Hi, my name is Bob Brooks and you are watching the prudent money channel. Thank you so much for investing time into financial education. And that's one of the things I love about the vitality network is that it's all about education. And it's not about mainstream, it's about what you need to know. But all the pros and cons of health, wellness and finances, and that's what we talk about here on the prudent money challenge that how to get to be a more effective when it comes to money and finances. And one of the things that I focus a lot on when it comes to the my radio show proven money radio show is that people need to be tracking their spending, they have to have a spending plan.

In fact, I did a teaching course on why I think that is one of the key causes of financial stress is the fact that people just really don't know the details when it comes to what they're spending. Now, if you've got debt, or if you want to be saving more, you got to figure out where you're going to that money is going to come from. And so what I wanted to talk about today was the seven areas of spending. You should audit for financial waste, you know, I've got Through this, this process in my own life, and I gotta tell you that it's almost embarrassing when I went through it just to see where I was wasting money, things that I was subscribed to that I don't even read anymore or use anymore. spending too much money on electricity. I mean, you name it, there was a lot of things.

And it all adds up. And this is what we're going to really focus on is that it could be that you're saving $10 here, $15 here, maybe $30 here. But once you find all that savings, it adds up to quite a bit and can come in real handy when it when it comes down to getting out of debt, or when it comes down to defining more money to invest. Let's start off with you can start by looking for unwanted subscription. Now this is a survey performed by hiatus and here's some of the results almost 62% that they surveyed have paid for unwanted subscriptions or memberships because they failed to cancel an auto renewal feature. Over half of the survey respondents didn't know how many subscriptions they currently have more than seven 70% of the survey consumer said they continue paying for unwanted subscriptions because they simply forgot to cancel the service before it renewed.

29% Say they didn't know the service was set for auto renewal. Almost 19% of the respondents say it takes too much effort to cancel the service. And then one lady that was survey said, One woman recently told us that we that when she checked her memberships, she found she'd spent almost 1200 dollars on subscriptions. She didn't use or even remember that she had unbelievable statistics when you when you really look at it, and what people are spending money on and I know this for, you know, for my life. When I went back through I found subscriptions that I'd taken out for my kids to play online games and this kind of thing and they haven't been played for years. But yet that keeps getting charged.

And here's the problem that you run into with these these 30 day trials are 15 day free trials, you have to give your credit card up front and a lot of times and this is how To me is that you even put a reminder out there to to make the change. And somehow through the way that they, they send notices the it looks like it's been cancelled, but it really hadn't been canceled and so you end up paying an extra month anyway. So find those unwanted subscriptions and get rid of them once and for all. One of my favorite statistics in there was that the one that they talked about the number of people who hung on to a subscription because they thought they might use it someday, you know, that's just like clothes in your closet that you don't wear if you're not wearing them, you get rid of them.

Same thing with subscription, you can always go back and re subscribe. And then there's your your cell phone bill. A 2015 study by American Economic Review concludes cell phone companies are patting their bills with higher fees because of overage warnings. I'll talk about that in a second. Most consumers don't fix overage problems and pay higher bills because of it. The third one consumers aren't good at estimating data usage.

People underestimate how much they will use and on average, go on by an hour, which can be expensive, at caliber confidence causes consumers to choose overly risky plans and underestimate the likelihood of paying overage costs, you know, with cellphone bills, and I'll never forget auditing my cell phone bill and just being in disbelief of how much money I was overspending can be confusing at best when you go and look at them, but you'll find money that you probably shouldn't be spending. Now, they talk a lot about overage fees in this in this study. And, you know, one of the things that I found with with cell phones is that we don't we're not real good. I would agree with this survey. We're not very good at monitoring that. Now, one of the things that cellphone companies are required to do by law is that they have to let you know that hey, you're getting close to going over.

It didn't used to do that and people would go way over. And of course, they stopped back a little bit of a consumer abuse if you ask me. Well, what's interesting about human nature is that we still, if we know we're about to get to To go over, then we continue to go over. We don't do anything to stop it. You know, it's something it's it's something to do with the importance of cell phones. I heard a question on Facebook one time.

