Do sweat the small stuff. Well, gently perspire at least!

Once your retirement plan is in place (pay off non-mortgage debts, keep expenditure to a minimum, and get saving as much as possible into pensions and tax efficient stock/bond/cash investments), we can afford to look at some of the smaller ways to be financially smarter whilst living our chosen lifestyle

For me, this is no-brainer stuff. Effectively FREE MONEY, just by doing a bit of shopping around. Some of the below saves money, meaning you have more to save (or spend, if you really must), and some of it could even be considered passive income, even if on a relatively small scale. Since ALL types of passive income are highly valuable, it just doesn’t make any sense to ignore these

So here goes – MY TOP 10 TIPS to make sure the household is running efficiently….

1-      Set up direct debits to pay all your bills. This cuts down on paperwork and admin, eliminates the threat of non-payment penalties, and is often cheaper than other payment methods (certainly for things like electricity). However if they want to charge you interest to pay every month (like car insurance), it’s better to pay in full

2-      Benchmark your utility bills every time you come out of contract. Gas, electricity, telephone, internet, insurance. It’s so fast and easy to jump on a reputable comparison website to check whether you could be paying less that I don’t understand why everyone doesn’t do this at least once a year. You might not even have to change provider – often just a phone call will get them to match the best price, but even if you do move, it’s often only an online form and a couple of clicks of a mouse.

3-      You can benchmark grocery shopping using comparison websites too, especially if you do your grocery shopping online like we do. (Some might complain about the delivery charges, but for me I can’t stand the MASSIVE inefficiency of going to the supermarket. Bear with me for a personal rant here, while I take you on a journey around my supermarket – you pick up an item and put it in the trolley. Then you take it out at the checkout. Then you put it in a bag, then put the bag back in the trolley. You go outside, take the bag out of the trolley and into your car. Drive home, take the bag out of the car and into the house, then take the item out of the bag, then put it on the shelf! I’m not a supply chain or efficiency expert but this purchase journey is absolute madness to my mind with far too much handling, so I get my groceries delivered and save this plus the fuel to get to the shop and back in my own car. It also cuts down on impulse purchases. Rant over, thanks for letting me get that off my chest!)

4-      Get the best bank account you can. I have a current / checking account that paid me £100 to join and puts £5 into my account every month. I have another account that pays me cashback on my direct debit payments AND pays 3% interest on my credit balance. Between these 2 accounts I earn around £30 per month for doing absolutely nothing! I love ‘em!

5-      Collect rewards and cashback when you spend. The easiest way I do this is with a credit card that gives me 1% cashback on all purchases. I also use 2 supermarket loyalty schemes (Tesco and Sainsbury) to collect points on my grocery shops, and for some online spending with their affiliate partners. I’d say my credit card and loyalty cards generate a further £20 income per month, again for doing nothing! Tips 4 and 5 together pay for my heating bill, so I effectively get free heating all year round now. I’d need £12,000 earning 5% to give me the equivalent passive income, so these perks are of significant value

6-      Pay off your credit and store cards in full every month. You can set this up with your card provider, meaning you never need to pay interest again

7-      Energy efficiency. Use low wattage light bulbs, don’t leave the tap running, insulate your home, be economical with use of heating and air conditioning. You’ll pay less and do your bit for the environment too

8-      Cheap fuel for your car. Obviously don’t drive 10 miles out of your way to save 2p a litre on fuel, but www.petrolprices.com will tell you which fuel stations near you have the best prices

9-      Discount vouchers and coupons. I must admit I have room for improvement here, but a quick 30 second look online for discount vouchers can often prove fruitful. For the best results though I think you need to start with the voucher or coupon, and then go and use it (I tend to do the reverse, such as getting to a checkout like Amazon, only to think about finding a code at the payment stage which isn’t usually very successful). Obviously the main challenge will be finding relevant vouchers to start with – I’ll never use a voucher for something which I don’t need immediately

10-   Finally, TRACK YOUR EXPENSES. I use a now-obsolete version of Microsoft Money to download all my bank accounts to, and keep track of mortgages, income, spending, retirement accounts, etc all in one place. It’s my source of reference when calculating my net worth, valuing my real estate, keeping up with my investments, but just as importantly it shows me where the household spending is going. You don’t know what spending is out of control until you can see the numbers. In our case, we spend far too much money on takeaway food so that’s something we’re at least made aware of by this activity. Whether we’ll do anything to address it or not is a separate topic!

