Life is busy, it’s getting harder and harder to manage everything particularly if you have a family that gets added to an already packed weekly workload. The busier your life is, the more you focus on important parts such as your family and your job, however for most people, equally important personal parts of your life, such as health and your finances seem to be put on the backburner.
The same can be said of health, with many readers of this article who have families likely put a priority on the health of those family members way ahead of their own. Yet when it comes to your health, this is regularly neglected and handled with a she’ll be right attitude until it isn’t. While women are better with this than men, this can be improved across the board.
The same can be said, even more so, regarding your personal finances. Most people would much prefer to sit on the couch and watch their favorite movie or tv show on Disney or Netflix than sit down and go through their finances reviewing their expenses or investments or even planning out their financial future by setting goals?
This approach, also known as a laziness tax, can leave you out of pocket by thousands of dollars a year and likely set you back many years in your retirement planning.
This needs to change, NOW!
Your personal finances and your financial future need to be one of the most prominent (at least in the short term) and taking stock quicker can put you on the path to financial success. Below we’ll go through some of the ways the laziness tax is costing you and how to turn this around.
Review you current subscriptions and memberships
Most people have a subscription to a multitude of media organizations, from the streaming platforms such as Disney and HBO/Discovery to a favorite online newspaper such as the New York Times, the Wall Street Journal or even the Sacramento Bee.
How many of these subscriptions do you actually use or rarely get any value from? Firstly go through all of these and determine whether you have used all of these subscriptions within the last 3 to 6 months.
An example of this could be a subscription to a gym you no longer use or for an obscure online newspaper that you once read but haven’t logged in months.
If you’ve forgotten all of your subscriptions look through your bank account or credit card statement to see all of the direct debits.
Secondly, for those subscriptions that you’ve used in recent times, are you getting sufficient value to warrant a continued subscription or at least to keep subscribing at the current subscription level you are locked into.
An example of this could be with a streaming subscription. This subscription could have several people linked to it as part of the monthly plan. You may have set this up when your children were at college however they have long ago graduated and have jobs where they can pay for their own subscription.
Another example could revolve around fitness or gym subscriptions. This could be a membership that was at the top level with all ancillary benefits, use of all parts of the gym, access to all classes and other benefits such as saunas, spas or discounted remedial services, services or areas that you never use.
You might determine that a lower level of membership (at a much cheaper rate) is sufficient for you which will also give you a significant monthly saving. Do this with all of your subscriptions to make sure you are getting value for money.
Review your loans and credit cards
It’s easy to neglect reviewing your loans and credit cards however rates can change quickly and loyalty/reward programs also change regularly (both positively and negatively).
The loan took out 2 years ago that had a great interest rate may now be costing you thousands more in interest than other loan options currently available. By ignoring this or neglecting to review on an annual basis means you could be missing out on easy additional savings opportunities that will take very little effort..
The same goes if you have any credit cards both with or without a balance. If you have a long term credit card balance obviously the main aim is to repay this ASAP, however there may be options to move this to a competitor that offers either an interest free period or offers a lower rate.
Even if you are a person who pays their credit card balance every month, your credit card rewards and benefits program may have changed since you took out your card and there may be better options on the market (such as higher airline points or higher rewards per purchase). There may even be better options within your current financial service provider.
Again this review is a relatively simple process for a potentially improved benefit as there are plenty of comparison credit card websites. By changing cards to a better reward program you might be able to boost your holidays or household contents without increasing your credit card spend.
Review your current savings accounts and investments
Similar to interest rates on loans, interest rates and benefits linked to savings accounts also change over time. Particularly in times where interest rates are low it’s easy to get complacent regarding savings account interest rates however rates can rise rather quickly so you want to check whether your current savings account stacks up to competition.
Firstly check to see are there better alternatives with your current financial services provider (you may have had increases in your salary or net wealth that accesses a better service tier) and if this isn’t the case then put this to the market.
What about your investment and your portfolio? When was the last time you reviewed this or was it reviewed by a finance professional? You might have shareholdings that may have been a great performer 2 years ago but in recent times has lost significant value and has dragged down your portfolio performance. A regular review may have highlighted the potential to sell this investment before it dropped.
