Recurring Luxuries = Recurring Trouble

It is estimated that more than 70% of the average family’s budget goes to recurring payments. This large chunk of money accounts for mortgages, car payments, electric bills, cell phone charges, and credit card minimums. However, it can also apply to gym memberships, online site subscriptions, or regular club dues.

Many of these payments are made automatically, so you don’t really think about where the money goes. Your Netflix is on auto-renew, right along with your Sports Insider membership. Making automatic, thoughtless payments for goods or services that don’t truly benefit you or your bottom line is a way to make recurring luxuries into recurring trouble.

To get a handle on this, make a list of all your recurring monthly debits. Once you have your list together, start dividing them into different categories.

You’ll have your must pay items. These should include loans, credit card minimums, and utilities.
Next, you’ll have your necessary evils, so to speak. This includes your cell phone bills, parking garage fees for work, and other items you need to function.

Finally, you’ll have your “indulgences”. You may not be thinking of them this way, but how else do you describe a gym membership you never use? Or the Fantasy Football league?

You’ll want to look at these critically. Specifically, you will want to ask yourself what is it that you get out of these payments? If your Netflix subscriptions saves you $20 a month on gas and late fees, perhaps it can stay. The gym you never go to or the magazines you never read are psychological indulgences—admit you aren’t benefiting from them and cut them out!

Some people whine through this exercise, complaining that it takes away all of the fun things. That’s not the point—the point is to ensure that you are spending money only on things that you really enjoy and benefit from purchasing. Any other recurring payment is just an unnecessary drain on your personal resources.