7 Changes I’ve Made to Save the Planet and Me Some Money

by ⋅ 2 Comments

At the start of 2009 I made a pact with myself that this year I would make as much effort as possible to change my lifestyle for the benefit of the environment as well as putting more money in my pocket.

Here’s what I have managed to do so far:-

1. Walk to work instead of drive

Since relocating to Bristol about 4 years ago I had been in a position where I was commuting to work, in my car, for 2-3 hours each and every day. It wasn’t a long trip – about 8 miles each way – it was simply a case of the congestion in and around Bristol holding me up.

The benefits to me of moving away from this “daily commute” were several – saved petrol and wear and tear on my car, saving the environment and natural resources, saving me time (my favourite savings by the way!) not sitting in the car for such periods of time as well as the health benefits of moving away from the stress of the daily commute.

In order to make this change I decided to move to a new company closer to home – and am I glad I did – I know have a fantastic 10 minute walk to work through some of the most beautiful streets in Bristol. The car rarely moves off the drive in the week now and I have extra money in the bank each and every month!

2. Give up pre-packed sandwiches and bottled water

Not only are they expensive (how can bottled water, in some instances, be more expensive than petrol?!) I used to buy a sandwich on a daily basis, as well as a bottle of water for work. Not only were these expensive (when compared to the alternatives of drinking tap water and making my own lunch) but stopping buying them also did a little bit for the environment as there is no rubbish (plastic wrappers and bottles) thrown away each day.

3. Taking the Train to Visit Parents

I was surprised when I looked into it that I can get a train from Bristol to my folk’s house, and back, at the weekend for less than the cost of the petrol I would burn to drive there.

OK, it takes a little planning and I have to walk a couple of miles to the stations, but this is one less car on the road, I have three hours of my life back for doing more productive stuff – especially if I am lucky enough to get a seat with a table on the train – and the train is going there anyway so the environmental impact is considerably reduced.

The result is I arrive fresher and less stressed than I used to and I see some fantastic countryside on the way there!

4. Unplug – not standby

Like most people, my TV/DVD player, radio, microwave, etc had all been left on standby for years. I was aware that this was using electricity but not to the extent that in reality it is.

I now turn off at the wall all my electrical items when they are no longer in use.

5. Holiday in the UK this year

Having been abroad most years for the last decade I decided that this year I would not fly abroad and would holiday at home. My goal was to minimise the total cost of the holiday and to this end we went camping! This was a great adventure and bought back a lot of childhood memories.

I’ll admit it takes a bit to get used to having to get out in the middle of the night to go to the toilet in the middle of a field and waking up to a cold tent, with lots of condensation, even in the middle of summer.

But it was more than just a holiday – it was an adventure – money was saved – and a great time was had by all of us – it just proved to us that we don’t need to jet off abroad and spend lots of money in fine restaurants to have a great time. We will certainly be doing it again next year.

6. Use email instead of posting stuff

Another concern I had to address was the amount of paper being wasted in running my investments, bank accounts, pensions, bills etc and the almost daily fall of half a rain forest through my letter box.

I registered with the Mailing Preference Service – which stopped most of the junk mail coming through the letter box in a couple of weeks. I moved all bank accounts to paperless statements – I don’t need paper ones – they have historically been filed away and never looked at again until destroyed after 7 years as I am self-employed.

7. Stopped buying newspapers and magazines.

Whilst having a clear out a few months back I was shocked at the amount of newspapers and magazines I had accumulated. I noticed that these were not cheap with the average magazine costing £3 – £4. The majority of the pages are adverts which I am not interested in anyway.

So I have not bought a newspaper or magazine at all this year – a great savings – I get my news and current affairs fix from the internet and TV now.

And the next 7………….?

I am sure there are many more changes I can make to put more money in my pocket as well as doing my bit for the environment – please let me know by leaving a comment below what hints and tips you would like to share with us.

Are you £1 ahead or £1 behind?

by ⋅ Leave a Comment

I was reading an excellent post over at Seth Godin’s blog which got me thinking about budgeting, wealth and financial independence.

The article talks about how over 2 billion people on this planet live below the poverty line. Now for one moment, the chances are that if you are reading this article, you are not living in the abject poverty being suffered around the world but you could be in a state of personal financial “poverty”.

Do you spend more than you earn? Does more money float out of your bank account each month than flows in?

If you spend just one more £1 than you earn each month, you will get further and further into debt. If you spend £1 less than you earn each month that is £1 extra put in reserve.

To achieve financial freedom in your life time you need to spend money only on necessities, and save for a later time, when you can afford to buy luxuries.

Actions:

1. Prioritise your debts – pay those carrying the higher interest rates first

2. Draw up a cashflow forecast – see how your money comes and goes each month over the next 12 months.

3. Prune all those “luxuries” you don’t need – e.g. possibly downgrade on your satellite or cable package, cancel that gym membership you never use.