A perfect example of reviewing your investments is when we enter a period where low interest rates start increasing. Rising interest rates can affect property and equity prices yet these interest rate increases can also make some savings account and fixed interest investments look very enticing, particularly cash and highly rate (and secure) fixed interest investments.
Do your research, look at current market conditions and trends and take a very critical eye over your portfolio to determine whether there are better investment options for the financial environment that you are currently in, rather than the environment when you first entered your investments.
This review should also take into account your current brokerage or trading service as new technology or new entrants may have driven prices and fees lower than what your current service costs you. Loyalty doesn’t always pay so check what alternatives are available and do your research.
Review your current job, education and career prospects
An area that most don’t put a lot of focus on regarding laziness tax is with their current job and salary. Most employees don’t request pay rises, preferring to wait for their current employers to either review it annually or not reviewing it at all.
This can be leaving money on the table and not in your bank account where it should be. Yes there are times when asking for a pay rise may not be a great move, particularly if there are layoffs at your employer or there is a serious recession going on, however in a lot of cases (particularly if you haven’t had a pay rise in a while) this is something you should be entertaining at least every year.
Most large companies provide annual pay reviews, however don’t leave it in the hands of your employer to get what you want with your pay. Have a plan and take this into your own hands. We’ve discussed tips to ask for a pay rise previously however assess the current work and economic climate and if your work is worthy of a pay rise then request a meeting and make your case. Though be realistic with your perceived pay rise worthiness.
When preparing your case, prepare a short presentation as to why you deserve the pay rise and highlight several recent examples as to the high quality of your work that adds to your case. Also have an idea of what pay rise you think is reasonable so you can accept or request something more.
Always have a backup plan in case it doesn’t go your way however back yourself and get the market rate you deserve. If there isn’t the opportunity at your current employer for a pay rise for whatever reason, is there an opportunity for an increased salary with a competitor or even a job promotion at another employer?
Another way to improve your chances at earning more money is through improving your education or training and this should be a focus for you particularly if your employer is offering education and training to you at little to no cost.
Not only can this extra training and education provide you with a pathway to earn more money through your career, this extra education can offer an alternative pathway to earning extra money through creating a side hustle or online business teaching others or building education courses in your field of expertise.
Review your lifestyle, habits and who you spend your time with
While you are in the process of reviewing, also review the time you spend with others, particularly people who you don’t really enjoy spending time with. These could be acquaintances, they could be your employer or boss, or even work colleagues.
Spending time with narrow minded negative people can keep you at a lower level in life that you shouldn’t be at. These people can be talking you down from a position at work you should be at, talking you down from starting a small business you know will be successful and add additional income to your household. Whilst not a laziness tax itself, surrounding yourself with the wrong people doesn’t challenge you or inspire you to be the best version of yourself, one that could be earning more than they currently do (not that money should always be your focus).
Life is too short to spend with people you don’t like, make changes to minimize time spent with these people or where possible, cut these people out of your life, eliminate all toxic people and activities from your life where you can.
Review your current hobbies, your diet and lifestyle. Ask whether these are still working for you and if not look to change these out for more healthy lifestyle choices. Is this lifestyle being lived for you or is it for someone else who may not have your best wishes at heart?
Also take a look at parts in your life that you think you can’t change, such as your career. Is it really the case that you can’t change this? Family and lifestyle should come first and if your job is taking its toll on your and your family, is money really everything? What other alternatives are available for you to live a more enjoyable and fulfilling life?
As we mentioned it’s easy to get caught up in life and neglect areas that need to be worked on such as your finances. Whilst you can (and should) automate your finances and eventually build up your emergency funds, savings and investments, you need to put some initial time in to get to the level where everything can be automated.
Put some time aside not just to review your expenses just to save a few bucks, but to put some serious thought and planning into your financial future and look to create and implement a plan that enables you to achieve your financial goals.
If you want to take this to the next level, to set your financial goals and put a plan in place to work towards eventual financial independence then click on some of your previous articles on these topics. At a minimum review your expenses on an annual basis to see if you are still on track, that you are still getting the best value you can and eliminate the ways the laziness tax is costing you in your life.