The New Necessities: Less is More

The following is a guest post from personal-finance expert Peter Dunn. He realized that he wanted to deal with money when he was in his sixth-grade math class. The teacher gave the class a stock-market project, and Pete was hooked. Pete hosts a popular radio show, “Skills Your Dad Never Taught You,” on WXNT Indianapolis (News Talk 1430) and appears regularly on FOX News and “Studio B with Shepard Smith.” Pete currently lives in Carmel, Indiana with his wife, Sarah, and his daughter, Olivia.  Pete’s second book, 60 Days to Change: A Daily How-To Guide with Actionable Tips for Improving Your Financial Life, is available in paperback for $14.95, at

Shelter, utilities, food. For hundreds of years, most people have found these to be necessary expenses and key categories of any budget. They know they must find a way to produce enough income to cover, at a bare minimum, these basics. Yet over time, this group of necessary expenses has continued to grow. And, as you might have guessed, it’s because the word “necessary” is subjective and relative.  This new, behemoth group of expenses is the “New Necessities” and now includes things such as mobile phone service, internet service, and cable or satellite tv. But are your New Necessities—and particularly your New Tech Necessities—keeping you in the red?

Controlling this type of expense is crucial to financial progress. As you hammer out a budget, you don’t necessarily need to scrap that category altogether, though. The most important tip? Make sure your usage matches your subscription plans. In my experience, most people overbuy and underuse these types of subscription plans—whether for mobile phones, internet, or cable/satellite. Here’s how to keep your costs in check: set aside an hour or two and call each one of your service providers to match up your usage with an appropriate plan. Doing this can easily save you hundreds of dollars per year.

Redefining your New Necessities requires taking a hard look at what you think you need but without which you can still survive and thrive. The fundamental questions to ask as you’re redefining are, “How much do I spend on this? And where can I cut back?” Do you really need the fastest Internet service available? What about those 400 satellite tv channels? You might not think eliminating or scaling back on services could save you that much—but once you start saving with a goal in mind, you’ve got a very powerful motivating force. With what you save by cutting your New Necessities list down to manageable size, you can contribute to your emergency fund, save for a vacation, or even sock away for college funds or retirement. It’s your decision: a year of the Handyman Channel—or a fund to someday start that handyman business you’ve always known you wanted to? Take a good, hard look at your monthly budget—and see where there’s room to save by dialing down.

What are your New Necessities? Where could you cut back if you had to—and what would you save for?

2 thoughts on “The New Necessities: Less is More”

  1. Very good points! I remember in our early marriage that the only “tech” bill was a $6.00/month phone bill! We still keep it pretty low, in my opinion. We don’t have cable of any kind, use a dial-up internet service for $12/month, have a $26/month landline, and my husband has a $33/month cell phone plan. I don’t have a cell but may get a Trac phone for this. I would like my husband to also switch to a Trac cell to cut these “New Necessities’ even more.

  2. My “tech necessities”:

    1) Utility Power. $25-30/month, mostly for refrigeration.
    2) Cable Modem, $24.95/month.
    3) Prepaid Cellphone, $24-26/month net.

    Of course, on net, these “new” items have supplanted the old POTS line ($20/month) + Slip Account ($20/month) + the post-paid cellphone ($75/month). All told, I’m money way-ahead from ten years ago. I have no other utilities.

    These bills don’t impact me. Its the rent ($600) and health insurance ($250/month, $5K deductible) and taxes which hurt. There aren’t any practical ways to lower either of those.


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