Eliminate unnecessary recurring charges

Authorizing automatic payments for routine transactions is a great help in simplifying your finances. But are you paying for things that you no longer use?

Most people have automated at least some of their regular payments, whether by credit card, automatic transfer from a bank account, or directly through the service provider. There are many advantages to this. You can avoid late payment fees by setting up a minimum monthly payment on any credit cards, you can often get a better deal by agreeing to automatic deductions, you can know that your utilities won't get cut off due to lack of payment ... the list goes on.

The only problem with all of this convenience is that you may end up paying for things that you no longer are using. Even if you are in the habit of regularly reviewing your bank and credit card transactions, you may not tumble to some of the outdated recurring charges that appear, especially if they are incurred by another family member. Or maybe you decide that it's just not worth the hassle to contact Microsoft to eliminate the minimal monthly fee paid for your Office365 solution, even though you've discovered that you can use OpenOffice for free. Or you really do intend to get back to the gym ... someday.

Challenge yourself to spend a half-hour writing down all of your household's recurring monthly payments that you have automated, noting the amount, frequency, user, and payment source for each one. Then go through the list with others in your household and confirm that you want to continue making each of these payments. Going through this process, you may find duplicate spending patterns: you have Spotify, your partner has Pandora -- so why not choose one provider and share the account? You may also find that as your needs have changed over time, your subscriptions haven't: are you still paying domain registration fees for a website that you've since abandoned?

Once you've narrowed your list to what you agree you want to still pay for, take a look at how you're paying each month and confirm that it's optimal for your situation. Maybe you are collecting mileage or points on a specific credit card and so want to use it for all of your automatic payments. Maybe you want to pay everything via PayPal so that fewer merchants have your credit card information. Or maybe you are uncomfortable with using credit for your monthly expenses and would rather that everything be deducted directly from your bank account.

So now that you've spent a half-hour on this, schedule some time for a later date so that you can contact your service providers and make the changes. Sometimes this takes a few minutes, often it takes longer, so just do what you can when you can and tick off the vendors one by one until your list is finished. Then put the list somewhere where you can easily refer to it, like the Go-To Guide, so that everyone in your household will be kept up-to-date.

Sound like more work than you want to tackle? You may be interested in a new company named Trim. Once you provide access it your accounts, Trim analyzes your transactions and provides you with a list of current subscriptions. You then authorize Trim to cancel any subscriptions that you don't want to continue, and they do all the work -- for free.  You can read more about this service in this recent New York Times article.