Tracking Expenses & other life changing habits I developed during an 8 month stint of being unemployed

Spending months going through countless job application processes without results can become disheartening. I decided to do what I could to remain upbeat, and to try to make the most of the time off work by forming some good habits that would hopefully stand me in good stead once I re-entered the workforce. Since finances were a concern, there was no more suitable time for me to begin getting a handle on my expenses. First step – to start tracking expenses:

1. Tracking my expenses:

This is possibly the most important routine that I formed while unemployed, and I intend to keep up the habit now that I am working again! I have lost track of the number of blog posts I have read which told me that that tracking my expenses and understanding where my money is going is a first and essential step towards financial independence. Yet, for some time I had resisted this. Since the beginning of 2017 though I have been saving my receipts in a in a chocolate box. Finally, some time in April I sat down one evening with my laptop and my box of receipts and began logging them all on a spreadsheet, month-by-month. I continue to collect my receipts, and sit down regularly to log them all into a spreadsheet, along with all debits from my online bank statement. Over the months I tweaked the data until I got it into a visual pie chart which gives me a high-level overview of my monthly expenses. I would recommend this as a good exercise for anyone, if only to enable them to answer questions like a) how much do you spend per month on groceries, electricity, etc.? Below is my little pie chart reflecting my June expenses.

Overview of June expenses:

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I have been living frugally, since I am coming out of the longest period of unemployment of my life. For this reason, discretionary expenses such as entertainment are at a minimum. Vet bills involved necessary vaccinations in order to keep a new pet healthy!

Tracking expenses heightens awareness, and influences behaviour. (“That which gets measured gets managed” etc.). For me the process of increased awareness and resulting changes in behaviour had already been developing slowly over the past year, since I randomly stumbled upon the FIRE community and began to realise the amount of waste involved in our first world consumerist lifestyles. Since for me the process of becoming aware had already begun, some behaviour modifications had also already begun to creep in. Tracking expenses crystallised this awareness for me. Ultimately, I would have to agree that we cannot know how much we need to live on unless we understand exactly what our annual expenses are! Doing this at a time when I had eliminated pretty much all discretionary spending was a bonus in that it showed  my costs at a fairly basic level – how much it costs per month just to keep the show on the road, and even if I never buy anything other than the bare essentials (groceries, power, insurance). This led me to make other positive changes as well, such as shopping around for a cheaper energy supplier, and getting a better deal from my existing mobile phone company, leading to reducing my expenses by €850. (For more information on this see this blog post – https://wordpress.com/post/financialindependenceireland.wordpress.com/9).  Ultimately, although a little frightening at first, this process is eventually empowering, because there is no longer a “great unknown”, and, armed with the raw data, we can make decisions about things we would like to change (or not). In addition to shopping around for the best deals on utility and health insurance, I began to cook more and eat out less (more on this under point 2. below). Most importantly, I realised that I could significantly reduce my expenses by renting out a room in my home!

Having made a number of positive changes, I will continue to track expenses to keep an eye on them, at least until the end of this year, but hopefully on an ongoing basis.  As a next step, I am now shifting my focus to tracking my net worth!

2. Meal planning/ Cooking more, eating out less:

Tracking expenses also led me to the realisation that I had been spending an average of €10 per day on food and coffee while working. Using this conservative estimate I was spending €50 per week, or a whopping €2,400 per year just on food and coffee during the workday! (Calculation based on a 48 week year, since I had about 4 weeks’ holiday per year). Some days I was so disorganised, that I would buy breakfast on the way to work, or forgo breakfast altogether if I was running late and didn’t have enough time to go to the shop. Additionally, I would buy 1 or 2 lattes per day at a cost of €2.85 each (later increased to €3, because according to the shop owner, the extra 15c would not make any difference to people – I beg to differ – I could probably buy a new pair of shoes each year with the difference! ). Then of course there was lunch, usually about €6.

