Personal wallet

Published on January 22nd, 2011 | by Pete


January Spending Review

OK, so it’s January, and a new year of debt reduction and  money saving beckons. But how to start the year? Well, I find that a bit of a financial ‘spring clean’ this time of year is always helpful. Think of it as a chance to shed those unwanted and unnecessary payments; or a chance to reduce outgoings where possible (the Government would probably refer to this as a ‘Comprehensive Spending Review). I think an annual review of what you spend monthly is invaluable, as it will encourage you to review and evaluate your spending. If there were 4 horses of financial apocalypse, I’m confident that non-action and apathy would be two of them!  This is an important job, so do invest a couple of hours; the results of my own spending review should hopefully encourage you to follow suit.

1. Extra Debt Repayment to Father

As well as the £110 monthly payment I make to my father, I also pay an extra £15 a month. I do this manually, and basically because I am impatient! I’ve been in such a hurry to get this debt paid off, that I make this extra payment every month. You might be impressed with my high levels of motivation and extra effort, but actually, historically it’s not been that helpful.

Over the last year, I’ve run out of money before the end of the month, and this extra money would have been very helpful. It also potentially may have stopped me dipping into my savings which I then need to replace with my next month’s pay; this of course starts me off having less money for the month. The vicious cycle is then completed by me running out of money earlier in the month, and again dipping into my savings. So, I’ll stop this, learn that ‘patience is a virtue’ (one of my dad’s favourite sayings ironically) and easy my cash flow situation. Savings per month – £15.00.

2. Regional Lottery Subscription

I have played this lottery for about 6 years now, and it costs £13 a quarter. I was lucky enough to win some money on this lottery last year, and are probably in profit overall. I’ve decided to quit while I’m ahead – I’m not likely to win again! Savings per month – £4.00.

3. Debt to Wife

My wife lent me money to buy some trousers for work, and some jeans just before Christmas. I’d agreed to pay £5.50 over 6 months. I have some Christmas money left over (that was given as a gift) so will use this to pay off this debt! I can then think about the trousers as a present! Savings per month – £5.50.

4. Car Insurance

This is due for renewal in May 2011, so I shall be aiming to make some savings at that point.

5. Football Subs Payment to Brother

I ‘play’ in a 6 a side football team one evening a week. Subs are £4 a week, and so I make a transfer of £16 to his account every month to cover the 4 weeks. I’m going to keep making the payment as I enjoy football and definitely need the exercise! Plus, I like to keep the other teams impressed with my articulated lorry sized turning circle.

6. Nationwide Loan Repayment

This is set at £136.98 and I can’t change it. Boo!

7. Debt Repayment to Father

This is set at £110 and I can’t change it. Boo!

8. Trade Union Membership Fees

I have been a member of my Trade Union for 6 years. I am in a secure Government job, and have not needed the services of this organisation since I have joined it. Therefore, I have made the decision that I don’t really need this membership, and I cannot see it becoming important in the foreseeable future. Savings per month – £6.15.

9. Barclaycard Repayment

This is set at around £125 and I can’t change it. Boo! I’m not paying interest on it though. Yay!

10. Orange Mobile Phone

I do have an Iphone, which costs me £35 a month. I have had this since October 2010, and am yet to go over my tariff, so I will be keeping this. Plus I love my Iphone, and it has proved useful in a range of different scenarios thus far.

11. Iphone Insurance Premium

I normally don’t like paying for insurance polices as I tend to view them as extra costs for a service which I rarely benefit from. However, I asked myself if I could afford to replace/repair my Iphone should it break, and the answer is no; I have no contingency plan. Therefore I will keep this insurance policy. This feels less painful than it might otherwise, as I was able to haggle them down from £13 a month to £8 a month when I originally signed up.

12. Monthly Savings Transfer

Every month I transfer a set amount into an E-Savings account as I save for a number of items, including my car tax, an annual music festival ticket and Dentist appointments. I decided to stop saving for certain items. I’ve stopped saving £2 a month for Aston Villa tickets. I used to go and watch them play at Portsmouth, and as they have been relegated, and Southampton are nowhere near the Premiership, it seems I will not be watching Villa for a few years! That will save me £2 a month.

I have also been saving to join a Professional Body pertinent to my job role. I have decided that membership of the Union doe not offer me enough benefits to make it worthwhile currently, so I will stop saving to join. This will save me £5 a month.

Finally, I’m a bit of a ‘Football Manager’ fan. This is a computer game that is released annually. I’ve decided that I will wait a couple of months to get it after it is released and ask for it for Christmas. This will save me £2.27 a month. So, total monthly saving for this transfer are £9.27. 

So, there we have it, my January spending review. I’ve made some pretty rational decisions, and evaluated my monthly spending, and identified a few places I can make some savings. All of this means that I save myself £39.92 a month. This is quite a lot, and means that most months I might have an extra £10 for my weekly budgets, which will help ease my cash flow problems. Also, it means I save £479.04 over the year! Awesome! Have a go yourselves, and let me know how much you are saving after your January spending review….

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