Cutting Waste, Growing Wealth

Is saving £432 worth an hour of your time?

Imagine you are looking into your account activity to ensure you have enough for your holiday gifts and plans, and you notice an unexpected monthly charge from your favourite service provider for £57. You think to yourself: ‘hmmm, that is interesting; I thought it was supposed to be for £21.’ (You can exchange the pounds for dollars, or any other currency you work with, it is the same math and logic).

You would probably do one of two things here: You could mentally dismiss the new expense right away and keep planning your holidays (which are very important), or you could address this unexpected overcharge right now.

‘But it is not worth my time, I am very busy!’ you may say to yourself when you think of addressing this issue. You are very busy, and your money is important; that is why you may want to address this new monthly payment now.

If you address it, you could save £432 per year, as it is a £36 monthly increase in service charge. Also, if you have already maxed your expenditures, and pay an average of 25% income tax, then you will have to make an extra £576 per year annual income to cover this new payment!

In fact, if you look at the opportunity cost, it is even more interesting. If you saved this £36 monthly for 10 years in an investment that made a return of 6%, then you would have £5,849 (which includes £4,320 of contributions and £1,529 growth). What could you do with almost £6,000? That could be a nice vacation, new boiler, or anything else on your wish list.

So you decide to investigate this new charge, and you call your favourite service provider, and find your 18 month contract for £21 monthly expired last month, and you were auto-renewed to the new plan for £57 monthly. After a quick Google of competitor rates, you negotiate it back down to £21 for another 18 months. This took you less than an hour. You have saved yourself £432 per year. Well done!

These small creeps in cash flow may seem insignificant, but can amount to big money over time and over many budget expenditures. If this was an exciting prospect for you, you can go through your account expenses and:

• • Renegotiate terms with your favourite providers, or change to new ones
  • Cancel 1-2 subscriptions or streaming services you no longer use
  • Cancel any other contracts for services and goods you no longer use

  Is saving £432 worth an hour of your time?

   

  About the Author

  Dr. Cora Pettipas, CFP is an award-winning global financial strategist, bestselling author, and creator of the Compass Star PATH system. Through her writing, speaking, and financial planning work, she helps individuals build Passion, Abundance, Time, and Health into their lives.
  Learn more about Dr. Cora Pettipas by clicking here.

   

  

   

  Continue Your PATH Journey

  Cutting Waste, Growing Wealth is part of the Abundance Pillar of the Compass Star PATH to True Wealth System (Passion, Abundance, Time, Health), which explores financial planning, cash flow management, mindful spending, wealth building, and the small financial choices that can have a big impact on long-term financial freedom. Learning to reduce monthly expenses and eliminate unnecessary money leaks can help create more resources for the things that matter most and support the journey toward true wealth.

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  Disclaimer: This article is for educational purposes only and is not personal financial advice.