I said, if you had to give up either your car or your cell phone for six months, which one would you give up? I got to thinking about it. And I thought shoot, I give up my car. Because I could always take over you You're so plugged into your cell phone. So it's like well, if it costs a little bit more it then I'll just spend it because I don't want to not use my cell phone. So there's those overages that that can really get to you know how to audit your phone bill.

Keep tabs on the minute you use, especially your kids, I know that with my two boys, when I first got them cell phones, that all of a sudden I find my my my account was getting more and more expensive. And we were kept going over until it's so important if you give your kid his cell phone to teach them the difference between using Wi Fi and using the service and how to make sure that they're not going over Be realistic don't cut it short and what I mean by that is when you're setting up a plan and you're you're establishing you know how many minutes that you have, make sure that you're being realistic. Don't just go cut it short because if you do end up going over it's expensive. And check in understand every recurring fee. I know that when I audited my my cell phone bill I couldn't believe the amount of fees that were on there that I didn't that I didn't need and I got removed so make sure that you're very thorough line item with that.

Auto pay is a good thing and a bad thing. You know, this is the problem with auto pay is that obviously just charges to your credit card or just comes out of your bank. And we just, you know you kind of kind of pay attention to it especially with the cell phone bill, because you look at it and go oh was a little bit more this month. Well maybe I'll check into that. And of course you never get around to checking into it. But you got to be more detailed, especially if you've got the auto pay working.

Number three your cable bill. This is one, two, that is easy and a lot of cable bills are on auto pay That you overspend. You know, some of the things that you're looking at for this audit is receivers that you aren't using anymore. I know that in the past when I've gone through and audited my satellite bill, I found I was being charged, you know, $5 per receiver that is not even in use anymore. We still have it. But I was getting charged for free Movie Channel offers.

I mean, how many times have you signed up for Showtime or HBO for the free 30 days and forgot about it, and then they started charging you, once again, I want to stress is that when you're on that auto payment system, which a lot of us are when it comes to these types of bills, we don't pay as much attention to it as if you were writing. If you're paying for it online, in a different way, outdated pricing. It's always good to go and check to make sure that there's not more and more inexpensive program because they've changed the pricing. You know, they're not going to tell you that they've changed the pricing, but one that fits you a little bit better in that you're getting the most value for subscriptions that you cancelled and still being busy. Obviously, anything that you've signed up for and you cancelled it like you know, HBO or Showtime you're still being billed for there's a lot of mistakes and studies will show there's a lot of mistakes on these bills.

And then number five, an understanding of every line item. This is the same as the is the cell phone bill, you want to make sure that you know exactly what you're being charged for. Now, the the the problem that you run into once again, these bills are tough, difficult to read, and but there are a lot of mistakes on it. I'll give you a good case in point. I bought my son a cell phone for Christmas. And of course they have a ways that they they charge you for the extra charges one way I went through and I looked at it, there was over 400 obviously this got my attention.

There was over $400 of charges that shouldn't have been there. They do make mistakes. Number four is your electricity bill. Are you shopping your electricity at least once a year you should be if you're not in Texas and this all this applies to Texas. You had the choice of electricity per abiders and there's a big competition for electricity providers. And you should be looking at this every 12 months you go to a site called the power to choose.org you plug in your zip code and all these providers will come up and you can choose from them what to look for energy is measured by kilowatt hours and so what you're looking at is the cents per kilowatt hour.

Now you're looking at the length of contract whether it's a six month three months I'm pretty biased towards the 12 months I think 12 months is a good time. Fixed Costs are variable cost does that cents per kilowatt hour does it fluctuate up or fluctuate downers with fixed I like to fix know your average consumption ahead of time and compare to the pricing bands. Now what I mean by that used to these services were a lot A lot, a lot easier to understand. They would just have per kilowatt hour now they have it in bands. So if you use 500 to 1000 kilowatt hours the cost of this if you use this to this number of kilowatt hours. To this amount of kilowatt hours, he costs this.

And so you really have to get in there, which is not always easy and average it out to see what is the better deal based on your usage, reminder of renewal date, this is important to once you sign up for a plan, make sure that you start on your calendar, this is coming up for renewal, because they don't tell you and what ends up happening. This happened to me one time is that I was paying this great low rate and then all of a sudden, I thought it renewed to two doubled in price and losing two or $300 because I didn't have a reminder. Are there any other fees? Are these plans are loaded with fees? Some plants have some fees, some plans? Don't you want to make sure that you're reading the fine print?

