Financial Margin and why it’s important
One of the most important financial matters that we address with clients early on is the concept of financial margin. Your financial margin is the percentage of income that is left over each month after paying the expenses and bills that must be met to keep life going. We encourage clients to target 35% – 40% of financial margin, which allows them to build freedom and flexibility in their life. You can read more about the concept of financial margin in Kenneth’s post, Financial Margin Revisited.
You can build financial margin by increasing your income, building savings, and/or decreasing expenses. In most client situations, decreasing expenses is the first step toward achieving financial margin. Below is just one example of many ways you can begin to build financial margin into your life.
Cutting the cable cord
When looking at my own monthly expenses, my cable bill stood out as not necessarily providing value equal to the cost — and I know a few other members of the Precedent Asset Managment team that felt the same way. Because I was only watching a handful of the channels I had access to, I began to look for other options and finally decided to cut the cable cord for good. And I’ve never looked back!
I understand that having access to ESPN and other channels is important, so here are a few ways to save some money and still have access to your favorite channels.
These come in both indoor and outdoor versions. I personally chose the indoor version purely for ease of use – the outdoor versions need to be secured to your roof. I bought my “RCA Multidirectional Indoor HDTV Antenna” from Best Buy for around $35. It is surprising how many free tv stations you can get with even a run-of-the-mill antenna — I have crystal clear access to over 50 stations in my viewing area! There is a good chance that you live within range of dozens of over-the-air broadcast channels, including NBC, ABC, CBS, CW, FOX, PBS, ION, and smaller regional stations. Many of the most popular TV shows, local sports games, and local news come over-the-air in crystal-clear high definition. And the broadcasts you can pick up with an HD antenna are higher quality than what cable provides because cable broadcasts are compressed. More importantly, these HDTV channels are totally free!
Adding a streaming player to the mix will let you watch internet-based services like Sling TV, Netflix, Amazon Prime Instant Video, and other cable alternatives right on your TV via the internet. Think of this as your cable box replacement, only it’s much smaller, and gives you access to way more content. I use my gaming console as my streaming device, but there are plenty to choose from. Chromecast, Apple TV, Amazon Fire TV stick, and the Roku streaming stick are all devices that simply plug into an HDMI port in your TV. These range from $35 to $150, but you own it; so say goodbye to equipment rental fees!
Accessing your favorite channels
There are a ton streaming services available, each with its own set of content. I did a search online to find out what services had the channels I wanted, and how much I could expect to pay for them. Since there aren’t many TV shows I watched, my selection was Netflix. It had a variety of their own shows and thousands of movies to choose from for only $8.99 per month. If you are a sports fan, or have shows that you watch regularly, Sling TV might be a better option for you. Sling will give you access to ESPN, HGTV, AMC, Disney, Travel, and many other popular channels for about $20 per month.
Cutting your cable cord is liberating, will likely put some money back in your pocket, and will also help increase your financial margin. And there are many more ways to further enhance your margin!
If you’d like to discuss your financial margin in detail and ways to help you increase it, feel free to schedule a time to talk to us. We’d be more than happy to assist you!