Kiddipedia Financial Support Information
By Hilary O’Dwyer, CEO, Titian Consulting
I work as a virtual CFO for small businesses but I am also the self-appointed CFO in our family of 4. There is always (or should be!) someone that takes on the role of the CFO to keep on top of the family budget. Whilst we did regularly review our spend and outgoings previously, in the past 6 months, this review has become monthly. Things had become a little loose in the lockdowns as there wasn’t much you could spend the cash on!
The impact of the rising interest rates on the mortgage, energy price hikes and my husband going down to 4 days a week at work, on 80% pay, have meant that we have had to be laser focussed on what we are spending our spare cash on. To get a firm grip on what we were spending our money on, I analysed 3 months of spending out of our bank accounts. I looked at 3 months so I captured all utility bills over the quarter. I put all the transactions into buckets like groceries; insurances; bills; eating out; takeaway; sports; subscriptions; mortgage. By doing this, we were able to see clearly where our money was going. And therefore, where we could cut back.
For the weekly groceries, we don’t shop exclusively at one of the 2 big supermarkets, we start in Aldi; then go to the fruit and veg shop and if we still need things, then we hit one of the big 2. They are not the cheapest by any means! We’ve cut out the pre-made home-delivered meals and are reducing the visits to the butcher. I’ve set a target for the weekly grocery bill and we stick to it. If the spend goes over one week in the month (we’re paid monthly), we need to make up this shortfall the next week. Can you say how much you spend on your weekly shopping? I’m always polling my friends to assess where our spend sits in comparison.
One of the big outgoings in our month is on insurance – home and contents; car and some other personal insurances. This is a classic example of where we pay the slack tax – paying more than we need as we don’t put in the effort to find a better deal. This is top of our life admin list right now and we’ll cut that expense back. The same applies to the mortgage – easily the biggest spend for us. We reached out to our broker before Christmas and without much effort, our existing lender made immediate cuts to our rates and we also got some cash back.
The most recent change we implemented, and I understand that this is not something everyone can do, is we put solar panels on our roof. Our electricity bill is the largest one of all the utilities and we will make significant savings by doing this. But having said that, you can reduce your usage by having sockets switched off when not in use and that kind of thing. It takes a little while to adjust (switching on the kettle and not realising its not boiling!) but leaving electronics on standby drains a heap of power.
Whilst we don’t pay for daycare fees anymore, we do have a lot of extracurricular sports for the children. We have cut some of them and explained to the children why. I believe its important for children to develop their own financial literacy so don’t shield them from money discussions. The subscriptions we pay for streaming services have been looked over with some being cut.
But easily the biggest spend for us has been on eating out and takeaways. And this was very apparent in our 3 months analysis. We’ve reduced this dramatically and it has had a major impact. We’re still lucky enough to have Take-Away Thursdays and maybe get to the local bowling club a couple of times a month. So we’re not feeling hard done by!
Whilst the paring back in the buckets of spend individually doesn’t sound like much, if you add them all up you’d be surprised at what the collective savings per month can be. But you need to go back to your target each month and compare what you spent to what you planned to spend and that will help keep you on track to balancing the budget!
Titian Consulting Details
Email: hilary@titian.consulting
Web: https://titian.consulting/
LInkedIn: @hilary-o-dwyer-85b35913/
