This article is brought to you by Verizon Fios.
“Too much” is, of course, a subjective term. But we’re not here to shame you for any one indulgence. In this case, we’re only talking about sneaky expenses — things that you can easily forget about because you only get billed once a month (in some cases through an automatic charge that you might literally never see if you don’t routinely scrutinize your bank statement). The more frequently that services and products became streamlined, automated expenses, the easier it is for us to rack up high bills without realizing it.
Modern convenience is a wonderful thing — but not at the expense of your financial health. In order to help get your spending back into shape, we’re partnering with Verizon Fios to talk about some of the biggest budget-busting culprits.
1. Subscription Boxes
Maria from The Sound of Music expressed it best: there is just something about a nice brown paper package arriving in the mail that makes you feel a little bit like bursting into song. We get it. And start-ups the world over get it, which is why it’s turned into a multi-billion dollar industry that has apparently become so niche that there are not only boxes for snacks, clothes, makeup, and dog toys, but four competing boxes for mermaid paraphernalia (…?).
Of course, if they fit into your budget, you actually use all of the products, and you get consistent joy out of them, great! What is worth remembering, though, is that there’s a reason companies embrace this model. Rather than having to spend enormous effort convincing you to buy (probably unnecessary) new stuff all the time, they’ve basically gotten you agree to buy stuff in advance and removed your rational decision-making from the process. When you’re in a store, you have to make a specific decision about the products in front of you, then physically hand over money to a real person. But with a subscription, you could almost forget you paid for these items at all. You have to ask yourself: If I saw these exact products in a store, would I really have chosen them? Do I really need or even want them?
2. Gym and fitness class memberships
Much like subscription boxes, the recurring nature of a membership can easily lead to spending on a service you don’t use, or don’t love, or both. But how much is “too much” when it comes to fitness spending? Here’s a quick list of questions to ask yourself:
- Do you go to the gym or classes less than once a week?
- Do you kind of dread going (i.e. you’re not really getting enjoyment out of it)?
- Could you be paying less for something you’d enjoy equally (i.e. a cheaper gym, or an activity like jogging that doesn’t require any membership)?
If you answered “yes” to at least two of the above, it’s probably time to reconsider your fitness options.
3. TV and Internet
The amount of entertainment services one can have these days is dizzying — between all of the TV streaming options, music, and basic internet access, you could easily rack up ten different recurring bills just for media. It’s a lot to keep track of, and very easy to make unwise choices. TFD’s CRO Annie shared an embarrassing story about how she ended up spending a bunch without realizing it:
“I got hooked on Sharp Objects on a flight, so when I got home, I was dying to finish it but my boyfriend asked for me to wait until he was less busy so he could watch it with me. But like an addict, I defied him and snuck into our room to sign up for the 7-day free trial to HBO with Amazon Prime with headphones. Of course, I not only forgot to cancel the service, but forgot I had HBO at all, so I wasn’t even using it for weeks.”
What you may not realize is that bundling some of them could actually be more cost-effective (not to mention easier to manage). If you’re looking for a way to streamline your TV and internet, you should check out Verizon Fios. Right now, they’re offering a special bonus of a $200 prepaid Visa gift card, and in addition, you can opt-in to a 2-month test drive. (Full disclosure: we are partnering with Fios to help spread the word about this deal.) During the 2-month period, you’ll get Ultimate HD TV with more than 425 channels (including direct access to Netflix) and Fios digital tools will analyze what you’re watching so it can make a recommendation on the best TV package for you. You also get super fast internet, so you can stream on all your devices at once.
Of all the “adult” decisions you have to make throughout life, few are more confusing or more dry than choosing the right insurance policies. Yet, given how expensive these policies are, it’s crucial to make informed choices. The average American spends $1,621 per year on car insurance, and the average 30-year-old spends more than $5,000 per year on health insurance premiums. If you don’t understand the terms, it’s very easy to choose plans that don’t quite fit your needs, or end up paying far more than you need to.
Luckily, there are many free tools, like PolicyGenius, that you can use to compare your options for all kinds of insurance (including health, life, renters, and auto). No matter what kind of insurance you’re buying, you’ll want to spend a bit of time researching and understanding your options. For instance, if you don’t drive a lot, you might consider a pay-per-mile insurance option like Metromile. If you’re a very careful driver, you might choose a plan that’s based more on how you drive than on your history. It’s all about knowing your options and what’s best for you.
5. Weddings (yours or your friends’)
While this isn’t a recurring or automated expense, we qualified it as “sneaky” because it’s not something you can predict terribly far in advance. For instance, let’s say you create your annual budget in January with a certain amount for travel or fun spending. Then in the following months, you get Save the Dates for two different destination weddings, plus a bachelorette weekend in another city. While you might be genuinely psyched to celebrate these events with friends, all of it is going to seriously impact your entertainment and travel budget. The hard truth is that if you’re going to accept these invitations, they very well may have to become the bulk of your vacation and fun budget for the year.
In other words, that couple’s weekend or solo trip you’d been thinking about might have to get cut. It could very well be a sacrifice worth making in order to be there for people you care about and create these memories together, but you’d be wise to make those decisions as quickly as possible and try to not feel overly frustrated (if you’re choosing friends over your former plans) or guilty (if you choose to decline events). Then, make a rough budget estimating how much you’re likely to spend on these events, and stick to it!
This article is brought to you by Verizon Fios. Learn how you could get a $200 prepaid Visa gift card here when you sign-up for a new plan with cable, internet, and phone (in Fios eligible areas).
Image via Unsplash