I have had basic cable television for as long as I have lived away from home. Most of the time, I haven’t had any movie channels, so for a period of 10+ years, my bill was probably about $25 to $35, and was around $35 up until about a year ago.
Around that time, I purchased a new TV (the old one really did have a very dark, horrible picture), and, well an LCD seemed like a logical choice, especially with the $100 discount I got from the cable company for upgrading to HD service. Well, guess what? I upgraded to digital cable with high definition programming.
And guess what else? My cable bill went up to about $75/mo.- doesn’t really surprise you, does it?
Recurring expenses such as these don’t really seem like a whole lot on the surface. I can’t count how many times I have said to myself “It’s only an extra $20, $30, or $50 a month”, and talk myself into something new.
But $20/month is $240 in a year, $30/month is $360, $50/month is $600 a year, and so on. It does add up, just like a $3.00 cup of coffee 200 times a year adds up to $600.
Some examples of Lifestyle Inflation that add recurring expenses:
- Getting a cell phone-or upgrading to a text, email, or data package with your phone service
- Digital cable, high definition service, or premium movie packages
- Subscription services- like Netflix, memberships, or other services
- Getting a housecleaning service- on a weekly or biweekly basis
- Gym Memberships
- Hiring someone to mow your lawn
If you take 3 or 4 of these services, at $20- $50 per month, you could be talking about several thousand dollars over the course of a year.
Now, it doesn’t mean all of these are bad. For example, if you frequently go to the movies or rent 3 or 4 movies a month, you may actually save money by joining Netflix.
So how do you avoid lifestyle inflation?- Consider your yearly costs, and think about what else you could be doing with it, such as debt reduction, saving for retirement, or some other saving goal.
Another problem is forgetting to cancel them when you no longer use them. JD Roth at Get Rich Slowly had a post this week where he asked readers for book suggestions for an audio book service he paid for and never canceled, and the credits were about to expire. Why? Because he forgot to cancel the service and got charged for it.
Examine your regular expenses, and ditch something if you no longer use it regularly or can live without it- then pay off your debt or save it!
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Andy @ Retire at 40 11.15.08 at 8:46 pm
You’re so right about lifestyle inflation. I have found that some parts of my life has inflated with increasing income (say eating out money) and other areas have stayed the same or decreased (my cell phone bill).
Recently I have applied my lifestyle deflation to all areas of my life and the total saving so far as been phenomenal. It really does add up.
poor boomer 11.15.08 at 11:05 pm
No lifestyle inflation here…my income is $900 per month.
RC 11.16.08 at 10:24 am
@Andy- I know what you mean, I have had similar expenses that have increased as my income has increased, while others have stayed about the same. Good idea about “lifestyle deflation”, I need to apply that to more areas in my life!