For each recurring service I have, I’ll look for competitors who are offering better deals. If I find a better deal, I’ll put a mark next to the service on my list - that I made in step 1. If no other deals are better than what I am paying, I consider that service to be fully optimized. This technique must be done at least twice a year, because service providers like to increase their rates at the same, if not faster, pace. When I am all done researching, I will then make the phone-calls needed to switch service providers. The money saved from switching providers goes directly into my IRA accounts - this will be further discussed in step 3. Sometimes, you may be able to save $20 after pruning your expenses, other times, you may save $200. It depends on how inflated your expenses are at the time. It is worth noting that even though we are trimming expenses, when you optimize, you are not sacrificing any services. You will still keep your automobile, internet, video service, etc. Now, if you have fully optimized your expenses and are still looking for more to save, you can begin to cut things from the list.
Remember the priority of the list discussed in step 1? Can you cut Starbucks completely? What if you substitute it for something else that’s cheaper? Can you cut your gym pass and work out at home? Cutting expenses that you can live without, after optimizing the ones on your list, is a great way to free-up some cash for saving.
But … I’m not ready to cut anything. That’s okay; sticking with trimming expenses for optimization, I have a great example that I am personally looking into. I signed up for a month-to-month no contract internet service in Southern California. When I initially purchased the service, the provider sent me the hardware to borrow for no cost. I paid $50 per month during the first year which is a deal. Then, when year two came around, the provider increased my bill to $70 per month. This new value is high for the area. What do I do?
Well, since my fiancee and I are not married yet, I'll use an internet hack. No, I’m not talking about borrowing someone else’s internet. My plan is to send the hardware back to the provider and cancel my internet. My fiancee will then call the same provider and ask for the $50 per month first year deal. They will send the hardware to her, and we will be saving $20 per month for the first year. This is the internet hack. I will only use this approach if I am unable to first try to convince the provider to lower my cost back to $50. Who knows, luck may be on my side, and I may not have to use the hack; but, if needed, I have it.