Financial Organisation – Tools we use to spend our money

 “It’s not your Salary that makes you rich, it’s your spending habits.”

–          Charles A. Jaffe

One of my favourite things is the “aggregation of marginal gains” which is a concept used by Sir David Brailsford in British Cycling. This says (if I paraphrase) that if you improve something a little bit then these little bits all add up to a much larger overall gain. The effect of using this on our finances is that we have a financial advantage over others who pay 100% for something instead of the 98% we do. I haven’t done the maths but I think by using the aggregation of marginal gains, we have either saved or made well over £3,000 a year or £250 per month. I don’t know about you but I would prefer that £250 in my back pocket rather than someone’s corporate coffers. This post is about we use tools that are available to everybody, to save us money for things that we have to buy.

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We start each month with me and Little Miss Fire sitting down to review what we spent last month and what we are expecting the following month. We move money around from our budget to pay for the following months expenditure. For example, we move £560 to savings to pay for petrol, food and other expenses that goes onto the credit card. All our bills are paid by automated direct debit from the joint account. This allows us to both track the bills being paid each month. Any other regular expenditure is paid by standing order. I.E. we share a Netflix account with my brother so transfer him £4 every month.

The bank accounts we use is a NatWest Reward Current Account in conjunction with a NatWest Reward Credit Card. The reward current account gives us a 2% back for every penny we spend on selected house hold bills. These include broadband, Council tax, mobile phone and utilities. The catch here is that you have to pay them by direct debit (which we do) and there is a £2 monthly fee. Last year we received over £80 in rewards for the £24 yearly fee so a profit of £56. The reward amount can either be traded up for a voucher at selected retailers (i.e. you can get a £40 voucher for £20 in rewards) or you can have the money back as cold hard cash. This is fantastic as we get money back for what we would have to spent anyway.

The NatWest Reward Credit card is used for our everyday spending. This gives is 0.5% cash back on whatever we spend, 1% in rewards in any supermarket spend (0.5% at supermarket petrol stations) and between 1%-15% at selected outlets (the percentages stack up so if I buy petrol from Sainsbury’s we get 0.5% cashback and 0.5% in rewards). The cashback is automatically deducted from our credit card bill every month. The catch here is that there is a £2 monthly fee. This is waved if you have a rewards current account so doesn’t cost us a penny. I can’t tell you how much we got back in cash back last year but I would think it was over £150. Everything we spend that can’t be a direct debit is put on here. Not only that but I run a company so any expenditure from there is also put through the credit card (e.g. we needed buildings insurance at £340 a year, that went on the credit card and was claimed back through expenses netting me £1.70 that I wouldn’t have otherwise had).

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I also stay on top of our gas and electric tariffs, broadband, mobile phone, mortgage, car insurance etc to make sure we are getting the best deal (comparison website such as gocompare is your friend here!) Whenever we change supplier I use cashback sites like Topcashback.com to see if I can get any money for doing what I was going to do anyway. For example my mobile phone is with EE (contract up in April) for which I pay £33 per month (don’t judge is was before I learnt about FIRE!) EE were offering a deal where they add an extra 5GB of data to your phone if you use them for broadband as well. I use quite a lot of data so this appealed to me. So when our Virgin Media contract was up I cancelled Virgin Media (who were offering me a special reduced rate of £36 per month for 50MB/s) to go with EE Broadband (£31 per month, 76MB/s) and get this extra data. I also checked topcashback and saw that for the deal I wanted with EE I could get £135 cashback. Not only that but when my contract is up in April I’m going to a SIM only plan that will cost about £10 per month. So to recap I got £135 cash back, saved £5 per month on my broadband bill, got an extra 5GB of data on my phone and will save around £23 per month when I go to a SIM only deal in a couple of months. That’s a saving of £471 for the 12 months the broadband deal is for. Even without the cashback I would have saved £336 for something I would have done anyway. That’s not including the 2% I get back from the bank for paying my mobile by direct debit.

There are other things we use (like a nectar card) but as this post has gone on and on and on I think we should end here.

Hopefully you can see how we do things. It’s unfortunate that we have a finite amount of money, being able to stretch the money we have to spend anyway will hopefully accelerate our FIRE journey quite a bit. If you guys have any other tips please feel free to share!

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7 thoughts on “Financial Organisation – Tools we use to spend our money

  1. I must be a bit slow – I have only just realised you (as in, Mr Five 2 Fire) and Mr Fire are the same person! I saw your comment on another blog and you mentioned Little Miss Fire and it didn’t click then why you did… doh! Did you have another blog as I may have come across it but didn’t get the chance to read properly?

    I don’t really have anything to add as you’ve shared some good tips by explaining what you do to get your extra £££s. I’ve been using TopCashback for years and also only ever been on SIM only plans since I don’t use a lot of data and I’ve never had an iphone.

    I don’t really make the most of the various credit cards cash back deals I have available as I’m happy just using one credit card (M&S) which gets me a £4-£5 voucher each month. I have something against paying monthly fees to banks for something which I feel should be free, so although you come out positively, I wouldn’t ever sign up to that £2 monthly set up.

    My matched betting funds and most of my emergency cash I have sitting in high interest paying current accounts (Tesco and TSB) so that ticks along nicely without haven’t to do anything except to monitor my balances.

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    1. I did have a blog that I started ages ago but I quickly found I didn’t have the time to do much with it. LMF was interested in what I was doing so she started her own. I have to admit she is much better at it than me.

      I think we were quite lucky as we have been both banking with NatWest since we were able to open a bank account (so many many years) and it just so happens they have a good deal on the current accounts and credit cards. Once we had done the maths over the accounts it was an opportunity we couldn’t pass up. Personally I think of the account fee as spending the money on petrol to be able to get me to work. Then I earn more than it costs in petrol to get me there.

      Both me and LMF have a First Direct account for Matched betting but it doesn’t pay any interest. It may be time to switch accounts so we earn something extra for our money. Thanks for the tip!

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      1. “Both me and LMF have a First Direct account for Matched betting ”

        Are you able to juggle your cash in your First Direct current accounts so that you can set up a First Direct regular savings account?

        Save between £25 and £300 a month, up to £3,600 per year, interest is 5% fixed for 12 months.

        If you withdraw any cash before the 12 months is up, the interest rate drops to their standard variable rate, hence my ‘juggling’ reference!

        Might be worth considering anyway to earn a bit extra.

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      2. We aren’t in a position to to the regular savings yet. It may be an option in the future depending on how things go.

        5% is quite good, but I don’t think I would be fully taking advantage unless we could put in £300.I think the bank accounts are somewhere we could do with some work to take full advantage.

        Liked by 1 person

  2. Thanks for sharing your tactics! I love these hacks to make cashback off stuff you need to spend money on anyway. The credit card I’m using recently halved the number of points for each pound spent, so I’m not getting much out of it these days. Will have to investigate alternatives when I’m back in the UK.

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  3. Great article – I really like your description of how you use the NatWest accounts to benefit. NatWest should be also very happy with you as a customer (your primary banking relationship, being a loyal customer and recommending the account in your blog) – so clearly a win-win! Unfortunately, such account structures are not available in all jurisdictions, e.g., in Germany.
    All the best,
    MFF

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