Scare yourself to sleep with 12 free spooky audio shows

I listed twelve of my favorite horror stories for fall & winter, but if you need something in your headphones to scare you to sleep instead, try my favorite audio versions of some terrifying tales.

two jack o lantern lamps
You might have to sleep with the lights on tonight.
  1. Hands Off, a Nightfall show about a lab-grown serum that makes animals aggressive. Very aggressive. Not to be confused with the popular new radio series Nightvale, Nightfall was a Canadian public broadcasting show from the 1980s and the best horror audio show I know of. Try out several and I’m sure you’ll hit at least one that gives you chills. All of them are excellently produced, scripted, and acted. They often contain adult themes and occasional profanity, so they’re not for children!
  2. The Darkness from WKBW’s 1973 Halloween show. The entire show is excellent and includes several great takes on some classic horror tales like the Monkey’s Paw.
  3. The Dunwich Horror. An H.P. Lovecraft tale adapted for radio by the famous Suspense Old Time Radio (OTR) show.
  4. The Thing on the Fourble Board. A very creepy tale about a thing deep down on a drilling platform. It’s from the OTR program Quiet, Please!
  5. If you have Spotify, Nelson Olmsted does an excellent reading of several Tales of Terror by Edgar Allen Poe including the evil murder story The Cask of Amontillado.
  6. Dark Benediction, a play about a disease outbreak with a twist– adapted by Sci-Fi Radio— an excellent collection of sci fi story radio adaptations.
  7. Chicken Heart from stella OTR program Light’s Out by radio virtuoso Arch Oboler is under 8 minutes long and unusually chilling for the bizarre plot line. Many other Light’s Out programs are excellent as well.
  8. Sorry Wrong Number is another famous Suspense OTR show starring Agnes Morehead as the (very) hysterical protagonist trying to prevent a murder being plotted.
  9. Dracula. Bram Stoker’s tale adapted by Orson Welles’ Mercury Theatre in 1938. Welles– who plays Count Dracula here– often tried very ambitious productions on his Mercury Theatre. This version of Dracula works very well. Welles’ classic War of the Worlds is a chilling tale in itself too, but about an alien invasion.
  10. Speaking of Dracula, what if Sherlock Holmes tried to catch him? Well, it would be this 85-minute 1981 BBC radio play– Sherlock Holmes v. Dracula— which actually works quite well despite the ‘what-if-Superman-fought-Batman’-style premise. The voice acting is excellent with superstar BBC radio voice actor John Moffat (of Hercule Poirot fame.)
  11. Speaking of Poirot, this 90 minute Agatha Christie detective caper–Halloween Party— takes place at a children’s party. There is murder afoot, and only Belgium’s most famous detective can crack the case! All the Poirot radio plays on this album are very good.
  12. The Ghost Train— a 90-minute BBC 4 adaption of a 1923 play– is a light, comedic spooky story for those who don’t want to have to sleep with the lights on. Many shorter BBC 4 Ghost stories are found in the same collection as well.

The most underused tax-savings vehicle: the Health Savings Account (HSA)

In summary

Health Savings Accounts (HSAs) let you save on taxes (like a 401k) when you contribute to them. They grow tax-deferred (also like a 401k/IRA), and if you use them for approved health costs*, the earnings are also tax-free! Unlike an FSA, the account is yours to take with you and the money never ‘expires’ (think of it like a healthcare spending IRA), and best of all, if you don’t use it for healthcare by the time you’re 65 years old, you can take it out with no penalty and just pay income taxes on it as those it were a 401k/IRA!

You must have an HSA-eligible health insurance plan to contribute (but not to use) an HSA, so check if your employer provides one and if the coverage makes sense for you (for most healthy people it does!)

Either open the HSA through your employer, or if you need to roll over an old HSA or you want to open one on your own, I highly recommend (and use) Lively, which has no fees, great customer service & website, and great investment options via a linked TD Ameritrade brokerage. (Yes, you can invest your HSA balance so that it can grow tax-free just like a retirement account! I keep a couple thousand for just-in-case health expenses in cash and invest the rest to grow for future needs for me or my family, since they can also use ‘your’ HSA.)

