This may sound unbelievable, but reducing these monthly expenses could result in well over $50,000 of additional money in retirement.
The end of the year is a good time to look at your routine spending and identify ways to cut costs. As last year came to an end I took a hard look at my cable, internet, and phone expenses. Spectrum has a monopoly on cable and internet service in my area. So, I couldn’t really do anything about internet and my only alternative for cable was going to a streaming service. Spectrum was charging me $191.62 per month for cable and internet. My cell phone was with Verizon – $82.99 per month for two phones with 2GB of shared data. My goal was to get the same service, or close to it, for less money.
Cell Phone. I researched several options for cell phone service including Mint Mobile and Republic Wireless. These are both good options and are highly recommended by many in the FI community, but the best option I found was Spectrum mobile at $14 per line. Unfortunately, this is only available to Spectrum internet customers. The plan includes unlimited talk and text and 1GB of data. And since they use the Verizon network, it is literally the exact same service. Switching was easy, I signed up online and they sent me new SIM cards. Monthly Savings = $54.99
Television. I looked at several streaming options. One important factor was having access to the handful of shows we watched and to live sports. I decided to go with YouTube TV for $49.99 per month [NOTE: the price was recently increased]. The channel lineup isn’t exactly the same as cable, but we didn’t lose anything we’re going to miss. Overall I’d rate YouTube TV as slightly better than Spectrum Cable. So, again we are getting essentially the same service for significantly less. Due to the switch, we did see a small increase in our internet service price because we were no longer bundling with the cable. Switching was a little more effort than the cell phone, but still fairly easy. I called Spectrum to see if they could give me a better price. The significant discount they offered was quite low enough, so I cancelled my cable service. Setting up YouTube TV was quick and easy to do online. Monthly Savings = $71.64
| Old | New | |
| Cell Phone | $82.99 | $28.00 |
| Internet | $64.99 | $69.99 |
| Cable | $126.63 | $49.99 |
| Total | $274.61 | $147.98 |
Monthly Savings = $126.63 ===> Annual Savings = $1,519.56
A little research and a little work to make the switch resulted in over $1,500 of annual savings. Taking that savings and investing it, even assuming a conservative 5% return, results in a cumulative savings of over $52,000 in 20 years. If you take these steps at a younger age and assume a slightly optimistic (though not unrealistic) 10% return, the total after 40 years is an astounding $800,000. And remember, this required absolutely no sacrifice. Only minimal effort was required to make these changes and the service is as good as what I had before.
As 2020 comes to a close, I strongly encourage everyone to take a look at your cable, internet, and cell phone expenses. You may be able to save a lot, without sacrificing service, by making a simple switch. If you’re open to cutting back, you can save even more using services like Amazon Prime Video, Netflix, and AppleTV to replace live programming. Many of the streaming services offer free trials and/or introductory rates, presenting an opportunity for even more savings if you’re open to frequently switching between services.