Do you pay much attention to your cable bill each month, or are you just now so used to it that as long as it more or less looks right, you pay it? That’s how most people are with bills like that – we decide early on that they’re simply the cost of doing business in the world of the 21st century American, and we give them little thought. It’s amazing, when you think about how sneakily television-watching has become the major, monthly expense it has from when many of us were kids. It used to be nothing, outside of the cost of the set and the cost of the electricity we used to watch it, but now it is not at all unusual to see people paying upwards of $100 per month to access the wide array of channels that can now be had by the TV “enthusiast,” and given the ubiquitousness of “bundling,” wherein you can enjoy the “simplicity” of having multiple services like cable TV, Internet, and home phone made available through one provider, it’s nothing to see bills for that exceed $200 per month. Beyond the matter of television, singularly, it’s important to note the mass psychological leverage that has come to be exerted over all of us over the past several decades regarding the matter of consumption, generally (ironically, it is through those very TV sets that we receive so many messages about how important so much “stuff” is, or should be, to our happiness).
This is not an article about detaching yourself from material possessions or anything quite so philosophical, but is, rather, a short piece about encouraging you to take a not-so-quick double-take at all the things on which you regularly spend your hard-earned money, with an eye to perhaps making some pretty painless changes for the benefit of your long-term financial goals. Did you know it is estimated that the average American forks over about $1,000 per year on coffee? What about the amount of money spent on dining out? Even if you enjoy a nice night out once a week at a decent restaurant, it’s nothing for that dinner to cost $100, including tip. What if you were able to cut that weekly check in half, or perhaps went to the same restaurants but did so every other week? If you are able to carve out just $200 per month by forgoing some of the simple excesses that cost us so much nowadays, and invest that an assumed annual interest rate of 7% per year, after 25 years you’ll have roughly $163,000 more than you’re set to have currently after the next 25 years roll by.
The point is that there are a lot of holes in our proverbial financial pockets through which thousands and thousands of dollars are slipping each year, money that could be applied constructively to either paying down important and substantial debt, like the mortgage, or to use toward building a retirement plan on which you can rely when you are no longer able to work. What this will take, however, is a willingness on your part to make some important decisions…decisions that, I wager, you’ll find to be surprisingly easy to make…about the current expenses that characterize much of your life. It will involve adjusting the way you think, perhaps even re-training yourself to learn to be happy with less, but here’s the cool part about that: because even modest changes can make such a big difference to your financial profile, you will likely find that there’s, overall, very little you have to change or go without in order to make the progress that will really matter down the road.
The information contained here is for general information purposes only. The Financial Writer blog and Bob Yetman disclaim responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article, or any other article featured at this blog, should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.