*out of pocket expenses, including on over-the-counter stuff like aspirin or feminine products, dental, and vision like contacts & contact solution). Generally you can’t pay for insurance, but if you’re on unemployment benefits or continuing your employer insurance with COBRA, you CAN pay for those premiums with your HSA.

Details

As health care costs in America continue to soar, so do health care insurance premiums.  The fortunate ones have access to quality, affordable, employer-sponsored group health insurance.  Those that are not so lucky?  Well, let’s just say your affordable options are somewhat limited (assuming you’re not independently wealthy and don’t want to “self-insure.”)

What does a “normal” health insurance policy cost for an individual?

A quick search on ehealthinsurance.com returns several plans with a wide range of premiums, coinsurance percentages, out-of-pocket maximums and coverages.***  The search I performed assumes that the policy holder (the person who’s buying the insurance) is a male non-smoker who lives in North Seattle and is 25 years old.  (Premium prices for a person who is 55 are in parentheses right next to our sample 25 year-old’s monthly premiums.)

Our sample person would pay $226 ($431) per month for a policy with a $500 deductible, 20% coinsurance after the deductible, and an out-of-pocket maximum of $4,500 (including deductible.)  The first 1-5 per year office visits to a primary doctor or specialist are exempted from the deductible.  All our person would have to cover is the $30 copayment (or “copay”, a typically small payment towards your health care per office visit.)  Also, prescription drugs are covered at a $20-$40 copay.

Health insurance is expensive!  How can I lower my premiums?

If that $226 ($431) monthly premium sounds pretty hefty to you (adding up to $2712 ($5172) per year), there are alternatives.  The easiest way to lower any kind of insurance premium is to increase your deductible.  This means that if you do use your insurance, more of the upfront costs will be born by you.  The benefit is that if you’re relatively healthy, you may not pay much out of pocket for health care, saving yourself the difference in premiums.  High-deductible health insurance is also referred to as “catastrophic” health insurance.  I.e: this type of insurance doesn’t pay much if anything for the small stuff, but if something terrible happens to you and you wind up in the hospital for a few days, you won’t be wiped out financially.

If we run our male 25-year old (55 year-old) search for high-deductible plans we find one with a $2,000 deductible, 10% coinsurance after the deductible, and an out-of-pocket maximum of $5,100 (including deductible.)  However, we don’t find any deductible exemptions for office visits on this policy.  Also, prescription drugs aren’t covered at all (which may be a consideration for our sample 55 year-old person.)

What’s the upside to the higher deductible (and out-of-pocket maximum) and the reduced benefits on this catastrophic policy?  Premiums are less than 30% (40%) of the lower-deductible policy at $65 ($168) per month.  Comparing our lower deductible and high-deductible policies, those premium differences amount to $1,932 ($3,156) per year in savings.  If you rarely go to the doctor, that could make a pretty big difference to you over the years, especially if you’re investing the difference and earning returns on that money each year.

Health Savings Accounts – how HSAs can help those considering high-deductible health insurance

The government has created a tax-advantaged device that might make high-deductible health insurance even more attractive to you.  This vehicle is called a Health Savings Account (HSA.)

The idea behind a Health Savings Account is fairly simple:

Step 1) An individual or family purchases a high-deductible (greater than $1,400 for individuals in 2021; $2,800 for families) health insurance option from any carrier they like (including your employer.)  The minimum deductible does NOT apply to preventative services.  Thus, you could have a plan that waives its deductible for routine office exams and immunizations that still qualifies for an HSA.  Also, the out-of-pocket maximum for an HSA-eligible plan must be less than $7,000 (for an individual in 2021;  $14,000 for families.)

Step 2) The same individual or family opens up an HSA, into which they can contribute up to the annual amount stipulated by the IRS.  For 2021, those annual limits are $3,600 & $7,200 for individuals & families respectively, with an extra $1,000 ‘catch up’ contribution for those who are 55 and up.

