Click HERE for Part 2
I want to start this post by saying that the cupcakes that I blogged about making yesterday were a massive success! Although it did take me two full hours and a lot of energy! I know it is not polite to give kudos to your own cooking, but the cupcakes were unreal!! All credit goes to The Alchemist who kindly confirmed today that it was OK for me to display her recipe.
After reading Nelson’s recent post about plagiarism over at Financial Uproar which is targeted at another PF blogger (I won’t name and shame) it prompted me to send an email of to check with the recipe’s author that it was OK. I think she appreciated it and hopefully some other readers will follow the links to her site to read about some of her other master pieces!! It is a good reminder to any writer or freelancer that content should be unique and that re-writing others work is just not acceptable. It does make it challenging to think up original ways to talk about what is essentially the same subject – Personal Finance! I am going to try and make my posts even more personal in an attempt to engage readers better. While my ideas are definitely not entirely original, I promise you that they are semi-so!
My Cupcakes!
Why Should I Cut Back on Basic Spending?
It’s all very well mastering the act of reducing impulse buying and unnecessary purchases (clothes, electronics, music, etc.) but we all need to address our base spending. What better way to make myself accountable than to disclose some of my own monthly outgoings and discuss what I could do to reduce them!
| Mortgage Repayment | £1,022.00 |
| Council Tax | £114.00 |
| Car Insurance (2 Cars) | £80.00 |
| House Insurance | £29.87 |
| Mobile 1 | £20.00 |
| Mobile 2 (with iPad) | £50.00 |
| Contact Lenses | £10.00 |
| Gym | £91.00 |
| Electricity/Gas | £80.00 |
| Water | £24.00 |
| Sky/TV/Broadband | £34.00 |
| TV License | £12.10 |
| Fuel | £500.00 |
| Loan 1 | £152.41 |
| Loan 2 | £197.00 |
| Food | £320.00 |
Reducing Individual Monthly Outgoings
I’ll start from the top and explain each item individually:
- Mortgage – This is a fixed cost for 3 years – 2 years remaining. We currently have an interest rate of 4.19% and fully intend to make over-payments over the next couple of years. Upon the fixed rate ending, we will qualify for the SVR which is pretty uncompetitive. Our plan is to remortgage (this time with more equity and hopefully with the house increasing in value) into another fixed term agreement.
- Council Tax – Again, this is a fixed cost. We could move to a different county or neighborhood, but the rates are relatively standard. Unfortunately it has transpired that about half of UK councils are planning to ignore the tax freeze and increase rates this year.
- Car Insurance – I spent a LONG time comparing prices for the best deal. We have a dual car policy (which saves 10%) and the relatively high costs here reflect that a) London is expensive and b) Mrs Scot had a car accident about a year ago. Our policy came up for renewal recently and I managed to negotiate a further 10% discount just by asking for it. (OK it took more persuading than that.. but I LOVE negotiation).
- House Insurance – This is an area that I realise we can reduce spending on. We are in a 12 month agreement which concludes at the end of March. After reading Jeremy’s post over at Modest Money I am going to check out the possibility of combining car and home insurance for further discounts! That said, I will be sure to exploit every search engine for home insurance quotes to make sure that I bag the best deal!
- Mobile Phones – I recently blogged about my mobile phone dilemma – essentially as to whether we should upgrade to the iPhone 5 (from 4S) or convert to a sim-only monthly contract. As voted by the readers, the Sim-Only approach won and we reduced our monthly bill by around £60! The iPad contract finishes in December which will save an additional £30 per month.
- Contact Lenses – We are most definitely getting the best deal on these and they are unfortunately expensive. Mrs Scot switches between glasses and contacts and doesn’t use the daily disposables. I see this as a fixed cost for now.
- Gym – This is where the current dilemma lies. While we are planning to go tonight, I’m not sure that a couple of times per week justifies this cost. I have a free gym at work that I use almost daily, but the hotel-leisure gym next to our home is definitely a luxury. We both love that it has a pool and will use it when it gets warmer etc. but there is a new 24/7 gym that has opened near by which costs £35 per month. That is a saving of £60 per month, which is pretty hard to ignore. What do you think guys?
- Electricity / Gas – Considering British Gas just announced controversial record profits we definitely pay too much for energy! That said, we are slowly working on lots of energy saving approaches to cut energy usage – especially following SS energy saving tips for appliances! We will continue to pay a monthly subscription to our account which should cover the increased winter usage.
