Oooppps I cant actually afford to eat!

“Every time you borrow money, you’re robbing your future self.”–Nathan W. Morris

So a terrible thing happened after posting my I&E report last week. I started using Excel! Why is this such a terrible thing I hear you cry? Well I’m terrible at it for one and the other is that Mr Fire is a bit of an Excel genius. Its part of his day job so basically anything I can do, he can do way way WAY better! (but you know anyone is better at Excel then me including my 5 year old!) Plus its kinda hard to ask for help with it since he’s sick of the site of it by the time he comes home from his 9 hour day job and 80 mile commute.

Anyhoo, I have become afraid obsessed with the need to cut my living expenses. Again referring back to my report, I think we have lost our way a bit with the food budget. So this post is going to be about steps to reduce the foodbill and then I will provide an update next month on if its worked! I will keep going until this food bill is reduced! Our budget for food is £260 a month which isnt bad for three of us really. Is it?

Food

  1. Make a meal planner
    I’ve literally had this on my list of things to do for months. Why my resistance to it? I hate to think I’m tied into what to eat. Maybe its a commitment thing, but I dont want to be told what to eat each night and when! But if FIRE is at stake then I guess i’m willing to give it a try (reluctantly I might add) The jury is out on whether a monthly or weekly planner is best but I’m going to start fortnightly and then go from there.

2. Make a shopping list based on your meal planner.
A no-brainer I suppose, only buy for the meals on your planner. I’m going to create a shopping list in Excel and tick/untick what I need each week. I’ve been telling Mr Fire I will be taking a “weekly stock take” of the food in our cupboards to which I got a raised eyebrow. Did I mention the word “obsessive” yet?
3. Buy household items once a month and fresh once a week.
I’ve never heard of this one before. Sounds like a good idea since you simply calculate what you need for the month on the items that are non perishable. I think this should help us alot since we live in the middle of nowhere now and running out of something simply means going without it until the net shopping trip.

4. Skip the meat
Yeah I’m not going to do this one……. I can see how it will save ALOT on the food bill but we love our chicken so maybe this can be edited to swapping to cheaper cuts and buying it as cheaply as possibly.

5. Batch Cooking and freeze
I used to do this way back when I lived a different life with my abusive ex. Did it save us money? Not a clue to be honest since only me and the little one ate it whilst Mr X reached for the microwave ready meal stash he had in the freezer…..

6. Swap to own brands
Another good one but we already shop in Aldi so not much wiggle room there. Well worth the swap though if anyone isn’t already doing it.

Food

How do you save money on your food bill?

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How to save money: A beginners guide to ISA’s

Since my post about saving money last month, I’ve been researching the heck out of good old Individual Saving Accounts (more commonly known as Isa”s) I’ve had my cash Isa since they first came about when I was the tender age of Seventeen and I didn’t have a clue what to do with it. My sister was the brains of the family and she ordered me to open one as soon as they came out but then left me to it! I’ve come along way since then and my poor old neglected Isa has come with me. I’m amazed now at how much they have grown!

Guide to Isa's

Isa’s are a way of earning interest on your money without having to pay tax on the money invested or the interest earned on that money. Isa’s are commonly known as a tax wrapper as it is protected from tax. Isa’s are only available to those within the UK.

There are currently five types of Isa in the UK:

  • Cash Isa
  • Stocks and Shares Isa
  • Innovative Finance Isa
  • Help to buy Isa
  • Lifetime Isa

 

Cash Isa

A cash Isa is essentially a savings account that you open with any bank/building society. It tends to have a higher interest rate then a regular savings account and has the added benefit of being tax free. Your initial deposit is always returned and that is  guaranteed with a bonus of any interest earned on it. The money is usually available instantly making it perfect for short term saving or even as the emergency fund account. There are still a variety of account types – Instant access, regular savings and fixed rate deals so be sure to open up the account that is right for you.

Stocks and Shares Isa

A Stocks and Shares Isa is very different from a cash Isa as your taking the leap from saving and dipping a toe into the world of investing. This can be things like Corporate Bonds (lending money to business/government), Shares (investing in individual companies) and Funds (mix of bonds and shares but with a specific theme). All these will be covered over the course of my journey. You can buy Stocks and Shares Isa’s from bank/building society and online. Its a two step process where you have to choose the provider first and then choose which types on investment you want. Its important to remember as well that if you withdraw money from your Stocks and Share’s Isa then it can not be reinvested and putting it back into the account will decrease your annual allowance so think really carefully before taking it out. Its a good idea to split your money between both Cash and Stocks and Shares if you think you may need the money but still fancy trying investing.

