How to get 1'000 bucks more in the pocket - per year!

It's my yearly challenge - I want to cut 1'000 CHF from our fix costs without making concessions to our living standard every year. In consulting terms: I strive for procurement spend reduction on a continuous basis! Again, I rather invite my Miss for dinner than wasting money. I started the challenge five years ago and - to my own surprise - so far achieved my goal every year! If you stack up the savings over the 5 years - quite considerable!

---

"Procurement spend reduction"

It's actually a continuous exercise over the year but with peaks at the beginning of the year and in August / September. Why August / September? Because a lot of subscription run until the end of the year and if you want to terminate one of these, you normally have to give notice three months before.

Let's have a look at typical areas for your personal spend reduction:

a) Insurance contracts

In my first year of the spend reduction challenge, insurance contracts provided a good source for reduction. Honestly, I did not look at my insurances for at least five years - until the challenge; what a mistake! I first identified all my contracts - normally you have at least a liability insurance, a household insurance and if you have a car, a car insurance. I then used a meta-site (in Switzerland comparis.ch) to get a first overview and comparison. It got clear very fast that there is abundant spend reduction potential! I saved more than 30% on each of the insurances - saving me a few hundred bucks! In addition, in most cases, I even got better conditions like e.g. a higher coverage etc.! Now, upon expiry of the contract, I always re-screen the market and search for new, better offers.

b) All kind of subscriptions

Subscription based businesses are booming - as an investor, quite a cool thing! But as a consumer, be aware - it's so easy to enter one and equally easy to forget about it as they often renew automatically...! So once in a while I browse through all our credit card statements in search of not-used/under-used subscriptions. What did I discover: two Spotify subscriptions (my Miss had one and I had one and then moved together...), a security software subscription (running on our old, not-used-anymore laptop...), a Netflix account my Miss made when working abroad...but was hardly used anymore upon her return as our internet/TV bundle included Comeback TV / Live Pause and On demand.

c) Claim your rent reduction

This one is quite a special one for Switzerland. If you rent an apartment in Switzerland (and that's the majority of people in Switzerland), the rent is connected to an official interest level (it's called " hypothekarische Referenzzinssatz" - kind of a benchmark of the current mortgage rates). If the benchmark moves downwards and once it is officially declared lower by the government, you can claim a rent reduction. At the beginning, in my first flat, I never did it. I was not familiar with the procedure and also a little bit afraid that the landlord would blacklist me for the future! But now, with a few years more experience and having change apartment a few times, I am much more confident. In the last round, I claimed the reduction and was able to shed 60 CHF from my monthly rent! Does not sound a lot, but if you multiply it by 12 months and 3 years (the year the benchmark moved down the last time)...gives you a whooping 2'160 CHF - that allows for a nice weekend away from home with my Miss!

d) Other strategies

Some more strategies I employ for the strategy reduction are selected cashback platforms. I was skeptical at first, but then started to use Rabattcorner.ch in Switzerland and with a low effort, it provides for a free dinner with my Miss per year. In addition, I also do some "currency arbitrage" and source a few items in neighboring countries like Germany. For example perfumes - I mean they are 1:1 the same in Germany but double the price here in Switzerland. I import them using the service of MeinEinkauf.ch - a smooth and easy process.

Another strategy is to negotiate better deals. I hate the fact that often new customers get better deals than the incumbent customers - so when a company I am a customer of is running heavy (and discounted) campaigns for new customers, I sometimes call the customer service and politely ask how incumbent customers can benefit as well. I did this successfully with my mobile contract.

Conclusion

It started out as a fun idea and now turned into a regular challenge. If I am doing a back-of-the-envelope calculation, it saved me 15'000 bucks over the five years - not bad; especially as it did not impact our lifestyle at all!

For me it's like defense in sports - this will make you win championships (aka wealth) - if you can combine it with offense (investing) even better! I will write about the offense aka investing part in a further post!