Some people might say there’s limited room to reducing your expenses and they’re probably right. Nevertheless, you’ll be surprised with ideas that can come up if you really pay attention to your spending habits and lifestyle choices.

Today, managing our expenses only takes a few hours a month. This is possible thanks to systems and tools like Personal Capital that do most of the heavy lifting for us.

Even though most of our finances are on auto-pilot we continue to challenge ourselves to identify ways to further increase the gap between income and expenses.

Without further ado, below are 5 decisions that led to $3,500+ in annual savings.

1. Cut Cable “ish” – $960/year

Getting rid of cable is a no brainer. We read about it on numerous blogs and decided it was a smart decision for us.

We bought a digital antenna, signed up for Netflix and started taking advantage of Amazon Video.

In the following days, we gave Comcast a call and they were able to set us up with their cheapest package. To our surprise, it was better to have a bundle that included local channels than just internet service.

This is what the numbers look like today:

• Comcast Package (before): $180/month
• Comcast Package (after): $86/month
• Netflix: $14/month
• Total Saved: $80/month or $960/year

2. Insurance Deductibles – $446/year

Not having insurance is definitely not a good option. We strongly believe in being prepared and protected to deal with possible eventualities. For that reason, we carry the following:

• Life insurance
• House insurance (primary residence & rental properties)
• Car insurance
• Umbrella insurance

Recently, while listening to one of my favorite podcasts, I discovered the connection between premiums and deductibles. That is, the lower the deductible the higher the premium.

Initially, my take-away was about risk and reward but after careful thought, it became more about having peace of mind. After considering all the pros and cons we realized we were comfortable increasing our deductibles on all of our policies. Here are the numbers:

• Primary residence ($1000 deductible): $1,532/year
• Primary residence ($5000 deductible): $1,245/year
• Car insurance for two vehicles ($500 deductible): $1,471.6/year
• Car insurance for two vehicles ($1000 deductible): $1,312.6/year
• Total saved: $446/year

3. Satellite Radio – $239.88/year

We have two certified pre-owned vehicles that came with a temporary subscription to SiriusXM. Once expired, we decided to keep the subscription on my vehicle. After a year, the value/cost ratio drove us to cancel.

Today, our go-to options are podcasts, Spotify, Pandora, Youtube, and Amazon Music. These options are free and allow us to pick and choose without having to pay Sirius XM $19.99/month.

Some folks will say that if you call SiriusXM you’re likely to get a deal for 3-5 months. That can certainly be the case just remember that at some point, the rate will go up to $19.99/month and you will find yourself calling to cancel or to bargain again.

• Total saved: $19.99/month or $239.88/year

4. Life Insurance – $1,507.39/year

Listen, if you have kids then you should consider getting life insurance. If your employer offers a policy as a paid benefit take it. If not, then shop around and get one.

I’m not going to walk you through all the insurance vehicles that are out there, instead, I’ll keep it simple and recommend term insurance. With this type of insurance, you pay a fixed annual premium for a policy that has a specific duration and coverage amount.

There are rules of thumb for coverage amounts. Some suggest 7-10 times your annual salary but that can change based on your personal situation. In general, the younger you are, the higher the amount and term duration. The opposite is true for individuals closer to retirement.

You can shop for term insurance with a simple Google search. In our case we used PolicyGenius. We heard about them in a personal finance podcast and liked their offering.

Their platform is very slick and does a great job walking you through a series of questions that enable their algorithm to deliver recommendations on coverage for different terms. In our case, we bought a 30Y policy for $2,521.8/year.

A year later, During our annual financial goals review, life insurance came up. After careful thought, we realized we may have been over-insured. As a result, we decreased the coverage amount and paid the lump-sum to get a 10% discount.

• 30Y term policy (before): $2,521.8/year
• 30Y term policy (after): $1,014.41/year
• Total saved: $1,507.39

5. Financial Advisor – $530+/year

Before discovering the Personal Finance community, our feelings towards money management were not the best. We were frugal but investing came across as something that required expertise and professional help.

At the time, the only investment vehicle we used was my company-sponsored 401(k) where I was contributing 6% to get a 100% match.

After a couple of years in the job, my company announced a partnership with Financial Engines. They provide financial advice and management of individual 401(k)s. Thankfully (or not), I paid attention and signed up for their services. We realized they would charge us 0.53% in fees based on assets under management (AUM). At the time we thought the cost was reasonable.

At one point we started to analyze our investments and realized they put us on a bond fund (low % – as my investment style was aggressive) with a 0.46% expense ratio.

My 401(k) had a different bond fund with a significantly lower expense ratio so I got on the phone to have them switch me for the one that was cheaper. They took care of the problem but I was troubled by needing to give advice to my advisor.

In 2016, we called Financial Engines to cancel their service. The reason was simple:  investment FEES … 0.53% of our hard-earned money … no way!

I won’t give you the details behind the amount we’ve been saving but it is significant. Assuming I had $100K in my 401(k) that’s $530/year!!!

Final Thoughts

• I know these 5 ideas are not applicable to everybody.
• Avoid getting attached to material stuff.
• Having a partner that has the same goals makes a HUGE difference.
• We can all adapt to changing environments.
• Check your expenses every now and then to avoid complacency.

If you have other ideas I should include feel free to leave those in the comment section.

Until next time … JJ