There are plenty out there who, for very good reasons, would include items such as overpaying the mortgage every month; putting fixed amounts into savings and then spending the rest; having a strict monthly budget; etc, etc but those things don’t personally work for Mrs FFUK and I – Tip 10 means that we are fully aware of our spending profile and will address any changes or patterns if and when necessary. As it stands, we top-up or withdraw excess from spending accounts periodically to make sure our money’s in the right place. If you’re not as organised or as boringly disciplined as us, then fixed saving transfers on payday, budgets, etc are definitely worthwhile tactics so I would recommend you look into them, but hopefully you’ll aspire to full personal cashflow tracking one day. It’s great to treat your financial affairs in the same way as a business – everything is accountable, you learn loads about personal finance and your own spending profile, and it can show you where to make big savings, or show alarming trends which need to be addressed before it’s too late

Mostly though, my Top 10 is EASY stuff that saves REAL MONEY. Have I missed anything? What would be in your top 10?

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5 responses to “Do sweat the small stuff. Well, gently perspire at least!

  1. #10 for me was a real eye opener. I suggest everyone do this, but it is especially important for those of us planning on early retirement.

  2. Great optimisation techniques and I can vouch for most of them.

    Where have you gone? Would be great to get an update on your progress. From a fellow UK resident just starting out on their path to financial freedom.

    • Hi, thanks for stopping by and commenting!
      I’m still here but the last 9-12 months have been somewhat tumultuous so have stopped blogging. I guess I owe an explanation:
      1-Blogging took a back seat as mrs FFUK had lengthy health problems, returned to work after maternity leave, and whilst I negotiated redundancy from my last employer, and found and started a new job. I’m making excuses, basically – everyone has to balance life priorities and for me the blog wasn’t one near the top
      2- There are so many excellent FI blogs out there already (mr1500 is one that I ALWAYS read-a great guy and excellent blog), and I launched my blog on impulse, having never even read a blog before. It turns out that my goal of writing a factual finance blog isn’t sustainable without spreading out into personality and lifestyle posting, which I’m not interested in writing about really.
      3- Partly due to this, I ran out of material. I’m still on track for FI in around 4 years (2017-2018), and could probably do it sooner but would be too chicken to do it without a decent buffer in case my income requirements need to increase at some unseen point in the future. However, the tools, techniques, strategies and tactics I’m using are as already written about here at FFUK
      4- Ultimately this site never really got any traffic, nor did I pick up any followers. I never set out to be a master blogger but didn’t appreciate the work involved in self-promotion to get the stats up. Or it could’ve been my amateur writing style! Or both…
      I thought I’d found a niche, as no one in my life was doing anything like me in my pursuit of FI. I didn’t realise that the techniques were already described in other blogs-I started writing about what I was doing before reaching out to other FI bloggers and realised that the FI message and “how to guides” we’re already out there.

      Of course, if there’s anything you’d like my take on, or if I can help you on your quest for FI in ANY way, I am still here and will respond to all contact and comments. Don’t hesitate to ask – I may have neglected the blog but I applaud anyone setting out for FI and will do whatever I can to help
      Thanks again for visiting 🙂

      • Thanks for the detailed reply, I really appreciate that! And no you don’t owe anyone an explanation for not blogging, there are many out there that have just stopped for one reason or another. It’s really good that you are still responding to comments as a lot just seem to dissapear of the Earth.

        There are a lot of FI blogs out there but I haven’t really found any based in the UK (Simple living in Suffolk… I dunno, that’s about it I think?) which is why I like you thought I had spotted a niche and went for it. Not the only reason of course, I thought it would be fun and help me learn and so far that has been overwhelmingly the case. Of course, blogging is also a massive time suck, so again I can totally understand why you put it on the back burner.

        Congrats on being so near to reaching your FI goal and I hope Mrs FFUK health problems are no longer a concern for you both.

      • I was also going to email you about something but I can’t find a contact form so will ask on here (sorry!)

        I was wondering if you would like (and be so kind!) to come out of blogging retirement briefly and write a guest post for my site, detailing your story? I think it would be really great to get the perspective from someone who is much further down the road than I am, to show it can be done, and to give some more wisdom that maybe I can give? And obviously the whole perspective from the UK thing is key as well!

        To save you time we could do it in an interview format, so I could send you a list of questions, and you can just provide short(ish) answers, if you’d rather?

        Anyway, let me know, if you are interested drop me a line using my contact form here:

        http://thefirestarter.co.uk/contact-thefirestarter/

        Cheers again, and all the best.

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