Save £££s with a makeover of your finances

editorial image
0
Have your say

I’LL be the first to admit I’m not great with money.

I’m one of those people who lives on the contents of their purse – a crumpled £5 note and a smattering of lint – the last week before payday.

budgetNB''Even one daily Starbucks costs hundreds of pounds more a year than taking your own coffee and milk into the office.

budgetNB''Even one daily Starbucks costs hundreds of pounds more a year than taking your own coffee and milk into the office.

I’ve always assumed that I’ll get better with money ‘when I grow up.’ It was only the other day when I was putting £6.25 worth of petrol into my car and hoping it would get me around for the next three days, that I realised I AM grown up.

I’m 28 and, like many people, feel as though I’m always just ‘getting by,’ while I have friends who earn less but seem generally better off. So why is this?

The problem, I believe, is that I don’t fret over small amounts.

I don’t save coppers. I’ll happily spend £1 extra on a brand name product at the supermarket and often make spur-of-the-moment purchases at the checkout.

File photo dated 23/01/09 of a broken piggy bank. A quarter of Britons have been forced to tap into their savings in order to make ends meet, research has indicated. PRESS ASSOCIATION Photo. Issue date: Friday June 10, 2011. Around 40% of people said they had made significant spending cutbacks since the end of last year, from going out less and spending less on take-aways, to cutting down on food shopping and using their car less often, according to insurer Axa. But despite this, 25% of people said they had still needed to use money they had saved in order to fund day-to-day living costs. See PA story MONEY Finances. Photo credit should read: Matt Morton/PA Wire

File photo dated 23/01/09 of a broken piggy bank. A quarter of Britons have been forced to tap into their savings in order to make ends meet, research has indicated. PRESS ASSOCIATION Photo. Issue date: Friday June 10, 2011. Around 40% of people said they had made significant spending cutbacks since the end of last year, from going out less and spending less on take-aways, to cutting down on food shopping and using their car less often, according to insurer Axa. But despite this, 25% of people said they had still needed to use money they had saved in order to fund day-to-day living costs. See PA story MONEY Finances. Photo credit should read: Matt Morton/PA Wire

I buy my lunch at work rather than take sandwiches and, for the most part, am blissfully ignorant of the month-to-month happenings of my bank account. January is a difficult time for us all, with the expense of Christmas still weighing heavily, so I decided to seize the opportunity to test out an age-old theory and see if every penny really does count.

Can all those little savings, 10p here and £1 there, really rack up? I committed to changing my ways for a week to measure the difference and was stunned by the results...

EAT BREAKFAST AT HOME

Buying breakfast on the go because you’re pushed for time is an easy trap to fall into and one I’m certainly guilty of, but it’s a costly mistake.

Buying a breakfast sandwich versus eating cereal at home has been setting me back around £260 a year. Bring on the Kellogg’s!

CAFFEINE FIX

Caffeine plays a big part in my day.

I have a cup first thing, one mid-morning, one with lunch and one mid-afternoon.

I used to buy them at the local sandwich shop at £1 a pop which, I have since worked out, was setting me back £1,040 a year! On tea? Here’s the amazing part: 13 boxes of teabags throughout the year will keep me in four cups a day.

That works out at just 53p a week.

I shared a small carton of milk every day with my colleague, at a cost of just £1.30 for the week, meaning my caffeine fix now comes in annually at £95.16, as opposed to £1,040 – an incredible saving of £944.84!

Even if you’re far less weird than me and you only go into Starbucks once a day, you’re still looking at an annual cost of about £450.

TAKE LUNCH TO WORK

On an average week I fork out about £22 for my daily sandwich, crisps and yoghurt or slice of cake.

This means I am spending a whopping £1,144 a year on lunch! On my ‘thrifty’ week, I bought two loaves of bread (one at the beginning of the week, one in the middle), a four-tin pack of tuna, a multipack of baked crisps and a multipack of yoghurts.

If I did this every week, I would save myself £728 a year. Gulp.

CHECK YOUR ACCOUNT

I have a confession: I don’t open my bank statements.

When they pop through the letterbox once a month, I just assume all is well and stick them aside.

Or in the bin. When I mentioned to a friend in passing recently that I hadn’t examined my account for a few years, she was horrified.

‘How do you know where your money’s going?’ she asked in disbelief. She raised a good point.

I went into my local branch on my lunch hour and asked the gentleman behind the counter for a list of all my direct debits.

We found out I was paying insurance for a phone I no longer have and insurance on a television I sold 18 months ago.

Worse still, £35 was being debited out of my account every month for my old phone contract which I’d forgotten to cancel. My current mobile phone, the bank teller also informed me, was insured by my bank as part of my account package, meaning I was paying a further unnecessary insurance amount. By the time I left the bank 20 minutes later I was paying £60.97 less a month.

CANCEL UNWANTED TV CHANNELS

We were paying an extra £5 a month to Sky for movie channels that we absolutely never watched. Cancelling them was something I’d meant to do for ages and is now saving £60 a year.

RESULTS

Are you ready for this? By eating breakfast at home, taking lunch to work, buying teabags and milk, sorting out my direct debits and trimming down my Sky package, I will be making an annual saving in 2012 of... drumroll please... £2670,48.

Two thousand, six hundred and seventy pounds, forty eight pence.

I’d love to stay and chat but I’m off to the travel agents to pick up some Caribbean cruise brochures.

I’ve just had a windfall!