£600 a year on coffee: the scary truth about my spending!

Keeping a spending diary for just one week will open your eyes to how much you spend on the ‘little things’ in life - as Victoria Bischoff discovered…

At the end of every month I sit down, study my bank statement in amazement and ask myself: where on earth does all my money go?

I don’t go on expensive holidays, I don’t run a car and I don’t buy designer clothes. Yet somehow, without fail, I manage to squander every penny I earn.

At the start of April, I decided: this had to stop!

Determined to take control of my money, I started a spending diary to find out what exactly what was happening to all my hard-earned cash. The results were terrifying.

My wake-up call
As I embarked upon my bold and dangerous spending diary adventure, I went out to the shops to choose the equipment that was going to help me cut my costs. I envisioned a beautiful book, coloured pens, highlighters… perhaps even a label maker. And then, it hit me; I was supposed to be saving money. Red-faced, I returned home to dig out an old notebook and start being sensible.

The plan was to keep the receipts for everything I bought each day, then sit down and fill in my diary religiously each evening.

The key, I knew, was to be meticulous. It’s easy to miss out small spends such as the odd chocolate bar at lunch, but these little expenditures soon add up.

If you bought a chocolate bar that cost 50p every day, over the course of a year you could chomp your way through £182.50!

The scary stats
Once I began adding up the cost of my treats, sweets and nice-to-eats, the floor seemed to fall from beneath me. Unbelievably, I was spending not far off £200 a week on ‘stuff’!

I found that roughly £20 a week went on my morning coffee and croissant. If I kept spending this way all year, I calculated I would fork out a shocking £600 on coffee – that’s nearly two whole weeks of my wages.

On the other hand, if I just exercised a little self control and rationed myself to one coffee a week, I would only pay about £70 a year – and I’d achieve a humongous saving of £530. I could go on holiday to Spain and lie in the sun for a week with that!

Moving onto lunch, I realised that failing to pack my own snacks was costing me a scary sum. I worked out that I spend a whopping £35 eating out during the week – so lunch is effectively costing me over £1,500 a year!

Combined with my barmy breakfast spending, this means that before considering the cost of my normal grocery shopping - let alone the occasional take-away – I am forking out over £2,000 on food. That adds up to more than four months’ rent for me. Sob!

Finally, it was time to calculate the cost of my Friday night tipples. I spent roughly £50 on one night out – and it shames me further to admit that I know I have spent even more in the past.

That’s £2,400 a year on Friday night drinks… And £4,800 if you go out for Saturday night beverages, too.

What I learnt
On a serious note, keeping track of my spending for just seven days was enough to convince me that I had to change my ways.

The reality is that consistently over-spending is likely to drive anyone into debt; and, given our country’s economic situation, this is the last thing anyone needs right now.

Here are the steps I decided to follow to get my cash-flow back under control:

1. Take a packed lunch to work. It’s an oldie, but it’s a goodie. If you really don’t have time to organise your lunch in the evenings (or can’t get up in the mornings), why not cook in bulk on Sundays and freeze separate portions of food for the week ahead.

2. Invest in a flask. If you’re like me and rely on a quick caffeine fix to wake you up in the morning, take your own coffee to work with you in a flask. Alternatively, keep a nice mug and a jar of the good stuff at the office.

3. Don’t take your bank card on nights out. Just think about how many times you’ve woken up with a sore head, groaning as mountains of receipts from the night before fall from your wallet. Pounding your plastic at the pub is not budget-friendly behaviour.

4. Pay by cash. I find that paying by plastic is not as much of a ‘reality check’ as physically handing over a crisp tenner. Try spending a few days where you exclusively pay for things with cash – it might slow down your spending.

5. Plan, plan and plan some more. For example, by budgeting to buy a monthly tube pass at £99.10 instead of a weekly pass at £25.80 you could save £152.40 over the course of a year. And if you opted for a yearly pass at £1,032 rather than a weekly pass, you could save a huge £309.60 a year.

6. Consider a cashback credit card. If, unlike me, you trust yourself with a flexible friend, using a cashback credit card in place of your usual debit card could earn you hundreds of pounds extra a year. (Find out more here.)

The spending diary psychology
Starting a spending diary is the first step to managing your finances well. As I discovered, you can only start to budget successfully when you know where (and why) you’re overspending.

Analysing why, when and where you spend can help you identify and break any bad spending habits you may have. After tracking my own outgoings, I noticed that when I’m bored I will often end up spending money I shouldn’t and buying things I don’t need.

Don’t make your own spending diary into a big deal; it’s just a quick and easy way to keep track of where your pennies go. If you let your diary become a nuisance, you’re less likely to stick to it.

You should find that, once you start to feel more in control of your finances, you will start to stress and worry less.

Clawing back control of your cash can be a difficult – even painful – experience, as I found out. But in the long run, making sure you’re in the driving seat when it comes to spending is worth a little short-term pain. As I can testify, knowing you can afford it will make that once-weekly latte taste all the sweeter.

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