It’s so easy to save +1000 USD in a couple of hours that I’m amazed by how few people actually seem to make sure they do it. It is not about skipping your daily coffee or anything like that (that alone would take you quite long to save +1000 USD…). The cool thing is that you can do all of this online so if you are not comfortable doing it over the phone, there is no need to!
The solution involves a comparison site like: www.moneysupermarket.com / www.compare.com / www.pricerunner.com (or the one in your country).
Call a friend over and do it together, it will be more fun and you can help each other. Then when you are done, call your mother-in-law and offer to save +1000 USD on her behalf as well. I can’t promise but you might become an instant favorite son/daughter-in-law!
The first thing to do:
Dig out the following information for your: pay-TV / utilities / car insurance / home insurance:
- Which company you are currently with.
- How much you are paying and what you get.
- If there are any fees involved for canceling the contract / subscription.
Yes, get it now so that you too can save +1000 USD!
Then log on to your comparison site so that you are ready to change supplier(s). You of course have to make sure that you get exactly what you need (so that you are paying for only that and nothing else) and that you are happy with the supplier (reputable firm etc.). If you are unsure of some of the details, ask a friend who you know is good with these things. I am sure they would be happy to help you out and it will make them feel good too!
Watching TV is unfortunately not going to get you, richer, fitter, healthier nor successful, that we all know. Still, the average person in the US spends 5 hours per day watching TV! Besides from all these negatives, it also comes at an average financial cost of 100 USD per month which amounts to 1,200 USD per year (not taking any additional food or drink consumption done in the TV-sofa into account..). I don’t even know if I should focus only on the potential financial savings here or all the other benefits you would get by either skipping the TV all together or at least half the cost and number of channels. But some of the benefits of skipping watching TV would be:
- You would have a massive 5 hours more per day (to do whatever you want to do/learn).
- You would become healthier as you would not sit down an “extra” 5 hours per day (and potentially eat/drink more than you need).
- You would have more energy (because you are not sitting down as much).
- You would most likely socialize or play with your kids more.
- You would most likely learn new things.
- You would most likely experience more as you would do more things.
Potential Saving: 600 – 1,200 USD! If you then invest that amount every month for a number of years, we are talking tens of thousands of dollars!
We all need utilities so can’t really cut that out. Though, the average couple in the US spends about 10% of their expenditures on utilities, which equals about 2,500 USD per year. These numbers will of course vary depending on how you live, where you live and the number of people in your household. You might have different providers for electricity, gas and water and if so, you will need to get the information for all three of them!
This little post is not about lowering the cost by changing your consumer behavior even if that can have a significant impact as well. Just bring out your bills and your details and do a comparison search online! This area might be somewhat limited in terms of competition but most of us will have a few alternatives and there tends to always be one which is more aggressive than the other (thanks to the comparison sites!), so why not take advantage and change provider?
Potential Saving: 500 USD!
Car insurance might be one of the most competitive things out there and the comparison sites are doing a great job. Still most people stay with the same company for years and years. Most often, these companies increase our premium year after year and we don’t seem to mind but we should! It is your money and more money to the insurance company means less money in your pocket! The average car insurance in the US costs 1,200 USD per car and the average is 1,9 cars per household in the US so you should be able to save around 20% just by using a comparison website!
Many insurance companies offer extra discounts during the first year so one should always make sure to remember when the renewal comes up again, in case you want to change provider. If you want to get the price down even further, check the deductible (how much you have to pay in case of an accident). If you are happy with a higher level, then your premium will come down so test a few different alternatives and choose what is most suitable to you.
Potential Saving: 480 USD!
You want to make sure you have the right coverage for your home in case something happens. What you don’t want is to pay for things that you don’t need nor want! Home insurance can often be a bit tricky as there are lots of details and different scenarios. So you have to make sure you know what you need and what you get! If you find this tricky, I really recommend that you ask a friend who is interested in details to help you out!
The great thing with home insurances is that, just like car insurances, it is a very competitive space so you should be able to secure a great deal! The average home insurance in the US costs around 1,200 USD per year and you should be able to save around 20% by comparing and optimizing.
Again, most of the time insurance companies will offer you a great deal during the first year to lure you in so remember to check online again when the renewal comes up! The deductible on your home insurance will also have an impact on the quote you get so you will have to find the right level for you.
Potential Saving: 240 USD
Gobsmacked to the tune of 2,420 USD?!
I am astonished by how few people actually spend a couple of hours per year to make sure they have great deals on these common expenditures. I mean, if you can save more than 2,400 USD in a few hours, I would guess that is time well spent, would you not agree?
If you can’t be bothered doing this (or asking a friend for help), just remember that you have to make 3,582 USD to have these 2,400 USD in your pocket (if you pay 33% income tax). So the only questions is if you want to work and make 3,582 USD every year, just to give it away to your insurance companies instead of keeping that money in your pocket… To me this is an absolute no-brainer and that 2,400 USD is a great saving which you can transfer monthly (200 USD) to your financial freedom account (your investment account).
Let’s say you stay on top of this every year and save these 200 USD per month, you set up a standing order to your investment account and invest in a low-cost ETF. You do this every year for the next 30 years (this is money you wouldn’t see anyway unless you decided to take action once every year, so free money!). Do you know how much money you could have by then if the stock market (your investment) delivers an average of 10% per annum (the historical average) over the next three decades?
Gobsmacked to the tune of 400,000 USD (it’s not a typo!)??
I know I have made quite a few assumptions here and your numbers will be individual to you but still… Those who made this one decision once thirty years ago and decided to invest the difference every month and managed to get 10% per year in return would have 400,000 USD! It is absolutely crazy to give that money away when it should be in your pocket. Just think about what that would do to your retirement.
If you don’t think it’s worth while, that’s ok. It’s your choice but it for sure will help towards a life on your terms!
Actions to take:
- Take care of the above things now so that you too can save +1000 USD!
- The Language of Money – a language for life
- How to change your money mindset!
- Check out our full Savings Section to have even more in your pocket!
- The Bucket System – Automating your Finances
- FIRE – Financial Independence Retire Early! Who knows, maybe you are interested?
- Buying a new car – Wake the fck up!