Budget Planner: Three Discretionary costs to cut to help build your retirement

"Cutting costs is only a first step, You may not end up a millionaire but cutting expenses and following three rules will allow you to build wealth"


By: Allan R Kirby

Mysmallbank.com personal finance blog discussion: Discretionary costs that you can cut to help build your retirement.

Expenses to Cut!


I am going to look at three common expenses you can trim to free up more money to help pay down debt and save for retirement. We are also going to discuss what else you need to do in order to succeed. To begin, let’s look at the three common expenses that will help you with expense cutting:

  1. Dining out.

  2. Subscriptions.

  3. Entertainment/Travel.

Dining out


Okay, so you have Grubhub, Door Dash, and a host of other food delivery services available. It makes it so easy today to order food. Additionally, you also have the very popular fast-casual restaurants that have sprung up over the last number of years, all of which make it so easy to just dine. It can begin to take a big bite out of your pay. In fact, even if you eat out only a couple of times of the week for lunch and dinner, it can add up to a substantial amount over a period of a month. I have also been doing some price checking for services such as Door Dash. For example, I found one of my favorite restaurants added Door Dash as a service, for free. However, when I did a price comparison between picking up myself and using Door Dash, the actual costs differed on average $5 or more per meal. A five-minute drive instead of Door Dash saves me between 15 to 20 % and was worth it. The point is that cutting out needless delivery and eating out less will save a substantial amount of income if you eat out regularly. Possible savings are $200 - $300 a month


Subscriptions


Yes, I love subscriptions but subscription creep is becoming very common and can add up to a substantial amount over the course of a year. To give you an example, it might be great to have a subscription to Netflix but you may also end up with Amazon Prime, Paramount+ (CBS all-access), and Hulu, plus a host of other subscriptions such as gym memberships, newspapers, magazines, food preparation, etc... It can really add up. I was in the same position when I did my subscription cleansing. It began to creep up so I did a complete review. Each person has to make choices and for myself. I decided to drop my magazine subscriptions but added Apple news ( a lot more for less). I changed my gym membership after I found a lower-cost gym, but I did ditch NETFLIX while keeping Paramount+ (CBS all access); strange, I know but that is what I was using most of the time, plus I still had my good old TV antenna. The point is that subscriptions can add up, but you do not need to ditch everything. Like myself you can just modify and find cheaper alternatives, however, overall you can still save enough to make a difference. Possible savings are $100 - $200 a month.


Today there are many online apps that help you reduce your monthly subscription costs, by negotiating new monthly rates such as Truebill. Learn more at the end of this article!


Entertainment/Travel


I am not as active as some people who still like to go out to sports events, concerts, or even smaller music events and short vacations. I am finding these types of activities are discretionary costs are no longer cheap. I do get that we all want to be active and go out and buy experiences. Unfortunately, I am finding the price of the ticket, food, parking or other forms of transportation together add significantly to the cost of going to a sporting event or short vacation. Recently I did a one-day skiing trip and found it easily added up to over $200 in gas, parking, lift ticket, food, etc.. and that was with every discount I could find. I will never advocate completely ditching buying experiences but I do recommend finding a good balance, better yet, I have found many free to very cheap experiences that keep me active. Possible savings are $100 - $300 a month.


“Cutting your expenses is only a first step. You need to ensure the money saved goes into a retirement fund to invest for growth"

Reality Check; My experience


When I was younger, I was spending a lot more on discretionary items so when the day came for myself to make tough choices to cut expenses, I found that it was only a first step. You need to follow through with additional steps to complete the path to financial freedom. It isn’t complicated but you need to do the following:


  1. Set up your retirement accounts to deposit your money automatically.

  2. Invest your money in mutual or index funds, stocks, bonds, real estate, etc...

  3. Continuously tracking and adjust your deposits and investments to ensure you continue to build your nest egg.

“Success in saving money can be measured by your commitment and discipline and not just the savings."

Look, the reality is that simply cutting expenses will not always result in you becoming a millionaire. There is a lot of extra “follow-through” required, which includes being disciplined to ensure you save your money and invest it. Even if you invest, you may not get the expected returns, so you need to continually track your retirement funds and make adjustments when required. It’s not easy and even if you have index funds, you still need to keep yourself committed and disciplined by reviewing your progress on an ongoing basis. Finally, life is life, cutting expenses is great but it’s up to you to determine the degree to which you want to cut your discretionary spending. I will always advocate moderation, too much spending is not good but you still need to keep yourself mentally sane.


Good luck and hopefully you will be successful!


How to save money on Bills


As more and more people struggle to find ways to keep track as well as save on their subscriptions, new apps are being developed to help you with those issues. Take Truebill a free app to sign up that allows you to take stock of your subscription services.


The app allows you to monitor and cancel services you no longer need or want as well as providing a service to help you reduce your monthly bills for many subscription services such as cable, telephone, and cell phone services and many other subscription services.


So how does Truebill work, how much is it, and do you save?


All you require to do is to download the app and sign up for free. You can sign up for the Truebill Premium service for about $36 a year, however, it's best to try the app out first before you decide to pay for the service.


Connect your bills to the Truebill app and let them help you save!


Once you have signed up to the app you can connect your bill either by logging in or by snapping a photo of your bill. Once you have your bills in the app you can then let Truebill experts review your bills and get to work finding hidden discounts and promo rates available to you.


Get your subscriptions reduced through Truebill


The Truebill staff will contact your service provider and negotiate your bill. As stated on Truebills' website " They never downgrade or remove your services. Instead, they try to lower your bill by either negotiating a better rate or by getting 1-time credits applied to your account."


They will then get an email letting you know of your savings and the details of your new billing.


Can you save money with Truebill?


Although we cannot independently confirm, Truebill states that they have helped countless people save over $14 million by helping them identify and cancel unwanted subscriptions, lower their bills, and get them refunds on fees and outages.


Do I get to keep all of my savings with Truebill?


No, you will split the savings with Truebill, the fee is 40% of your savings. which means that if you save $100, Truebill takes $40. Additionally, if Truebill can’t negotiate any savings, you do not pay anything.


Is Truebill safe, is my information protected?


Yes, Truebill states that your financial and billing information, as well as your accounts, are secure. Truebill uses high security, 256-bit SSL encryption


Budget Planner is a segment of the MySmallBank.com blog written by Allan R Kirby, who writes and produces Personal Finance articles and videos along with My Success Magazine.