Financial fitness: the beginning

For my first week, it hasn’t been an auspicious start.

Before I’d made my commitment to work on my spending, I’d already committed to take the kids to the cinema, so my first day involved a spend of £41.49 that I probably could have done without. Added to the fact that the kids didn’t have a great time, I’m not sure it was money well spent. That being said, I enjoyed the movie (Isle of Dogs, it was cute).

The next day we went to Ikea and spent £42 on furniture we didn’t entirely need. Part of that spend – £12 – has proved to be transformative in my homeworking arrangements, so I’m pleased about that. £30 was spent on a table that we can play board games on. So we’d better make sure we play games.

This is the beginning of a commitment so I’m not going to spend too much time beating myself up about what didn’t go so well. What, instead, I want to focus on is the groundwork and the ways in which those groundworks will help to transform my relationship with money and debt.

For a start, I ennumerated all my debts. I’m not going to share that figure here, but being able to quantify the extent of the problem feels like an important start. It’s a daunting figure, but not unmanageable, and the bulk of it I can budget to pay off over my five year plan. The mortgage will take longer, of course. My key action is to make sure I don’t incur additional debt. Every additional debt takes me from my goal of paying off the debt I have. Changing my spending habits is key.

I also worked out my monthly commitments: mortgage, utilities, phone, insurances. There isn’t a lot of wriggle room with these. My optional spends are things like Netflix and Spotify. I’m not ready to consider cancelling these as they’re used extensively by the family. Maybe in the future. After quantifying my incomings and outgoings, including my budget for debt reduction, I have a decent amount of disposable income which suggests, further, that if I can think more carefully about how I manage that disposable income I can perhaps put more money to debt reduction or more money into savings.

Adjusting my spending habits is key.

To address my spending I realise I need to do a few key things:

Monitor what I’m spending money on

To do this I’ve created a spreadsheet into which every receipt is logged. This both helps me keep track of how much I’ve spent but also what I’ve spent money on. I don’t intend to cut out all treats – for example, I know the kids will be desperate to see Avengers: Infinity War next month but I can account for that in my budget, or we could go to a cheaper cinema or smuggle in our own treats. And for future movies, we can really weigh up whether we need to go on its release or whether it’s better to wait until it comes out on DVD. Delayed gratification is something I think I need to become better friends with, as opposed to being caught up in the excitement of the moment.

Use cash

Switching to cash spending for some purchases helps me to think more carefully about how my money is spent and how much I am spending. For example, when I have to travel to London and the trip involves an overnight stay I will buy lunch in London. Lunch in London is not cheap, but I can make it cheap. For example, I could either make my second day a fasting day and skip lunch altogether, or I could challenge myself to construct a lunch from supermarket foods for a budget of £1.50 or less. And if I leave the office with only £1.50 in my pocket, that forces me to stick to the budget. I also have a bit of a tendancy to buy a snack for the train journey, a purchase which is both unnecessary and habitual. On my most recent trip to London (Wednesday) I managed to ditch this habit by forgetting my purse in the morning and having to rely on an emergency cash withdrawal which I didn’t want to break into. I managed perfectly fine, not surprisingly!

I’ve set myself a budget of £30 for ancillary spending during the month – this caters for things like lunch with friends, buying coffee or drinks or treats, buying lunch on days I’ve been too lazy to make it or I’m in a place where I couldn’t take my lunch. I’ve drawn £30 out of the bank and I have to make it last the month. I’ve a lunch planned with a friend next week, and a coffee with a co-worker who is leaving and whose job I’m interested in, so my cash will be accompanying me and I’ll have to think quite carefully about how I spend it.

Cut my grocery spending

I’ve been thinking about this a great deal, largely because we don’t actually spend a huge amount on groceries. Also, my husband does a lot of the shopping (and he’s pretty cheap already!). Where I can control spending is on things like breakfast and lunch which I organise for myself. Mostly I’m pretty cheap, but since I started homeworking I’ve slipped into some poor habits. Separately I want to eat more healthily, and I think these things are fairly aligned. For example, few breakfasts are as cheap and healthy as porridge (oatmeal, if you prefer) and I have regularly taken porridge for breakfast when I’m going into work. So I can just do that at home instead. If I add another £0.25 to the equation this budgets for 2 bananas which I can split into 4 portions of porridge, adding a portion of fruit and interest into the mix. This morning I’ve made a vegetable chilli using lots of cheap vegetables and beans and which has cost me about £3 to make. That’ll serve me at least 4 lunches and it’s cost about half of what I would usually spend. It’s a small saving, about £5 on my weekly budget, but that’s £20 over a month that I can save. Little savings mount up. I can do this, too, when I do the weekly shop. Making swops – beans instead of meat, for example – planning meals, avoiding impulsive treats will all help to keep that grocery shop low.

Be more creative

A while ago I read The Art of Frugal Hedonism and I was struck both by how straightforward the advice was and also by how a little creative thinking can alter how we behave. I realise I’ve been a lazy thinker when it comes to shopping. Buying something – whether it’s a trip to the cinema, a tasty treat or a book – is an easy compensation to the exhaustion that comes from the daily grind. But a creative solution is so much more rewarding. It takes a bit more effort, perhaps but not a great deal more. It is so easy to repeat the same old formula, but I don’t think I’ve ever really taken the time to measure the value of that old formula or whether it was working anymore. I need new formulas, lots of them. Wasn’t that what the Life Experiment was all about, after all?

 

I realise I’ve been really lazy, lazy and thoughtless. I’ve thought of money as a throwaway thing, not something real with value. Changing that thinking is going to take some work, but I think it will be worth it. Over the next month I want to keep money in my mind. I’m going to read about it. I’m going to think about what I do with it, what other people do with it on my behalf. I’m going to make both me and money work better together, because I simply have to. It wasn’t an auspicious start, but I’ve learned something from it. The key is to keep that learning going, making small changes until the big change I’m seeking has occurred. It’s going to take a long time, I know. I’m sure there’ll be slip ups along the way, but I feel positive and ready. That’s as good a start as I could hope for.

 

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