Death by a Thousand Cuts: Optimizing Everything Else
Beyond the Big Three
We've covered the Big Three expenses that typically eat up 60-70% of most people's spending: housing, transportation, and food. But what about everything else?
These "other" expenses might seem small individually, but they add up fast. A $15 subscription here, a $50 utility bill there, $200 for insurance…suddenly you're spending hundreds or even thousands on categories you barely think about.
Today we're going to tackle these smaller expense categories systematically. While none of them will transform your finances like optimizing housing, collectively they can save you thousands annually and cut years off your FI timeline.
Remember: every $100/month you save across all categories reduces your FI number by $30,000. Also, these categories have less to work with. Is it easier to save $100 on your rent or your phone bill? That’s why we start with the large categories.
The Subscription Avalanche
Let's start with the expense category that sneaks up on everyone: subscriptions.
The Problem: Subscriptions are designed to be "set and forget." You sign up once, and the charges just disappear into the background. Companies love this because most people pay for things they don't use.
Common Subscriptions That Add Up:
Streaming services: Netflix ($15), Hulu ($8), HBO Max ($15), Disney+ ($8), Amazon Prime ($15), Paramount Plus ($8), Starz ($11), Spotify ($10), and there are more!
Software: Microsoft Office ($10), various apps ($5-20 each)
Services: Gym memberships ($30-100), meal kit services ($60-120)
News/magazines: New York Times ($25), various publications ($5-15 each)
Shopping: Amazon Prime ($139/year), Costco membership ($60/year), Barkbox ($25), BirchBox ($25)
The Audit Process:
Review bank and credit card statements for the last 12 months (to find annual subscriptions)
List every recurring charge, no matter how small
Calculate annual cost for each subscription
Ask the hard question: "Do I regularly use this product? Would I buy it again today?"
Cancel anything that doesn't pass that test
Pro Tips:
Set calendar reminders to review subscriptions quarterly
Use services like Rocket Money to track recurring charges
Share streaming services with family/friends (within terms of service)
Rotate subscriptions. Cancel Netflix when you want HBO, switch back later
Potential Savings: $50-300/month depending on how subscription-heavy you are
Insurance: The Necessary Evil
Insurance is required for many things, but that doesn't mean you have to overpay.
Auto Insurance (Revisited)
We covered this in transportation earlier, but it's worth repeating: shop auto insurance annually. Rates change constantly, and loyalty is not rewarded in insurance. (Those “loyalty discounts” are fake. They raise the price and then apply a loyalty discount. All that matters is the price you actually pay, not how much loyalty discount you have.)
Advanced strategies:
Increase deductibles if you have emergency fund coverage
Drop comprehensive/collision on cars worth less than $5,000
Ask about low-mileage discounts if you drive less than 10,000 miles/year
Bundle with renters/homeowners insurance (but verify it's actually cheaper)
Health Insurance
This is the most complex and personal insurance category. We’ll do a deep dive on it in the future.
Here is the takeaway: buy the plan that makes sense for your health situation.
If you consume a lot of healthcare services (because you have multiple prescriptions, see many doctors, or have frequent hospital visits), you have permission to buy an expensive plan because you’ll come out ahead.
If you are completely healthy, you do not need the most expensive plan! You are paying for insurance you won’t use. That doesn’t mean to go uninsured. It means to use catastrophic coverage or a high-deductible plan. That saves you money every month and keeps you covered in case of an emergency.
Life Insurance
If you are young, single, and have enough to cover your final expenses, you probably don’t need life insurance. If you have people depending on you, it’s very cheap while you’re young.
Once you cross 40, the cost starts increasing dramatically. I don’t have life insurance because I’m financially independent. If something happens to me, my wife has plenty for the rest of her life.
If you’re over 40, have people depending on you, and have little savings, life insurance probably makes sense. You can cancel it once you reach FI.
Term life insurance is usually much cheaper than whole life for pure protection needs. If you need life insurance, buy term and invest the difference.
Potential Savings: $50-200/month depending on your current coverage
Utilities: The Monthly Necessities
Utilities feel fixed, but there's often room for optimization.
Electricity and Gas
We covered these in our housing newsletter.
Internet and Phone
Internet:
Most people pay for faster speeds than they need. You can usually stream 4k video with 50mbps or less. If you have ten people sharing wifi, gigabit internet can make sense. If you live alone, you’re probably wasting money.
Call annually to negotiate rates or threaten to cancel. I used to call Comcast every 12 months to argue my rate back down. It was obnoxious, but saved me $240 every year for a 20 minute hold.
Consider switching providers every 1-2 years for promotional rates. If you have two options where you live, sometimes the first year will be extremely cheap. Jump back and forth every year to capture the teaser rates.
Bundle phone and TV only if it's actually cheaper! It usually isn’t. I have never bundled my internet service with anything else.
Phone:
Consider MVNOs (Mobile Virtual Network Operators) like Mint Mobile, Cricket, or Visible
Same towers. Same network. 30-50% less cost.
