How to cut spending and save more for investing?






Image Curtesy: Public Co in pixby


It’s a beautiful Sunny Sun day! It’s hard to believe such a pandemic is ravaging lives across the country. On surface all seems all ok but it’s not, such a strange feeling. I hope all are staying safe and healthy. I am working from home for almost now 1 and half month and office just declared it will remain same till end of summer. I believe for any large organization its going to be a challenge to bring all employee back while keeping safeguards in place. In my office floor there are about 40 people are placed in adjacent cubicles. I don’t think it will easy to keep safe distance even half of the folks decide to back to office. Then additional risk will be sharing the rest rooms, elevators, kitchen area so on.
Anyway, today I am going to share some thoughts on saving few extra dollars by cutting recurring expenses that we just cannot stop spending. Now that I am stuck at home, I started reviewing our monthly recurring bills except grocery. So, I targeted if some way I could reduce our car insurance, internet bill, home insurance and phone bill. Let’s review each of them separately.
We were paying about 110$/month for our two cars. Our newer CR-V is fully covered while the old Camry is under liability coverage only. I guess that’s quite standard price in Hosuton metro area but wondering is there way to cut the bill further. These days my office hours are approximately 7 am to 4 pm. I am saving almost two hours’ worth of commute every work day, what a blessing😊 So after 4 PM, I started calling Liberty mutual, Geico, Amica and few others for quote keeping the same existing coverage. I am not sure is it for the fact that people are not driving a lot, so risks are minimal, all insurance provider were giving discounts. I went with the lowest quote for 85$/month and cancelled my existing policy. So that about  25$/month of saving..wow, I am impressed.

Next I targeted my internet bill which is currently running about $70/month. For internet, ther are not many options in our subdivision, its either Comcast or At& T. After some search I found only way to cut 10-15 bucks by opting for lower mbps policy. But my wife objected that we both are working from home, so should not sacrifice on internet speed. That was practical opinion from wify😊 So I stopped shopping around on internet policy. I will review this option later when we will go back to office again.

The next target was out yearly home insurance policy. Here in Houston, due to close proximity to gulf of Mexico and hurricane occurrences, home insurance is quite pricey. Currently we are paying about 1500 $/year for full coverage of our house. We also keep a flood insurance of 400$/year although our house is not in flood zone. I am keeping this for extra peace of mind, specially considering the devastating flood Houston area experienced after hurricane Harvey in 2017. So many neighborhoods which were not even not near any flood zone, got decimated by that sudden flooding. So I am not thinking to opt out for this flood insurance. Anyway, for home insurance I was able to get quote at 1350$/ year from a large national insurance agency. I could get much lower quote by scraping some option from my insurance. But I don’t think that’s a pragmatic idea considering the repair cost even for a small water leak or roof damage.
Our current phone bill is running bit on the higher side of $90/month with T -mobile. I think this is quite expensive considering the basic options it has. I was thinking several times before lock down to shop around but could not find time. I was researching some options on the internet and seem like same package we can get around $60/month. But to get the SIM we need to go to physical store that I don’t guess a safe choice for now. I will get back to this later once things come back to normal.

Now lets summarize my savings, its 25$ X 12 (Car insurance) + 150 (home insurance) = 450$/year.
Although this does not seem a lot but hey who is giving me these 450 dollars for free anyway 😊
For many of us that’s almost 2-3 days’ worth of office work.
If I think another way, at 4% dividend rate, I need to invest about 11,000$  to get same 450$ a year as income. That means saving about 1000$ every month for 11 months.
So, in a way this a passive income for us😊 for which I did not work at all!
Hope this article will help you guys to review your recurring bills and hence some saving potential!

Stay safe!

Disclaimer: This article shows my personal opinion and its for entertainment purpose only. This is no way professional financial advice. You may seek professional advice or conduct own research before investing.

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