- Sky – TV/Broadband/Phone Line – This is a pretty fixed cost. We have the entertainment package which we definitely make use of and a high-speed broadband connection. This is another well negotiated price which I see as a relatively flat cost. We both enjoy the high-speed broadband for downloading and streaming and enjoy recording programs to fit our hectic schedules. Sure, we could cut some costs here – but we don’t want to!
- TV License – This is another fixed cost that we are legally obliged to pay. We pay monthly to avoid bulk payments as there is no interest charged.
- Fuel – Unfortunately we both have long commutes and regularly visit family. We will endeavor to drive even more economically! For now, this cost is relatively fixed until our situation changes. I do my best to make plans that don’t involve extensive driving at the weekends anyway!
- Loans – These loans are for vehicle repayments. We have a fixed rate deal on both of these and will pay them off within a few years. The rates are very competitive and again, these are fixed costs for now.
- Food – We both love food, but this is an area we are constantly trying to squeeze. We do all that we can to save money on food – including all the tactics of bulk-buying where it makes sense, cooking in bulk and freezing, using ‘reduced sections’ in supermarkets, planning our meals around upcoming offers at the supermarket etc. We bought a LOT of meat (including 8 kg of chicken) recently so will only be buying vegetables for the next few weeks. This budget also includes our money to go out for meals… we have a dirty little secret – we both love to eat a kebab once a week or so. 😀
Consider This:
I always like to work out the monthly savings that can be made and then calculate an annual saving. While this figure is impressive, more hard-hitting is to calculate the pre-tax value of that saving – i.e. the pay rise equivalent that you have just given yourself. Saving £60 a month on the gym is £720 in a year, but if you consider a 40% rate of income tax – that is equivalent to £1200 extra on your salary!!
Next time you think that it is only a tenner a week – consider that this equates to almost £1000 pre-tax salary! It certainly makes you take contents insurance quotes more seriously! I always think in a pre-tax mindset these days and I make some very different decisions that I used to.
What is your top saving tip for monthly expenses? How much did you save?
Click HERE for Part 2
This post was featured on the No More Spending, Mo Money Mo Houses, thank you!
Decide that nothing is sacred – and in our case gradually drifting the variable costs down by 1% every month until you reach the “no-more” limit. Our no-more limit was 37% of our starting point BTW …………… with all the savings being stashed against our mortgage.
I love that idea of gradually reducing costs 🙂 – I guess that you don’t notice any ‘big’ changes and feel like you are sacrificing things. I would probably learn to adapt better this way too – I see a new challenge coming on 🙂
Agreed plagiarism sucks! Also think it’s a great idea to revisit your normal budget and see if you can do even better with your saving. Good job!
Cheeers Jess 🙂
That’s awesome that you emailed the person for permission! I need to start doing that.
I just need to keep it up! 😀
Have you thought about knocking 20 odd % off your food bill by just not buying meat? It’s certainly a lot cheaper and better for your health which ties in with your trips to the gym?
Hey Miles.. I have thought about it, but I eat way too much chicken and don’t want to sacrifice the quality protein… that said we are definitely looking to cut out more red meat which could offer a good saving. We may not see this though as I will likely substitute the red meat for fish – which is equally expensive. I guess I just love my food too much 😀
Ah well on that we can agree, I certainly love my food too much! Indian food is my passion, always cooking at home and has the benefit of being even cheaper than most regions 🙂
Full disclaimer here – I am vegetarian, but I’m not here to beat the drum for any reason other than the price benefits and the health ones. non-meat produce lasts longer in the fridge so you throw less away, it’s literally cheaper, pound for pound and the storage costs are far lower (not in the fridge). You can also buy in bulk to save even more money.
The idea that you can’t get quality protein in a veggie diet is a bit of a pervasive myth, having been quite keen on the gym until the kids took all my time away I promise you can get everythign you need without making any concessions. Quorn is pretty nice as well. Anyway, good luck 🙂
Indian food is definitely one of my favs (alongside Thai)! Got any tried and tested recipes to share? Interestingly, my wife and I have been eating far more vegetables recently and are enjoying lots of veggie meals! Again any nice recipes 😉 ! Cheers
Uncannily I do actually:
https://www.evernote.com/pub/tetsugaku-san/recipees
They are a mix of things picked up from all over the place, my favourites are the Quorn Subji (try that before saying you like chicken too much!) and yellow split Dal – good luck 🙂
Oh and apologies for some of the recipees being quite tatty…
Thanks so much for sharing! 🙂
Based on your council tax band you have a smaller home than mine and I pay £32/month for electricity, no gas, and four people live there. Turning the lights off is good but you should compare and switch if there is a better tariff. I am on EDF price promise and they are supposed to warn me if a new tariff from any provider is £1 per week cheaper.