Now my routine is very different. Since starting at the new job I have been bringing lunch with me. I cook at night and make enough for lunch the following day. I hindsight I realise that it is much more relaxing to actually know that I have my lunch with me, and not to have to spend half of my lunch break walking/ queuing for something to eat, not to mention the fact that I spent most of my working life eating white bread rolls which did nothing for me health wise! Add to that the fact that the company where I now work has a large, fully equipped lunch room, means that lunches are more relaxed, healthier and much less expensive. I even find time to take a walk and get some fresh air before going back to my desk. As for breakfast, I leave a big bag of muesli at the office, and start my day with getting in a bit early and having a coffee and muesli at work. I have now done 2 whole months at my new job, and with the exception of my first day, I have not spent any money on food or coffee during my working day. Other than the obvious cost saving, I am also saving time, and am eating healthier.

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3. Getting regular exercise:

I had been walking regularly for most of the period I was unemployed. I then decided to up my game by joining the gym for a month, availing of a 1 month special offer available to the unemployed. Around the same time that I got my job offer, the gym had a special offer for the remainder of the year for about the price of 2 doctor’s visits, so I joined up! My routine now is to pack a gym bag 2 days a week, and go to a fitness class after work, and I try to go once at the week end too. I try to look at this as as much a part of my routine as going to work. I’ll allow myself some choice in which days I go, but I try to make sure it is 2 days during the work week. At first my only goal was to make it to the classes and participate to be best of my ability. Over the 2 months that I have been doing this I find that my flexibility has improved, and that I have more stamina. The classes are becoming less of a big deal to me as my fitness level improves.

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In summary:

All-in-all, the fact that it took 8 months to secure my new job forced me to adopt more frugal routines. Going through 1st, 2nd and even 3rd round job interviews, and sometimes not even hearing back was a humbling experience, to say the least. The result of this is that these days I take nothing for granted, and actually appreciate having a job! I feel like the routines that I adopted while unemployed are benefitting me greatly now that I am back in work. My health and my finances were both aspects of my life that I had ignored until now. In all, I have found that these routines put structure on my life, and I tend to organise my time better, knowing that I will be leaving the office to go to a gym class, or that I will be getting myself in there bright and early to have my breakfast and hit the ground running. Financially, I have stopped burying my head in the sand, and to my amazement have found that, through my new awareness, and with just a small amount of planning, I have eliminated quite a bit of waste, which has translated to more money in the bank at the end of the month, with no sense of sacrifice!

Next up – the interesting bit – how will I choose to invest the savings…

 

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How to save € 850 tonight without leaving your couch!

Have you ever heard those ads on the radio or on TV offering you money off to switch your electricity supplier, your insurer or even your bank? Have you told yourself you must look into it some time, and never got around to it? The good news is that this takes very little effort, can be done from the comfort of your sofa and can save you thousands of Euro per year in expenses. I have more reasons than most for focusing on my expenses right now. I have been “between jobs” for the past number of months, so I am more “time rich and cash poor” than usual, and these savings translate to more money in the bank for me at this time where I am particularly budget-conscious.

Here’s a breakdown of how I reduced my expenses by € 850 this evening without leaving my couch, starting with the biggest savings!

  • Home Insurance: Saving of € 484 per year / (61% reduction)

In order to avail of a mortgage, the bank required that I take out home insurance. Like many people, I took a policy out with the bank that offered me the mortgage. I spent an hour or two one evening recently reviewing comparison websites and submitting enquiries, which resulted in a few call backs with quotes the following day. In the end, switching the policy reduced my yearly expense by 61%, or €484 per year in real terms. I made this saving by switching from the policy I had with the bank/ mortgage provider, and by reducing the amount of cover I had in the policy for rebuilding costs as well as contents, since the original policy included more cover than I actually needed. Over the course of a 29 year mortgage, this couple of hours one evening spent looking into alternatives would result in a saving of over € 14,000, and that’s without taking into consideration the effects of compounding (the interest which could be earned on the money saved over the time period). A simple Google search will produce many comparison websites. Below are a few which I used, which are specific to the Irish market:

www.bestinsurancequotes.ie ; www.insuremyhouse.ie www.paddycompare.ie www.quoteme.ie www.123.ie www.chill.ie www.quotedevil.ie

  • Gas and Electricity: Saving of € 261.76 per year (15% reduction)

I used the switching website www.bonkers.ie to search for the option with the biggest savings. Bonkers arranges the entire switch, and ensures that the process is seamless

