Over the years, I have called the cable company to reduce the amount of money my mom pays for her cable TV on a fairly regular basis. I just did it again this week and saved her $170 over a 6 month period. No matter how many times I tell my mom that she needs to do this when her cable rates increase when the promotional rate expires, she never seems to do it. There seems to be a lot of people that aren’t willing to do this. I’m not sure why since this is pain free savings.
One of the things I realised early on when getting my finances in order was that all types of cost cutting is not created equally when it comes to the pain it causes. This doesn’t seem to be intuitive to a lot of people. Many of my friends that I have helped over the years had assumed that cost cutting was the same no matter how they approached it and never considered that some ways to cut costs could be far more pain free than others. Whenever I am trying to cut costs for myself or to help others, I always go for pain free savings first.
If you want (or are forced) to cut the amount you are spending, it makes sense to start saving money where it isn’t going to cause any pain to your regular lifestyle. It is often surprising how much can be saved this way, and best of all it doesn’t entail any sacrifice. In order to do this, it’s important to understand the different cost cutting categories which exist since different categories will determine the amount of “pain” you are likely to feel.
Streamline to Pain Free Savings
When I need to cut costs, the first type I try to find is streamline cost cutting. Cost reductions found within the streamlining category are by far the best type of money saving tips to find since they cause no pain or change ones lifestyle. Streamlining means getting the exact same things you currently purchase for better price. It’s basically a tune-up of recurring expenses. Much like a car requires service over time to make sure it’s performing at its best, streamlining is doing the same with your spending by making sure that you receive the best deal for the product or services for which you are currently paying. You won’t change anything that you are currently doing or make any changes to the services you are receiving, but merely get a better deal on these.
The perfect example is my mom and her cable TV. She still is getting the exact same TV channels that she was getting before, but paying less for it. Another example of this would be refinancing your home mortgage with your current mortgage lender at a lower interest rate. Contacting your credit card company and getting a better interest rate on any credit card balance you have (studies have shown that it’s possible in some cases to have a credit card company lower the interest rate they charge simply by asking) would be another. In all these instances, the exact same service is received from the exact same institution, but the cost is reduced.
While the most obvious streamlining opportunities come from recurring services, they aren’t limited to services. It’s possible to streamline the cost of products you use on a regular basis as well. An example would be if you drink a couple of cans of cola each day and you go each week to the store to buy your supply for the next week at retail price. If you instead purchased a 3 month supply when the cola went on sale (most sales cycles come about every 3 months), you still get the same cola while reducing the cost of it.
Laziness and habit are the main nemesis of streamlining. There is a very good reason that the cable company offers a discounted price for a specific period and then raises the price once that time period ends. They know that most people are like my mom and will not call and ask for a better deal when the promotion ends. What this means is that streamlining is a never ending process that requires you to be proactive on a regular basis to make sure you are getting the best price for the things you are purchasing. The good news is that the better you get at streamlining, the more money you can save without changing your lifestyle.