Note that a family can never contribute more than the family limit with all their combined employee + employer contributions. For example, if each spouse has their own HDHP + HSA, and one spouse is covering children on theirs, they can NOT contribute $7,200 to the kids+spouse plan and $3,600 to the individual. Each spouse can only contribute the $3,600 to each HSA.

Benefits of an HSA – Triple tax-advantaged!

– You can deduct contributions that you make to the HSA from your taxes** (without having to itemize.)  Also, you can invest in whatever you want, similar to an IRA.  In theory, any provider of IRAs is eligible to offer HSAs.  In practice, however, I haven’t heard of any brokerages or mutual fund houses that offer HSAs directly (but hopefully that will change as the HSA becomes more popular and widely known.)

** State tax treatment of HSAs varies. Depending upon the state, HSA contributions and earnings may or may not be subject to state taxes.  See THIS for information on your state.]

– Your contributions remain in your account from year to year until you use them (unlike Flexible Savings Accounts which are often “use it or lose it” for a given year.)

– The interest or other earnings on the assets in the account are tax free.

– Distributions are tax free if you pay for documented qualified medical expenses.  These expenses can include medical/dental/vision/chiropractic services, over-the-counter and prescription drugs, medical hardware like eyeglasses and hearing aids and long-term care insurance premiums (however, generally you cannot treat insurance premiums as qualified medical expenses for HSAs.)

Who’s covered?

The qualified expenses can be for you, your spouse, or any of your dependents (i.e.: children.)

What’s covered?

From the IRS, “the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. These expenses include payments for legal medical services rendered by physicians, surgeons, dentists, and other medical practitioners. They include the costs of equipment, supplies, and diagnostic devices needed for these purposes.

Medical care expenses must be primarily to alleviate or prevent a physical or mental defect or illness. They do not include expenses that are merely beneficial to general health, such as vitamins or a vacation.”

A large list can be found HERE, and includes all the ‘normal’ medical expenses one might think of (exams, hospitalization, treatment, lab fees, vaccines, surgery (NOT cosmetic!, medicine), as well as acupuncture, dental treatment & hardware (dentures, braces – but teeth whitening is NOT covered),  birth control, chiropractor bills, contact lenses (including saline solution), glasses (for vision correction), eye exams, laser eye surgery, hearing aids, and nursing homes & services.

There is also a list of things NOT covered, which includes cosmetic surgery, hair removal or transplant, funeral expenses, gym memberships, nonprescription medicine (e.g.: aspirin), and nutritional supplements (e.g.: vitamins).

What about insurance premiums?

In general, insurance premiums (the cost you pay to maintain your insurance) are NOT covered, since they aren’t direct payment for medical care.  However, you CAN use HSA money tax & penalty-free if you’re paying for 1) Long-term Care insurance (up to certain limits), 2) health care continuation coverage (COBRA), 3) insurance while you’re receiving unemployment benefits, and 4) Medicare premiums once you (or you AND your spouse if you’re covering your spouse) are 65 or older.  See Pub 969 for details.

What if you DON’T use the money for qualified medical expenses?

If you use the money for something else, you will pay a 20% fee on the money and income taxes (so DON’T do that!)  However, if you are 65 or older or disabled, you can withdraw the money for whatever you like and only pay regular income tax (avoiding the extra penalty, making the HSA similar to a Traditional IRA or 401k.)  After 65, you continue to withdraw your HSA money tax-free to pay for medical expenses.

Additionally, unlike Traditional IRAs and 401ks, there are NO Required Minimum Distributions (RMDs) for HSAs, so the money can continue to grow tax-free while you’re in retirement.

Furthermore, if the policyholder ends their HSA-eligible insurance coverage, he or she loses eligibility to deposit further funds, but funds already in the HSA remain available for use (1).  Your HSA is also “portable” in that it stays with you if you change employers or stop working.

