In my recent post titled, “Your Financial Freedom Journey: Where To Begin”, I highlighted 3 activities people can undertake to help identify possible overspending. If you haven’t had a chance, please check it out!
In it, I focus on expenses that can be reduced somewhat quickly and easily; discretionary spending, communication costs and outstanding consumer debt (through consolidation of high interest credit accounts).
For those who don’t know where to begin their financial freedom journey, these activities provide a great starting point.
Today, let’s take a closer look at the second item, communication costs. I consider these to be any expenses you incur in order to communicate or receive information. For that reason, I also refer to them as information costs.
Here are some examples:
- cable/satellite TV
- home/Wifi Internet
- home phone (landline)
- cell phone (often multiple phones)
- paid streaming services (Netflix, Amazon Prime, Apple Music, Spotify, etc.)
- newspaper/magazine subscriptions (online or paper-based)
- satellite radio subscriptions
It’s a long list!
Looking at the above items, it’s clear that we live in a digital age. We have access to seemingly unlimited amounts of information via the internet, and in recent years through wireless and mobile technologies. We are truly living in the lap of luxury!
It wasn’t that long ago that most families had a home phone, cable TV, and perhaps a newspaper delivered to their door each morning. That was it. The monthly communication budget was pretty modest.
Nowadays most of us can’t fathom life without a smartphone at our disposal. Not only for us, our spouses have separate devices, and even our kids by a certain age. They seem so indispensable, you’d never know the first iPhone was released only 9 years ago, in 2007!
There is an underlying problem with all of this technology. As rapidly as our communication options have expanded, so have the related monthly expenses.
DEATH BY A THOUSAND CUTS
Ask yourself, how many of the products and services listed above are you currently paying for? Also, do you know how much you’re spending each month to enjoy the convenience of all this technology?
There are millions of people who pay for all of these and more. In fact, a family’s communication bill could EASILY exceed $500/mth if they had a comprehensive cable package, and 2 or more smartphones linked to their account.
Most consumers have no idea how much they are spending on this stuff!
That’s why I refer to communication expenses as ‘a death by a thousand cuts’. No item on its own will hurt you, but when added together it could be killing your budget.
BEWARE THE HARDWARE!
It’s not just the monthly bills that add up. Every time you upgrade your smartphone, you have to pay for a new device. Even if it’s subsidized by your cell phone contract, it can still be a $200-300 hit. When it comes to TV, it seems everyone has a PVR for recording their favourite program. This is not to mention the 60” screen they’re watching it on. And whether it’s a desktop, a laptop, or a tablet, you can’t access your wifi without a computer, which needs to be upgraded every few years.
TAKE ACTION! MYSTERY MONEY CHALLENGE:
If you haven’t already done so, total up the amount you are spending each month on your communication costs. How can you reduce these expenses? What services can you do without? Remember, financial freedom requires sacrifice. Giving up some conveniences will free up a lot of money better used elsewhere.
PLEASE SHARE! If you take up the challenge, I’d love to hear about the results! I’m also interested to know how my readers are saving money on communication expenses! Please feel free to send me an email or comment below!