Note: This is a guest blog by my colleague, Christine Moriarty, CFP, of MoneyPeace, Inc.
Hand writing the text: How Much Can You Save?When it comes to cost versus convenience, many of us opt for convenience. In this fast paced world, saving time seems to have universal appeal throughout the classes and the country.
We swipe to pay. We Snap Chat to get a quick message across. We listen to podcasts when we exercise. We employ headsets while we talk on the phone so we can walk, write or clean up emails.
Our “efficiency” is costing us dearly from our health to our exhaustion to relationships. Arianna Huffington lived this and wrote about it in her book Thrive: The Third Metric to Redefining Success and Creating a Life of Well-Being, Wisdom, and Wonder. She realized her fast-pace was killing her.
Our prehistoric ancestors only made very few decisions a day. They did not have a lot of options or places to explore before making decisions on food, housing or clothing. Yet, today human beings have a multitude of choices in the area of food shopping. No wonder why we are overwhelmed and choose convenience or perceived convenience. We are faced with abundance that would be the abundance of choice.
Beyond the issues addressed in Huffington’s book, there are financial costs to our immediate and often impulsive financial decisions. Marketers appeal to our sense of hurriedness and over commitment. They study what will sell and how to sell it. We continue to multi-task and grab at the next best thing. Or impulse purchase whether on-line or at the grocery store check-out.
Studies have shown that giving people an abundance of choice still had a demotivating effect. No more is this relevant than in financial decision-making. When people encounter an abundance of choice, they typically do one of two things to deal with their feeling of overload: They either decide not to choose or pick the easiest and most convenient choice. We all adopt strategies that simplify the decision-making process.
When we make financial decisions without thinking it through, we tend to spend unnecessary money. Many people tell me “I did not mind paying $10 so that the detail was off my plate.” Yet, the financial costs outweigh the benefits, especially if that ten dollars is a reoccurring monthly charge.
Let me tell you about something I learned this week that saved me much more than ten dollars a month. My cell phone battery died and I was faced with either getting new battery or a new phone. After three years and the fast pace of technology, I opted for a new phone. When faced with the expense of the $700 phone, I was in a bit of shock. No matter how I paid for it – monthly installments, all at once or by credit card, I was feeling the pinch. That is when the salesperson offered monthly insurance for $7.99. “If anything happens to your phone, we will replace it – whether you drop it, lose it or it gets stolen.” This was so tempting that I almost went for it. But something stopped me.
The next day I was driving to work with my new phone and a bit apprehensive with the cost of technology in my pocketbook. I got to thinking – what about my home insurance? I paid for that to cover my personal property. When I had a moment at work, I called my friendly, knowledgeable and fun agent, Jim, to ask the question, “Do I need the cellular company’s phone insurance?”
“No. No. No!” was his quick and adamant answer. You have a home policy and if you schedule your electronics on the policy for a small additional fee, your phone will be covered. I was a bit taken back as I had never heard this before nor thought of it. Then, I got to work gathering what he needed which was simply the receipt so that the insurance company had proof I owned it.
We got the additional computer coverage – smart phones are mini computers after all. The cost for the year? $26. Best of all that covers my phone, my husband’s phone, my tablet and computers in house. Had I used the wireless carrier’s convenient insurance for just three of these, I would have been paying that monthly.
Slow down and ask a question before you take on more financial commitments. What other areas could you be looking at for savings? Here are just a few to get started:
1. While we are talking insurance:
Review your policy with your agent to see if you are covered for identity theft. If you are, rather than sign up for an identity theft service with a monthly fee, you can check your own credit reports once a year and use what protection in place to help you if there is a problem.
Thinking about getting mortgage insurance on that new home? Compare the cost to taking out a separate term life insurance policy for the same amount. If you are co-owner, look into the price of two separate life insurance policies. The savings can add up quickly over the life of a thirty year loan.
2. Look at your monthly bills: 
Did you sign up for a cable or satellite TV free monthly offer and now that the time is elapsed, you are being charged $6.99 a month? Cancel the stations and services you do not use. This savings will cover the cost of the service for a month after a year or less. Read your all your utility bills carefully.
3. Credit Card:
Read your monthly statement. Did you give your gym your credit card number to pay the monthly fee? If you have now moved or no longer go for some reason, they still may be deducting the monthly membership fee. This happens for all sorts of recurring expenses from music to vacation to business services – once you stop using the companies’ services unless you notify them, they will continue to bill you.
Review the sites you use that have your credit cards. Many shopping sites ask for your credit card number and offer to store it for you. Then, when you go to iTunes, Amazon or Wayfair, you save time not having to enter your financial information. Though they are most obliging to securely store your credit card information for future services, the truth is corporations know this will lead to greater sales for them. If they do not have your information, you need to take the five to ten extra minutes to input the information before you buy. This may be just the time you need to reconsider the purchase. Really want the item? The time is so worth it. Not really necessary? You have prevented yourself or a family member from an unnecessary expense.
You want more time? You want more money? I have written before about how the two are intimately connected. The less time we have the more money we spend. If you want to interrupt the cycle, give yourself an hour and half to explore one of the above topics. A savings of even $20 a month, translates into $240 in your pocket over the course of the year. OR if you prefer to think of it as your hourly rate for this money project: You “earned” over a $150, tax free!
Take on one a month and by next year, your cash flow will look refreshingly different. More cash may overcome convenience in your daily thinking.
Christine D. Moriarty is a financial speaker, writer and coach. She is dedicated to empowering others around their money so they can achieve their dreams. She can be reached through her website