With negative cash flow, I’ve embarked on a mission to trim unnecessary expenses from my budget. In times of surplus cash before my home purchase, I hadn’t scrutinized my expenses for years.
It’s not that I was lazy about budgeting; instead, I’ve always embraced the “pay myself first and spend the rest” strategy. Each month, I allocate a specific percentage to save and invest for passive income, taking care of my retirement needs upfront and allowing me the freedom to spend on other things afterward.
Even in challenging cash flow situations, adopting the “pay yourself first” habit can motivate you to explore side hustles or cut down on expenses. For the sake of re-achieving financial freedom by 2029, I’m more motivated than ever to save.
Three Sneaky Expenses Weighing Down My Budget
My goal was to identify unnecessary recurring expenses and reduce them. Given I’m not willing to cut my private sports club membership for $180/month, I needed to find elsewhere to cut.
Here are the main ones I found that probably pertain to many of you as well.
1) Cutting food costs is the biggest and easiest recurring expense
At the onset of the 2020 pandemic, we made the decision to allocate more funds to restaurant food delivery and grocery delivery. The rationale was that the extra cost was justified in minimizing the risk of contracting COVID by avoiding trips to the grocery store or dining out. With a newborn in the picture, we erred on the side of caution, considering her developing immune system.
Having successfully avoided COVID for two years, we continued our food delivery routine, resulting in an additional monthly expense of $1,000 – $1,500. Sometimes, we indulged in food delivery twice a day, with each delivery costing between $40 and $100. Saving time on cooking while caring for a newborn and homeschooling a toddler was valuable.
Now that COVID has long subsided, there’s no longer a need to pay a premium for food, delivery fees, and tips. However, we found ourselves stuck in this pattern of food consumption due to inertia—it had become our norm for over three years.
Save Money, Lose Weight
Upon scrutinizing our budget, we’ve managed to trim approximately $1,000 per month in food expenses by embracing home-cooked meals. While the routine of eating lasagna for five consecutive days can be monotonous, it’s a sacrifice we’re willing to make for the sake of saving money.
A delightful side effect of our reduced food budget is the relatively easy weight loss we’ve experienced. Who would have thought that steering clear of those tempting donuts and cookies on a weekly basis could yield such positive results? I’ve shed five pounds, and my wife has dropped three pounds since we implemented these changes.
Admittedly, there are moments when hunger pangs strike, affecting my productivity. However, I view my hunger as a gentle reminder to appreciate the abundance in my life. It is the main weight loss tip that has enabled me to wear my same clothes for the past 25 years.
Food is the sneakiest expense because it takes years to witness the effects of overeating. One waffle cone ice cream here and there doesn’t hurt today. But over time, they can really add up.
2) Spending money on premium gas is a waste
When I initially bought my car in December 2016, the gas cap indicated a preference for “premium gas.” Consequently, I diligently filled my tank with Plus gas (89 octane) to adhere to this recommendation, even though it cost around 25 cents more per gallon than Regular gas (87 octane).
With an average monthly fill-up of 2.5 times and my tendency to pump around 25 gallons per visit, I found myself spending an additional $15.62 each month on gas, totaling an unnecessary $1,312 over seven years.
Premium Gas Is Considered 91 Octane Gas
Interestingly, the revelation came to light that “premium gas recommended” actually meant Supreme gas (91 octane), not the 89 octane I had been using. Surprisingly, my car ran smoothly without any issues for over seven years, even though I had been using a lower octane than recommended.
In October 2023, amid a cost-cutting initiative after purchasing my house, I switched to 87 octane gas to save money. The car continued to run just fine.
Three months after my switch to 87 octane gas, my check engine light went on. Uh oh, did I screw up my engine? However, upon consulting the auto mechanic, it was determined that the check engine light resulted from a torn PVC valve and a leaky vacuum pump, unrelated to the gas change. The auto mechanic also agreed the type of gas didn’t really matter.
If I had been using premium 91 octane gas since December 2016, I would have incurred an additional 20-25 cents per gallon. Thanks to my unwitting ignorance, I saved an additional $1,000 on gas. But if I had stuck to just 87 octane gas, I would have saved over $2,300 in gas since Dec 2016. Oh well.
Buying Branded Gas From Chevron And Shell Is Unnecessary
Beyond octane choices, an even greater unnecessary expense is paying a premium of 30-60 cents per gallon for branded gas from companies like Chevron and Shell. These well-known brands may be considered the Gucci and Prada of gasoline, but similar to luxury consumer goods, their profit margins are significantly higher than the actual product cost.
In the context of gas, the brand is inconspicuous, making the premium for luxury gas a less justifiable expense. At least with a $5,000 handbag or $20,000 watch you can show it off to all your friends!
With gas, nobody knows what type of gas you have. If you want to show off with your car, the only want to show off is with a nicer car. Just make sure to follow my 1/10th rule for car buying so you don’t ruin your finances.
Cost Differential Between Branded Gas And Generic Gas Is Absurd
A local Speedway gas station on the west side of San Francisco sells 91 octane gas at a 40 cents cheaper rate per gallon than Chevron, merely three blocks away. While Chevron boasts Techron, a detergent-containing formula that aids in engine cleanliness, the cost difference is not worth paying the premium.
Ultimately, all gasoline producers must meet state-specified minimum requirements, providing consumers assurance that their choice is satisfactory. In certain states like California, gasoline standards are exceptionally high, further supporting the notion that whatever gas is purchased is more than adequate.
Besides, you’re not Carlos Sainz from Scuderia Ferrari F1 who needs all the edge he can get to beat his competition. Nor are you likely going to drive your car for over 15 years and over 150,000 miles. Before some no-name gas brand with low octane and less detergents damages your car, if it does at all, you’ll have bought a new one long before then!
If you’re really concerned about carbon deposits building up due to cheaper gas, buy a bottle of Techron for $18 and dump it into your tank every 5,000 miles.
3) Sneaky monthly subscription expenses that have to go
Eliminating sneaky monthly subscription expenses is a crucial step to cut unnecessary costs. A recent revelation made me realize how I’ve been unwittingly shelling out $9.99 a month for Apple TV+ since March 2023.
The initial spark came when Apple TV released the Severance show on February 18, 2022. Intrigued by the positive reviews and my affinity for dystopian shows, I decided to opt for Apple’s free one-month trial to watch Severance. It lived up to expectations, so I decided to commit to a yearly subscription upfront after the trial period, given the cost-saving incentive – around $80 at that time.
Anticipating the release of Severance Season 2 in 2023, I was disappointed to find that it never came. Busy with various commitments, I didn’t explore other content on Apple TV, and my subscription continued unnoticed.
It was only in February 2024 that I discovered I had been paying $9.99 monthly for Apple TV+ since my renewal in March 2023. Realizing I had spent over $200 on a service I wasn’t actively using prompted me to cancel the subscription promptly.
Cut every subscription you’re not actively using
After cancelling my Apple TV+ subscription, I reviewed our credit cards bills to find more unnecessary subscriptions. We found that I had over $260 in credit on a massage app called Zeel. We had paused our subscription during COVID and I had removed the app on my phone. But the subscription turned back on at some point without us noticing.
Luckily, we were able to use the credits by arranging a 135-minute massage for my parents and me when they visited. It was their first professional massage in over 10 years.
For those looking to trim unnecessary expenses, canceling subscriptions can make a significant impact. On an iPhone, iPad, or Apple Vision Pro, cancel subscriptions by opening the Settings app, tap on your name, navigate to subscriptions, and discontinue services that are no longer in use.
Related to subscriptions, the other sneaky expense is your growing cable bill. Cable companies love to catch you with a promotion, then slowly raise prices over time. To cut costs, you must call and bargain with the company provider.
Operating On A Leaner Budget Feels Better
I despise unnecessary waste, which is why we are vigilant about not discarding food and limiting ourselves to only one car. I also wear the same clothes over and over again for years.
For anyone who hasn’t scrutinized their budget recently, I recommend a comprehensive examination of each line item to identify potential areas for reduction. Over time, it’s easy to accumulate budgetary excess as we acquire and incorporate more items into our lives.
Getting into a lean operating mindset. You’ll go farther financially if you do!
Reader Questions And Suggestions
What are some other sneaky expenses that could be ruining our budgets? What are some areas of your budget you’re cutting to increase your savings and investing?
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