Friday, 15 March 2013

Frugal Friday...

I've just worked through our budgets again. With the new financial year looming there are revised figures on a couple of bits, and our special offer with Sky is coming to an end too. In addition Scottish Power wanted to increase our Direct Debit payment "In line with our usage" - this is apparently a routine review which happens quarterly, but we have only been customers since November, and as our heating is all electric, the months of November, December, January & February are NOT a good reflection of our annual use. As I was unhappy about the increase I telephoned them and they immediately agreed with me and confirmed that the payments would not be increasing for the time being.  Even the telephone call cost me nothing as rather than using the standard "National Rate" number they give for enquiries, I checked and found a freephone number to use instead.

Notre Dame - Paris. Jan 2008
When we first started on the "Money saving" trail, we were in our overdrafts by the middle of every month, and as many people do, we just accepted that was "the way things were" - we never had a vast amount of uncontrolled debt - there were loans for car purchases but those were paid off through regular monthly payments. On the face of it we were quite sensible with money - when we looked to buy our first home we bought the size of property we needed, without looking for something huge, with a "good postcode" or that would impress our friends. We didn't run up big bills on storecards, borrow vast amounts to buy the latest gadget, or spend beyond our means on exotic holidays, or "keeping up with the Jones's" home improvements but the day to day stuff tended to escape us a little, and that was where the problem was. Once we'd seen the light though, it suddenly occurred to us that all the money we were paying on interest payments would be far better staying firmly in our pockets, and the ability to do that was right there at our fingertips.

Eiffel Tower - Paris, January 2008
The first step was to do exactly what I have just done again - to go through our bank statements and direct debits to list out everything that we were committed to spending in a month, so everything from the mortgage, council tax, utility bills and service charge through to toiletries, magazine subscriptions and personal spending money. Then you need to work out how much you spend on "other stuff" - food & household items, travel, insurances (which may be paid out annually) and things like the routine running costs on vehicles. We went back through statements for a full year to be sure of catching everything, and then worked the whole sum out into a monthly average figure. Unsurprisingly, I'm sure, what it revealed was the on paper, we were earning far more than we spent! 'So', we thought, 'If that's the case, why are our bank accounts permanently in the red?' Good question, eh? The answer of course was that the overspend was not what we KNEW were were spending, but rather, all the things that we simply spent without noticing. 

View from Eiffel Tower by night - Jan 2008
The means to deal with this were exactly the same as for those people whose outgoings, on a monthly basis, exceed what they have coming in. The first thing was to identify all the little extra expenditures - the lunches, the bar of chocolate here and there, or the magazine bought for a train journey. All these items are perfectly reasonable in their own way so long as you have the income to cover them, but it is still important to know where your money is actually going! Once that was done we started going through the Direct Debits one at a time - the fixed costs we ignored, so Mortgage, Council Tax, Service Charge & Water Rates. We noticed that our electricity direct debit had increased slowly over time until it was standing at over £80 per month - this seemed quite a lot for a two bedroomed flat, and when we investigated we discovered that this was due to our supplier having failed to read our meter for over TWO YEARS - working instead wholly on estimated readings. I read the meter and provided them with the correct readings, and discovered that we were over £300 in credit with them! Of course once they knew our correct level of use we were also able to reduce the monthly direct debit down substantially! We also worked to reduce our electricity use - scouring the house for items on standby and chargers left plugged in, changing regular lightbulbs to low energy ones and becoming the "light bulb Police" determined to throw the book at anyone leaving a light on unless they were actually in the room! One by one we attacked each and every bill, assessing whether it could be reduced at all and if so, dealing with that. Our TV, Broadband and telephone were absorbed into one package which cost less, and provided us with more, than the individual suppliers previously had managed. My mobile phone contract was cancelled and I switched to Pay As You Go, on a deal which, as a low user, costs me less than half of what I was paying on a contract before.

Sacre Coeur - Paris, Jan 2008
Our grocery shopping was the next thing to come under attack - we'd slipped into a bad habit of buying lots of little "treats" and also on popping into the supermarket several times each week - usually because we'd run out milk, or bread, or potatoes, but then coming out with far more than that, on each occasion. Failing to plan our meals was also a problem - and this leading to far more trips to the takeaway than were good for either our pockets, or indeed our waistbands! This was surprisingly easy to put in hand - meal planning (more on this in another Frugal Friday post coming up shortly) helped a huge amount, as did restricting our shopping, mostly, to a single trip per week to the supermarket, plus a monthly visit to the farmer's market for meat. Suddenly we were eating better, tastier, and higher quality food than we ever had before, and yet were spending a fraction of the cost. As an added bonus, all that time previously spent "wondering what to eat that night" was suddenly freed up for more jolly uses. We investigated which "budget" products were worth buying - with the result that I still automatically go for the value fruit & veg, but the Tesco Value Tea-bags are a never to be repeated experience!

Come on then - over to you - do you have a "never again!" budget buy? Or, even better, one that was so good you have never been tempted to return to the branded alternative?


(Yes, another bunch of unrelated photos!)


Marksgran said...

I admire you for being able to stick to this. I read the Frugal Queen blog too and I always think 'what strength of character'. I am rubbish! I am full of good intentions, I started making my own bread but I'm not sure its saving me any money, I do try to put lights off and I try to budget, but inevitably the minute a crisis comes into my life (and it seems full of them just now) I go and buy some chocolate and a magazine. You've no idea how many times I've sworn I'll never buy another magazine and yet, come the end of the month and all the new ones appear I am drawn to them like a moth to light! Well done you for getting it together, i'll keep trying, hopefully its like learning to drive, one day understanding the gears just clicks and you 'get it'! Loved the unrelated photos too lol x

Robyn said...

Making your own bread should certainly save you money assuming you don't fall victim to the temptation of the freshly made loaf every time - and we've all been through that phase! I can't speak for FQ at all, but from my perspective it's really nothing to do with strength of character - more a wilful determination to get rid of the mortgage as soon as possible! She's far more hardcore than I am and is also fortunate to be able to save and overpay by an amount every month that we can only dream of. We certainly could put a bit more towards the mortgage, but one of our main "things" is that we refuse to put our lives on hold just to save money, so fun with pals, holidays, and days out will continue, I'm always conscious of that "what if" thing, and if the worst should happen, wouldn't want to be regretting things we hadn't done.

Try changing one small thing at a time - do you have friends of work colleagues who read the same sort of magazines? If so, why not agree a swap with someone - that way you both get to read the mags you like, but only spend half the cash!

Scarlet said...

My Mum drinks value coffee from S'bury's and it's not bad at all.I can't have caffeine regularly, so although it's okay for the occasional cup when I visit, it's not something I could drink all the time. I always use either value tinned tomatoes or those in the world foods aisle at Asda which are 3 tins for 1.00. I buy them by the dozen, and have been asked more than once if they are okay to use!

Robyn said...

One of our "Branded essentials" is Nescafe Coffee for MrEH - bless him, it's his only luxury! ;-) As for tinned toms - have you got a B&M Bargains or a Home bargains near you? Try their chopped tinned toms - usually italian, and 29p a can, less watery than the supermarket value ones too!