Cutting costs, or how to have £50 more per month from spending 5 minutes.

This week my focus is on cutting my costs in a specific area. It is the area of magazine subscriptions, and club memberships.

Today I have reduced my costs of £171 per year by removing a magazine while basically just contains gossip, and TV programs (we have the TV guide on the Sky Box, so do we really need a magazine that doesn’t contain a majority of the channels we have anyway?). I also removed a membership, which is included in those savings.

Are you the kind of person who gets gym membership, and then don’t end up using it? Cancel your gym membership, and go outside running instead (easy to say in the summer like now, wait for the autumn).

Are you the kind of person who subscribes to a magazine, or newspaper, but never have enough time to sit down and actually read it? Cancel it! You can always buy single issues when you do have the time.

I have another £396 per year to save from a short 5 minute phone call tomorrow to cancel something I am subscribing on, but that I am not really using.

I guess I will need to lobby harder for my wife to give up the Gym at £480 per year.

That would bring it to a saving of £1047 per year, or £87 per month.

Well, looking on the good side my ISA increased by 1.27% today, but unfortunately my non taxfree investments in shares dropped by 1.58%. Fortunately enough the upside was more than the downside.

Also, the Bordeaux 2009 sales are now finished. Had my last order confirmed today. Now all I have to do is wait 10 years and hope that they have some better value then :)

Until next Friday, when I will talk a little bit about gambling (yes, I used to gamble, and now all I can possibly lose is the interest).

/Fredrik Sohlberg

What is the secret behind riches, and people who get rich?

Actually, there is not that much of a secret, but all advertising we are surrounded by daily works to break down the barriers to your wealth and fortune, and encourage us to spend it, rather than save it.

This is what actually keeps a majority of people from getting rich. Instant gratification. Buy now, pay later. All of the eighties, and nineties was all about buy now, pay later.

Our neighbour changes their car for a new one, and all of a sudden we feel inferious and want a new car yourself. If only we had the patience to wait until our passive income could grant us all that, without putting us further into dept.

Of cause I would want that new car as well, but I have realised that I will have to wait on some of those dreams, until I can affoard to fulfill them.

What am I doing then?

  • Cutting my spending. Trying to spend less on things I don’t need, and keep putting money into savings (how I save, and invest is something I will come to later).
  • Increasing my income. In my case it is not through work, but through the work I am doing for myself when not at the office. Actually this blog is part of that, eventhough it might not bring me a fortune anytime soon, and right now only costs me money.
  • Investing wisely. That means that I don’t keep my money in my savings account, but I try to find other ways that can make my money grow faster. Right now my investments include Wine, Stocks & Shares, and Fixed Income Instruments. I plan on moving on to Property at a later stage, but for now I am happy with what I am currently doing.

Next post will be related to earnings and spending, and how to make your income stretch longer.

/Fredrik