February finances and springing into March


It’s all over the news that George Osborne has decided not to go ahead with the expected changes to tax relief on pensions in the upcoming budget. We’ll know in a couple of weeks exactly what he has decided – I’m sure we’re all waiting with baited breath!

However, in the meantime, month two is over and it’s time to look at how I did. I set myself in January the following two goals for the month:

  • Continue my focus on everyday spending, and see if I can stick to my new budget
  • Find out exactly where I stand with my pension.

I have to confess that I haven’t had time, or inclination, to sit down with my new work-in-progress spreadsheet (it’s still a mess) to review exactly how much I’ve spent and on what. Partly this is because it seems to take too long to fire up my old laptop (if it takes more than 2 minutes, it’s enough to put me off), partly it still feels like a daunting task to go through this process as I haven’t yet got into a good system. I’m doing a good job of procrastinating…but it is on my hit list of things to do. I’m the sort of person who likes their ‘I’s dotted and their ‘T’s crossed, and I’ll feel better once it’s done.

However, looking at my Spending Tracker app I can see my everyday spending has definitely been within my new budget. Yay! I’m pleased with this as I’ve emerged from my January hibernation, and it seems to suggest that it might be a practical budget even allowing for fun and going out. More importantly, because I’m clearer in my mind about what types of expenses my normal budget should include, I’ve taken a couple of larger expenses that occurred during the month outside of this budget and mentally allocated them to the category of ‘emergency fund’.

Distinguish between monthly spending and emergency expenses

We’ve reached the point where we need to spend money on our house, and it’s as if our household inanimate objects are in cahoots and have conspired one-by-one to give up the ghost. So far this year, we’ve had an electrician out several times for a dodgy plug socket, followed by a broken shower with an accompanying even-dodgier plug socket which had actually caught fire, and a broken tumble drier. This is ignoring the fridge and oven which are both on their last legs and need replacing, but that we’re hoping will last until we’re ready to deal with them. In the past, I would have muddled the costs of replacing broken appliances and emergency repairs with everyday spending, and been stressed not only by finding the money for the extra expenses, but also by the thought that I couldn’t stick to a budget. So though I’m not exactly cheering that we’re facing these extra expenses, I am definitely feeling happier just by being more organised and recognising them for what they are, unexpected expenses, that should be paid for from money put aside for exactly that purpose. I’ve yet to decide how much should be saved in this emergency fund – I sense a March goal coming up! – but feel better having decided that these should not skew my new monthly budget.

Bringing more money in

As well as sticking to a new budget, we’ve also made an effort to save and bring in more money in other ways:

  • Switched energy supplier via moneysavingexpert’s Cheap Energy Club. This was actually very quick and easy, and apparently I’ll be saving over £600 a year, although it seems to be taking an age for the switch to actually take place.
  • Successfully claimed a refund from Experian for unwanted CreditExpert credit report service – £700 approx.
  • Sold a mountain of small items on ebay. This is incredibly time-consuming, but has brought in around £150.
  • Husband is up to £22.11 saved in the penny-day challenge!

Pension muddle

I already had the documents from my current pension scheme, but have now also pulled together the documents from earlier pension schemes. It’s disappointing as it confirms what I suspected, namely that the amount in earlier schemes is not going to help in any tangible way. I don’t have a forgotten pot of gold! However, at least I know where I stand and I can now account for each scheme.

It’s clear that one earlier personal pension has performed terribly, and is sat in a cash fund earning absolutely nothing. The amount in the pension is small, but I need to look for a better fund with the same firm, or find another provider.

An earlier company pension scheme posed the most problems, as there had been a change in the administrators. I had a merry time being passed from the current pension scheme administrator (they didn’t have details of any scheme members prior to the date they took over the scheme), to the previous scheme administrators (they said they’d passed all details to the current administrators), finally to the pension team at my old employer who could confirm the date and amount paid out to me. However, I still didn’t know what I’d actually done with this money…. It was only when I went through my bank account records from 6 years ago with a nice lady in the bank that I worked out that I’d put some of the money into an ISA, and also withdrawn cash, I think to pay for house renovations (so much for pension saving!).

I still have the ISA, so at least I haven’t spent that, but had forgotten it was pension money. If I ear-mark it for long-term savings, which was the original intention, then it should probably be invested into a stocks and shares ISA at least, not sat in a cash ISA earning me nothing.

So it’s clear I have some work to do in checking where money I have is invested, including with my current pension.

Goals for March

I feel great taking stock of what we’ve done in February, and seeing how much we’ve already achieved this year. I’m a big fan of a list, but it’s easy to get despondent when you’re thinking just of the huge number of items still on the to-do list. This is a nice reminder that actually we’re doing ok, and it takes time. Next up for March:

  • Car finance – I bought my car on finance, and the finance is coming to the end of the term. What are my options, and what should I do?
  • Emergency fund – how much do I need?
  • Savings – how much should I be saving a month, including for retirement. Just how much will I need to live on when I retire?

Image: Pixabay, Pezibear

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