In order to qualify for an HSA, you must be enrolled in a high deductible health plan (HDHP), you can’t be enrolled in Medicare, and you can’t be claimed as a dependent on someone else’s tax return for the year you enroll/contribute.  In 2014, a HDHP must have a MINimum annual deductible of $1,250 for an individual ($2,500 for a couple) and a MAXimum out-of-pocket maximum (INCLUDING the deductible) of $6,350 ($12,700) for ‘in-network’ coverage, if your plan is a in/out-of-network plan.  HDHPs MAY cover preventative care without requiring the deductible.

Your health insurance provider, and health care search engines like ehealthinsurance.com, can tell you whether your plan qualifies as a HDHP so that you (or your employer) can contribute to an HSA.

Conclusion

Health insurance can be tricky and somewhat complicated.  Besides looking at the financial side of things (premiums, coinsurance, out-of-pocket maximums) you need to be especially careful at reading through a potential policy to understand everything that’s covered, and more importantly, what isn’t.

HSAs are one way that a person might be able to save on health care costs.  However, to benefit you should be healthy (i.e.: need the doctor rarely in the future), in a tax bracket where the tax savings will give you a nice benefit, and making enough money and have the discipline to invest in your HSA.  Doing so successfully could result in significantly lower health insurance premiums, while allowing your HSA to grow tax-free until you either need it for medical expenses down the line, or you use it like a 401k/IRA after you turn 65.

Regardless of which health care option you choose for yourself or your family, make sure you understand it and make sure you enroll in one of those options!  Due to the high cost of health care, and the likelihood that something can happen to you at any moment, you can’t afford NOT to buy health insurance.  You may feel young and invincible (I sure do!), but all it takes is a car wreck or a sports accident to lay you up.  Often times these circumstances are completely beyond our control.  Your entire savings and assets could be wiped out (and you could accrue significant debt) by a few days stay at a hospital.

So, stay healthy (both physically and financially)!  Eat right, exercise, invest early and often and make sure you have health insurance to protect yourself and your family.

[To learn more about HSAs, check out the IRS’s Publication 969.]

***”Coinsurance” is the % of your covered health care costs that YOU will pay for AFTER you pay costs up to the amount of the deductible. (Therefore, if your coinsurance is 15%, you pay 15% of the costs after you pay the deductible amount and your health insurance company pays the balance of 85%.)

The policy’s annual “deductible” is the amount of health care costs that you will have to incur (per year) before your insurance company will help pay some of them.

The annual “Out-of-pocket maximum” is the total amount of money that you might be liable for, in one year, should you have to pay that much in health care costs that year.  This number sometimes includes the deductible and sometimes does not.

The monthly “premiums” equate to the amount you must pay to maintain your health insurance coverage.  For a given policy, premiums generally go up as you get older, as it becomes more likely that you will incur health care costs that your insurance provider will have to cover.

Here’s an example to show how all these parts of your health insurance policy work together: Let’s say Joe N. Shured has a policy which features a $1000 deductible and 20% coinsurance after that, with an out-of-pocket maximum of $5000, which includes the deductible.

In 2008, Joe goes in for a routine checkup which costs $250.  Since this amount is below his annual $1000 deductible, Joe pays for the whole $250 out of his own pocket.  Later in the same year, Joe breaks his arm skiing and has to go in for X-rays, a cast, etc.  His total bills for the broken arm are  $6750.  Since Joe had already paid $250 towards his deductible, the first $750 of his broken arm bills also goes towards the $1000 annual deductible (which he pays all himself.)  Now that Joe has paid health care costs in 2008 equal to his deductible, the coinsurance of 20% kicks in.  Joe therefore pays 20% of the remaining $6000 balance, which equals $1200.  His insurance company picks up the tab for the remaining $4800 (assuming his policy covers those types of medical expenses; always read your policy carefully!)

