I have just been told that we are quite obsessive about our finances! When I say we, I probably mean me mostly but it came from a friend that has been staying for a few days and I think he was fascinated, or should that be appalled, at my practice of recording everything we spend on a spreadsheet. It’s something we have done on and off for years and it’s all part of our strategy for dealing with the thorny subject of money. Money seems to cause so much worry and stress to people, not to mention being at the root of most extortion, violence and general skulduggery. It seems to be both worshipped and despised almost equally and universally. I think a little obsession can probably be forgiven.
It seems to me that there are three statuses when it comes to money. You either have lots of the stuff in which case there isn’t a lot of need to account for each pound you spend and you can focus all your stress into hanging on to it, worrying about pensions and investments and planning how much or how little you want to leave behind when you go. The second scenario, the most awful one I imagine, is simply not having enough to get by on. I don’t mean struggling to decide if you can afford that second Mediterranean cruise this year, I mean choosing between electricity and bread or holding back the rent to buy replacement shoes for the kids. Gill and I are lucky enough to fall somewhere in the middle of the two where I actually think that managing the money is an interesting challenge but after our friends comments I’m worried that I might have become a bit too focussed on counting the pennies. I feel I need to defend myself.
I should confess at this point that I really like spreadsheets. Maybe now would be a good time to say that there are other blogs available. There is a particularly well written one that contains humour of a cat based nature just a click away here. If you are still with me however, I’ll give you an example of how my beloved spreadsheet has come in useful since we moved house. (There won’t be any formulae involved I promise)
We bought our mobile park home purely as a financial solution. Swapping £500 per month rent for £84 per month pitch fee doesn’t require a financial advisor to explain the benefits and we were lucky enough to be able to raise the cash to buy the home outright. It’s all part of our strategy of focussing on what our outgoings are rather than what our income is. A lot of working people seem to focus on how much they earn and then live a lifestyle to match that income. Fair enough if that is what floats your boat. I myself don’t really hanker after most of the stuff that money can buy but I do crave the things that it can’t buy, time especially. By focussing on how much money is going out rather than what is coming in, it kind of turns everything on its head and you tend to want to reduce your outgoings so that you can work less and play more, which is why I record everything.
Sometimes however, just knowing what you are spending isn’t enough which is why I have just put yet another spreadsheet together to monitor our gas consumption. That cat bloke is here by the way. In fact if you Google ‘funny blogs’ you may never need to come back here again, I won’t be offended.
It all started when we decided to buy the park home, and as part of our economy drive, we took a bold decision to change our gas supplier. We had been loyal customers of British Gas for many years and probably suffered, like most people, from inertia when it came to switching. That and the worry that it would all go to pot and we would end up in some administrative nightmare with no gas at all but enough paper bills to keep us warm so long as we kept burning them. But despite our fears we decided to be brave and after a bit of research we signed up with Zog Energy on a tariff that was almost exactly half the price of the old one, so far so good.
There was a bit of initial misunderstanding because the mains gas meter had to be replaced which confused both British Gas and Zog Energy, in fact British Gas sent us a bill for £907 for two day’s supply at one point. They were very nice about it when I complained and agreed that it did seem just a tad excessive. Once things settled down though we thought it would be wise to do some reading about the most efficient way to run our new central heating boiler and as you do we turned to the internet. Well it seems that there are those that think it is best to leave the heating ticking over low all the time and those who favour periods of no heating interspersed with fiery blasts for cosy nights in and candle lit showers. (We don’t have a bath). We probably should have taken into consideration that we now live in what amounts to a plywood box with a tin roof rather than a Victorian brick built mid-terraced house but we didn’t. We thought we would try the ‘just ticking over constantly’ option to start with. Had I had a spreadsheet to monitor things from the start it might have been different but I didn’t so it was a bit of a shock when the first E-bill arrived in my in tray. When I saw the figures for estimated consumption my mind went into mental arithmetic gymnastics and I immediately ran outside to take an actual reading rather than phone the bank for a loan.
To my horror, the actual reading was much higher than the estimated one and with a slight sickly feeling in my stomach I sat down, with a spreadsheet of course, to work out our fate. It wasn’t good news. If I hadn’t been having so much fun writing conditional IF statements
I might have been considering arson as a possible solution to the horror of heating our lovely new nest. It looked like we were going to be paying half as much for our gas but using FOUR TIMES as much of it at the current rate of consumption.
So to plan B; we now have the timer on the boiler firmly set to long periods of no heating at all and if that means a trip around the charity shops looking for previously loved knitwear then so be it. I am also making twice daily visits to the gas meter to take a reading and record it in column B alongside the date, daily consumption, units used, Kwh, Cost before VAT etc., etc. It’s early days, but I am hugely relieved to report that there may be some gas left for the other residents of the park after all.
I am probably rambling a bit I know but my point is that without recording stuff it’s impossible to know what is going on and the same applies to the daily shopping expenditure. I don’t expect anybody to be particularly impressed that I will be able to tell you in six months’ time how much we have spent on pickles and sauces and yes, perhaps I may have gone into slightly too much detail there, I agree. The point is though that being able to analyse your spending is half the battle in reducing it. Having reviewed the first two months figures since we moved here though, I am also wondering if I should perhaps merge the categories of alcohol and gas so that I can pretend that I don’t know anything about either of them.
I will spare you the calculations that went into justifying buying a new car over a second hand one and as for the fuel consumption records that will ensure we don’t go too far over our allotted ten thousand miles per year? Ok, well maybe I am a little obsessive after all and perhaps you can actually have too much of that precious time that money can’t buy.