A reminder on the importance of eliminating recurring expenses

[jkern]

I view this discussion as just being efficient with your money. If the product you really want is $100, then spend $100. If you can get an alternate product that meets your needs or desires for $50, then spend $50. Same thing with respect to DIY projects.

For me it's not about the lowest cost option, it's about not wasting money.

[ncbill]

Quote:

Originally Posted by Pscottforster I have recently seen a automotive tire store that rents tires. That is a new one on me.

Shoot, there's no need to rent tires, just follow the same strategy my mechanic told me about from one oh his older, thriftier customer.

That customer simply bought old "donut" spare tires...and ran them on all 4 wheels.

Kept a stockpile bought from various shops for $10-$20 - would just swap in a replacement when needed.

[athena53]

Quote:

Originally Posted by ncbill Shoot, there's no need to rent tires, just follow the same strategy my mechanic told me about from one oh his older, thriftier customer. That customer simply bought old "donut" spare tires...and ran them on all 4 wheels. Kept a stockpile bought from various shops for $10-$20 - would just swap in a replacement when needed.

An old BF back in college said there are two aspects of a car where you never want to go cheap: tires and brakes. I've never forgotten that.

[aida2003]

I didn't read the whole thread, but I know that on the 1st page of it people were discussing how much they save on the phones by switching to Ooma or Google Voice, or Magic Jack. At the time of reading, I thought that people should have put the saving into perspective and should have told how much they spend on their Internet as Google Voice or others come as VOIP service you gotta be connected somehow and it costs money. We pay $65/mo. for the AT&T internet and phone (200 monthly minutes are free). Not sure it's the cheapest option but after a few years of calling to negotiate good pricing every 12 months, I'm gotten lazy or just don't see it worth my time to save $120/year.

[Cobra9777]

Quote:

Originally Posted by aida2003 I didn't read the whole thread, but I know that on the 1st page of it people were discussing how much they save on the phones by switching to Ooma or Google Voice, or Magic Jack. At the time of reading, I thought that people should have put the saving into perspective and should have told how much they spend on their Internet as Google Voice or others come as VOIP service you gotta be connected somehow and it costs money. We pay $65/mo. for the AT&T internet and phone (200 monthly minutes are free). Not sure it's the cheapest option but after a few years of calling to negotiate good pricing every 12 months, I'm gotten lazy or just don't see it worth my time to save $120/year.

I don't think the cost of internet is particularly relevant. Most of us are going to have internet service no matter what we choose regarding landline phone service, including no service at all. It's become a basic utility like electricity. We have unlimited data with no caps, so there is no incremental cost of using free VoIP like GV and very little incremental cost of using Ooma and many others.

We pay $55/mo for Frontier FiOS 50/50 internet. So it's $120/yr cheaper than your AT&T package and with Obi+GV, we have unlimited domestic calling, compared to your 200-minute limit. Cutting the cord on TV can be a bit tricky for some people (e.g. sports fans), but landline phone is a no-brainer IMHO. We'll probably drop the landline entirely next time the batteries are dead in all the handsets. We can also do free WiFi calling on our cell phones so the landlines are becoming increasingly unnecessary.

[aida2003]

Quote:

Originally Posted by Cobra9777 We pay $55/mo for Frontier FiOS 50/50 internet. So it's $120/yr cheaper than your AT&T package and with Obi+GV, we have unlimited domestic calling, compared to your 200-minute limit. Cutting the cord on TV can be a bit tricky for some people (e.g. sports fans), but landline phone is a no-brainer IMHO. We'll probably drop the landline entirely next time the batteries are dead in all the handsets. We can also do free WiFi calling on our cell phones so the landlines are becoming increasingly unnecessary.

Thanks for the lead. I'll check out Frontier sometime and see if it might be a better/cheaper fit than AT&T. Since we don't have smartphones, only emergency flip phones, we need a landline or something trustworthy to receive messages from school, doctors, work. E.g. due to a silly security upgrade at my work, I wouldn't be able to work from home unless I have a phone # to receive a call or a text code to activate my work system.

I think we fit into a minor group of people who just don't bother shopping once we are set with one company that has served us reasonably well. I hear that people save money by switching insurers around. We've been 15 years with the same home/auto/umbrella insurer.