To date, in 2008 Joe has paid $1000 for the deductible plus $1200 after the coinsurance kicks in for an out-of-pocket total of $2200.  His insurance company has paid $4800 (for a total of $7000 in medical bills in 2008.)  Let’s say that Joe, the clumsly being that he is, falls down a flight of stairs later in 2008 and breaks both legs.  These leg bills come to a total of $20,000, after a couple days stay in the hospital.  At 20% coinsurance, you might think Joe would have to pay $4,000, but notice that Joe already has paid $2,200 out-of-pocket medical expenses this year.  Because Joe’s policy has an out-of-pocket maximum (including deductible in our example) of $5,000, Joe only has to pay $2,800 of the leg bills out-of-pocket.  (Because $2,200 + $2,800 = $5,000.)  His insurance company must pay the remaining $17,200 of bills.

Joe finally makes it out of 2008 without anymore scrapes.  However, on Jan 2nd of 2009, Joe celebrates State U’s touchdown a little too violently and gives himself a hernia.  His hospital bill for this is $225.  Since Joe is in a new calendar year, his deductible has reset to $1000 again, so Joe must pay the whole $225 himself.  (Joe’s annual out-of-pocket maximum is also back at $5000 for 2009.)

(1) http://en.wikipedia.org/wiki/Health_savings_account

How to start investing profitably in individual stocks

So even after reading my warning, and despite all the ease, simplicity, lower risks and excellent returns of target date index funds, you still want to pick your own stocks, huh? Ok, keep reading, but don’t say I didn’t warn you!

Stock-picking Acid Test: do you have at least $100,000 in stock index funds? Have you paid off all high interest debt like credit cards? Are you on track to retire by at least 60-65? If not, go back to the basics first before you consider buying individual stocks!

I recommend keeping at least 75-90% of your portfolio in index funds such as a Vanguard Target retirement fund, and only allowing yourself to pick stocks for the other 10-25%.  That way, if you lose your shirt, you’ll still have plenty of assets to fall back on.  Alternatively, you could designate your retirement funds as index-only, and stick to taxable accounts for any stock picks.  I do this, since I don’t want to screw up my age 60 retirement accounts (401k & IRAs), but am willing to take a little more risk on my ‘early retirement’ accounts.

Also, diversification– owning several different stocks of different sizes in different industries– helps you lower your portfolio’s risk.  The right index funds give you that diversification so that you don’t have to worry about it as much when you’re picking individual stocks.

Quick start guide to picking your first stock

  • Start small (cap.) small investors have better chances beating the market than large investors when it comes to the sizes of companies they can profit from. Choosing a small cap company with a market cap between $500 million to $2 billion means you’re competing with far fewer institutional investors.
  • Learn how to read financial statements. Get your company’s latest 10-Q (quarterly report) and 10-K (annual report) and read it from cover to cover, skimming as needed.
  • Have the right attitude about valuations. The market’s prices are there to serve you, not to inform you. Every single company, which is what a stock represents, is undervalued at one price, appropriately valued at another price, and overvalued at yet another price. You’re investing in a partial ownership of a business enterprise; you’re not playing a casino game. As Ben Graham famously said, “in the short run, the market is a voting machine but in the long run, it is a weighing machine.”
  • Understand how you can be fooled by randomness, and understand why ‘value investing‘ (<– famous Buffett essay)– broadly interpreted as trying to get more business value than the cash you give up in buying a stock– is the ONLY way to invest with a hope of beating the market.

Educate yourself

Peruse investing education websites like the Motley Fool (which unfortunately has a lot of link-baity junk too; but you can still find some good stuff on investing like this, or this.)  MoneyChimp is a great site too, with many investing (and general personal finance) calculators available.

Read superinvestor Warren Buffett’s ‘Letters to Berkshire Hathaway shareholders’ for free online (or consolidated in a much easier format in this book.)  The best book I’ve read to get a feel for the correct general investing philosophy is Roger Lowenstein’s Buffett biography.  I recommend this as a must-read for any would-be investor to learn the correct investing temperament, which is even more important than  learning how to value stocks.

