Direct Debit Detox

Direct Debit Detox

The historic route of the word February is to do with purification and so we are motivated to talk about a clean-up of the finances. Apparently, februa refers to a purification feast held in this month. Who knew?

What we spend is shaping our future

An important part of healthy finances is a thorough understanding of spending. How comfy you are going to be in the future is always going to be influenced by how you currently use money. Whilst not being a fan of sacrificing your daily espresso in order to bank another £2.50 (I am too much of a caffeine addict to be able to stick to that commitment), it is a fact that to create wealth for the future we must manage, or learn to manage, today’s expenditure. The world throws billions of pounds at getting us to spend when we didn’t intend to, so we need to have a few defence tactics to deploy and keep ourselves on track when they are trying to run us off the road.

Direct Debit Detox

We are stronger together

The Women’s Wealth community constantly share tips and tricks that keep us aware, informed and empowered around choices that support our overall goals. Left to ourselves we have a limited perspective which has been built of the things we learned and experienced, some good and useful, some destructive and unhelpful. There is something very special about having access to other people’s perspective and ideas and it makes us stronger than when we rely solely on our individual conditioning. You can learn from other ladies how they win and what they struggle with. It may well be that there are some who can help by virtue of their strengths around money and some who can warn or empathise when it comes to unhelpful behaviours. Visit https://www.facebook.com/womenswealthplanning to become part of our community.

Having spoken to thousands of people about money management over several decades, I promise you that we think very differently about money and it has much to do with what we were told, what we saw, how we interpreted financial issues and how secure we felt in our formative years. Sometimes we are managing money matters based on seriously out of date information that has no relevance to current circumstances, but even when we realise this, it can be hard to change well-practiced routines and interrupt “normal” thinking. It takes fresh information, new ways of doing things and lots and lots of support to effect change, but the results can be fantastic!

Direct Debit Detox

The February Direct Debit Detox is a practical step we can take to keep things fresh and relevant. We have prepared a Direct Debit Planner which is available to those who sign up for our monthly topical tip and email update at https://womens-wealth.co.uk

As busy people who know how to engage automation to save ourselves time and hassle. We have become accustomed to setting up direct debits and standing orders to make repeat payments, but have you ever had the embarrassing moment when you look at a transaction and think “I have no idea what that is for”?

Don’t worry. It seems it happens to a lot of us and it highlights the importance of having a periodic review of routine transactions to make sure they are all still appropriate.

Here are some of the discoveries that have resulted in savings:

  • Gym membership unused for months. Check if the charge for a daily pass would have been less than a year’s membership (The gym can tell you how many times you attended as they keep electronic records, but they may be reluctant because they know the truth – most people don’t get good value from gym membership!)
  • Mobile phone insurance policy and/or travel insurance when the cover is provided under a premium banking package.
  • Annual pet insurance collected for a beloved pet who passed earlier in the year, but no one remembered to cancel the insurance.
  • Financing two lots of car insurance having transferred to a more competitive provider while the persistence of the auto-renew function meant the old cover was still in place.
  • Subscription for magazine delivery when online reading has all but replaced the paper mags that just hang around for a month before going in the recycling unread. 

Online banking and mobile phone apps make it easy to check our balances frequently and has replaced the need for a monthly trawl through the paper statement to check on the transactions that have happened during the month. Is this preventing us from doing a deeper dive into the continuing relevance of regular transactions?

We have some very well organised ladies amongst the Women’s Wealth members who do thorough monthly penny perfect reconciliations. We have others who just check daily what the balance is because they have a running total idea in their head and they only drill down if the balance seems off.  Some ladies feel a quarterly check is ample. Many rely on balance alerts, auto top-up from one account to another and other tech-based money management tools. However, there is no tool for taking an honest look at the range of direct debits and standing orders and asking yourself honestly:

Is this expense still relevant?

Is this routine outgoing overdue for a test to see if it is available at a better price?

Managing Routine Outgoings

When I bought my first flat it was essential for me to have my Direct Debit planner on the fridge. I was unused to so many DDs and the budget was tight. In fact, my mum frequently bailed me out in those early years because I misjudged things. With a few years’ experience, I learned, but then things got more complex as I became responsible for family budgeting and cash calls for clubs, trips and must-have fashion items, so my monthly planner became important again. These days we have a yearly planner for the business as some of the bills we must pay are whoppers and without planning, we could have cash flow problems. Given how useful a Direct Debit planner can be we have designed one for you. The added bonus is the effort involved in filling it out gives you the ideal opportunity to review each of the entries for appropriateness and competitiveness. Good luck with your DD Detox.

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