One way we keep our overall spending down is by being very careful about adding monthly payments to our budget. In some categories, of course, you simply cannot avoid paying every single month (I think we’d mostly agree that running water isn’t really a bill we’re willing to forgo). But in general, I try to avoid committing to paying a bill every single month unless I really have to.
When you have a lot of bills you are required to pay every single month, the income you have at your disposal to pay down debts, build up savings, or fund vacations diminishes.
Worse, I’ve found that once you begin paying something every single month, you start to feel that it’s an absolute necessity, something you could never cut from your life. For me, at this point, it’s almost inconceivable to imagine not having high-speed internet at home or a cell phone.
A few years ago, Bart really wanted to get a smartphone. But not only was the cost for the phone more than I wanted to spend (I have always gone with the free phone because, really, I’m not doing anything more than making a few phone calls and sending some text messages), the cost of the plan would have increased our current cell phone bill three fold. This . . . did not really appeal to me. We finally agreed to stick with our cheap plans and free phones, and in the last two and a half years, I’ve been grateful every month for our relatively low bill.
Netflix is the same way for me – I just don’t want to be committed to paying every single month for it. I don’t want to own so many things that I need a storage unit (and its accompanying monthly fee) to hold it all.
By keeping monthly financial commitments to a minimum, we can better control our spending and increase our ability to save money and pay off our student loans at an accelerated rate. Because I don’t want to have a monthly bill for those loans either.