When it comes to talking about money, especially personal finances, I find most people are very secretive and try not to reveal too much about their own situation. However, I think if someone is going to try and take control of their finances, it is vital to be open and honest about what is coming in, and what is going out. Once you make a habit of tracking this information, I believe most people would at first be in shock, as they suddenly realise how much money they waste, and secondly be amazed, as now they can see where they can make savings which they thought were impossible to make before. So as part of this blog, I thought it would be a great idea to track my spending habits each month, as I think it will become a powerful tool to have as I move forward with my goal of financial independence.
Now I must admit, I would consider myself to be quite a frugal person in general and have always tried to keep our expenses as low as I can, but I have never actually written down our expenses and tracked them over a period of time. It has always been something I have intended to do, as I believe it forces you to spend money intentionally and with purpose, making you accountable for every decision you make. Going through life just spending money without any thought and then wondering where the money has gone is quite a scary thought if you ask me, therefore I would encourage everyone to start doing this, regardless of whether you want to display it online for the world to see, or to just keep it private just for your own knowledge, the principle is still the same.
Income + £3905.33 After Tax. (Income is higher than normal this month as I received a £500 bonus)
Water – £17.50
Electric/Gas – £40.00
Council Tax – £143.00
Apple Music – £14.99
House Insurance – £6.77
TV and Internet – £64.63
Mobile Plans – £20.00
Mortgage – £408 + £1582 overpayment = £2000
Food – £114.82
Total Spend = £2421.71 (Without Mortgage Overpayment =£839.71)
I must admit, I was pleasantly surprised whilst typing those numbers in above. It turns out May was a very lean month in my household, and its mostly due to the whole Covid-19 situation. Due to the on-going pandemic, both I and my partner are working from home full-time, which we have been doing since late March, and this is having a huge impact on our finances in a positive way, saving us A LOT of money in travel expenses and other associated costs.
To put it into perspective, I would normally spend up to £200 a month on fuel alone to allow me to get to work and back, plus any other journeys throughout the month. However, since lockdown started at the end of March, I have not spent a penny on fuel, the car has just been sat on the drive. I’m now starting to get used to not having to pay for fuel and it is a wonderful feeling, but I’m quite aware it can’t last forever. The day is creeping closer to where my boss asks me to go back into the office, and I can’t say I’m looking forward to that at all. Although, hopefully, the new ‘normal’ will involve much more working from home, meaning I won’t end up having to go back to the £200 a month fuel costs.
Another area we have been making savings is by not eating out/takeaway food. Again, this is something we have not done since late March and has had a huge impact on our monthly expenses. We have consciously been trying to keep our food costs low, as I feel in the past this is an area which we were much more frivolous. To do this we have been cooking at home all the time and doing a lot of meal prepping and batch cooking, which we have found to be very effective and efficient. Again, this is mostly due to the current pandemic. Before lockdown, we rarely made the time to do this sort of food planning, but as it has been so effective for us it is definitely something we are going to try and take forward as things start to go back to ‘normal’.
So, what have we been doing with all the money that we have been saving? Well, as you can see above, we have been using those extra savings to make much larger payments towards the Mortgage balance, which is pushing us ever closer to the goal of being Mortgage Free! Our standard mortgage payment is just £408 a month, so this is all we are contractually required to pay each month. However, as our primary goal right now is to get rid of our mortgage, we are committed to making large over-payments every month to bring the balance down as quickly as possible. If your interested to find out how over-payments work and how INCREDIBLY POWERFUL they can be, check out my post The Magic Of Over-Payments. What I find really motivating about looking at those numbers above is, if we didn’t have a mortgage in the month of May, our overall monthly spend would have been just £431.71! That is what I am looking forward to in the coming years once we get the mortgage paid off, because having our monthly expenses that low will bring such an incredible amount of freedom to our lives and allow us to do things that currently, we could go only dream of.
I think it’s fair to say 2020 is treating us pretty well so far, at least financially speaking, and I hope in the months to come it will continue to be a year of both personal and financial growth for us. For anyone who has taken the time to read my blog, I hope this year is treating you just as well or maybe even better!
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