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What do we waste our money on?

By: admin

What do we waste our money on?

Have you ever sat down to think about all the money that you would have right now if it was not for all the silly purchases, frivolous expenses and forgotten monthly subscriptions of the past?

I am not talking about missed opportunities, like why did I not buy bitcoin in 2009 when they were going for 1p each. (Don’t we all)

If you ever take the time to sit down and list all the little small outgoings, we have each week you might surprise yourself.

If you are determined to pay down your payday loans, credit card loans, overdraft and get back on track then this short article may be just for you.

All it takes is a little adjustment to our behaviour and everyday routine to start making a difference to how we treat money and how money treats us. I have always believed that money is attracted to money but will fly out of the pockets of those who do not understand money.

A few years ago, I decided to list all of my monthly expenses, not with the view of cutting anything out initially, I just wanted to see how many holes my finances had, and this is wanting I came up with. Most of these are my expenses and not my partners.

Monthly Spend

Lunch: £100

Coffee: £40

Petrol: £100

Gym membership: £40

Netflix Subscription: £7

Mobile Phone contract: £35

Food Shopping: £250

Going out: £150

Takeaways: £100

Pub: £50

At the end of the month I could see that I had been spending more than I thought I had. The odd coffee here and there turned out to be a £40 per month habit, lunch was also something I had not expected to run up to such a large bill.

If totalled all the expenses over the course of the year it would come to:

Lunch: £100 x 12 = £1,200

Coffee: £40 x 12 = £480

Petrol: £100 x 12 = £1,200

Gym membership: £40 x 12 = £480

Netflix Subscription: £7 x 12 = £84

Mobile Phone contract: £35 x 12 = £420

Food Shopping: £250 x 12 = £3,000

Going out: £150 x 12 = £1,800

Takeaways: £100 x 12 = £1,200

Pub: £50 x 12 = £600

Total of £10,464 each year

In the list I did not put down expenses such a utilities and council tax, those are more or less fixed costs and I pretty much either have to pay them or just use less gas and electricity which I am pretty good at in most cases.

I was completely surprised by the figure of £10,464. Ok, I need to eat so it might be unfair to list food in the outgoings but there is something we can do about the food shop, just shop at less expensive places and do not buy anything you won’t eat.

How can we reduce the bills to the low thousands? Well this is how I cut down to less than half that number almost overnight.

This is how I did it:

Subscriptions

I have always been very careful about taking out subscriptions. I have it my mind that the prices are set low so that if you are not too fussed if you don’t cancel and let it run for another month.

A small magazine subscription could end up costing you thousands of the course of many years and as you know, most If not everything you need can be found a few mouse clicks away on the internet.

I cancelled my Netflix subscription. It may not sound like a lot but that’s £84 per year saved

Make sure to check your bank account each month to see that no further money is being taken out. If they continue to take payments, you can ask the bank to block payments.

In any event, there are far better things to watch on YouTube than Netflix

£10,464 – £84 = £10,380

Cancel Gym Memberships

Gravity works the same no matter where you are in the world. Unless you are going every single day then cancel it.

I cancelled mine and bought some weights for home and took up running. I also dusted off my old bicycle. This was easy to do but I did miss the swimming pool.

Remember, that even if you do not step foot into the gym, they are stepping foot into your bank balance.

Although some gym memberships are contract which span over the year. Although I managed to get out my contract by claiming financial hardship and I just could not longer afford it. They were pretty decent about it and cancelled the contract.

£10,380 – £480 = £9,900



Going out to eat and takeaways.

When making my list I was shocked to see how much money I was spending on meals out and takeaways.

I got thinking, do I really need to get takeaways, why do I get takeaways? The answer was that we would be too tired to cook most evenings and picking up the phone was easier than getting out all the pots and pans.