[aida2003]

I just checked Frontier and I find it a bit confusing. It requires a 2-year agreement. T&C mention that I must agree to Amazon Prime and will be charged $120/year. So now the deal is more like $47+$10 for Amazon for 2 years (and hopefully I don't need to cancel earlier to a move or some other reason). I also don't shop on Amazon that much to warrant the $120 yearly fee (I prefer Costco membership). So it seems it's not such a great deal after all to make me want to go through a hassle of switching to a new co.
Are there more secret tricks up Frontier's sleeve?

[Katsmeow]

Actually it isn't so much eliminating recurring expenses. It is eliminating/reducing expenses overall.

Recently I've been helping my mother pay her bills and handle her finances as she has been ill. She actually has quite a few recurring expenses that I would not myself incur. For example, she pays about $45 a month for a landline phone and $60+ a month for the local newspaper. She pays for AAA and for regular Trugreen care. I think most of those are not expenses I would incur.

And, yet over the past several years she has saved money on an income of around $24k a year. That is her average each year are below that amount. And, after looking throw her records for the past few years I understand why.

Basically she just doesn't spend a lot of money. Her biggest expense is Medicare and supplement and prescription premiums. She has expenditures for a few prescriptions and a few medical related things like eye exams.

Her house is paid for. She has utility costs but her house is small so they are low. She buys food.

But what is notable is what she doesn't buy. She doesn't have internet or cable TV (she is in her 90s). She rarely buys clothes, only if really needed. She rarely buys bed linens or towels (she won't use up what she has left in her lifetime). She doesn't go out to eat except on rare occasions. She doesn't travel. She has no hobbies that cost money. The closest is reading the local newspaper each day. Basically she just doesn't have a lot of things to spend money on.

Basically she has very little discretionary spending (mostly just buying Christmas presents for people). That is what has allowed her to save money. The fact she has recurring expenses hasn't kept her from doing it. The point is that she is avoiding one time expenses that for many people are a lot of money.

[daylatedollarshort]

Quote:

Originally Posted by Katsmeow Actually it isn't so much eliminating recurring expenses. It is eliminating/reducing expenses overall.

I agree they are both important, but I think the reminder for recurring expenses is that many people don't realize how small expenses can add up over time. Amy Dacyzyn of the Tightwad Gazette had a bit of wisdom in one of her books along the lines of most people have a limited number of large expenses, but might have hundreds or thousands of small expenses that can add up to big savings over time if they are reduced on a permanent basis.

[aida2003]

Quote:

Originally Posted by daylatedollarshort I agree they are both important, but I think the reminder for recurring expenses is that many people don't realize how small expenses can add up over time. Amy Dacyzyn of the Tightwad Gazette had a bit of wisdom in one of her books along the lines of most people have a limited number of large expenses, but might have hundreds or thousands of small expenses that can add up to big savings over time if they are reduced on a permanent basis.

I would agree with the above quote for people who are young/still youngish and complain that they cannot save for retirement due to a number of recurring, but not totally necessary, expenses. In Katsmeow's case, her mom can spend $60/mo. for newspaper (BTW, is it REALLY 60 dollars a month??!!) because she doesn't have any other unimportant expenses, she's in her 90's, she's gotta enjoy the rest of her life. In addition, by not having an internet she doesn't get scammed by some 'lost grandson' overseas, or something else.

[ncbill]

I will hopefully be paying more for internet...

as soon as AT&T's fiber is finally run from the main road down through my neighborhood (already happening in ones nearby)

$80/month for 1GBps from AT&T vs. $60/month for 100MBps from Spectrum.

[Katsmeow]

Quote:

Originally Posted by aida2003 I would agree with the above quote for people who are young/still youngish and complain that they cannot save for retirement due to a number of recurring, but not totally necessary, expenses. In Katsmeow's case, her mom can spend $60/mo. for newspaper (BTW, is it REALLY 60 dollars a month??!!) because she doesn't have any other unimportant expenses, she's in her 90's, she's gotta enjoy the rest of her life. In addition, by not having an internet she doesn't get scammed by some 'lost grandson' overseas, or something else.

Well, there is that. Yes, it really is $60 a month because it includes the TV listings (my mom doesn't have cable either). She does gets lots of people calling her on her phone but thankfully she hasn't gotten sucked into anything.

