You Are Being Boiled Alive

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I am never one to place financial blame on the government, or corporations, or anyone else for your financial problems. Those problems are yours, and you have MUCH more control over them than society thinks.

But the majority of people I help through my financial coaching just don’t see the impact of all the small expenses in their budget. I always try to show them the long term impact of these things, and many people are shocked at how a few simple items could delay their retirement a few years! Yes, the latte factor is in full effect, but this time it’s not lattes killing the budget.

Boiling Frog Syndrome

Now, I’m going to preface this with the fact that I am not a psychology major. I haven’t read any psychology books, and I’m mostly making all of this up.

With that being said, I do have a lot of experience examining people’s personal financial lives, both through my time as a tax professional and through my financial coaching service. What I have found worries me. And it worries me because I know that companies that are after your money have found this out as well.

It is MUCH easier to let go of $10 per month than it is to let go of $100 up front.

This may come as no surprise, but it doesn’t change the fact that this is how we operate. This is sometimes referred to a “boiling frog syndrome.” The anecdote goes:

If you place a frog in boiling water, it will immediately jump out. But if you place a frog in cold water, and gradually heat up that water to boiling, the frog will stay there and boil to death.

Gradual change can lead to significant impact. If you don’t stay aware of the gradual changes in life, you may end up being overcome by hardship due to something you could have easily prevented. You may end up being boiled alive.

Get Out Of the Water

Part of any good budget is the principal of constant optimization. What this means is that you are always keeping your ear to the ground, searching for great deals and finding ways to lower your monthly outgo and increase your monthly savings. Tag team that with kicking butt at your income producing activities, and you will be financially independent in no time (like our buddy Tommy here).

First, I would start by looking over your regular monthly bills. Utilities and technology companies are NOTORIOUS for “accidently” billing your too much, or adding some sort of service you didn’t ask for. I even wrote a 3-part series on how to tackle billing mistakes. Comb that over and make sure you’re not getting screwed.

Next, I would start to question every recurring bill you have.

No, seriously.

Your cable. Your cell phone. Your Nextflix/Hulu Plus combo. Your Amazon Prime membership. Lawn care. Car loans. X-box live. Magazine subscriptions. 0% payment plans. Mortgage.

Question everything.

Why? Because math.

Stop Turning Up The Heat On Yourself

Every time you add a monthly fee, you are turning up the water temperature, getting closer and closer to the boiling point. You hardly notice, because “what’s a $8 a month fee?” Well, luckily I like calculators and can show you the impact of that $8 monthly video service.

$8 x 12 = $96.00 per year

$96 per year invested at 7% for 10 years = $1,419

Not a big deal, right? But what if you have like 6 or 7 of these “small” monthly subscriptions. That’s when it gets a bit hotter.

$8 x 12 x 7 = $672.00 per year

$672 per year invested at 7% for 10 years = $14,902

Ok, that’s worse. But really, still not all that bad, right?

Well, since we want our money to grow a bit longer, what’s the 30 year impact of those “harmless” expenses?



To put it another way, if you want to retire, and your normal expenses are $3,000 per month, you will need to work almost another 2 years to enjoy your little subscriptions. Worth it?

But let’s be real, we probably have WAY MORE than $56 per month we can cut out of our budget, making the impact EXPONENTIALLY WORSE than the numbers shown above. Which means you could reduce your need to work but MANY MORE YEARS by cutting out all those unnecessary monthly fees.

Don’t Be A Frog

More and more companies are moving to “subscription” services. They know that a small monthly fee hurts much less than a large up-front cost. I guarantee you will see this everywhere in the coming years. My caution to you is to recognize that gradual change, and don’t let yet another business sign you up for another monthly fee service.

Don’t be a frog. Get your butt out of that water and enjoy freedom from the chains of recurring theft payments.

Note: There are a very few monthly services I recommend, and the one that actually saves MUCH more money than it takes away is eMeals. I recommend them all over this site because I’ve used it and it works. If it didn’t, I would recommend you drop them as well.

photo credit: jronaldlee via photopin cc

Jacob Wade

Jacob Wade

Jacob Wade has been a nationally-recognized personal finance expert for the past decade. He has written professionally for The Balance, The Spruce, LendingTree, Investing Answers, and other widely-followed sites. 
He’s also been a featured expert on CBS News, MSN Money, Forbes, Nasdaq, Yahoo! Finance, Go Banking Rates, and AOL Finance.

In 2018, Jacob quit his job and his family decided to sell everything (including their home) to take off on an adventure. They traveled the country in an RV for nearly 3 years, visiting over 38 states, 20+ national parks and eventually settling in the sunshine state!

25 thoughts on “You Are Being Boiled Alive”

  1. Love the analogy Jacob! Those little monthly fees surely add up. They can also be some of the toughest things to let go of because they are focused around entertainment or services that make our lives easier.

    • It’s true. Entertainment has some kind of addictive hold on society, and is draining wallets daily around the nation. There are SO MANY things that entertain without monthly fees, I recommend getting a bit creative and enjoying the freedom from your monthly dues 🙂

  2. You’re so right. Many people never consider the small things that add up.
    Back when I was growing up in the 60’s and 70’s, I could count on one hand the amount of times we went to the restaurant, or bought take-out.
    Now people buy it daily, or several times a week…and it is no longer even considered a treat, it is almost considered part of the grocery bill.

    • We get Pizza twice a month, and that’s about it. And here’s the thing, our family enjoys it MUCH MORE than those who go out several times a week. There’s something magical about a healthy anticipation and delayed gratification. Something our society knows nothing about.

