Every two years (why don’t I do this every year?) I perform a detailed audit of my personal finances. I realign investments, adjust our annual budget, and update future plans.
An important part of the audit is analyzing all reoccurring bills and services by asking these questions:
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- Am I paying for something I no longer need or value?
- Has the price for this product or service gone down?
- Can I negotiate a better price from the current vendor or should I get new bids?
- Am I paying for a service I could provide myself?
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In January 2020, my financial audit prompted these changes:
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- A service representative from AT&T helped me tweak my mobile phone plan, saving $29 per month.
- I renegotiated my internet service plan, saving $49 per month.
- I canceled my subscription to the local newspaper because I can find most of the information online, saving $35 per month.
- I changed storage facilities and reduced the rent I’ve been paying from $119 per month to $35—saving $84 per month.
- I asked Chase Bank to eliminate the monthly service charge on two of my six checking accounts. They did, saving me $20 per month.
- I purchased a new battery-powered hedge trimmer and started trimming my bushes instead of paying to have it done, which will save me about $800 annually.
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Savings: $3,404 per year.
The same technique should be used in organizations. At my church, we recently renegotiated the contract on our copy machines, saving 40%. We canceled two of the four shuttle buses we lease on Sunday mornings, saving $800 per week. Installing LED lights in the sanctuary has a 24-month ROI after which time we’ll save $1,000 per Sunday on electricity. We discovered that we can get twice the internet bandwidth for less cost.
Senator Everett Dirksen (1896-1964), concerned that federal spending had a way of getting out of control, reportedly observed, “A billion here, a billion there, and pretty soon you’re talking real money.”
For the average American, I’ll tweak Dirksen’s statement and say, “A hundred dollars here, a hundred there, and pretty soon it adds up to a significant amount of money.” Why not save money if you can do so without significantly changing your standard of living?
Audit your finances at least every two years.
Excellent!
Thanks, Kandy, for affirming words. Don
Great advice, Don. As I’m sure you are aware, things like TV and Internet service often have expiring discounts…sometimes 1 year, sometimes more. I keep a file on my computer with such expiration dates and a monthly diary. Also, I occasionally get sucked into a “3 month free trial” and forget to cancel by the specified date and “Wham!!” I get a shipment I don’t want and a bill to match.
A thorough review of the things you mention should be part of a personal budget review…not longer than every two years. Tax time might be a good time, when you’re growling about not having enough left over.
Thanks, Neil, for sharing your thoughts. Yep, I’ve been bitten by “free-trials” and expiring discounts; I need to develop (as you have) a plan for tracking that. Tax season or end of year are both good times to analyze our finances. Take care, Don.
Awesome. Actually I am in the process of this myself. Much needed and smart. Glad to hear our church is doing the same!
Blessings?
Thanks, Marsha. Good for you for pursuing financial belt-tightening. Don
Very sound advice. Thank you for your post.
Diane, thanks for taking the time to write. Don
Do you also audit your charitable giving? As we make savings elsewhere, we might be able to give a little more to those who don’t have our advantages.
Even helping those who are struggling to manage their finances, a little help might be just what they need. As a very confident person, you would not be fearful of making those calls to reduce your bills but someone who doesn’t have a good credit rating might be worried they would get a worse deal. They may have to own up to being on short time working due to COVID-19.
You used the pronoun “I” in your piece but you often obtain savings as a couple. As you have declared your age in the past, I am aware that as an older person you also probably know some of the tricks with insurance companies like having a younger person on your motor insurance. My husband’s insurance went down when he added me to his policy.
My husband and I have one mobile telephone account with two separate ‘phones on it. Only one bill to deal with and a £20.00 saving.
Thanks for highlighting this issue. Those of us approaching retirement, need to think about our ongoing living costs.
Best wishes
Angela Willson
Angela, as always, thanks for sharing your insight. We do track charitable giving; it’s a line item in our budget. I like your idea about helping other people with their financial planning and accountability. It’s such an important area of life. I am fortunate to be married to Mary; we are both frugal and careful about money; it would be difficult to be married to someone who didn’t share that value. Kind regards, Don.