At the risk of firing up the gods of spring cleaning into an unholy rage, I decided to have an expenses spring clean a bit early.
Historically, I have found it easy to go after my variable expenses with vengeance, coffees in cafes, eating out, drinks in bars and random other shitty unneeded purchases. I got good at battering down the latte factor. Sadly this approach completely ignores the fixed expense side of the equation and allows them to run freely on the vast expense tundra.
And that has largely been my approach, sort out my luxury spending habits and watch the outgoings fall. It’s worked a treat, but the work of a beserker of frugality is never done. I look at my outgoings now and see lots of pesky regular expenses that could do with a bit of a smack about the chops. They are starting to get a little arrogant you see, prying further into the limitless expense tundra. Without the odd suplex or dropkick here and there they have been testing the waters, increasing each year and generally getting a bit ludicrous.
The method for reviewing expenses was to boil the kettle, put tea bag in a mug and add boiling water. Muse over the upcoming battle with expenses for two minutes, remove tea bag and add a dash of milk to the tea. Carry tea upstairs and take a seat in the War Chair facing the Battle Ground of Excel. Extract all regular expenses and starting with the most expensive first see if they can be smited downwards with the Hammer of Research.
A quick sorting of my regular expenses by size shows me that the mortgage payment is our single largest out going. I work for a financial services company and get a good deal that can’t be beaten in the market, even after I get taxed on it as a benefit in kind, and it allows penalty free over payments. No savings to be made here. Savings – £nil. A draw.
Council tax? No choice here I’m afraid sucka, it’s linked to our address. Savings – £nil. A draw.
The necessity of Gas & Electric are up next, which are currently coming in at £62 a month combined. I am pretty embarrassed to say that I don’t know if this is a good deal or a bad one. A quick Google suggests £784 for a small house/flat or £1,153 for a medium size house is average in 2015. We come in at £744 so slightly lower than the national average. Come on Castle Zombie, we can do better than that. You’re not that draughty. Loading a few details into USwitch shows me I can reduce my cost to about £44 per month. Savings – £220 per year. (I could have saved a little more if I was willing to fix my price for 20 months). Expense smited.
Next up is our joint life insurance and critical illness policies coming in at £54 a month. These were set up years ago when we first moved into the house and have just been left to run. Time to dig out the documents. Arrrrggghhh…can’t find them in Mrs Z’s filing system. So. Much. Paper. Obviously, they are in one of the turrets of Castle Zombie. The policy is a fixed term assurance and a fixed level of critical illness cover over 30 years, not even reducing with the mortgage. Naughty IFA that sold us the policy way back when, should have been decreasing as it was to offset the mortgage. AI quick look at some quotes shows I can get equivalent level of cover for much cheaper, and cheaper again through work. A quick chat with Mrs Z and we decide that with no dependents and a few years worth of savings should things go wrong, to cancel the policies. Savings – £648 per year. (I’m not saying you should cancel your life insurance or income protection policy, but for us it made sense to cancel it. With a good savings rate we could easily live off one salary if it came to that, or for a good few years if we both lost our income at the same time.) Expense smited.
The horror of Sky TV is up next at £50 a month, including broadband, phone line etc. Fifty quid! Mrs Z isn’t budging on this one…yet. Savings – £nil. (Time to work on this one, some savings to be made here). Draw.
Rolling in at £29.99 a month we have my mobile phone contract. It comes to an end in June and then I plan on going Sim Only until it falls apart. I found an offer for £7.50 on GiffGaff with 1GB of data, which would do me. Reviews I can see make GiffGaff look ok. Savings – £135 from June (£270 annually onwards). Expense smited.
It looks like I can’t change my water supplier. Savings – £nil. Draw.
Next on the agenda is my gym membership at £18.99. Unlike the majority of the population I do actually use my gym membership, nearly everyday. I’ve no room in my current house for a squat rack and bench so the gym will have to do for now. It’s 2 minutes walk from work and a 10 minute cycle from my house. No dice, sorry, it stays. Savings – £nil. Draw.
The TV licence is next under Mr Zombie’s beady investigative eye. No change here, Mrs Z want to keep this. Fair enough. Savings – £nil. Draw.
Finally, it’s music. Mr Zombie has music with him at all times. Walking to work. Cycling about. Cooking in the kitchen. Why, even right now he is bobbing his head along to the funky grooves of Clutch. Deezer was coming in at £9.99 a month, which was admittedly less that I was previously spending on buying music. I managed to find a deal on spotify for £4.99 a month, a funky funky sweet deal! Savings – £60 annually. Expense smited.
You’ll notice that I didn’t lose any of the expense skirmishes above, I either won and reduced the expense or it remained the same. So don’t be scared, it’s impossible to have a look at your expenses, lose a skirmish and actually end up paying more. The eagle eyed amongst you will notice that there is no insurance (home or third party car in the above). That’s because I review them annually for the cheapest deal. They are ideally the only insurances that we would be using, as they are required by law and we couldn’t self insure against the losses at the moment anyway.
Phew, that’s some serious good work there, the Battle Ground of Excel is awash with battered expenses. Let’s total the annual savings, shall we? £220 + £648 + £270 + £60 for a total of £1,198! That’s some serious saving. It took me about 3 hours to pull this post together and make all the necessary calls.
Put another way, that’s £399 per hour, per year. Damn Mr Z, you just went and got paid like a consultant or a high class hooker.
Put yet another way, that’s savings of £16.5k compounded at 7% over 10 years or nearly £50k over 20 years.
To really drive the point home, that’s a reduction of £30k to my required Financial Independence fund (on account of the reduced spending assuming a 4% withdrawal rate).
*Breaks out into a happy dance*
Your task – set three hours aside this weekend and get paid a ridiculous hourly wage like I did.
Spend Less 😉 , Save More & Escape the Horde