Most of us have a set of monthly bills that we pay as part of our regular routine.
They constantly chip away at our monthly and annual budget, eroding how much
we can spend on a regular basis. Some of these are essential (electricity), while
others are maybe less essential (Netflix). Today, we’re going to take all of these
monthly expenses and see whether or not any of them can be reduced or
eliminated.

First, make a list of every monthly bill you pay. Cell phone, cable, internet,
electricity, mortgage, rent, insurance, and so on. Write the approximate amount
you pay each month next to them, but leave some space over to the right for some
more calculations.

Once you’ve made this list, cross off the ones that are fundamental for day
to day life. Electricity is fundamental, while internet access is not. The mortgage
is fundamental, while Netflix is not. Loan payments are fundamental, while cable
or satellite television is not.

Now multiply each of the remaining elements by twelve so that you can
see how much the bill is costing you in a year. You should also multiply that
yearly amount by 1.025 (2.5% more, in other words), because that’s how much
you’d have if you put that bill amount into savings each month. Multiplying out
the bill amount like this can often make a reasonable bill seem crazy. For
example, if you pay $19.95 a month for Netflix, that’s $245.39 a year towards
your life dream that’s going away. Spend $50 a month on cable? That’s $615
towards your dream gone forever. Got a $200 country club membership fee?
$2,460 a year goes poof.

At this point, go through each item and ask yourself whether it’s worth
what you’re paying for it. It might be worth it to you right now, or you might
realize that it’s something you rarely use so it’s not really helping you build
towards your dreams. Most likely, you’ll find ways to reduce that bill without
eliminating it. Maybe you can go to a cheaper plan on Netflix ($61.50 saved a
year), or you could eliminate $15 worth of premium channels from your cable bill
($184.50 saved a year), or you could get a less expensive calling plan from your
cell phone provider.

It’s important to remember that even though each cut seems tiny, if you’ve been
following the plan this month, you’ve trimmed away a lot of fat from your budget
without really affecting your way of life all that much. Depending on your choices,
you may have dropped ten percent of your expenditures already; if you take that
ten percent and use it to pay off debts now and later invest it in your dreams,
you’ve literally taken a dream that seemed impossible and transformed it into
something possible.