Happy New Year, Skint pals! This first post of the new year also kicks off with an apology for being so lax in my posts this past six weeks or so. Now, you may imagine too many mince pies and parties to be the reason and while that could have had something to do with it, the main reason is that I’ve had my head down finishing Skint in the City, the book. Yep, Skint in the City is now to become a book as well as a blog – and I FINISHED IT YESTERDAY!!! Cue much dancing round the living room, followed by a very long sleep (oh yes, I sure know how to celebrate, wild-style).
Now all I need is to get it out there into the big wide world and let it do its thing. So, thanks for your patience while I finished it – I promise not to disappear for so long again.
And suddenly I’ve come out of my coma and it’s 2012. How did that happen? Will you be sorry to see the back of 2011? I won’t. Just got this feeling that 2012 is going to be a better one. Even with all of the gloomy forecasts about the economy, I’m just feeling something good going down.
And now that the Skint book is out of the way I’m turning my attentions to the usual resolutions. There’s one this year that tops them all for me – getting my finances into better shape. You see, even though I blog here, I’ve tended till now to look upon saving money as a means to spending more. you know, stop buying daily takeaway cappucino, buy a new pair of shoes a month instead. All very true, and I’d rather have new shoes than coffee, but lately I’ve been feeling that I’m missing the bigger picture.
Remember that episode of Sex and the City where Carrie finds herself flat broke, then realises than over her lifetime she has spent $40,000 on shoes? I will be, she concludes, literally be the Old Woman Who Lived in Her Shoe. That episode resonated with women across the world but it was also, I thought, terribly sad. I felt Carrie’s pain and I know I wasn’t alone.
Why does properly sorting out our money drive us to tears? Why would we rather spend hours on the web tracking down a discount designer bag than take half-an-hour applying for an ISA that could easily earn us a couple of hundred quid for that thirty minutes work? I don’t know, but if you find out please tell me because I am as ostrich-like about money as they come – or at least I used to be. Till recently (even the thought of all those years now fills me with regret) I was stunningly, ridiculously anti-money. Not that I was against spending it – that was a cinch – but I was against saving it or even knowing about it. Just the mention of an ISA would make my eyes glaze over. The merest whiff of a percentage sign would get me yawning – unless it was to direct my attention to a discount in the sales. I NEVER checked my balance. Money flowed in and out as furiously as a river in a flood and I can’t really explain why. I even hesitate to write about this because I don’t want to add to the impression that women can’t get their heads round finances. I don’t think that’s true anyway. I know a lot of smart women who handle their money really well, and a lot of smart women who don’t.
I also know a lot of guys who could use a few lessons in money management but who prefer to spend their time and cash on the high street, so I don’t think it’s got much to do with gender. I think the reason is simpler: the desire to avoid pain. There’s no doubt that minding your money, tracking interest rates and so on isn’t the pinnacle of fun. Much easier to go online and check out some fashion blogs. And because there’s no real deadline, sorting finances is one of those things that you always thinking you’ll get around to next week, and often never do. It’s a bit like going to the gym: you frequently can’t be bothered and yet because the consequences of not going to the gym show faster than the consequences of not saving, it’s saving that gets put off.
So, I’ve decided that even if the thought of sitting down and working out my income and expenditure sounds about as much fun as sticking pins in my eyes, it’s time to face up to it. Like it or not, the only way to have an even more fabulous life in the future is by getting real about saving money now.
That’s what I’ve come to realise anyway, and that’s why this year I’m sorting my finances out good and proper starting with these six simple steps:
Checking my Statements – Sounds simple, doesn’t it? Like, who doesn’t do this already? Umm, that would be me, sticking my guilty little hand up. So, in a spirit of repentance, I’ve now started the task of going through my bank statements for the last six months and noting how much money is coming in and flowing out. Which figure is largest? Which figure ought to be? I’m looking at where my biggest spends occur, particularly my habit of going to the cash machine every couple of days and withdrawing more than I should?
Identify the Money Eaters – Working from my statements, (oh, that sounds organised), I’ve made a quick list of the top six moneyeaters every month, things that I either don’t need or simply aren’t worth the money. I was staggered to see how much I pay for home insurance and it’s first on the hit list, followed by cancelling a subscription for a magazine I now longer care about. I’ve resolved to sort these money eaters, one a week, over the next six weeks. Baby steps, but this way I’ll still find that six weeks from now I should be far better off. I’m looking forward to totting up how much I’ll save each month from doing this – think I might be getting addicted.
Become Money-Aware – Already, just a few days in to starting this process I’ve become more aware of money eaters and how to weed them out. Whereas before I might have overlooked a few quid here or there rolling out of my account, from now on thinking about how purchases will look on my monthly bank statement will provide a great incentive to more frugal living. Before I spend I’m resolving to stop and think if the purchase will really enhance my quality of life. If not, maybe the money’s better off staying snugly in my account.
The 10% Rule – If I stick to the three above rules like a good little squirrel I should find that I’ve got a few extra quid in my account each month. Now, my usual impulse would be to withdraw that and buy an extra blouse, but in 2012 I’m going to save it instead, trying to put away 10% of my income every month. It’ll be a stretch, but I’m going to start at 10% and scale lower if needs be. I don’t mean keeping it under lock and key till I’m 60 – just saving it for a holiday or a really big purchase. To make sure I don’t renege I’m going to set up a direct debit each month into one of those high interest saving accounts; that way it leaves my account (relatively) painlessly, without any interference from me.
Use my ISA Allowance – Boring? Not if it nets me a couple of hundred extra a year.
Be a Financial Floozy: Sometimes it pays to be a little bit of a floozy. The financial crisis has proven, once and for all surely, that the big financial institutions don’t value customer loyalty, so why give it to them? My exorbitant home insurance bill grew so big because I’ve never bothered to switch, so HBOS keeps piling the pounds onto me. From now on I’m keeping an eye on where the best deals are and will be prepared to jump ship accordingly.
That’s it. Six steps that will hopefully make a sizeable difference in my bank balance. There’s plenty of other stuff I want to do, like getting to grips with cashback sites, but for now those six will do me fine. What about you? Have you made any financial resolutions this year? I’d love to hear them.
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