Do you really need unlimited data? If you spend all your time on home and office internet, you may be spending extra for data you don’t use.
Potential Savings: $50-150/month
Banking Services
My advice: NEVER pay bank fees. There will be quite a few posts on financial services coming up!
Checking Account Optimization:
Find a bank with no monthly fees, no minimum balance requirements
Credit unions often have better rates and fewer fees than big banks
Online banks typically offer better interest rates on savings
Credit Card Strategy:
Pay off balances in full. Never pay interest.
Use cards with rewards for categories you actually spend on
Cancel cards with annual fees unless the benefits exceed the cost
Never pay for credit monitoring (free options available)
Potential Savings: $20-200/month in avoided fees and better rates
Personal Care and Health
This category includes everything from haircuts to healthcare.
Healthcare Optimization:
Use generic medications when available
Shop around for dental/vision care
Consider urgent care instead of emergency rooms for non-emergencies
Use HSA/FSA accounts for tax advantages
Personal Care:
Learn to cut your own hair (or find a cheaper barber/salon)
Buy personal care items in bulk or during sales
Consider whether premium brands are worth the cost
Use store-brand alternatives for basics
Potential Savings: $50-200/month
Clothing and Shopping
Americans spend way too much on clothes they don't need.
Clothing Strategy:
Buy quality basics that last rather than trendy items
Shop secondhand for non-essential items
Implement a "one in, one out" policy to avoid accumulation
Wait 24-48 hours before any non-essential clothing purchase
General Shopping:
Use cash back apps like Rakuten for online purchases
Buy generic brands for items where brand doesn't matter
Avoid impulse purchases by implementing waiting periods
Use the library instead of buying books
Potential Savings: $100-400/month
Entertainment and Hobbies
Fun is important, but it doesn't have to be expensive.
Entertainment Optimization:
Take advantage of free community events
Host game nights instead of going out
Use library resources (books, movies, sometimes even tools)
Find free or cheap hobbies (hiking, reading, cooking)
Vacation Strategy:
Travel during off-peak times
Use points and miles strategically (I’ll go into this later)
Consider house sitting or home exchanges
Explore destinations closer to home
Potential Savings: $100-500/month
Real-World Example: My "Other" Category Optimization
Here's how I optimized these smaller categories:
Subscriptions: Rotate subscriptions. Right now I pay for Netflix. We watch what we want, cancel, and work through another service. Effectively we cancelled 4 unused services. (Apple TV, Hulu, Disney, Paramount). = ~$50/month savings
Insurance: We dropped our $1,200/month comprehensive ACA plan and now pay $400/month for a high deductible plan elsewhere. $800/month savings. (Will do a post on this!)
Phone: Verizon charges around $60/line for service. I pay $20/month instead. I’ve been a customer of Cricket, Mint, Visible, Google Fi, Red Pocket, and Tello. I switch to promotion rates frequently, but it’s usually a $40/month savings.
Banking: Moved cash to online HYSA. Chase interest: 0.01%. Bask: 4.2% = $83/month savings ($25k emergency fund)
Total monthly savings: $973
Annual savings: $11,676
FI number reduction: $291,900
Not as dramatic as housing optimization, but still significant!
The Compound Effect
Here's why these smaller optimizations matter:
Individual Impact: Each optimization might save $20-100/month
Collective Impact: All optimizations together can save $300-800/month
FI Impact: This could reduce your FI number by $90,000-240,000
Time Impact: Potentially 2-5 years less working
Common Mistakes to Avoid
Penny-Wise, Pound-Foolish: Don't spend hours optimizing $5/month while ignoring $500/month opportunities. Paying $1/month for iCloud storage isn’t important.
Analysis Paralysis: Don't research options for months. Make decisions and move on. You can always come back and save more later.
False Economy: Don't eliminate things that provide real value just to save money! If you have health issues, don’t skimp on the health insurance!
Optimization Burnout: Don't try to optimize everything at once. Pick a few categories per quarter. It took me years to gradually fix every category.
Action Plan
Week 1: Subscription audit and cancellation
Week 2: Shop internet/phone
Week 3: Review banking fees and optimize accounts
Week 4: Check other insurance policies
Don’t overwhelm yourself! Just make gradual progress.
The Bottom Line
The Big Three expenses (housing, transportation, food) are where you'll see the most dramatic savings. But optimizing these smaller categories can still save thousands annually and significantly accelerate your FI timeline.
Every dollar you save in these categories is a dollar that can work for your freedom instead of corporate profits.
Next time, we'll dive into the income side of the equation: strategies for increasing your earnings through side hustles, career advancement, and creating multiple income streams.
Until then, your homework: Pick two expense categories from this post and optimize them this week. Calculate your annual savings and add it to your FI progress tracking.
Here's to death by a thousand cuts! (in your expenses, not your wallet)
Max
Remember: Small leaks sink big ships. These "minor" expenses can add up to major obstacles to your financial independence if left unchecked.