Monday, October 18, 2010

Cutting the bills pays off big - $4,000 per year and counting!

It's report card time here at CuttingTheBills. Just to show you that this blog isn't just about cutting the cord from pay TV I thought I'd start adding up some of my annual savings from a few of my projects.  So far I'm saving easily over $4,000 per year.  YES, FOUR THOUSAND DOLLARS!  If I were that piggy-bank, I'd be one REALLY happy pig!

As nice as these savings are, there are even more ways to save.  In fact, I think this is just the beginning.

Are you skeptical?  You should be!  Let me review the savings and I'll show you how you can save too!  And to be fair, I'll be disclosing ALL of my costs (even trivial ones).  If I've made a mistake or missed something, let me know and I'll correct it. But the bottom line is that you can save a significant amount of money in quite a few different areas.

In the process, I hope you also appreciate my blog's main theme that technology can help us cut costs (without sacrifice).  All too often technology is just a way to distract us with shiny new toys while really trying to sap our pocketbook.  It's time to fight back and who says we can't have some fun in the process!

Now on to the savings!

First let's go over the items that are pretty straightforward.  These are items that I've mostly blogged about already.

Just follow the links in the tables to see the original articles that talk about each savings in detail.

Cutting the bills Annual savings
Cutting the cord from pay TV $960
Switching to an OOMA phone $360
Making my own coffee $740
Getting Smarter car insurance coverage $580
Collecting cash for recycling $60
Canceling my gym membership $480
Avoiding a cell phone data plan $600

Total annual savings: $3,780

WOW, that is a lot of cash (and this is just the easy stuff to count)!  Those savings sure do add up fast!

What you don't believe me?  Okay, here are the details:

Cutting the cord savings
  • My old "triple play" (or rather triple pay) cable bill was $165 per month (phone, cable TV and Internet)
  • With Internet only service (no TV or phone), it dropped to $42 per month
  • I added Netflix (the 1-out at a time plan) which is just under $10 per month
  • My net savings is $165 - $42 + $10 or $113 per month
  • I estimate that the phone portion of my old cable bill was about $33
  • OOMA (my new phone) isn't totally free, the monthly "tax" fee is about $3.47 for most people
  • My net phone savings would be $33 - $3 or $30 per month ($360 per year!).
  • My net TV savings would be $80 per month ($960 per year!)
Coffee savings
  • A typical coffee drink is about $4, one per day, 5 times a week that is $1040 per year
  • Yes, I like coffee, but I have a relatively mild habit compared to some!
  • I'd estimate my coffee supplies (beans, milk, chocolate) at $25 per month or $300 per year
  • I only buy fresh beans from a local coffee roaster (remember, savings WITHOUT sacrifice!)
  • Net savings on coffee of $740 per year
Car Insurance savings
  • We have three relatively new (2000, 2005 and 2007) vehicles in our family
  • The vehicles aren't fancy, just practical
  • By removing collision/comprehensive (with a $1,000 deductible) we save $580 per year
  • Yes, I've assumed some risk, but I've also maxed out my liability coverage (the protection that is really important)!  Read my argument here why I thing this is being smart for the long-term.
Gym membership savings
  • I haven't blogged about this yet, but by canceling my local gym membership (at $40 per month) I save $480 per year
  • No, I haven't stopped exercising!
  • I switched to more time-efficient and free methods (and am actually in much better shape now!). 
Recycling savings
  • By collecting cans, plastic and glass bottles (instead of dumping them in the recycle bin), I'm getting cash back that amounts to about $5 per month, or $60 per year.
Cell phone savings
  • My current cell phone bill (AT&T) is usually less than $30 per month (and with plenty of minutes)
  • I haven't done an exhaustive survey, but $80 per month for an iPhone with a data plan isn't unusual.
  • This save me $50 per month (I still use my iPhone's data features, just only on Wifi).  This saves me $600 per year.
  • I also bought a portable GPS navigator to use instead of my cell phone (works better too)
  • NOTE:  If you are a light user of a cell phone, you can save ever more.  By switching to a pre-paid plan I got my Mom's bill to about $5 per month!
Okay, that covers the easy stuff, what about the rest?

Some ways to save money are more difficult to estimate exactly.  These items could be small, or run into the thousands.  For example:

Cutting the bills Annual savings
Reusing older computers ???
Using my local library ???
Doing simple car maintenance ???
Watching my electricity use ???

Computer Savings

Instead of buying new computers, I've upgraded nearly all of my computers to Windows 7.  Microsoft has done a fantastic job with this new OS and it runs on surprisingly well on old computers.   For once, PC users get an OS that is more efficient and doesn't force you to buy new hardware!

A new laptop alone for me would be over $1,000 (I like the good ones).   I've even upgraded my kids' computers (really old) and they work great now.  Eventually I'll have to buy new computers, but Windows 7 has allowed me to put off that expense for a while - saving me money!

You even can pick up a 3-User Windows 7 (Home Premium) upgrade family pack from Amazon for less than $150.  This is much cheaper than new computers!

Library savings

I'm also a fan of using my local library.  I can rent (borrow) DVDs, CDs, as well as avoid having to buy books.  Anyone with kids can appreciate how expensive a trip to Barnes and Nobles can be!  Having access to free DVDs is also a great way to help you cut the cord.

Car maintenance savings

Working on your own car doesn't have to be scary.  It doesn't have to even be big things.  I've blogged about doing simple things like cleaning your own cabin air filter.   Even better, if you change your own oil, you can save $50 (as much as $200 per vehicle per year!).  Sure car maintenance is a challenge, but if you do it yourself you learn a bit and know it is done right.

Electricity bill savings

Finally, one simple tool that I've blogged about can help you with your energy use.  A typical electricity bill can run over $100 per month.  Just being smarter about what you buy and how you use it could easily knock 5% off your bill.  That would add up to $60 per year with no effort at all.

For most of these items, it is really hard to estimate how much I'm actually saving.  However, it isn't a question of if I'm saving, it is really a question of how much.  I could make a silly guess, but I'd rather be conservative and just say that these items add up to at least a few hundred dollars per year (minus any costs).

My combined savings are over $4,000!

Okay, while $4,000 is an attention grabbing number it is easily attainable and justifiable.  However, I did spend some money on a few technology toys that helped me along the way.  My goal is saving without sacrifice and some technology is great at that.  To be fair, we must offset the savings by this cost:

Fixed (one time) costs

Item Cost
An OOMA Phone $200
My DIY Media PC $600
Digital TV Antenna $150
Garmin GPS Navigator $150
Kill A Watt meter $20

Total costs:  $1,120

With a annual savings of $4,000, spending a little over a $1,000 is truly a no-brainer.  Of course, these items should easily last several years.  Just average these costs out and almost all of your savings stay in your pocket where they belong!


Well, I hope I've made a believer out of some of you in that there are multiple ways to cut your bills and save money with technology.  With how busy we all are it is sure easy to ignore some of these and you don't really realize how quickly it adds up to real money.  While cutting the cord is definitely one of my favorite topics, it is just one of many ways to fight rising bills.

There are lots more ways to save and if people tell you that it isn't worth it don't believe them!  Try it for yourself instead!

What ways have you saved money?

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