The Saving Journey

I thought it would be interesting to review my spending for last year as a starting point to improve this year. I’ve kept spreadsheets to track spending for a few years now but this is the first time I’ve used the information for more than checking month by month that my balance is within my overdraft limit!

My total net income for the year was £33k and total expenditure for the year was £34k so I overspent by £1k which is showing as my current overdraft. I’m not surprised by this as I’ve been in and out of my overdraft all year but I’ve budgeted to clear this by next month and my new goal is to not go back into it!

In terms of what I spent that £34k on, the breakdown is as follows:

£13k or 39% – clearing debt

This does include a little bit of interest as well as capital repayments on my mortgage and car payments. The biggest pay offs were on my credit cards of £7k now cleared to nil which I’m really pleased about. This year I’d like to clear my car loan and overpay my mortgage so I’d expect a similar figure next year.

£8k or 24% – other expenses

This is the most worrying category as it seems a huge amount at nearly a quarter of my expenses and I couldn’t immediately identify what it is. Digging deeper into this I can see the largest expenditure is on:

Restaurants – £1,370 I’m happy with this figure and will continue to spend around £100 per months on meals out with my family or friends.

Holidays – £1,526 I’m reasonably happy with this figure. Last year we had a number of weekends where we were attending weddings which increased our costs. The same will happen again this year with 3 more weddings to attend so I’d expect a similar figure. Costs for our main holiday will come from savings.

Birthdays/Christmas – £1,206 I’m happy with this figure as it included a number of 30th birthdays which were bigger events. I’d like to see this drop a little this year.

Car (except fuel and loan) – £868 I’m hoping to see this drop as last year I had a different car with higher costs.

Clothes – £714 This is a bit higher than I expected! I usually buy clothes in batches around the seasons but my records show I also spent £30 – £50 a number of times in between these batches and it all adds up. Having stocked up in the January sales for my winter wardrobe I am now committing to not buying any more clothes until April when I’ll update it for summer.

Toiletries/Beauty Treatments – £476 This is as expected as I’d started the year with an expensive toiletries habit! I’ve since downgraded to Sainsbury’s own brand which does an equally good job and saves a fortune.

Overall, it’s not as bad as I thought but I wouldn’t want it to get any higher so I’ll target £8k this year too.

£5k or 14% – savings

I’m really pleased with this as a starter savings rate especially when looking at the amount of debt clearing that I managed alongside it. This also doesn’t take into account my pension contributions which are taken from my gross salary at £4k per year almost doubling my savings. My pension contributions will stay at the same rate for this year and I would like to at least double my other savings to £10k.

£3k or 9% – food 

This averages at £250 per month which is a little high considering I lived alone for most of the year. Now that I’m part of a household for two, I’d like to maintain this level and get better value for money. I intend to start going to the local farmer’s market as a way to save money and get better quality meat (hopefully!)

£3k  or 8% – other utilities

This included a television subscription, gym membership and boiler cover all of which I no longer have so this should come down.

£1k or 4% – fuel

Although my new car is cheaper to run, I’ll also be doing a lot more miles this year as my commute has increased so I expect this to at least double.

£1k or 2% – energy

This is purely gas and electric which I regularly check for the best rate. I’d hope these costs would remain around the same this year.

Overall, I’m happy with my expenses for last year and this will be a good base for comparison with this year and future years. Do you review your expenses at the end of the year? What have you learned from it?