4. Destroy those credit cards – only use cash for purchases – open a separate savings account for those large, one-off purchases you need to make each year.

5. Live by the mantra, “10% of all I earn is mine to keep forever”.

What else can I add to this list – please comment below.

Small Increases in Income Make a Big Difference!

by ⋅ 2 Comments

101-ways-to-make-extra-cash

When considering whether to move to a new employer, many feel that it is important to ensure that they maximise the amount of increase in income that they achieve.

Many would not consider moving to a new job for just £1,000 or £2,000 extra per year.

But it is the point of this article that a small increase in income can make a BIG difference.

When we consider the normal income and expenditure profile for a family we can roughly divide it’s expenditure into “fixed” and “variable”. An example of a fixed expense would be a rent or mortgage payment. It is generally fixed in relation to an increase in income – if you earn an extra £2,000 per year then generally you may stay living in the same property. A “variable” expense on the other hand is an expense which does or can change with income – for example – entertainment – if you’re earning more you may have a tendency to go out for meals, cinema, holidays more, therefore spending more on entertainment as your income rises.

So having considered this, we can see that all people have “fixed costs” and “variable costs” of living. The difference between total expenditure and total income is therefore what we like to think of as “disposable income”.

Having assessed your income and expenditure (see this article on cashflow forecasting) you will arrive at a figure for your “disposable income”.

For example, say your monthly take home pay, after tax and national insurance is £2,000, you have fixed costs of £1,200 per month and variable costs of £500 per month.

This gives total expenses of £1,700 per month and a disposable income of £300 per month.

Now let’s say for arguments sake that you could move to another job which earns you just another £100 per month after tax (£1,200 per year). Many would not consider taking this course of action, yet when we consider this in relation to your “disposable income” you have now seen an increase in your “disposable income” of £100 per month, from £300 to £400 – a 33% increase in disposable income!!!

This is an example of “leverage” where a small change in one variable results in a large change in another variable.

Now you might not get very excited about an additional £100 per month, but what if it was an extra £250, £500, or even £1,000 per month – what could you do with that additional income? I’m sure you could let your imagination run wild on this one.

Could you move to another job for an increase in income, or do something in your free time to earn more money????

Retirement is an income, not an age

by ⋅ 1 Comment

It occurred to me recently with all this talk about the need to raise retirement age in the UK due to our ageing population, that many people have got it wrong.

They are thinking of “retirement” as an age, yet in reality it should be an income – when you have sufficient assets to provide you with enough income to replace that which you earn working the 9 to 5, then you are in a position to “retire”.

The overall goal for financial planning in the current day and age must surely be to try and attain “financial independence” in our own lifetimes. To this end, we should endeavour to accumulate sufficient assets around us to provide enough income to enable us not to have to work for a living.

So with this in mind, give consideration to the amount of “income” you would need to retire today – do you really need the full amount of your take-home pay or, with careful planning and spending, could you live on less than you currently receive.

I guess the answer to this must be “yes” – with retirement comes one of the greatest assets we can ever attain – the asset of time.

With time on your side, you can plan your life and expenditure better – you have time to browse for bargains at the supermarket, to shop around for a better deal on your house or car insurance, to cook your own meals instead of buying “expensive” pre-prepared ones.

Start by analysing your income and expenditure – read this article – cashflow forecasting – planning income and expenditure.

Cashflow Forecasting – planning income and expenditure

by ⋅ 1 Comment

Introduction

Historically, cashflow forecasting was a method used by business owners, managers and accountants to analyse income and expenditure over a set period of time. By analysing inflows and outflows of cash for each period, e.g. each month, they were able to see what strains they would have on cash at any one time – e.g. was there any particular month or months where they needed to draw on other sources of cash.

Similarly, the use of a spreadsheet allowed the business manager to perform a number of “what if” scenarios – “what if” price increased 10%, “what if” this loan was repaid early.

Cashflow Forecasts and Personal Financial Planning

These same principles can be applied to your own personal finances. We all tend to have the same regular inflows and outflows of cash – e.g. if you’re in a salaried position then your net take home pay will tend to be the same each and every month. It is the irregular payments that can cause problems, for example car insurance premiums paid on an annual basis, payment for holidays etc.

By entering your expected income and expenditure each month into a spreadsheet it is possible to see the monthly flows of cash that you expect to occur.

The spreadsheet which accompanies this article contains most areas the typical family might find in terms of income and expenditure.

To Download Cashflow Forecast

Download the cashflow forecast spreadsheet –

Excel 2003 version – cashflow_forecast.xls

Please register for updates

We will announce all changes, improvements and amendments to the spreadsheet through our newsletter – register for our newsletter.

Please feel free to pass copies of this spreadsheet to friends and family and add this page to favourites as the spreadsheet will be updated from time to time as

Feedback

Please give us feedback on whether you found this spreadsheet useful or not and check out other downloads as they become available at our Download page.

Related Articles

I hope you find the cashflow forecast spreadsheet useful.

Download free Year Planner for 2010