I am not at all, by the way, saying that eliminating recurring small expenses can't help. It does. I am just making the point that sometimes it is the overall load of expenditures that is the problem even if non-recurring.

[Z3Dreamer]

We haven't talked cars on this thread. My car looked really bad. I could have spent $321 per month for 60 months on that brand new car. Instead, I renovated my 2003 160k car. Here is what I did: 1) Brand new stereo, installed for $250. It does more than the stereo in a new car. 2) Had my mechanic do major maintenance, replaced tire, replaced some gaskets. $811. 3) Had 2 rust spots and 2 pieces of plastic trim that had lost some paint. Purchased a $20 can of perfectly matched paint. Read up on how to fix that kind of thing. It looks great.

Total spent was less than 4 payments.

[capjak]

Quote:

Originally Posted by Z3Dreamer We haven't talked cars on this thread. My car looked really bad. I could have spent $321 per month for 60 months on that brand new car. Instead, I renovated my 2003 160k car. Here is what I did: 1) Brand new stereo, installed for $250. It does more than the stereo in a new car. 2) Had my mechanic do major maintenance, replaced tire, replaced some gaskets. $811. 3) Had 2 rust spots and 2 pieces of plastic trim that had lost some paint. Purchased a $20 can of perfectly matched paint. Read up on how to fix that kind of thing. It looks great. Total spent was less than 4 payments.

Problem is that it is hard to upgrade to the most current safety equipment.

[Denverite]

Quote:

Originally Posted by scrabbler1 You see this with charities sometimes. All of those tear-jerking "Feed the starving children" and "Save the abused animals" TV ads always try to minimize the monthly $20 cost by saying it is "only 63 cents per day....." Well, that is $240 per year, not a trivial amount.

Yes, Particularly when you find out the organization you were sponsoring with that monthly payment has multiple personnel receiving six figure salaries. No starving children in that group.

I contributed a monthly amount to the Child Worldfund (formerly the Christian Children's Fund) until I read the President makes over $375K. Sickening. Something about very high salaries and running a "charitable" organization just doesn't sit right.

[kcowan]

Quote:

Originally Posted by Katsmeow Well, there is that. Yes, it really is $60 a month because it includes the TV listings (my mom doesn't have cable either). She does gets lots of people calling her on her phone but thankfully she hasn't gotten sucked into anything...

We never scrutinized MILs expenses. She lasted until 93. But on one visit, we noticed an invoice from the auto association. We asked her about it and she said she liked their magazine. She had not had a car for 3 years. We convinced her to buy a magazine subscription instead.

After she passed on, we cancelled all her subscriptions. One was the cable company. They screwed up the cancellation. When they followed up with us, we gave them her forwarding address, the funeral home.

The collection company called a few months later and claimed we should pay the arrears to avoid a bad credit rating! We explained that she no longer had a need for a credit rating.

[Katsmeow]

Quote:

Originally Posted by kcowan We never scrutinized MILs expenses. She lasted until 93. But on one visit, we noticed an invoice from the auto association. We asked her about it and she said she liked their magazine. She had not had a car for 3 years. We convinced her to buy a magazine subscription instead.

I was surprised to find that Mom pays for a AAA subscription. She does (well, did) still drive. But, not that much. Maybe she did it in case she had a flat tire. Don't know.

[LastOfTheBoomers]

Quote:

Originally Posted by Katsmeow I was surprised to find that Mom pays for a AAA subscription. She does (well, did) still drive. But, not that much. Maybe she did it in case she had a flat tire. Don't know.

I remember canceling my AAA membership on the phone - and part of the script from the call center was to remind you that if you are in someone else’s car and they get a flat tire - you can use your card to get it fixed.

It is sad that they use fear as a motivator.

[Katsmeow]

Quote:

Originally Posted by LastOfTheBoomers I remember canceling my AAA membership on the phone - and part of the script from the call center was to remind you that if you are in someone else’s car and they get a flat tire - you can use your card to get it fixed. It is sad that they use fear as a motivator.

And, with a lot of insurance policies nowadays you get flat tire coverage anyway. So AAA isn't even needed....

[kannon]

Any advice on how to use a VOIP like Oama for multiple phones?

We have Verizon FIOS so have high speed internet. Like to get rid of landline via Verizon and use a VOIP. Problem is we have 3 phones throughout the house. Anyone use Oama for multiple phones?

Thanks

Kannon