Budgeting – Recurring Expenses

One piece of advice I’ve learned from various personal finance sites, is that you should have as few recurring costs as possible. A lot of people easily get trapped into paying monthly bills for services they don’t use (like gym memberships). In these cases, the act of paying becomes a habit, even if going to the gym doesn’t.

For me, my monthly recurring expenses are my cell phone, electricity, rent, cable/internet, and netflix. The first three I can’t get rid of (unless I moved to somewhere where rent included electricity). The internet is something I won’t give up. I also investigate my phone bill at least once a year, to see if there’s a better/different plan I should switch over too. Why pay more then you need to?

However, for me, the cable and netflix are debatable expenses. I have looked at canceling my cable membership (I rarely watch it), but it turns out that won’t save me much per month (as I save extra by bundling my cable and internet). And I was using it to watch the NHL finals.

This fall, Canada will finally switch to digital over-the-air service. Which means, this summer is probably a good time for me to investigate how expensive (or cheap) it would be for me to move in this direction. It would get rid of the monthly bill for a single start up cost. But will I still get the shows I watch? (Likely, as they are all on the basic channels.)

For the amount I spend on cable, another option is to subscribe to the few shows I watch on iTunes (or through some other service). I’d still come out ahead and save some money. Or, even better, I can watch them online the following day for free on sites like Global and CTV. The only drawback to this, is they only usually have the last few episodes available, so it’s not possible to re-watch earlier episodes, which I like to do.

I recently set up a netflix account. I was hoping it may turn out to be a good alternative to cable. However, the Canada selection is still pretty sparse, athough it is growing. For the first few weeks of having it, I found myself watching my way through a few shows. Then I started paying for it, and at that point I had finished all of the shows I was excited about and was no longer using it. So I put my account on hold. If I feel an urge to start watching again, I’ll start it up. If not, when the hold expires, I’ll consider canceling it all together.

Other common recurring expenses are magazine and newspaper subscriptions, online game memberships, and gym/club fees. It’s worth taking a moment to go through your list of recurring expenses and ask yourself – Am I paying more than this item is worth? Can I do without it? Can I change my plan/package to better suit my needs?

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