I seriously don’t understand how your house is so cheap! I have already switched and am on the best deal… I will look out for the price promise! 🙂
my property is a flat so uses less than a house. I have underfloor heating which is supposed to be super efficient, windows are sealing impeccably, the walls are fully insulated, it has a B energy rating if I remember properly. The advantage of new properties!
I’m constantly reviewing our basic costs and will shop around or move companies (insurance/utilities) to get the best deal.
I never think of costs pre-tax – I need to! Good idea 🙂
It really helps to add an extra level of caution when you realise the ‘true’ cost in terms of pay rise equivalent! 🙂
I took the plunge and cancelled my gym membership this year. I think you should definitely check out the new gym (at least for the year contract) and see if the saved money is worth it or whether you really miss it.
I think I am going to take the plunge Rach – The best bit is that there is no monthly contract so we can always try it for a month or two before we renew! 🙂
Wow, I had no idea. I guess that shows who has been paying attention . 😉 Anyway, we look at the value we receive for what we’re spending and if it’s truly worth it or not. We actually just got a gym membership that we had canceled a year or so ago. We try to do what we can at home, but this particular gym has a lot of activities for kids that ours have grown to love. It’s worth the value to us to spend the money so we can teach our kids about being active.
Oh man that sounds good! I am definitely an advocate of these things when they add real value! Guess it is a great way to bond together too 🙂 – Have a good weekend 🙂
Holy cow that’ a lot for gas! At this point the gym thing is something I’d consider cutting. I loved my gym too and thought it would be so hard to live without, but I got used to it and still exercise just about every day without it, and you still have another gym you can use for free. But…only if you WANT to cut something!
I think you should cut the gym next your hotel out. As you say it is a luxury and in the end can save lots of money. Have you considered working out home doing calisthenics?
I employ the same strategy when saving for my travels. Always figure out how much you can save a month and times it by how many months you have to save. That gives you a number to focus on, and you don’t spend money on needless crap because you are always trying to reach that number. Good to see I’m doing something right.
Keep up the great work my friend!
Controversial but – have no TV and stream it all? Therefore no TV licence, and no pay TV?
And – I’m surprised you have loans to buy cars – consider buying outright in future?
Just two suggestions
Definitely think about doing without the gym membership, or changing down to the 24/7.
Lastly, I’m link queen – better I over link to other sources, than forget or not at all. It’s not the same as asking, but it is possibly generating traffic for others, and isn’t that the name of the game?
Hey Sarah – Thanks for the input.
We COULD get rid of the TV and stream, but you would still need a tv license for that legally. Also, I love the convenience of setting things to record from my smartphone and being able to fast-forward all the ad breaks. That saves a LOT of time!!
The reason I have a car loan is that I have only recently graduated and with buying a house and relocating etc. it was a necessity. In future we will definitely buy outright and are already saving for the next one. I got a good deal on a fixed rate loan and the savings with buying a more reliable and economical car (60mpg) are huge on my daily commute of around 70 miles.
We will definitely try the 24/7 gym, but enjoy exercise far too much to cut it out completely. The beauty about the 24/7 one is that there is no contract!
I don’t fully understand your last suggestion, but if you insert too many links (even nofollow) into posts, google severly penalises you. I can still generate traffic for others (and do) in other ways! 🙂
I think google would penalise me if I had a lot of the same links to non legit sources. But one or two links to the blogs that inspire a post surely isn’t malicious. But then again, I’m not making money from my blog, so if google penalises me, I’m sure my handful of readers will hardly notice.
I don’t understand what you mean by non-legit sources?! Do you know the difference between dofollow and nofollow links and how PR influences?
Non legit sources, in my opinion, would be blogs that are thinly veiled ads for selling product. Or just blatant spammers. I do know (a little of) the difference between dofollow and nofollow links, given this is what my partner does for a living. However, I maintain, none of it really matters to me, as I blog for the enjoyment and the outlet, and no at all for the money/prestige/links/follows. A handful of ‘real’ people read my blog, and they have blogs, and if it stays like that forever, I’ll be 100% happy.
Do you create a meal plan for the month? When I’m focusing on my budget I find that that works wonders!!Also, I don’t buy lunch too often.
Well sort of… we create meal plans for the week and base each week on what we have left from the previous week and what is in the freezer! Without a meal plan we would be stuck though
I would definitely reduce the gym membership and try only using the one at work. If this isn’t enough, use the cheaper one near home as well, but you can’t justify £60 extra every month to have a swimming pool that you use a few times every summer…!!
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