Innovative Finance Isa (IFISA)

A brand spanking new Isa for 2016.  This Isa is Peer to Peer lending which simply, put is lending your money directly to borrowers without the bank. This way you get the interest in your pocket without banking fee’s for lending it out. Typically the interest rates around this type of Isa are double the usual rate of a Cash Isa  however it is important to note that the IFISA is currently not covered by the Financial Services Compensation Scheme so its essential to check what type of protection scheme is in place before handing over your hard earned cash.

Help to Buy Isa

This Isa is designed specifically for first time home buyers and offers a nice little Government bonus as an incentive/ help you get your foot on the ladder. Simply put you put your money in this Isa and the government boost your savings by 25%, pretty sweet huh? The maximum the Government will give you though is £3k. They are available  from most banks/building societies, and you can save a maximum of £200 every month. You can even fire up your saving by making your first deposit £1,200. You can only use this Isa to buy your first house though so its not suitable for anyone  who already own a property.

Lifetime Isa

New for 2017, this account is for First time home buyers or saving for after your 60 since if you use it for something other than these two you are hit with a whopping 25% fee on the amount you withdraw! Your only able to pay £4k from your allowance into this Isa but the Government will give you a nice little bonus of 25%/ max of £1k per year. You can only pay into this account until you either buy your first home or until you reach the age of 50. Then the account will remain open but you can not pay anything in to it. Once you hit 60 the money can be withdrawn fee free and used for whatever you want. This is best for the youngsters out there at the ripe old age of 18 or for people with extra cash that can max it each year and gain a tidy little profit at the end.

Here’s a handy little comparison chart:

Compare IsaSo I hope you’ve gained some insight into Isa’s, I know I feel a lot more switched on to making my money work for me once I have some to save of course.

How do you use your Isa allowance?

How to Save Money: Cutting down on household expenses

“Too many people spend money they earned..to buy things they don’t want..to impress people that they don’t like” –Will Rogers

Do you remember my Income and Expense report from the beginning of this month? I do and in fact I feel like it has burnt a hole in my brain. Its really made me question my outgoing expenses. Surely one of the keys to unlocking FIRE is to reduce outgoing expenses and then put the difference between your income and expenditure to work in investments and savings? (I’m ignoring the fact I currently don’t have an income on purpose today!)

I’ve decided to spend some time each month really focusing hard on how to reduce my living expenses, so that once I have an income then it will then be hard at work for me only paying for the basic’s. I don’t know what my bills will be yet now I’ve moved house so its best to have a back up plan incase my bills increase:

 

Plan

I’ve spent lots of time this month drawing up plans and trying to work out were to take my first steps into my FIRE journey. I’m looking forward to the actual doing next month!

How do you reduce your living expenses?

 

 

 

 

 

 

On a budget: The cheapest way to Move House

“Home is where the heart is… Even if you cant remember what box it is it” – #Happymovetips

I did it! I’ve finally moved house. It feels alittle strange being totally out of my comfort zone and in a new area. I think it will be hardest when dropping the little one off at school and then returning to an empty house.

How did I move house on next to zero money? That is exactly what this post is about. When thinking about moving house, my brain conjures up visions on TV programs with slapstick humor and a massive removal van complete with an army of eager to lift men. The main character simply standing in the perfectly renovated new house, calm and collected pointing to where the furniture should live in its new home. My experience was totally different. For one, all I hired was a van. I sweet talked Mr Fire into driving it and he brought along one of his best friends to help with the heavy lifting.

Geography wise, whilst I’m leaving my rented accommodation and moving out the area, my stuff was actually scattered all around! When I fled I was only presented with a handful of safe opportunities to return to where I lived  and tried to move as much of my things out as possible on each trip. That meant we needed the van for the whole day.

