Recently while on a trip back to the States The Big Guy & I decided to update our budget which included scrutinizing every expenditure & finding any hidden monthly expenses on our previous credit card & bank statements. During this process we saw random recurring expenditures that we – within plain view, but hidden monthly, quarterly or yearly expenses – had been neglecting. Wow! We were definitely surprised by the total $$ amounts we had neglected.
We had been so proud of ourselves for creating a financial plan that enabled us to leave all our material things behind & travel, but we were in for an eye opener once we made a really deep dive into our ‘renewal’ subscriptions. Reducing monthly expenses is not an easy chore, because some expenses required pulling insurance policies, etc we had been paying for years & reading the fine print in the docs. We put our heads together & amazed ourselves at what we were paying monthly that had little or no value to us.
Years ago we had both come to the conclusion that life is not about material things as we were never the ones that HAD to buy the newest model phones, cars, or etc each year. It was on a need rather than a have to keep up with the neighbors mentality. We quit buying birthday & holiday gifts simply for the reason that it reached the point that the gifts themselves had little to no meaning to the recipients anymore so why spend the time & money shopping for something that would be discarded shortly?
As I indicated many a time in earlier posts we began what I choose to call a minimal lifestyle. After all we are retired and live on a fixed income which equates to a limited budget. We needed to establish basic financial guidelines that would allow us to enjoy our small retirement income to the fullest. This article goes into a little more depth but worth the read if you are in process of making your initial travel escape as well as confirming what we discovered in our deep dive into our monthly expenses. We did not want to miss out on our life plan of travel opportunities because we messed up on our budget.
We made a list of our monthly recurring expenses for a deeper review for the numbers popping up for auto renewal each month. Here is what we found & how we addressed those costs.
Our Five Areas We Wasted Money in Hidden Monthly Expenses & How We Fixed it!
1. Insurance Policies
Check the fine print of those policies. What are the ‘exclusions’? Are there limitations of policy coverage? Will the coverage be pay if accident/death is out of country? If in doubt, call your insurance company & ask!
We had at one time a policy offered one of our banks for a nominal charge. We identified an accident &hospitalization policy that we had been paying on for a very long time. When we considered filing a claim for an accident that required hospitalization we sadly found out that in the fine print of that policy that it contained policy limitations that did not cover accidents outside of the country. That was canceled adding approximately $1000 USD a year back into our travel budget!
More importantly are your payments adding up to more than the actual value of the policy? I found this when I was handling my mom’s expenses. She had been faithfully paying a $35 a month insurance premium for close to 30+ years for a policy with pay out at death of $3,000! She had paid over $12,000! We canceled the policy & the company issued her a check for $700. You don’t want this to happen to you. Please know what you are buying.
2. Subscriptions – This proves that pennies do add up!
We kept adding to the list of monthly subscriptions that were being auto renewed between debit & credit cards! Between Google Storage, streaming services, blogging ‘stuff’ that I no longer use, jewelry insurance, mail service & phone warranty plans, we had 28 – yes – 28 monthly/yearly auto-renewals on various cards. Included above would be credit card yearly fee [1], shopping memberships [2] they definitely add up. It is ridiculous how a few dollars here & six canceled subscriptions can absolutely add up.
What we did was to cancel streaming services [airBnB’s normally offer these services free!], online magazine subscription [basic issue works fine] as well as several misc creative sites. Although we kept both store shopping memberships, as they are nationally set, we did decrease one membership to the basic. We added approximately $540 to our yearly travel fund.
3. Amazon Prime
We have been loyal Amazon Prime members since its introduction BUT now that we have traveled this past year we only used it twice. That’s $139 for year membership we did not & will not need. As of June when the membership is due to be renewed, we will be canceling & adding that $139 USD to our yearly travel budget! If we need anything ordered, we can use snail mail!
4. Medical Insurance for Senior Travelers – A huge but not necessarily hidden monthly expense!
This isn’t a hidden monthly expense per se but it has to be on the top of the list to be researched to see what is or isn’t covered out of country. Medical Insurance for senior travelers is a necessity & the cost only goes up especially after you hit 60+ as we senior travelers have found out time & again. During our first year of travel we paid our health insurance monthly payments faithfully although coverage would have been iffy out of the US. We did have a small travel policy which thank goodness we did as it did reimburse us for my emergency surgery in Mexico. My US supplemental policy only covers the first 60 days of a trip outside of the states & my accident was on the 70th day so it was useless but the travel insurance was great although it took almost five months to reimburse us.
The Big Guy, who tries to stay in shape has a health insurance policy that cost more than $600 a month& could only be used while in the states. My Medicare & supplemental completed our initial insurance coverage.
Here is what we have changed for the new year of travel. We canceled his insurance, kept mine & bought a comprehensive travel insurance for this next year. Canceling his health insurance, keeping my Medicare plan & adding the travel insurance will still add approximately $3800+ to our yearly travel budget.
5. Phone Plans
We are on a senior plan with T-Mobile which has worked out well for us this past year so at the moment we see no reason to change that. Before we discovered that T-Mobile had a senior plan we were paying over $110 a month for limited cell phone service for the two of us. Once we went on their senior plan [which has had everything we need] our monthly bill went down to less than $60 saving us over $600 a year adding that to our travel budget!
Now to be totally transparent we pay $460 a year for warranty on our iPhones 11 pros so if you want to be really OCD & subtract the warranty per year paid from phone service than we are still adding around $140 to our travel budget for the year! We buy refurbished phones “only” when the old ones wear out. Our present phones are well over a year old & at present we have no plans to renew, as I stated in the beginning we are minimalist and not concerned concerned about material items or having the newest cell phones.
Bottom Line…in finding those hidden monthly expenses…
I have to say we were pretty amazed that we have the potential to eliminate approximately $6000+/- from our expenses & adding around $500 per month to our travel budget! This means we could have a little more cushion in our future travel plans. It took some time to get this done and I hope that by reading this you will feel empowered to review your monthly, quarterly and /or yearly recurring expenses and determine if you are overspending for subscriptions services such as magazines, computer services, insurance, or etc that you are no longer useful to you. Your Thoughts?
Happy traveling!