It might come as a surprise but the office of National Statistics has published the following:

Spending on restaurants and hotels varies greatly across the income distribution as shown in  The poorest 10% of households spent an average of £18.20 a week on restaurants and hotels (7% of total expenditure), compared with £110.60 a week for those in the highest income decile (10% of total expenditure), just over six times as much, 

Source:https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/financialyearending2018#which-households-spent-the-most-on-takeaway-meals-eaten-at-home

On average a family will spend around £50 per week on restaurants and hotels. The ONS does not publish the figures for takeaways in this study. But It does illustrate how we as a nation spend our money.

I am not suggesting becoming a hermit, but I decided to cut out all the takeaways from the household bills and only eat out once per month at the cost of £50 per meal (£600)

Going out: £100 x 12 = £1,200

Takeaways: £100 x 12 = £1,200

£9,900 – £1,200 = £8,700

£8,700 – £1,200 = £7,500

Now I was starting to see some progress. More money in the bank and less around weight around the waist too.

Just Nipping Down the Pub

I was spending £600 a year down the pub, I never knew. So this had to go as well. Now I just get a few tins of beer from the local Costco and invite friends around, who with out fail also bring drinks with them. Although I was no longer going to the pub, I was still buying booze for our get togethers which came to about £150 per year.

Pub: £50 x 12 = £600

£7,500 – £450 (Minus the supermarket beer) = £7,050

Lunch and Coffee.

Another expense I wanted to kick into touch. Just like the pub expenses I simply made my own sandwiches before I left for work and take a flask of coffee for the journey on the train to work.

I also bought a coffee cafetière and a bag of filter coffee for the office that would last me a week for only £2.95

Making lunch at home reduced the cost of my lunches from £1,200 to just £250 per year

Lunch: £100 x 12 = £950

Buying bag of filter coffee at £2.95 for 12 months £153

Coffee: £40 x 12 = £480 – £153 = £297

£7,050 – £950 = £6,100

£6,100 – £297 = £5,802

Petrol

I need the car to get to work. But here comes the clever bit. Rather that drive all the way to the office and park next to the building. I would park the car about a kilometre away. That might sound like a lot but it’s only 1,000 meters and you can cover that in 8 minutes. For me this was my morning and evening work out.

Kill two birds with on stone. I save driving 10km per week or 520km per year. Or in miles that is 520 / 1.6 = 325 miles.

Ok, you might be thinking is it worth it. Well, consider this. What if we all did it. What if everyone on the planet parked a little further away and just walked the difference it would make.

I might have saved about £75, but I would rather have the £75 in my pocket than I the pocket of some oil executive right?

£5,802 – £75 = £5,702

Mobile phone contract

Can you downsize, can you get a pay as you go? Most people now use their mobile phones to play games, post on social media, messaging apps but not so much to make calls.

I use wireless when and where I can. I am not in too much of a hurry to post anything on social media unless it is for business purposes.

My phone contract went from £420 a year to £120 per year. Saved £300. Nice.

£5,702 – £300 = £5,427

Weekly shop

Although the household shopping bill was £3,000 per year, we did what we could to reduce it and we did but since I was now making my own lunch the food shop did not change much.

I went from spending £10,464 per year to almost halving the bill. I now had an extra £5000 in my bank from making a few little changes to my habits.

I intend to continue this and soon I will have enough cash to put down to purchase a rental property.

When taking my partners expenses into account we were able to reduce our outgoings by an additional £2,000 from her lunches, coffee, going out etc.

So, all in all, our finances are in much better shape than ever before.

Debt management agencies are regulated by The Financial Conduct Authority

Many people in the U.K struggle with debts and many do not know how to start to repay them speaking to a debt advisor is one of the best things you will do along with taking action yourself by speaking directly with your creditors.

https://www.nationaldebtline.org/ and https://www.moneyadviceservice.org.uk

You should always seek professional advice when handling debt problems. Cashute are not licensed debt advisers and any information contained in this article should not be taken as legal advice. It is your Responsibility to seek out correct legal advice

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Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk