Decreasing expenses

If you're like me and you plan on increasing the amount of disposable income you have each and every month, you have two options - You can either increase your income or decrease your expenses. 

I've spent a lot of time working on how I can increase my income. I re-focused my efforts at work to maximise commission, I've put myself in a position where I have a better chance of promotion, I've looked at getting a higher earning job elsewhere, getting a part time job on the side, selling on Ebay, saving and investing, not to mention many more options. I'm pleased to say that I've seen good returns in this area. 

I've also spent some time reviewing my expenses over the years, seeing if there's anyway to reduce them. When it comes to bills, I'm really not the type of loyal customer companies are look for. I will never auto-renew any insurance, I'll change my current account every couple of years, I'll play companies off each other to reduce the price for me. I'm a right selfish so-and-so when it comes to paying bills. Similarly to my Income, I have made really good returns in this area as well. However, there has always been one clear difference between how I handle my income and expenses....... I always record my income and I set goals every year for what I want to earn. I'm not really sure why I haven't recorded my daily expenses before or set goals for it, I just haven't.....

I do some form of recording, for example I keep track on all of my monthly direct debits and bills. I'm aware how much they are, and when they come out of my account each month and I have the same process for my annual bills. I spent some time a couple of years ago setting up a budget planner for myself (I'll share this with you all at some point). I calculated all of my one off or annual spends. These included car tax, car insurance, car maintenance, oil for the house, holiday fund, Christmas, dentist, protein powder. I added them together (£2178) and divided the number into 12 (£181.50). I rounded the number up to give me a little bit of a buffer (£185 per month). I pay that figure into a separate account on the day my wages go into my current account. When one of those bills came around, for example car insurance, I would simply withdraw the money from that account and pay for it. In previous years, I would have scrambled the money together at short notice, and tried to survive the rest of the month depleted. This has been a great tool for me, and I highly recommend it to anyone. It's difficult to begin with as I'm paying £185 per month into an easy access saving account, where it sits until a bill needs paying. The plan comes into it's own when a bills turns up though. When my fiance says that we're running low on oil for the house, and an order is going to cost us £400. It's such a nice feeling to just withdraw the money and hand it over. It feels like I have free money! 

I have the same process for my regular spends like my mobile phone contract, birthdays, mortgage, house bills, petrol money, food etc. These all come to £695 per month for me. I keep the money in my account and watch them disappear throughout the month, and hope for left overs! I've carried on this process for a few years now and, If I don't mind saying so myself, I think I've got a pretty good system in place. All of my bills get paid on time, I never miss a payment or fall short of cash..............but I think I can do better!

I recently read how powerful recording information can be, and I've seen first hand what it can do for income, savings and another passion of mine, exercise. 

As of march 2014 I've started to document where my pennies are going. Just the simple act of writing down what I spend has already made a impact on the amount I've spent this month. I'm now accountable. I've taken it a step further by documenting it all here too, so it's free for you all to see. I think this is going to be a real motivator for me to keep going, especially when I see the amount of money I'm able to save each month to invest and re-invest. 

Once we're into April, I will create a page at the top of the blog and record all of my Income/Expenses. I believe in being completely transparent in this process. I want people to see exactly how I have got to a position in the future with any smoke and mirrors. 

I'll let you know how I get on!

Have you been recording your expenses? How are you finding it? Have you found any success in it?

I welcome any thoughts, comments, questions or support. Thank you for taking the time to read!