Cutting fixed expenses may be the easiest way that you can save money. Fixed expenses are those annoying payments that you must make every month in order to live a “normal” life. They are everything from your heating and electricity costs, to your cell phone bill, to your cable TV subscription.
The problem with fixed expenses is that they never go away, and that they never get smaller, unless you make them smaller. So here's a few ways that you can reduce your fixed expenses this very month, resulting in massive savings over the next year.
You should probably reduce or eliminate your Cable TV subscription. Here's the deal. Your cable TV is probably costing you around $40 a month. Sure with bundled packaging it may be less, and perhaps you watch TV every single night, but you really don't need cable TV.
With the growth of services like Netflix, funny cat videos, and online streaming directly from the content producer's site, you really don't need Cable TV in order to get entertainment for the next year. So why not call up your cable provider, ignore their attempts to retain you as a customer, and cut down your cable bill by $40 over the next 12 months. Feel free to re-subscribe next year, and you can always catch up on episodes at that point.
Have a favorite TV show you just can't give up that isn't available legally online? Why not start a “viewing party” – at your friend's house? Great TV is worth sharing, might as well save some cash and enjoy yourself at the same time.
Potential savings: $480/year
You probably aren't using your cell phone to its maximum potential. Unfortunately, what that probably means is that you are overpaying for your phone service.
With Verizon no longer looking to come up north, it appears us Canadians are stuck with The “Big Three”. Fight their massive overpriced cell plans by canceling your service, and if you must have a cell phone, get one with a smaller company like Wind Mobile. Even a smaller company that is owned (fully or in part) by Bell, Rogers, or Telus is preferable as their prices are significantly less.
Recently both my wife and I quit our previous providers and went to Koodo. Together we're saving about $95/month. We were able to do this because we tracked what services and features we needed from a provider, realized we were overpaying for the service, and switched to a company that offered us exactly what we wanted at a fair price.
Even if you can only save half of that every month, you may be able to reduce your expenses by another $35 or $40 a month simply by switching providers.
Potential Savings $420/year
Like your cell phone, you are probably overpaying for your Internet. If you live in a major metropolitan area, chances are good that there is a small ISP that will resell you the same service you are currently subscribed to for significantly less.
The major downfall would be that you don't get the same level of polish and customer service that you may get from a larger ISP, but if you're comfortable doing your own house wiring or troubleshooting slow internet speeds, feel free to sign up with a small Canadian ISP. You'll get faster speeds, higher bandwidth caps, and lower prices from a small operation like those found on Canadian ISP.
Once you've picked a good ISP, you'll have to pick a particular plan. These can be confusing for people who just want “the internet” at home, and aren't concerned about what level of service they might need.
Here's a couple things to keep in mind if you're choosing a rate plan. First, how many people are going to be using the internet? If it is 3 or more, you may want to bump up a level. For one or two people a basic plan would be fine, but when you get into multiple devices watching HD quality youtube, for example, you may want the additional bandwidth that comes with a higher plan. You can always start at the lowest and upgrade if you notice Netflix is stuttering or not hitting the “HD quality” when streaming.
Second, how much are you downloading? If you have teenagers, chances are good that they are consuming content like crazy. Hopefully your current provider can show you how much data, on average, you're using each month. If your provider doesn't have a cap or a charge for overages, then it doesn't matter (at least not yet), but if you do have to pay for more data, it may be worth upgrading to a higher tier of service if you are consistently hitting or exceeding your cap.
Finally, don't confuse a slow computer or a slow home network with a slow internet connection. Don't overpay for services you aren't receiving. Check with speedtest.net to see if you're receiving the level of service that you're paying for. You can probably save $20-30 a month simply by switching providers or downgrading service.
Potential Savings: $300/year
Which fixed expenses have you cut back on this year? What are you going to do with your annual savings?