  3. Yes indeed sir. Take responsibility in your own life and take control because blaming does not help your situation. This may be a million dollar blog because it takes a change in mindset before you earn millions of dollars. The little details does matter when it comes to accounting finances. Good job pointing that out Sir.

    • Thank you sir. I think people need to focus on the big things AND the small things. For some reason, people gravitate toward one or the other, and still end up wasting a lot of money without knowing it. I hope to provide clarity on both so that any money spending decision can be done with eyes wide open.

  4. I think you are confounding two ideas here – offering a subscription service, and charging an annual versus a monthly payment. Companies are not only going to a subscription service because consumers are more likely to pay small monthly fees, but also because it is a more sustainable business model. Cloud services have ongoing costs, and therefore must generate ongoing revenue. Some subscriptions do charge an annual fee, such as Evernote Premium, Pandora One, or Amazon Prime; that doesn’t mean the company is more or less nefarious than others charging monthly. Annual subscriptions may be even more problematic for your readers because they are tricky to budget for, easy to forget, and can come up unexpectedly (oh, that renews THIS month?).
    Although I agree that everyone should review and prune their subscriptions, I do not necessarily think that having a larger one-time expense is preferential to having several equivalent smaller expenses, just because you might “feel” it more. Maybe that’s not the argument you’re making, but it seems implied to me.

    • Thanks for the comment Randell. I maybe could have been more clear.

      The point is not monthly vs. annual, but anything that is a recurring fee. Annual would fall into that category as well. The point is people can (and do) live just fine without Evernote premium and Pandora One. Most “charged” services have a free equivalent, but people tend to be suckered into the features of the “premium” service, and the small price tag does not seem to bother them, and it should.

      My point is that you don’t NEED most of the recurring expense stuff these days, and I recommend being a bit more creative. For example; we don’t have Netflix or Hulu Plus, because there are a TON of free shows on Hulu.com and station websites. We have an antenna for our TV to pick up local sports and shows and such. And honestly, we enjoy NOT consuming a lot of media, and save money by doing so as well.

      Pandora has a free version, Evernote have a free version, there are free movies online (check out crackle.com), and many other things that people pay for have a free version that is good enough. I wanted to show the long-term implications of choosing the “premium” service over just enjoying what the free ones have to offer.

  5. AWESOME POST! This year is the first year I’ve really taken on any monthly payments, and I definitely notice all of them. I think it comes from years of living a lifestyle that didn’t have bills, I really can’t get over that people live this way.

    I realize that sounds nuts, but every single day I am tempted to go back to one of my jobs that covered room and board. I didn’t even like the jobs, I just think it’s nuts to have to worry so much about your basic necessities. I can see why company owned coal mining towns were so popular for so long too.

    • Being a apartment office manager I think is one of those jobs that covers rent. I would hate the position tho.

      Yeah, monthly bills suck, and paring down as many of those as possible will lead to a much better financial position in the long haul 🙂

  6. Yes, little expenses do add up!! 🙂 On a little bit of a reverse theory… we started a little savings account for Christmas expenses – my husband and I only put in $25 each – which is what I calculated I actually spent going to Starbucks per month before I stopped going. What do you know?!?! That little fund is now at about $500 and by the time next Christmas rolls around, we have all the money we need for presents. And we didn’t even feel the burden in our finances AT ALL! Isn’t it a beautiful thing?!?
    Love the post – hopefully you don’t get in trouble with any animal rights activists 🙂 Maybe you should post that “no frogs were harmed in the writing of this post!” LoL

  7. That’s a great analogy and really unfortunate for the frogs! That is exactly how we got into debt by thinking one more payment was not big deal. You lose your sense of normal when you think normal means tons of monthly payments. We do have some memberships and subscriptions that add value, like my spinning classes and our netflix, so I’d work a couple of years to continue those, but we certainly look at the value meter before taking on any new debt or spending.

    • As long as you’re comfortable working to pay for those luxuries, then you’re golden. Many people, presented with the option to retire 2 years prior, may think twice about the non-essential monthly expenditures. 🙂

  8. Reducing the recurring expenses is why I’m seriously looking into getting off-grid when we move in a few years. The cost of PV keeps dropping, and there’s a lot of smart money being aimed at storage, which is the bottleneck for power right now.

    I love the frog analogy. 🙂 Another thing I’ve heard about cutting those recurring expenses is that it’s the fastest way of doubling your money: 1) you invest what you just saved and 2) your COL is now that much lower.

  9. Yeah, I think as long as you use and value the subscriptions, you’re fine. I love my Netflix, Hulu, and Spotify subscriptions and they add up to $26 a month, which I’m fine parting with for relatively cheap entertainment. Of course, you should evaluate each of these recurring expenses to make sure they are worth the monthly cost.

  10. I am in the process of not renewing several magazine subscriptions and we’ve cut other things to the point beyond which we don’t want to go. But what really makes me mad are all the fees the government imposes that we can’t get around. Most people look at their tax bill because it is such a huge amount. But I focus on things like the excise taxes on phone or utility bills, and the universal connectivity fee on the phone bill that gives people free cell phones. I know I’m hard hearted, but my cell phone isn’t free, why is theirs? The things the government imposes may seem insignificant when standing alone, but when they are all added together, it creates quite an additional burden.

  11. “Boiling the frog.” Good one. I’ve heard a similar analogy for how executives end up doing increasingly egregious things by only comparing every new decision to only the most recent one…with each incremental decision only being slightly worse than the previous one. Talk about a downward spiral when you apply it to personal finance! Can you say CRISIS?

    On the part of lenders, I have noticed that most car ads now way only $X bi-weekly, cutting monthly payments down even further. It is easy to become myopic in our thinking when marketers train us to think that way.


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