Five Cents Ten Cents

Flickr image "Poolside wedding and reception" by Joits

The title of today’s post is taken from this song by the group Boys 2 Men. The song hails from the time when the group was popular and their melodic voices helped me pass some good times when I was young(er).

Today’s post is not about music. It’s about cutting down your present expenses that were incurred in the past. It’s about letting go of “sunk costs” that still hold us back from terminating memberships in clubs we don’t visit. Closing off subscriptions to services we don’t use anymore. It’s about acknowledging making mistakes in the past in terms of expenses and making corrections in the present by terminating them.

Just-in-case and Someday syndrome
Look back at your past. Did you ever sign up some membership subscriptions that you regret doing? Did you take up some package for facial that you ended up hardly using because of the poor service.
Making mistakes is part and parcel of being human.

In your quest for financial freedom, sometimes you can save more money just by letting go of the past and cancelling your subscriptions. This may sometime mean a loss of your deposit or monies being paid but it frees up your future cash flows to be channelled to more productive areas of investments and savings.

A few years after I graduated from NTU, I decided to join their Alumni Club so that I could have a place to entertain people. It costs me $2,500 entrance fee and a monthly fee of $15.45 (inclusive of GST).

Initially, I visited the club once in a few months. I attended talks organised and made use of the gym. But over time, as work got busier and I got married, I realised I was making use of the facilities less and less.
Later the NTU Alumni Club moved from its leased premises in River Valley into its own spanking clubhouse facility at Buona Vista. It came with swimming pool, gym and other amenities.

But guess what, after a few initial visits, again I started to use the facilities less and less. Unfortunately, due to the higher upkeep of the new facilities, the NTU Alumni Club increased its subscription fee frm $15.45 to $40+ a month. In a bid to attract new members, it also reduced the entrance fee from $2,500 to $800.

By this time, I have been a member for six to seven years and had been faithfully paying for something I hardly used. As I am staying in an Executive Condo, there is a swimming pool downstairs for use as well as a small but functional gym. Thus, I had been paying subscription fees that amounted to thousands of dollars for something I hardly made use of.

Future benefits and current costs
Over time, I realised that it was financially foolish of me to be paying for something I hardly used. But why didn’t I stop sooner? Part of the reason was the attachment to the $2,500 “invested” in the club membership. It was not transferrable so I couldn’t sell it. Thus, I was trapped by my own emotional attachment to the money which can never be recovered in the first place!

Eventually, I saw how dumb I was to continue forking out $40+ a month which could be used to offset living expenses and cost of my daughter.
I made the decision to terminate my membership. That was that.

Since then, my life hasn’t changed in that all along I’ve stopped using the facilities for so long that I don’t miss it at all.

In fact, I’m happy to write-off that $2,500 because if I continue to pay it would be thousands of dollars more in future subscriptions that doesn’t add any value to my life.

Think about what other subscriptions that you don’t use.

Do you think you are able to terminate them and free up money for other things?

It’s hard to say goodbye to past decisions that detract us from financial freedom.

Be well and prosper.