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Tuesday, 27 January 2009

Counting the Pennies

Though I am slightly ashamed to admit it, I've never quite understood the concept of budgeting. Money comes in, I stare at it in astonishment, then go out and spend it on whatever I need to hold hearth and home together.

I have all kinds of theories about my dubious relationship with money that I won't bore you with here, suffice to say finding myself living through the first recession I remember as a home owning adult, it struck me that perhaps it was time to identify exactly how much of my hard earned pennies are going on joyful unnecessaries while I all too often find myself feeling borderline poverty struck in the aisles of the supermarket..

And so on January 1st 2009 I started a little experiment: I would write down every single penny I spent and finally discover what it is that is eating my money...

Below is my expenditure from the first four weeks of 2009. (I know it isn't thought polite to share the details of one's finances, but it seems that there isn't a tad of me I now consider private, bless my silly soul.) This was probably a quiet month in term of socializing and also a very good month with regard to bills. The car is currently off the road so there was no expenditure there, though because it has been so very cold gas costs have spiraled. I have no idea whether this represents the normal spending pattern of a thirty six year old single mother of one little munchkin, but I would be interested to hear your own views and ideas on budgeting. Am I spending too much on food? Not enough? Is my book/magazine obsession out of hand? Percentage wise do you and I have similar spending patterns or is my expenditure a bit skewiff? Have you got any budgeting tips that will transform my life in an era when tomato puree (my credit crunch price barometer) was 26p last week and 49p this week?

Bills.(Note: Mark pays the mortgage in lieu of maintenance)

Gas and electricity: £120.00 (14%)
Phone and Broadband: £55.00 (6%)
Council Tax: £100.00 (12%)
Parking Ticket (!!): £38.00 (5%)
Insurances: £54.00 (7%)
Dog Sponsorship For Finn: £8.00 (1%)
DVD rental: £13.00 (2%)


Food: £170.00 (21%)
Sundries: £30.00 (3%)
Books and Magazines: £67.00 (8%)
Clothes and Shoes: £15.00 (2%)
Gifts: £45.00 (5%)
Vintage Treasure: £30.00 (3%)


Entertainment and Eating Out: £60.00 (7%)
Computer Software: £22.00 (2%)

Total: £827.00

And the challenge? To reduce my expenditure by 5% month by month until the end of 2009. Watch this space...



Heather said...

I should really do this. The one thing I found was really eating into my money was what I spent on tea every morning before work and then eating out. I now bring tea to work and make a cup there and have been bringing my lunch to work. (I fell off the bandwagon yesterday though and had a piece of pizza for lunch - it wasn't even that good and cost way too much!)

Anonymous said...

Gosh, I'm impressed that you managed to write everything down for four weeks. I never manage to stay that disciplined for so long!

I think you could make some significant savings on things like gas/elec/phone bills without cutting back. I found Martin Lewis's website absolutely full of really useful advice for sorting out my utility bills: see The Old Style forum on the website is also good for tips on how to spend less at the supermarket!

Bobbi Lewin said...

You deserve a box of chocolates for doing that! My opinion is that spending money on good food can bring a feeling of great abundance when you have to cut back on frills. The book issue is one of my own habits. I think $100 a month is a perfectly reasonable amount to spend on books;) and often they can be claimed as necessary to career!

Amy said...

That seems about what we spend here in NZ and we're thrifty too. It's good you're writing down what you buy, I really should do that too.

lizzie said...

Retrench !!!!! Its all so awful - the nice thing about you is that you are a tinsy bit excessive and thats what we like about you Alison. Dried lentils are good and cheap veggies to cook with them - think onions and garlic not leeks and mushrooms- and of course Lidl !

Anonymous said...

I am in awe of your endeavor!
We have a recycle stop near here that keeps magazines and books separate from all other items...they are clean and very nice and we often find books as well as magazine in new or nearly new condition...for FREE!
You probably practice frugal things already and just have not learned to appreciate your talent!
Good luck in your journey, I look forward to reading about your adventures over the next month and the next....

The Machinist's Wife said...

Hi Alison, I think your spending, other than utilities is a bit excessive (and I'm sure you could save on utilities, too), but you know - that's me. You don't have credit cards and you're already in front. You could save so much for you and Finn for whatever you wanted to achieve. The money is certainly there to do it. I've sent you a private email with more info, because you did ask...

Miz said...

I really should budget too, especially since I'm on a very low income, but there doesn't seem much point simply because I've very little cash to see me through the week.

Ok, leading from your example, I promise to do so for the next month, and see where I can save the (literal) pennies!

In regards to your own spending, I see nothing *too* bad, although shopping around for a better deal for your power supplier and internet provider might jut throw up some results, or at least threaten your current ones that you're shopping around, and they might just give you a great *please stay* deal. I've done it myself to great success! You never said how many books you bought, just how much they cost, so maybe you can (if you can!) limit yourself to 2 new books pcm and a set amount allowed for second hand? After all, dear Alison, you work awfully hard, making this corner of the internet lovely and cosy, and deserve to treat yourself!

Gena said...

Oh I dont really want to do this its scary! and your figures are horribly close to mine!the books and magazine thing,I must,must,must cut back,I subscribe to my favourites but often when out shopping I just cant resist popping a couple of others in my trolley,your looking at around £6.00 minimum there arent you? Yikes! thank you Alison you have given me food for thought.

Anonymous said...

Ooh it is scary commenting on someone elses finances but as Gena said, here goes! If you took out all of the non-essential items such as books (I know they are kinda essetial :-/), clothes, eating out and entertainment and vintage treasures then you would have saved yourself £172! BUT on the other hand we all choose what to spend our money on in order to suit our lifestyle, budget etc. However, if you added up that kind of saving over a year it would be over £2000 and imagine what you could do with that :o) I agree that you could probably save on your gas and electricity too (we recently switched through and online comparison site and are saving LOADS)! All the best x

jennicakes said...

I haven't bought new books in a year (not counting gifts.) There are so many to be had for free, or used. Have you looked into book swapping on, or some other site?

Sarah said...

hi Alison

Bit late coming to this debate, but nevermind.
Anyway, what I wanted to say was - the thing about budgeting is having a boundary to stay within. You haven't actually identified whether that £827 a month is sustainable. If it's within your income, then you're fine, although I notice there's no disaster fund. If you could, say, get half your books and mags from the library instead of buying them you could build a small oops-fund. All our "new" books (even some for presents now) come from charity shops. Our local Oxfam is particularly good.

Also, I hope you're eating well for that £170 on two of you; that's quite a lot of caviar given that I'm feeding 5 on £300 (although I appreciate Finn's needs probably push your budget up food-wise).

But my main point was that for budgeting to work, to have to know why you're doing it. If it's just to be comfortable within your own financial skin and boundaries, that's fine. Best of luck.

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