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A while back when I was embarking on a money saving journey, something came to mind.Â I realized that when I saved money, it was actually worth more than what I had saved due to the tax savings. Recently, I canceled a service that I don’t use. Technically, I suspended it because they talked me out of canceling it and selling me on my value as a long term client;Â value that I would lose if I canceled my service. For me it made a bit of sense, since I might be needing the service again down the road (it was a backup wireless Internet Service provider).
I told me wife I was canceling it which is always music to her ears (we seem to want to spend on different things) 🙂 Anyhow, she wasn’t as excited as I was when I told her the true value of the savings was almost $125 because it would take about that much income to net $75 (given the cost of taxes and being self employed). Even if you aren’t self employed, the true savings is at least 25% more if you are in a low tax bracket and have some write offs.
Some will argue that the cost of reducing business expenses would look different due to an expense being a tax write off.Â In my opinion, one of the biggest lies a business owner can believe is that an expense is not really an expense because it is a write off. You have to actually earn money to write off expenses.Â If you don’t earn money and just take a loss, how long can you sustain that? It’s just faulty logic to me.
Balancing your budget has to do with reducing expenses and/or increasing income.Â If you can’t directly increase income, you can exponentially reduce expenses by removing their costs.
One of the best places to “find money” is in your utilities such as bundled cable services and bundled telecom or cell phone services.Â There are people who make money by analyzing these bills for people to help them save money.Â I don’t know of any off hand that I would recommend, so if you need one, ask someone you know and trust for a referral.
Another great place to find money is by having a professional analyze your insurance policies.Â One time I saved about $100 per month on my car insurance by switching carriers (true savings of about $150).Â You can imagine I was pretty upset when I realized I was paying more for less coverage.
So what do you do with all of your new found money? Start building a personal banking system (that’s what I am doing).
Have a great day!