  • Mobile Phone: Saving of € 60 per year (17% reduction)

My plan cost € 30 per month for 15 GB Data, unlimited calls and texts. I discovered that my provider was now offering the exact same deal for € 25 per month for 6 months, so I switched to this plan. A useful comparison website is:

http://www.moneyguideireland.com/irish-mobile-sim-only-plans-compared.html

  • Internet (mobile broadband): Saving of € 45 per year (20% reduction)

I was paying € 15 per month for 15 GB Data. While I didn’t find a cheaper offer with any other provider, I did notice that my existing provider currently had an online offer of 30 GB for € 15, so I switched to this deal and got double the data for the same price. This will save me, since I have gone over my data allowance in the past year to the tune of € 45. Since I have both mobile phone and internet from the same supplier, I was able to switch both with just one call.

Savings Breakdown:

Home Insurance: €484.00
Gas & Electric: €261.76
Mobile Phone: €60.00
Internet: €45.00
Total Savings: €850.76

Thoughts:

With a minimal amount of effort, I was able to reduce my expenses by € 850. I feel that it is well worth the effort, and plan on making this an annual exercise from now on! This is extremely easy to do thanks to the proliferation of comparison websites, some of which even arrange for the switch. It is also worthwhile since some utilities, such as gas and electricity, reward switchers as opposed to loyal customers. For these utilities in particular, it makes sense to review, and probably even to switch, on an annual basis. In the case of my phone and internet bills, it was simply a matter of looking on the provider’s website to see that they had reduced the rates for the particular package which I had. The next step was simply a matter of calling their loyalty team to kindly ask that they put me on the latest pricing for that package, which they did with no objection. In the case of life insurance, (another mandatory requirement to take out the mortgage), I discovered that my current policy is about the most competitive in the market, and it did not make sense to switch. In the case of health insurance, I purposefully held off on looking into this for the moment, since I am currently looking for a new job, and this is often provided by employers in Ireland as part of the benefits package. As such I will review this once I have secured a new job. By far the biggest saving for me came from switching my home insurance policy. This represented over half of my total saving from this exercise – €484. If you have time to look at one expense only, this would be the one I would recommend looking at, particularly for anyone who took the policy out with the bank who provided them with the mortgage, as I did. In some cases, banks have “oversold” in this area, leaving people paying for more insurance than they need. Also, the quotes which the banks themselves offer are often not the most competitive in the market. In my case, this exercise resulted in an € 850 saving for just a couple of hours of my time!

The websites I have referenced here are relevant to the options available in Ireland. A Google search should produce similar options for other countries.

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Why start this blog?

I decided to start this blog to talk about and share ideas on financial independence and early retirement with interested individuals living in Ireland. About a month ago I randomly stumbled on an article about a couple who had retired in their 30s, and my curiosity about how they did it led me to spend the past month or so researching the stories of several others who had achieved financial independence. Their stories and value systems struck a chord with me and led me to establish this as a goal for myself. Having just begun my own journey to financial independence – a journey which has no clearly-defined path as yet – I took a look online for others in Ireland pursuing similar goals, and could find no evidence of an online community. So, I’ve decided to document my own journey…

Early Retirement for beginners…

Have you ever had the audacity to consider that there may be an alternative to working 40 years or waiting until you are 60, 65 or even 70 years of age before you can leave your day job?

I had been keeping my head down, pacing myself for my 9 am to 7 pm daily grind when one evening about a month ago by chance I stumbled upon an article about a US-based couple who retired in their 30s – “Go Curry Cracker”. Mildly curious about how this seemingly ordinary couple had somehow managed to retire in their 30s, I began to research this further, which led me over the course of the past month to the blogs and podcasts of Mr. Money Mustache, Mad FIentist,  Jim Collins, Frugalwoods and others…

Curiouser and curiouser, I began to look for an Irish-based community of like-minded individuals, and to my surprise my search yielded very little! When asked whether he knew that there was a community of like-minded individuals out there working towards financial independence back in the 1970s, Jim Collins replied that he didn’t even know that there was a path! Similarly, I do not know my aim of bringing together the Irish-based FI community to share advice and trade stories on financial independence is an overambitious one, and indeed whether there even is such a community!

Over to you – What’s your story?