The Future Value of Money

We live in a subscription society. Gone are the days of buying music albums. Instead, you can pay $10 a month to listen to all the albums you want.  When my friends are telling me about how great a subscription service is, they usually light up and say something to the effect of

It only costs Ten Bucks a month!

That's about the same as two lattes a month... but these small bills add up big.

Spotify ($9.99), Netflix ($8.99), Amazon Prime(8.25), Pandora($4.99), Hulu ($7.99) in addition to the necessary WiFi bill ($55), and extra purchases on redbox, iTunes, Google Play!  According to the Bureau of Labor Statistics the average American spends $210/month on entertainment.

No biggie, right? Our spending on entertainment is less than 5% of our average annual income.  But many of these services overlap, and if we could cut our spending in half, we'd save ~$100/month without it hurting too bad... If we put that savings straight into our home mortgage payment (or student loans) we'd pay our home off 5 yrs earlier and save more than $54,000 that would have been lost to interest over the term of our loan...

It's hard to make decisions now that won't pay off until 25-yrs later, but every $10/month you shave in the present turns into more than $5,000 in your pocket 30-yrs from now.  So maybe I'll cancel Netflix, and hold off on those lattes...

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