Read Benjamin Graham’s classic ‘The Intelligent Investor’, or at least the chapters on ‘Mr. Market’ and the Margin of Safety concept (Chapters 8 and 20.)  Graham was Buffett’s teacher and, together with David Dodd, pioneered value investing with ‘Security Analysis’.

Peter Lynch’s One up on Wall Street and Beating the Street are also good. Philip Fisher’s Common Stocks and Uncommon Profits is excellent too, especially for the notion of ‘scuttlebut’; picking up (legal) insider tips on your own.

A less dense and very useful ‘just get started investing’ primer is the Motley Fool’s Million Dollar Portfolio book.

One word of caution: if you ever come across ‘technical analysis’, otherwise known as ‘charting’, run the other way as fast as you can!  Technical Analysis is a stock picking method akin to voodoo (and just as scientific.)  It involves looking at the past patterns in past price data (random movements in the market) for a given stock.  Supposedly, patterns like ‘head and shoulders‘ (I’m not making this up) are ‘buy’ indicators, whereas the ‘rounding top‘ pattern is something to fear.  If you think trying to divine future stock movements from random patterns in past price data sounds crazy, you’re right; don’t give this garbage any space in your brain.

Do your homework

Once you find a company you’re interested in, start looking at their financial data and business model. I use Yahoo! Finance for a quick look at financials and to track companies I’ve already bought or am considering buying in the future. Download annual reports (10-K’s) and quarterly reports (10-Q’s) from the Investor Relations section of a company’s website. Do whatever valuation techniques you like, but at a minimum compute some ratios (PE, PEG, Current, Quick, etc) and do a Discounted Cash Flow (DCF) analysis on a company’s Free Cash Flow (FCF.)  Valuation matters!

Plan to buy and hold a company… forever!

Warren Buffett is often quoted as saying his favorite holding period is forever.  What he means is that if you do a thorough job in steps 1 and 2 above, you should have found a company worth holding for a very long time.  Ideally, that great business would continue to be a profitable investment for years to come, so why wouldn’t you keep the stock?  There are some legitimate reasons to sell, maybe the business has changed, or maybe you overlooked some glaring issue at the time you purchased.  Maybe the all-star CEO has left and you’re not comfortable with her replacement.  Or, maybe you finally need the money.

Other than these reasons, plan on holding for a very long time.  Buy and hold investing forces you to do your research up front.  It also keeps you from trading too much, which incurs large costs and lowers returns dramatically.  Not only that, but the IRS tax code favors investors who hold their investment gains as long as possible (this last consideration doesn’t matter for retirement accounts that are tax-advantaged, like 401ks or IRAs.)

Track your portfolio’s performance against an appropriate benchmark index

Here’s the easiest way to do this, which is what I do to track my performance casually and easily.

Knowing your performance against a relevant benchmark. If you can’t beat the market benchmark, picking stocks is detrimental to your wealth AND a waste of your time. I recommend keeping your brokerage account that you use for individual stocks separate from the rest of your investments (i.e.: your index funds, bonds, and cash reserves.)

After you calculate your total return, calculate what your total return would’ve been if you’d made the same investments (amount and date of investment) in an index fund like the Vanguard Total Stock Market index fund (ETF ticker: VTI.)  Ideally you would like as long a time period as possible, as random fluctuations in your portfolio can make you lucky (or unlucky) in the short term.  Check your portfolio’s return against a benchmark at least every 6 months to a year.

If you can outperform the market for 3 years or more by a 1-2% each year, you’re doing very well. If you’re doing better than that, you’re crushing it compared to most investors. That might not sound like much, but it is when you can keep up that performance year over year. You might also compare the dollar gain vs the time you’re spending on it.

Conclusion

It’s very difficult to gain the knowledge, emotional attitude and discipline to be a successful stock picker. By using the resources about you’ll have a better chance than most, which still may not be enough. Stock picking can be fun, but make sure you’re giving yourself constant reality checks by measuring your entire portfolio’s performance against a major stock market index fund like the S&P 500. Use a buy and hold strategy with a long-term (5+ years) holding period. Thoroughly investigate the pros and cons of every investment before you buy. Good luck!

