So my first step in sorting my finances out is getting to grips with what we spend per month and working out if I can make some savings.
I’m married and our finances are fairly intertwined, we have a joint account which all the bills get paid from and then our own separate bank accounts for personal expenditure. So the costs you see below are for both of us.
After a not-so-exciting few hours with a spreadsheet and my bank statements, I came up with the table below which shows everything we currently spend.
|Monthly Cost £||Monthly Cost $||Annual Cost £||Annual Cost $||Payment Date||Category|
|Microsoft 365||£5.83||$7.22||£70.00||$86.62||21st Feb||Subscriptions|
|Mobile Phone (SIM only)||£15.00||$18.56||£180.00||$222.75||5th||Internet|
|House & Car Insurance||£43.11||$53.35||£517.30||$640.15||September||House|
|Car Road Tax||£24.17||$29.91||£290.00||$358.87||September||Car|
|Car Running Costs||£50.00||$61.87||£600.00||$742.49||Car|
|Annual House Maintenance||£30.00||$37.12||£360.00||$445.49||House|
|Gas & Electricity||£133.62||$165.35||£1,603.44||$1,984.23||4th||Utilities|
|Pet Insurance - Dog 1||£22.81||$28.23||£273.72||$338.72||June||Pets|
|Pet Insurance - Dog 2||£17.60||$21.78||£211.20||$261.36||May||Pets|
|Discretionary - MAFF||£400.00||$494.99||£4,800.00||$5,939.93||Discretionary Spending|
|Discretionary - Jon||£300.00||$371.25||£3,600.00||$4,454.95||Discretionary Spending|
Expenditure Pie Chart 2023
If you’re not from the UK then some of the expenditure items might not be familiar to you so let me explain some of them.
This is a mandatory fee charged by the local council to anyone who owns or rents a home (unless you’re on benefits). It varies depending on the value of your home and by council region. It pays for things like; refuse collection, street lighting, infrastructure, education, parks, libraries etc. etc.
This is also a mandatory fee if you watch live TV or record BBC programmes. Basically, the money goes toward paying for the BBC (British Broadcasting Corporation) which is an ad-free national/quasi-state TV/Radio company.
Its existence is somewhat controversial and it has been debated quite often by different governments to scrap it. In today’s age of streaming TV services from the likes of Netflix, Disney+, Amazon, Sky etc. then it is somewhat of an anachronism but unfortunately, at the time of writing, it is still a thing.
Let’s just call it something eccentrically British. To add to that eccentricity, the fee is significantly cheaper if you have a black and white TV (can you even buy a black and white TV in 2023?).
If you own a car in the UK you have to pay road tax (as well as insurance & have an MOT). Its original intention was to pay for the building and maintenance of roads. In practice, these days, it goes into government coffers and is used to pay for whatever.
Every year, for cars older than 3 years, your car needs an inspection to make sure it is safe and roadworthy. This check is called an MOT (Ministry of Transport Test) and there is a fixed cost for it (you obviously have to pay extra for any work that is required on your car to make it pass the test).
This isn’t a common expenditure in the UK, but I live in a city centre flat with on-street parking and the council charges you for a residents parking permit. The price is based on the CO₂ emission level of your car.
Observations & Actions
There’s obviously a lot of work required here. I’m surprised by how much we spend per year. Given the average earnings in the UK is approx £28k per year, which is £22,871 after tax, we are spending more than the average person earns. I know there are two of us, but given we don’t have a mortgage or rent to pay and we don’t exactly live a lavish lifestyle, it seems a lot.
I’m going to go through all of this in detail over the next few weeks and work out where money can be saved. Below are my initial thoughts and I’ll update the post as I come to more conclusions.
Change Our Joint Bank Account
The first thing that became apparent when working out all my outgoings was how time-consuming it was to calculate them all. Our joint current account, where most of the bills come out of, is with First Direct and their app is rubbish. It doesn’t easily allow you to categorise things, you can’t set spending alerts, budgets, instant spend notifications or anything like that.
So the first job is to move the joint account to a bank that has better functionality. Luckily both MAFF (Mrs Aiming For FIRE) and I have personal accounts with Starling Bank which does have all this kind of functionality. Opening a new joint account with them was easy (literally took 2 mins). Now I’m just waiting for the debit cards to arrive and then I’ll use their switching service to transfer all the Direct Debits etc. from our old First Direct account.
Once the new bank account has been running for a few months, I’ll be able to categorise all my regular outgoings e.g. the various supermarkets we use can all be categorised under ‘food’. This will make things much easier to keep an eye on going forwards.
The Bulk of Our Spending
- Food – £7,200/$8,900 p/a
- Discretionary(MAFF) – £4,800/$5,900 p/a
- Discretionary(Jon) – £3,600/$4,450 p/a
The above are obviously the largest chunks of where the money goes, so I need to come up with a plan here. I think food is one area we can definitely cut down the cost on.
Discretionary spending, which covers everything we individually spend on things like; going out, clothes etc. is going to be harder to reduce as I’ve looked at this a lot in the past.
TV Streaming Services – £386.66/$478.49 p/a
- Now TV
- Amazon Prime
- Apple TV
MAFF & I do watch a lot of television but the plethora of streaming services available today and the associated monthly cost is getting a bit ridiculous. Amazon Prime does give me free Amazon postage in addition to TV and probably costs in but maybe we need to think about whether we really need the rest.
Recurring Software/Online storage – £99.88/$123.73 p/a
- Apple iCloud
- Microsoft 365
I think iCloud and Microsoft 365 are two I can easily do something about. We don’t use either service that often, so I’m going to look at alternatives/options.
Dog Walker – £576/$713.59 p/a
Hmm, we have 2 dogs and we have a dog walker take the younger one out once a week. This is pure laziness on our part, just to give us a bit of a break from dog walking.
Laura, I’m sorry but now I see how much you cost on an annual basis I’m afraid your days might be numbered.
Things I could reduce
Mobile Phone (SIM only)
I’ve only just changed my SIM to O2 at £6 p/m, so I’m stuck with that one for 12 months now. MAFF however is not in a contract so I’m going to have a look at the best option for her phone SIM.
Don’t get me started on this one….too late, see my How to Get Virgin Media Bill Down post.