Welcome to FIDiary and my first post! If you’d like to read about why I started this website, please visit my about page.
One of the reasons I started this website was because I knew sharing my finances online would result in me being stricter with the way I use my money and as a result improve my progress towards Financial Independence.
January went some way towards proving this point. As I’m sure many others do, I started the new year with a full review of my finances. It’s funny how without regular reviews, my finances act a bit like a school locker, filling up with unnecessary things that really should have been cleared out months ago.
My financial review consisted of a number of steps and questions:
I found some old socks in my financial school locker
- Checking all direct debits and monthly/quarterly/yearly subscriptions. Do I recognise them all and are they all necessary?
- For the direct debits/subscriptions I do recognise – am I getting the best deal with them?
- Checking all current and savings accounts. Am I getting the best interest for my money? Do I have any money in these accounts that isn’t working for me?
As I hadn’t done a proper review for at least 6 months, it was unsurprising that I found some old socks in my financial school locker.
There were 3 major shifts in my finances as a result of this review:
- I found some direct debits that although legit, were no longer necessary:
- I cancelled my monthly credit report. I subscribed to this about a year ago whilst applying for a mortgage. Now that I’m settled and not looking for credit any time soon, I’m happy not to have the monthly update. Saving: £4.99 per month.
- I cancelled my flickr pro subscription (I’m an avid photographer in my spare time). Although I enjoy the benefits it brings, this is a nice to have, not a must have. Saving: £4.77 per month.
- I finally took the plunge and cancelled my gym membership.
- With my darling daughter now on the scene, and a house to renovate (more about this in a later post), it’s time to admit that the gym is no longer on my priority list and the amount of time I’ll have spare to use it isn’t worth the monthly payment! Frustratingly the T&C’s for my gym (David Lloyds) stipulate 3 months notice so the saving won’t be realised for 3 months. Future Saving: £63 per month.
- I reviewed my work travel costs.
- I’ve switched from using pay as you go straight to zone 1 and have decided to commit to an annual ticket which gets me as far as zone 2 with a short walk into zone 1 at the end. This not only saves a significant amount per month, but will hopefully make up for the lack of gym membership with the additional exercise as part of my commute. Saving: £78.33 per month!
Total January Finance Review Savings
Per Month: £151.09
Per Year: £1,813.08
These savings represent over 4.5% of my take home pay, not an insignificant amount!
So onto my January 2017 Cashflow report:
|Total Variable Outgoings||(£656)|
|Total Fixed and Variable Outgoings||(£2,772)|
Savings and Investments
|23% net salary saved this month|
|23% average net salary saved this year|
*Variable Outgoings include: Phone and Petrol
Although a net savings rate of 23%, or nearly a quarter of my take home pay is not bad, I’m confident that with some small changes I can increase this figure throughout the year.
January was a challenging month for a few reasons:
- My January finance review savings haven’t fully taken affect yet
- I had some hangover credit from Christmas that I wanted to clear
- I had a Structural Engineer invoice to pay
- I was on paternity leave for the first few weeks of January and as a result my ‘leisure’ spend was slightly higher than normal
A few points about my Cashflow Report:
- I’m not including pension contributions in my savings/wealth figures. My Salary figure is my take home pay, after pension contributions have been made.
- For now I’m excluding my property and valuable assets (car etc) from my total wealth figure.
So that’s my first cashflow report published online! How did you do this month? Did you perform a new year finance review and if so what did you discover?