Here are my expenses from the big day:

Cost of moving

  1. Van Hire.
    The cost of hiring an actual removal companies van was substantial with me leaving the area and moving to a 3 bedroom house. I went a different route and I chose a Sunday to move since there would be less traffic than a weekday and just filled a form in online to book a normal van. Flat fee for the whole day.
  2. Movers
    Only cost here was Mr Fire and his friends time. They were rewarded with some home cooked food and a few beers afterwards as a thank you (probably cost me about £5!)
  3. Packing Boxes
    I really resented the idea of having to buy boxes to put my stuff in and then be left with lots of them at the end. I asked around at supermarkets for free boxes and used old reusable plastic bags that friends/family had with the promise of returning them at the end.
  4. Packers
    I actually don’t like the idea of packers coming into my home and packing my things so I was happy to pack it myself. Not working definitely helped this as it took a few hours each week night before the move.
  5. Change of Address cards
    A nice novel idea,but in the age whatsap, text messages and emails. There is no real need for these. Plus I really wanted to control who had my new address.
  6. Time off work
    Lucky for me, this wasn’t an issue! It was for Mr Fire which is another reason to choose a weekend over a weekday

So  there we have it. I’m all moved in and ready to begin the next chapter of my life and actually you know, make some money!

How to Save Money: How to build an Emergency Fund

“You must gain control over your money or the lack of it will forever control you” –Dave Ramsey

I’ve found recently that whilst knowledge may be power, its also pretty darn scary! After literally hours and hours of searching the internet on all things finance, its seems the universe (well Google) is trying to tell me I may already be too late. I should have already been saving 10% of my wages for the last twenty years, I also should have been planning for my retirement (conventional age 65 of course) as soon as I turned 30 so I’m already late to the saving party. After taking a few deep breathes I’ve decided that the best way to start saving is to begin with an Emergency Fund.

Emergency Fund

The Emergency fund is exactly what it sounds like: a pot of money set aside for emergencies such as a boiler breaking, the car not starting and being out off work for a few months.

How much is enough?

This is definitely a one size does not fit all type of question! Its fairly easy to work it out though and there are two ways to do it.

  1. Simply aim for three months wages. You know you can survive on it as you do it every month,
  2. Work out what you spend each month on mortgage/rent, food and heating bills, and other things you cant live with out. Aim to have three months worth.

How much is too much?

The jury is still out on this. My very inexperienced take on it is that you don’t really want to have more than six months worth of emergency cash no matter which method you use for calculating. Quite simply put its a bit of a missed  opportunity, don’t you think? Your missing out on the opportunity to gain a better interest rate.

Where do I put it?

Its up to you really, Cash under the bed or in an instant saving account is still cash that can be accessed quickly, although the former runs the risk of getting spent or lost/stolen. The best bank account is one that gives you quick, easy and penalty free access to your cash. I’ve had an instant saving account since the beginning of time (not literally) and I’m sure it will work just fine.

Whats next?

So once you’ve saved up your magic emergency fund number, whats next? I’m going to be researching Isa’s next so I’ll let you know.

Where are you up to with your emergency fund?

 

 

 

How to save money

“Opportunity is missed by most people because it is dressed in overalls and looks like work” Thomas Edison

I didn’t intend for this to be a blog post. I mean we all know how to save money right? I’ve always put my money in any old savings account when I can afford to and that is  that bit taken care of. As for making savings on household bills, thats easy, dont use the heating unless its cold and get the best deal on electricity, gas ect..

Well that was way before I found FIRE. Its scary to think that if I had known what I know now but ten years earlier, I could be half way through saving for my retirement. No use dwelling on the past is there? So I’m going way back to basics and exploring every one of those “how to save money” results from a trusty Google search.

Starting way at the beginning, My best pal Wiki defines it as this:

“Saving is income not spent or deferred consumption. Methods of savings include putting money aside in a deposit account, pension account, investment fund, or as cash”

Sounds really easy right? Well if only I actually earned money to deposit….So I’m going to look at Investments as well as savings money on household bills and items. So here’s my hit list in no particular order:

Savings Plan

 

I was actually talking about investments and saving with my driving instructor and he was telling me that although he is self employed and well paid (he earns £200 a day) not only is he scared of the money he earns, he doesn’t even have a bank account!

Well i’m off to research ISA’s since I’ve had one since the beginning of time and actually have no clue what to do with it other than watch my hard earned money dwindle away.

How do you save money?