Vanquishing My Debt

I'm 29 and trying to get a handle on my finances so that, one day, I can buy a home of my own. I've been reading personal finance blogs recently and decided to start one chronicling my own struggles and success (hopefully). I am lucky, considering the amounts of debt and tales of tragedy I've read about... but I am making some positive changes and moving in the right direction.

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Location: Los Angeles, CA

Wednesday, December 13, 2006

Can't see the forest for the trees sometimes

I was reading an article yesterday that talked about how to negotiate lower rates for cable television and how to get cheaper cell phones. Right off the bat, I read this statement:

"And according to the Yankee Group, the average household enjoying home-phone, cellphone, cable and Internet service paid more than $2,400 last year, up from $2,070 in 2001. "

So I'm sitting there thinking, "What idiot spends $2,400 a year on that stuff? That's insane! I only pay...." and I start to do the math, feeling very superior and very budget-conscious.

$96 a month to Time Warner for cable TV and high speed internet access = about $1,200 a year. Holy crap, that's halfway there!

About $95 a month to Verizon for our cell phone service = almost $1,200 a year! Jeez, I am the idiot! I am paying $2,400 a year for this junk!

Just when I thought it couldn't get any worse, it occured to me that I hadn't yet added in our landline telephone. $25 a month to AT&T adds $300 a year to my total... which is now $2,700 a year!

I'm spending $2,700 a year... and mocking people who spend $2,400 a year! Oh, sweet humility.

Rule #1 of budgeting is usually to look at the big picture. Add up all those small expenses and suddenly, they're not so darn small anymore. How'd I miss this one? I've been so focused on cutting our grocery budget, yadda yadda yadda, that I didn't even think that much about expenses like these.

So yesterday I looked into some other options for our services. I'm dumping Time Warner as our cable and internet provider, which we were talking about doing anyways. I found out that AT&T offers a high speed internet service for $15 a month in our area. We're also switching to the Dish Network for our basic cable - even though we'll have to pay for the dish/antennae, it's still cheaper in the long run. By making these changes, we should be saving about $40 a month on cable and internet - which adds up to $480 a year.

Next I have to figure out our cell phone issue, which I dread doing... the plans are confusing and the customer service reps certainly don't try to help you sort it out. But it's next on my list.

$2,700 a year - whew! Ridiculous.


Anonymous MollysBrother said...

Great post. You made me laugh out loud when you said, "I'm spending $2,700 a year... and mocking people who spend $2,400 a year! Oh, sweet humility."

Sometimes it's so difficult to pull back and see the financial impact of our monthly payments.

Good luck looking into the cell phone arena.

I enjoy your blog. Keep it up.

10:02 AM  

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