Do you know those moments? Where you sit on the couch, maybe a blanket and some hot tea with you, and your eyes staring thoughtlessly at the screen in front of you. Enjoying the battles of Game of Thrones, enjoying a romantic love story or stay updated on the daily news.
But what to do if that subscription keeps costing you more and more every year. And those nights of sitting on the coach are happening less and less? Well, we did nothing for a very, very long time. But as of this week, we have officially ended our television subscription.
Additionally, we have found two other household topics on which we could save money on. In the journey of financial independence, there is a whole spectrum on how to deal with saving and generating income. In previous posts, I’ve often mentioned that, for us, income generating assets are more important than cost reductions, due to the bigger impact. However, that doesn’t mean we don’t care what we spend our precious money!
Reducing costs just for the sake of saving money isn’t the journey we pursue. We have found a nice balance (more or less) in how we want to spend and save our money. For now. Meaning, we keep continuing with our current level of spending while we are building our business of income-generating assets, enabling a Fat FIRE life in the near future.
In this spectrum of saving money, we focus on what brings real value to our lives. Creating a life that fits our needs, lifestyle AND income level. Without having the worry to spend less than we already do. We created a state of mind, where we are content with owning less, but high-value items. This way we aim to withstand the need for lifestyle inflation and the overall common perception of how to live your life.
Because we live a fairly minimal lifestyle, and easily leave out items that aren’t necessary, we already save an average of 50% of our income per month. However, having a television subscription while we don’t watch, owning a car while we don’t drive it and buying a new phone while the current one is still good enough, helps us making specific choices in which others might not. In the meantime, it saves us money that will help grow our portfolio even more. We ditch items that don’t bring a lot of value to us anymore and instead look for ways that do.
Cutting the cord
We have done it. Something that I was on and off about for probably a few years already, but never made a final decision on cutting the cord.
The main reason I didn’t do it before, was because I couldn’t find a very cheap television or streaming alternatives, like Netflix or Knppr. Where ideally there would be an on-demand and online subscription model in order to watch television/movies. But there wasn’t such a thing. Netflix comes close, but still wasn’t quite what we wanted.
Secondly, with a lot of internet only subscriptions, the monthly payment isn’t that much lower compared to the television + internet plans. For a long time, the incentive to switch, or cut the cord wasn’t big enough to actually do it. Until now.
Last week, on the Personal Finance Cafe, I spoke with Niettot71, who told me he had canceled his television subscription. Triggered by how and where he has done it, I decided to get on it again. Without other (cheap) alternatives, the solution was crystal clear this time: cutting the cord altogether.
As of the 1st of January next year, our television subscription will end. Talking about some decent new year’s resolution! And we transferred our internet subscription to a different company. Resulting in a reduction of payments from 60 to 30 euro per month.
One other thought that still haunts my thoughts, is to subscribe to a Netflix account in case we ever want to be a couch potato.
Mobile phone subscription
Two years ago, I signed a 2-year contract with my phone provider for a new iPhone 6. Its predecessor was an iPhone 4 slowly dying out. Those 2 years are over as of January 2018. Which gave me the opportunity to extend my subscription. I already received some emails telling me to upgrade my phone or check out which other amazing opportunities they could offer me…
As I wanted to do everything online (hate those long phone calls), it’s interesting to see that when I get logged in on their website, I immediately get a pop-up with promotions in which they are influencing me to take. Instead of choosing an iPhone x or another brand new phone, a sim-card only subscription would have to do it for me.
I did the same thing earlier, resulting in 4 or 5 years handling the same phone. Although I would love some fancy upgrades, high res photo’s and especially more data storage. It will have to wait until my iPhone 6 will give up in a few years.
The plus side of extending in sim-only is that my internet data limit will go up, and I’m not stuck to a yearly (or 2 years) subscription anymore. This small change will save me 20 euro per month.
As most of you know, I had bought a (used) car to use for my new daily commute. Just in case, we have held on to the other car (the one we already owned) as well. For reasons like when Mr. D. needs to get somewhere while the new(er) car isn’t available. Turns out, in the last month he used it exactly once.
Additionally, that car is in such bad shape, fixing up is a no go. Fixing it will only extend the lifespan with the maximum of one year – if we’re lucky. And the cost we have to put in, will not be worth it.
So, in the spirit of finding more impact full savings, we decided to ditch the car. Directly. It is already gone as we speak. It saves us a total 50 euro’s per month on taxes and insurance. We don’t expect that it will be sold, but when it does, it gives as a financial bonus we didn’t anticipate on.
And so, we have managed to change 3 small things with major effects, that will save us 100 euro per month going forward. On a yearly basis, it means we will have 1200 euro extra to invest. Money for which we otherwise needed an investment worth of 40.000 euro. Taken into account that the money was invested in stocks with a 3% dividend yield.
These small changes can have a big impact on your investments later on. That 1200 euro per month we can invest could grow every single year into something bigger. We are still more focused on increasing income, but every little bit we can use to build up our real estate business is very welcome.
In the end, we also help the environment more by ditching a less durable car. And save ourselves of endless nights of entertainment, where we would watch shows we normally wouldn’t watch at all.
What would you do? Get that Netflix account? Stay attached to the cord? Or have some other alternative?