When life gets busy it’s easy to let financial habits slide. My wife and I noticed recently that fixed costs were eating away more of our monthly budget than we'd like. The thing is, fixed costs are sneaky. You set them up once, and suddenly they're automatic, slipping silently out of your account each month.
Here's how we tackled our fixed costs practically and simply. No nonsense, no spreadsheets with ten tabs—just a clear approach anyone can follow.
Step 1: Know What You're Dealing With
First things first: figure out exactly what you're paying for monthly. My wife and I sat down together for about an hour (during a rare quiet afternoon nap for the kids!) and went through our bank statements.
- Rent or mortgage
- Utilities (electricity, internet, mobile phones)
- Insurances (health, car, liability)
- Streaming services
- Subscriptions (apps, magazines)
You might be surprised—I certainly was—to see all those little recurring charges stack up.
Step 2: Ask Yourself the Hard Questions
Now the uncomfortable part: questioning each expense. Our mantra became, "Do we really use this?" and, "Is this worth it to us?" Not all decisions were fun, but honestly, it felt great to cut back on stuff we didn’t truly value.
We kept Netflix but canceled an extra streaming service. I had an app subscription for coding I hadn’t touched in months—gone. My wife had a fitness subscription she'd forgotten about—also gone.
Step 3: Get Better Deals Without Stress
Reducing doesn’t always mean eliminating. Sometimes, it’s as simple as switching providers or negotiating a better rate.
- Insurance: We quickly compared insurance rates online, and saved a surprising chunk of money just by switching our car insurance provider. (Pro tip: do this annually.)
- Mobile and Internet: One short call to our current provider resulted in a lower monthly rate. Turns out companies are quite willing to give discounts if it means keeping you as a customer.
Step 4: Automate Saving the Difference
We decided that any money saved from reducing fixed costs goes straight to our ETF investments. It's a good feeling: instead of thoughtlessly spending that cash, it's quietly growing in our MSCI World fund, working toward financial independence without extra effort.
Step 5: Make it a Habit, but Keep it Chill
Regular check-ins are important. We now do this once or twice a year. It doesn’t feel tedious; it's just part of our routine, like checking tire pressure or sorting through old toys.
Fixed costs aren't bad by definition—they're essential. But periodically reviewing and adjusting them keeps your money working for you instead of slipping quietly away.
In the end, cutting fixed costs isn't about being cheap. It's about consciously choosing what's valuable to you and your family. Because let's face it, life's expensive enough already.