Are Your Expenses Necessities or Luxuries?

The other day I read an article over at Free Money Finance titled Three Expenses I Thought I Couldn’t Live Without. I found the fact that the author addressed these things that he sacrificed as expenses instead of necessities very interesting.

I admit that I do think of certain things as necessities and do get very attached to certain possessions; like the author of the article noted, his roommate exclaimed that she would die without the internet. I understand how people can be pretty dramatic about their possessions.

That article got me thinking about things that I personally thought I couldn’t live without but learned to over time?

Here are the basic amenities found in most homes that our family chooses to do without.

Cable or Satellite Television

Growing up, my family only had Cable TV in my later years of teenage life. I did live without it before and decided that we couldn’t afford it when my wife and I bought our home, so we tried to go without. We have been without Cable or Satellite TV since 2007 and haven’t looked back. There are way too many ways to get entertainment for free  now that TV is just irrelevant. Now if I was a sports nut, things may be different but when basketball season rolls around and my wife wants to watch a game, we just go to the in-laws to get our fix.

Subscription services (Print and Digital)

I hate the thought of being under contract to anyone and not being able to cancel. If I decide the service is no longer worth the money, I want the option to drop it!

We don’t subscribe to any magazines, movie subscriptions or home delivery services. The only things we pay on a monthly basis are insurance and utilities (including Internet service).

Phone Service

We have never had a land line phone but some people just can’t let go of their land lines. For some circumstances, this makes sense, but I don’t know too many people that don’t have a cell phone now and I have a hard time believing that you are getting the amount of use out of your land line you are paying.

As far as cell phone service goes, my wife and I both still use a cell phone but my wife has a prepaid cell phone without any contract and my work currently pays for my cell phone. I will be honest here, I love my phone. It is so convenient to be able to do many of the things I used to do on my computer, on my phone but honestly, if my work decided to stop supplying cell phone service, I really believe I could live without it. Before my work started picking up the phone bill, I only used my phone for calls (no data or text) and I could definitely get by with a prepaid phone. I could also opt to use a VOIP service like Skype or Magic Jack if I needed to make a long phone call that would use too many prepaid minutes.

Here are a few that we could probably cut, even though it may be difficult, if we absolutely needed to.

Eating out

My wife and I value eating out. We enjoy it and do it more often than most people in the frugal circle, but we cut other expenses from our life in order to be able to eat out more often. If we absolutely had to, we could cut eating out from our expenses. We have experimented with cutting down the frequency of how often we eat out and have gone several months with only a single visit to our favorite restaurant without too much fuss, so it is surely doable.

Transportation

Utah is not known for its transportation system and until recently it didn’t have anything other than bus that would travel between cities. Recently, a rail system was put in that travels between the two major cities, and stops in all the cities in-between which is only about a 100 mile stretch. I have run the numbers and if you consider the time I would lose (it would take 4 times the amount of time to get to work), it’s actually cheaper to drive my car to and from work than it is to ride this new train but if it became absolutely necessary that we do without a vehicle, we could probably survive.

Finally, one thing I don’t believe we could do without, not because of the entertainment or communication aspect of it but because a portion of my income is dependent on having it:

The Internet

I do have Internet at work but with the amount of things that I do online, only 5% of them consist of recreational activities. I do IT consulting, web design, and freelance writing just to name a few of the activities  that I do online at home that help supplement our income. We also have a really inexpensive internet plan with no frills or additional services tacked on. If it were life and death, we could cut the net, but if it were a choice between the cost per month and the income I receive that is dependent on that service, the Internet stays.

Are there any luxuries you have cut out of your life to better your financial situation?

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10 People have left comments on this post



» Phi VoNo Gravatar said: { Sep 24, 2010 - 06:09:43 }

Really cool post. I know some people view things as luxuries but they really aren't. EVERYONE needs something to keep them happy and motivated – it's not a latte factor, it's something that enriches your life. For example, I love photography so I'll work hard in order to splurge on the best gear. However, that doesn't mean that I'm being reckless with it; I'll still save towards the goal before buying.

If you really go down to the basic expenses to just live, why are you even working so hard? There is no point in living without the luxuries that make us happy! 🙂
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Jesse MichelsenNo Gravatar Reply:

Thanks Phi, and I often write about things that we value more than money because without enjoying life, what's the point? My wife really has to correct me on these though as I try and be way too strict on the family. She helps me realize that sometimes the value of the activity or the time spent together outweighs the money spent.

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» YanaNo Gravatar said: { Sep 24, 2010 - 08:09:42 }

Over the years, I've eliminated expenses, altered them and added. I used to take 2-3 newspapers, but quit all of them after my husband took a job at a newspaper. While he worked there, we got the paper delivered free, but the way he was treated at the job made me want to boycott every newspaper. So when he left the job, we quit getting any newspapers delivered.

Switching from a cell phone plan to prepaid cell phones has saved us a lot of money. I'd never want to go back to a plan. I recently gave up the landline, and I do not like being without it. Better call quality. But I can't stand dealing with the service provider. Also gave up DSL internet with that same provider, and switched to much more expensive cable internet. The customer service is an order of magnitude better, and it doesn't take long to get a human being on the phone. We didn't have cable TV for years, but that was deprivation for my husband. Since he works hard (common excuse for people to spend too much money), we got basic non-digital cable. Without it, we get no TV reception. He likes football. I watch a TV show on Hulu, and sometimes catch something my husband is watching.

We now eat out more than we used to. We feel like we're living large, but some things we just don't do. Like movies, DVDs, Netflix – we have no interest in those things. The internet is our greatest entertainment, and a whole lot more 😉

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Jesse MichelsenNo Gravatar Reply:

You have to set your own priorities in life and spend money on what you enjoy. As long as you are aware of your choices, and make them on your own with a sound mind, you shouldn't feel guilty about any of your choices.

Yana, I'm constantly impressed by the insight you give in comments here and on other blogs around here. You make great decisions and seem to have your future pretty well mapped out. Keep it up, and thanks for taking the time to share your thoughts with the rest of us .

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» @Yakezie said: { Sep 24, 2010 - 11:09:50 }

All that you have listed in this post are absolute NECESSITIES for me! 🙂

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Jesse MichelsenNo Gravatar Reply:

To each his own 🙂

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» Kay LynnNo Gravatar said: { Sep 25, 2010 - 07:09:20 }

I can't imagine not getting the newspaper and at least a few magazines. However, I change our newspaper subscriptions up as pricing special occurs. Last year we got the LA Times daily, now it's the San Diego Union daily and the Times on Sundays ($10 for a full year of Sundays).

I get the magazines either free or dirt cheap.
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Jesse MichelsenNo Gravatar Reply:

For that price, and if you get genuine value from the service, I wouldn't see a problem with it. I prefer ala carte methods like the net, to a full magazine or newspaper, there's just too much junk in there and don't want to sift through! (Plus I can't stand getting my hands all black, the feel of the paper drives me nuts 🙂 )

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» KNS_FinancialNo Gravatar said: { Sep 29, 2010 - 04:09:12 }

I think we could do without the other services that you mentioned, and have to keep internet. For the same reasons as you, I run a part of my business through the internet. Having a smart phone with a data plan is next, because I'm able to use my phone as a mini computer and it keeps me in constant contact when I need to be.
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Jesse MichelsenNo Gravatar Reply:

Exactly, personally I can sacrifice anything that doesn't add anything to my life without question, but things that I rely on to actually provide for my family are a must.

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