to impress during the sales process. So I use software that both saves me time and looks impressive. The problem is, it’s $89/mo and there are many months I don’t use it. That’s $1,068/ year.
Decision: Keep it, but keep an eye on it to kill later.
I decided to cut this and use a powerpoint template I bought for $17.
Total yearly Savings: $1,068
I have a platinum SurveyMonkey account which I pay yearly on auto-renew and is $85/ mo, or $1020/ year. I use this to support my business
Decision: Downgrade it in June before renewal. I need this tool, but the platinum account, while having nice features, is a bit luxurious. I’ll move down to the $25/ mo plan.
Total yearly savings: $720
Web Hosting (Yearly)
Well, if I want to keep this blog going, I’ll need hosting. Currently I’m using GoDaddy and I’m on a plan that allows for 5 sites. Their next lowest tier is 2 sites hosted. The tricky thing is I currently host 3 sites. But by downgrading, I could save $14.99/mo
Decision: Keep it. I don’t want to kill any of my blogs.
Total yearly savings: $0
Fitness Membership + Training (Monthly)
I just got a Lifetime membership and a trainer last month in order to hit my 2017 goals of getting ripped. Sure technically, I don’t need these things, and there are cheaper alternatives. I pay about $130/mo and then around $800 for the trainer.
Decision: Downgrade. I’ll keep the membership and move the trainer from 2x/ week at $85/hr to $1x/ week.
Total yearly savings: $4080
Auto, Rent, and Phone
I’ve gotten these down to $0, but for most people, these will be the biggies, and where the largest chunk of recurring money goes out, and where you might be able to make do. Frankly I like not having a car and insurance and all the headaches that go along with it.
Total yearly savings: $6,981 $8049
So that’s about it for me. At least for the things I can think of now.
In the course of the hour or so it took me to go through everything and make decisions, I ended up saving myself a total of $6,981 $8,049 for the year. At a 3% dividend payout, that’s an extra $209 each year that can help accelerate my income snowball that much faster.
So what do you think? Should I trim the fat more with things like Prime? What about you? What auto-renews or subscriptions do you have that you could find a free alternative or kill? Are there any leaks you’ll downsize or plug up with free alternatives?