Tuesday, July 19, 2016

Loose Ends Update

Time to update our savings numbers from credit card charges.
You may remember our post from last month Credit Card Loose Ends.  In the article we discussed how we started using Personal Capital to track all of our expenses and we were finding small credit card charges for services we had forgotten about.  As of the time of that post we had managed to identify and cancel services we no longer wanted or needed and save $42 monthly and $502 annually. I also promised that we would keep looking and keep everyone updated on additional savings.

Well here we are about a month later and the totals keep adding up.  We have identified more charges on the credit cards but have also found some in other areas such as recurring PayPal charges.  In today's world it is so easy to sign up for something with monthly payments.  Then you forget about them or remember them and a few dollars a month seems like no big deal (even though you don't need the service anymore) so you let it ride.  Here's the list as it currently stands:

Online subscription (hadn't used in over a year)                                                 $12.00   monthly
Online service (signed up when job searching don't need anymore)                  $30.00   monthly
Online subscription (seasonal use not needed now)                                           $20.00   monthly
Online service (iFreebies child #1 used for school, no longer needed)              $16.00   monthly
Online service (nobody remembered signing up one year ago, no need)           $4.00     monthly
Online service (decided no longer needed while reviewing costs)                     $64.00   monthly
iTunes auto renew service (no longer used)                                                        $8.24     monthly
iTunes auto renew service (no longer used)                                                        $5.24     monthly

Totals                                                                                                                   $159.48     monthly
                                                                                                                             $1,913.76  annually

So one month in thanks to Personal Capital and paying attention we have found $1,913 of savings this year.  Sadly that number is even larger considering most of these were going onto credit card bills so probably would have incurred some interest charges as well.  For this exercise we'll forget about the credit card interest and just focus on the savings.  That $1,913 we save annually can be invested over the next ten years before we retire.  That's $19,130 just in principal.  But imagine we average a return on this.  A $159.48 monthly investment over 10 years at 7% will get us $27,603 in ten years. Twenty seven thousand dollars for simply investing money we were essentially wasting by not paying attention.  I can imagine that $27,000 will come in handy at retirement.  If nothing else we know that would generate another $1,080 annually using the 4% withdrawal rule.

I also know somewhere lurking out there are some charges that only occur quarterly, semi-annually or annually.  I hope to find them before they renew but it wouldn't surprise me if they popped up in a few months and have to quickly be termed.  This exercise and the last month in general has us finding new ways to think about cutting expenses and we will look for those opportunities as well.  It is just amazing how much money can fly out of our accounts when we are too busy only focusing on bringing more in.  I'll probably add to this running list and keep it going for all to see.  Quite amazing just how quickly this adds up.  I keep looking at that $1,913 amount and remember that is after tax dollars.  Pre-tax that is easily $2,700 -$3,000 of our annual earnings that was essentially wasted. Kind of like giving ourselves a mid-year raise.  On to find more savings.

Photo credit:  convisum 123rf.com

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