Saving money and building wealth requires patience and a lot of sacrifice. When we started our journey to financial freedom we became challenged with the choice of giving up some things we really enjoyed having. I’m talking about memberships and subscriptions we’ve had for years.
We all get to this point on our journey to build wealth and create the life we desire for ourselves and our families. And there’s a question that only a few of us are willing to actually answer: “What am I willing to give up now in order to have what I want later?”
To make answering this question a little bit easier I’m going to help you by looking at some monthly expenses that’s keeping you from building wealth.
Cable, Netflix, HBO Go, Hulu…
Oh no, not my Netflix! Yes, your Netflix only if you have all these other TV subscriptions. Honestly, why do you need all the different TV subscriptions especially cable when you don’t watch everything there is to watch.
For sports fans I know this is hard to do. There’s no way keep sports channels without keeping cable. However, there are platforms like YouTube, Sling TV and I imagine Apple TV that’s working to make it easier to watch sports and not sacrifice your retirement funding.
If you can limit your television subscriptions to 1 or 0 (like us, we only have Netflix) then you will definitely have a lot of money to build wealth or even pay off debts faster if you have any.
Estimated monthly savings: $12-$200
Gym membership
Oh no, not my gym membership! C’mon this should be a no brainer. Yeah, for some of us it’s not. Seriously, why do you have a gym membership if you have $100,000 of debt? Why are you paying $30, $35, $50 every month for a service you don’t use every day of each month?
Now, don’t get me wrong. I am not promoting laziness or not exercising. Quite the contrary. I want you to exercise and stay fit, but you can do the exercise you need outside! If you live in an apartment you may have weights and a small gym that gives you everything you need. You can also shop around garage sales, yard sales, Craigslist for a some gym equipment you can keep in your garage or basement. Maybe you have a friend who has a gym in his or her basement that you can use. Remember that person you use to hang out with before life got too “busy” to hang out.
I’m all for getting a trainer and help to get fit especially if you’re just getting started. Just try to be wise with what you need and what you want with exercising. Don’t pay for a service you don’t regularly use or can’t afford to keep when you’re in debt.
Estimated monthly savings: $30-$100
Haircut/Hairdos
It’s 2019! With YoutTube university and the internet full of “how-tos” getting a haircut or your hair done shouldn’t be a ridiculously high monthly expense.
I’ll speak on haircuts first. Almost 15 years ago when I started college I learned that getting haircuts was expensive. So, I had to learn how to cut my own hair. Today, I have a barber I go to once a month or every other month. But this every 2 weeks thing is a big NO-NO for me.
There were times my haircut looked weird and uneven, but I was determined to learn to cut my own hair. Eventually I got pretty decent at it that people would give me compliments.
I’ll admit that you do need a steady hand for when you cut the back, but if you’re fine with just one level, no fade then you really have no excuse to not cut your own hair.
Now, for hairdos and hair salon type services. I can’t say definitively what you should or shouldn’t do, because of my lack of expertise. However, I can look to my wife and she’ll admit that there are ways to cut down costs on hair. Maybe you try to go natural for a little. Also, having a weave over your natural hair is a way to go long periods of time without having any major hair services.
The main point when it comes to our hair and money is to learn to do what we can ourselves at least until you’re debt free. And then make sure to budget for hair expenses if you absolutely desire and want to have a haircut or get your hair done each month.
Estimated monthly savings: $20-$200
New Clothes
I haven’t bought a new pair of jeans in over 2 years, maybe more. I’m not exactly sure. I can’t tell you the last time I went shopping for clothes. Yet, there are folks out there who easily spend $100s of dollars each month on clothes and shoes.
Remember I’m not against you having nice things and buying what you want. However, I do want you to look at your financial situation and evaluate whether $100 per month on clothes is more important than putting that $100 toward a debt payment. One option helps you come out of being broke faster. The other option just helps you look nice while you stay broke.
Estimated monthly savings: $50-$400
Amazon subscription
Giving up my Amazon subscription was hard for me. I basically had the subscription since almost 2012. But I had to let it go. I was paying $9.99 per month (now Amazon charges $12.99) for a subscription that I wasn’t really using often.
Some months I would never order anything or watch anything on Amazon Prime. Subscriptions are dangerous for the consumer. You begin to feel emotionally connected and with all the updates aNd new features FOMO (fear of missing out) becomes real. And there’s no subscription service that knows this better than Amazon.
Personally, I love Amazon’s services like the entertainment and storage for photos that’s offered. The Prime reading and Audible services are nice and now I understand Amazon is delivering food. Still, it’s not a financial commitment I’m ready to make even as my family has found our way out of debt.
Estimated monthly savings: $13-$35
Whole Life Insurance
Life insurance is important as you work to build wealth. It’s actually one of the first decisions you need to make if you’re just getting started with all this personal finance stuff. Yet, it’s sad to see many people purchase the type of life insurance that does not help build wealth. More specifically permanent life insurance like whole life and adjusted variable life.
Signing up for the wrong life insurance product could cost you 10 to 20 times than what it should. Remember, life insurance is simply a temporary place holder as you build wealth.
Estimated monthly savings: $180-$900+
Cell Phone Payment
I may lose many of you here, but I believe cell phone payments are worth mentioning. It’s always interesting to see how many people will line up for the latest Apple iPhone or Samsung Galaxy only to put their purchase on a payment plan.
Cell phone service is now becoming a very competitive market that you and me can be the direct beneficiaries of. Service is becoming cheaper and cheaper and I think where most people get hurt is putting a phone on payment plan they don’t have the money to buy outright. This is a big NO! Just get the 2 year old version of the same phone and trust me you will.
Estimated monthly savings: $30-$50
Car Payment
According to CNBC and Experian the average new car payment in 2019 is $530 and for a used car is $381. What else is there to say other than, BUY A USED CAR STRAIGHT CASH! Nothing else to say about car payments. I haven’t had one for almost 5 years and I am so glad I made the choice to pay off my car note early.
Of course not every circumstance is the same, but I would encourage anyone who says they “need” a car to really look at your options. Especially if those options include financing a car that you have no business financing to begin with.
Estimated monthly savings: $381-$530
Eating Out
I love to eat out as much as the next person. However, I’ve come to realize that eating out is just way too expensive to do every month. When you go grocery shopping and plan out your meals you actually save a lot of money on dining out.
To be fully transparent my wife and I do have an eating out budget that has been about $100-150 per month. We never really break that budget, because we’re always buying groceries that can last us up to two weeks. So that $10 lunch you have every day doesn’t have to be $10 if you buy your own groceries and prepare your meals.
Estimated monthly savings: $300-$900
How Much Do You Really Save?
There you have it folks. When you add up all these savings you get $1,016 on the low end and a whopping $3,315 on the high end! If you take those monthly savings and apply it to your debt, a savings account, an investment account or even paying a little extra on your mortgage there is no doubt you will win with money.
Yet, there is even another benefit to all this. You get so much of your time back and leave a legacy for the next generation that will do wonders for them.