Final word of caution and advice

Be brutally honest with yourself: if this all sounds like too much work, or if you know that your initial excitement to do the work will lose steam in a few months, just buy broad low-fee index funds. Just ‘buying the market’ will result in huge compound returns over time, and beats the vast majority of professional money managers (because of their fees + taxes they generate from more frequent trading), not to mention all your friends.  Not only that, but target date index funds require practically ZERO work and maintenance, allowing you to ‘set it and forget it’ and get on with the rest of your life.

How I save thousand$$$ a year WITHOUT sacrificing lifestyle

Here’s how I overcome the two main reasons saving money is hard for people:

  1. Inertia (aka mental laziness)
  2. Loss aversion to cuts in lifestyle
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Seize the day and make just one change that will save you $100s or $1,000s per year!

Inertia

Overcoming inertia– which is just a fancy way of saying ‘changing your habits’– is often where my clients get the quickest spending wins. Changing your automatic habits is often more about spending a little time to, say, shop for a better deal on something, or change your banking structure to build wealth by default, vs having less stuff or less experiences.

How do you overcome spending inertia? You can start by figuring out your spending, and then do one of these things which don’t involve any sacrifice of your lifestyle.

Cancel stuff you don’t use anymore

Here’s a few examples to motivate your own saving:

  1. Cancel any subscriptions that you no longer use, or use so rarely you’d never miss them. Never use Hulu anymore because you spend all your time on Netflix? Cancel it. Write down all your subscriptions– look at your last months’ credit or debit card statement to find them all– and then make notes on the costs and which ones aren’t worth it anymore, then cancel them. Click this Google query and replace the word ‘Netflix’ with your subscription to find out how to cancel it.
  2. Bought a gym membership but never go? Cancel it, and optionally substitute with some body weight exercises, or buy some (used) home gym equipment.
  3. Bought something you don’t use anymore? Sell or donate it to free up space in your home.

Substitute with a free or cheaper option

Substitution is another great way to cut costs without cutting fun.

  • Optimize your auto insurance to protect yourself for less.
  • The library is a great way to get free books, ebooks, audio books, streaming movies (yes, you heard me!), and other freebies like digital subscriptions to paid services like newspapers or Consumer Reports. Sign up for a library card at your nearest branch and see what they have to offer.
  • Cut your cable bill down to nothing with negotiation and dropping unnecessary services like modem rental.
  • Get something used or free from neighborhood marketplace sites like Facebook’s Buy Nothing groups (find your local one), Nextdoor, Offerup, or, if you must, Craigslist.
  • Switch cell phone plans to Consumer Cellular (I use and recommend them) or other small carriers like Ting. Google is getting into the act too. This takes a couple hours of time to port over your old number, but the savings will be several hundred a year for many people and most couples on a family plan. This is well worth your time and energy.
  • Ask your friends and family if they subscribe to a service that they can add you to for free. I get Netflix, Hulu, Disney+, and Spotify all for free thanks to the generosity of my friends and family. Worst-case you can of course offer to split the cost with someone–saving you at least half the cost of the subscription– but many people have open ‘spots’ on these subscriptions to add people, and are happy to do so for close friends and family. (God bless them!)
  • Do something yourself instead of paying for it. Yard work, simple car repair, dog-walking, cleaning, or even making your own hard apple cider are all skills that some people pay for but others do themselves. YouTube is your friend if you want to learn new skills. You might think you don’t have the time to do something, but remember that DIY’ing has other benefits too like exercise or using different mental or physical skills that have health benefits too. You also save the time it takes to shop or coordinate the service you pay for, and add to your own ‘personal capital’ whenever you enhance your skill set. Invest in yourself and save!