What's the cancellation fee in case it doesn't work out, you want to get out? You want to be comfortable with that. And then the special offers hardly ever a good deal. Now there's a one electricity provider that markets these deals. So if you sign up for their plan, then you get this benefit and one benefit that they they market is a if you set up for a 12 month contract, you get the 13th month free and you think to yourself, well, that's a pretty good deal a free month of electricity, but they always market it the time of year where that 13th month lands on April. In April is the mildest month of the year.

This is the one month of the year that you use, probably the less electricity and that is your free month. And they do that on purpose. Now, if you look at what they're charging you per kilowatt hour, you're realizing that you're spending way more than you're saving in that one free month of low energy uses. They all use it. They also have another commercial where you can get a signed a signed football by Dallas Cowboy and you get to go to a meet and greet. So I figured it out.

I thought okay, if I sign up for this with this higher kilowatt per kilowatt usage, versus the better deal I could get with no free football, then I'm going to save this amount of money over this contract during the year. And you could take some of that savings now when I thought what if I went on eBay and looked up what an autographed football would cost? You still save tons of money even after buying the football so be careful the special offers are really not that good of a deal. audit your home and car insurance. I think this is extremely important as well. And I say this with a caveat.

I give you a good example. I've been with the same company since I was 15 years old. And I've been with the same agent now for 20 something years. I know I overpay for for home insurance and car insurance at the same time. And my experiences with this agent have been superb and this guy always takes care of me. And to me I put a value on it so I don't mind overpaying.

But if you don't feel like you've got that relationship and you need to go out and price these things to make sure that you're not overpaying where you can save some money on home and car insurance. audit your interest rates This is something you know a couple of these probably you think about others you don't your car for instance, a lot of times people are paying way too much interest for their their Car Loans. I'll give you a good example, had a friend go into a BMW dealership set in the finance office, I know he's got good credit. And the guy comes out and says the best we could do based on your credit is 4.5%. And even then, I mean historical standards, that's pretty low. And so he's telling me about this.

And I said, you know, you can go refinance at a 2% and get the lower interest rate and cut your rate and more than half, and the amount of money that you save an interest is very well it's worth doing. So check your car, rate your car loan, make sure you're not overpaying. credit cards, we live in a day and age where these credit card companies are issuing credit cards to people with great credit, and they're still charging them 14%. And what I found on average, it's the big banks that are doing it, that the going rate for good credit is typically 6% less than what these big banks are charging today. So if you have good credit, Don't settle for these high interest rate credit cards. Then finally, your mortgage rates, this is a big, big cost.

And this is why It makes sense to find a have a good mortgage consultant on your team of someone you can trust because you can get them to look at the cost of the refinance you can get them to look at what you're paying now what you could pay is see if it makes sense. Remember, mortgage consultants are in the business to sell mortgage loans it's a sales process for some it's a consultants process brother, make sure that you sit down with a good consultant in an audit that and make sure that you're still at a good rate. Other overlooked expenses are you paying more than you should for a gym membership you know you a lot of times you'll go in and your situation will be such that you're paying this amount of money for a gym membership. And then through the years things change in your way overpaying for a gym membership, or the gym membership has gone up so much you should be looking at other gym memberships if that's one of those auto pays and we don't pay a lot attention to so check that out.

Are you properly bundled now what I mean by that is simply Are you getting your internet you Your, your internet, your cable or satellite and your phone from the same alarm from the same place. Typically when you get all those services from the same company instead of having different companies, you can save money. And it's worth doing worth looking into. Are you overpaying for your long distance? When's the last time you looked at your long distance plan to make sure that it's relevant, that it is a good deal? And then finally, finally, do you need your landline so many people are still with a landline they're overpaying for what they could be paying for is an internet based phone.

That works just as great. Bottom line amounts of savings might be small, however, numerous small payments can add up to big savings. Now, this is one of the things that I think is so very important. You know, we've done teaching videos on this we'll do more, and it's about tracking your spending. And it's good to go through every once in a while to audit what you're doing to make sure you're not wasting money and overspending.