2006 is over, and credit card debt ended at an all-time high and the average American family's savings was at an all-time low. Look at your expenses. Can you cut them? How can you either A) Increase your income, and/or B) Cut your expenses? Start by making a list of all of your expenses. And to make things even more interesting, compare them to say, 10 years ago. Look at all of these monthly expenses:
- Cell Phone - Did you have a cell phone 10 years ago, let alone a $80-$100/month bill? Multiply that for a married couple and even more if you have children with mobile phones. Not to mention the add-ons like downloadable ring tones, data plans, etc. It adds up. If your contract is close to expiring, shop around for the best deal. If you are in a contract, there are still ways to save money, look at your bill and analyze it. You're the CFO. Take charge.
- Cable Bill - Has yours increased? You bet. You didn't have add-on services like TIVO, HD, multiple movie networks, etc. years ago. Do you need the $12/month HBO year-round? I don't. I cancel it when my favorite show (Entourage) isn't airing new episodes. I have a friend whose monthly bill is $120....that's almost $1500/year and almost $2,000 before taxes. How can you lower it? A *lot* of shows are available commercial free online and even more can be downloaded through iTunes and elsewhere. $1500 gets you a lot of downloads on iTunes.
- Satellite Radio - XM and Sirius are wonderful. But they didn't exist 10 years ago and this $12/month expense for millions of families didn't exist.
- Cost of Driving - Has the cost of driving increased? Yes, gas prices have increased. But what's increased even more are the number of available options on many models which didn't exist 10 years ago. Try these: $2,000 GPS system, $1495 DVD system, $800 heated windshield, $495 heated seats, $995 moonroof, $20/month Onstar, and the list goes on. These features are great, my vehicles have a lot of these but is the navigation system really worth $2,000? Just to not have a map? Let's say you keep your car 4 years and make an average of 3 road trips per year where you easily need a map, that's 12 times over 4 years and a cost of $166 per use!
- Subscription Services - I'm talking about eHarmony, weight loss programs, tanning bed subscriptions, email newsletters (the ones that don't provide value), and whatever else people find to waste money.
What are you buying? What do you need? Did you spend more on Christmas this year? Chances are you did. And the cost of gadgets continues to rise also...considering how hot the $250 iPod or how popular the $599 PS3 was. So gas has increased roughly 100% in the past 10 years but your $149-$199 gaming console has also tripled and so has your Walkman (now your iPod) - it's up 500%. The cost of college has increased 56% in the last 5 years alone. Everything's relative....so they say.