Loss aversion due to fear of lifestyle cuts

My clients are often resistant to even talking about spending cuts because they think it will mean a reduction in their lifestyle. While it’s true that we often overestimate the happiness we’ll feel when engaging in ‘retail therapy’, their concerns are legitimate. I try to get around this reluctance by recommending spending cuts that have small lifestyle cuts, or ones that are unknown, but can be easily tested and rolled back if clients find that they miss whatever they cut out. Remember that nearly every spending cut you make can be instantly and easily reversed, so there’s no risk in trying something out and seeing how it goes for a few weeks!

Reduce the frequency of repeat purchases, or delay an upcoming purchase

A great way to minimize the hit to your lifestyle is to just do a little bit less of something, and see if you really miss it.

  • One of my clients cut her housecleaning service from once every 3 weeks to once every 4 weeks. I don’t think this made any difference in her happiness– or any noticeable difference in her apartment’s cleanliness– but it cut this bill by 25%!
  • Delay your next haircut, massage, mani-pedi, or other personal care service.
  • Delaying the purchase of your next car is a big way to save money. Changing cars every 10 years vs every 5 years will save you tens of thousands of dollars. Investing that difference over time will add up to hundreds of thousands. Driving my car into the ground is one of the best ways I’ve built my financial independence.
  • Even just delaying routine purchases like a new cell phone or laptop will add up over time. This assumes your old devices work just fine for you. Don’t put up with glitches that are actually wasting your precious time or frustrating you!

Buy one thing at a time instead of subscribing

Ramit Sethi describes his a la carte method of just buying things when you want them as opposed to paying a recurring subscription fee. This method works great for things like streaming services (just buy one movie at a time), gym memberships (buy single use passes), or any other subscription service that you use infrequently.

This method works because we overestimate how often we use our subscriptions, and we rarely never do the math to see if it would be cheaper to just buy one thing at a time vs subscribing. Gym memberships are notorious for this. I was occasionally going to a 24 Hour fitness a couple year ago, and then I actually looked at how often I went (this gym actually tracked that for me on their website, those fools!), which was only once every 2 weeks! I immediately cancelled my $40/month membership and switched to using $10 day passes instead, saving me $20 a month.

I do the same thing with streaming movies. If there’s one I wanna watch RIGHT NOW that I can’t get through the library– or through one of my friends’ or family’s subscriptions that I freeload on– then I just pony up the $3-4 and stream it, no sweat. I probably do this less than once a month, so I’m saving a lot vs paying $12-$15/month for another streaming service.

Simply jot down the cost of your subscription, divide by how often you use it to get the ‘per use’ cost, and then cut the ones that are more expensive than buying a la carte. Or, just cut them anyway and trust that buying a la carte will make you think twice about using that service and thus save you money anyway. You can always re-subscribe later if it doesn’t work out for you.

Make small changes at first

Some A few people get very gung ho about saving money and try to cut everything down to the bone all at once. “I’ll never go back to Whole Foods and will buy everything on sale or at Costco!” they say, and within a week they’re back to cashing their whole paycheck for organic tomatoes and trendy skin lotions. Instead, start small to avoid noticing any loss in your consumption. (That’s also why I recommend small annual increases to your retirement contributions.)

  • Turn your thermostat down by 3 degrees in the winter, and up by 3 degrees in summer if you have AC. This will save you at least 10% on your heating bills, reduce your greenhouse gas emissions, and you’ll barely notice it. Just throw on a Merino wool sweater when it’s cold out– or move around a little more— and bank that extra cash.
  • Pack your lunch for work one extra time per week than you already do.
  • Make one more meal at home than you already do instead of ordering out.
  • Host drinks or dinner at home for a change instead of going out, and encourage your friends to reciprocate.
  • Say ‘no’ to one expensive travel plan (*cough* friend’s destination wedding) that you can’t really justify going to.

Where will your next $1,000 in savings come from?

Pick an area of your life that you can spend 1 – 2 hours on right now to realize some significant savings, and share what you do and about how much you’re going to save in the comments.

I have 10 great savings tips if you need more ideas, plus two more for homeowner’s.