Only days into 2008 and the World Bank issued a statement predicting that global economic growth will slow in 2008 as the credit crunch hit even the worlds richest nations. But I doubt even they expected the FTSE would end the year down 31.3%, with interest rates across the globe being slashed to record lows. But despite all this doom and gloom I was still able to make money as my Millionaire Adventure continued.

As you can see from the chart below the year started rather slowly with me trimming a little here and a little there from my regular expenses. Then in June things really took off when I started matched betting during Euro2008 which helped me to earn over £200 during the 3 week tournament.

After that I was on a run quickly notching up a £240 saving by threatening to leave my mobile phone provider and a further £140 saving from switching my broadband provider. Then in August I received news that I had finally won my battle to reclaim my credit card charges which along with some more matched betting brought my summer earnings to over £1000.

Octobers highlight was selling on eBay which earned me £172 although did require a lot of effort and a substantial amount of my time. The final couple months of the year saw cashback that I had earned earlier in the year finally starting to make its way into my bank account with almost £24 cashback being earned just from booking a weeks holiday.

As you can see from the chart below my earnings were roughly equally divided between Money Saving, Money Making and Gambling. Which is why the more astute of you may have noticed that these are now the sites main categories.

The challenge for 2009 is now to start making my existing earnings work to earn me more money, which is why you’ll shortly see the appearance of an Investments category, but more on that later in the month.

My spending on essentials (i.e. Rent, Food & Bills) is £110 under budget however this includes the £11.72 per month savings I have already made switching broadband provider. So after taking this into account I am actually £75 under budget.

My discretionary spending (i.e. everything except for essentials) was £636 under budget, which includes £247 earned from betting refunds that have already been included in my total earnings. I’m very pleased to have come in £94 under budget on my Christmas spending as I put a lot of effort into planning what I was going to get and then searching both the high street and online stores to find the best price.

So in total over the year I am £1009 under budget. However, I’m not going to be adding this to my MillionaireAdventure total as I have been putting off getting a new clutch for my car, which along with ever increasing costs of living will significantly dent this saving.

My spending on essentials (i.e. Rent, Food & Bills) is £104 under budget however this includes the £11.72 and £15 per month savings I have already made from switching my mobile phone and broadband provider. So after taking these into account I am actually £24 under budget which is very good considering the rising rate of inflation on my food and electricity costs.

My discretionary spending (i.e. everything except for essentials) was £373 over budget, which would have been even worse if I hadn’t earned £103 from betting refunds which have already been included in my total earnings. All of my overspend can be attributed to my unplanned holiday to Barcelona to watch the England football team.

The next big challenge is to minimise the cost of Christmas as the costs of buying presents, attending Christmas parties and the big day itself can all add up. If I am prudent over the next couple of months then I could well end the year under budget which would be a massive achievement considering the substantial rises we have seen in living costs this year.

My spending on essentials (i.e. Rent, Food & Bills) is £113 under budget despite my rent increasing by £30 per month from June. The majority of this saving was as a result of me using up the contents of my freezer before going on holiday so not needing to buy as much food for those weeks. Another £7.31 of this saving was the result of my experiment to become vegetarian for the week.

My discretionary spending (i.e. everything except for essentials) was £816 under budget during the quarter. The majority of this was due to savings on my car insurance, the car not yet needing a service and using less petrol than I had budgeted (probably because I was on holiday!) which in total saved me £553. There was also £90.22 from betting refunds but I have already included those as part of my Euro 2008 challenge so they don’t count.

So in total I am over £800 under budget so far excluding the stuff I have already posted about on MillionaireAdventure. But I won’t be able to repeat many of these savings for the rest of the year, and inflation increases on food, petrol and bills is only going to get worse in the coming months. What I have done so far has set me up well for the rest of the year, but I need to remain focused on my spending if I am going to have any money left over at the end of the year to add to my total.

Overall my spending so far on essentials (i.e. Rent, Bills & Food) is £8 over-budget as inflation is countering all my money saving attempts that I have posted about on here. However if I had not taken these actions in the last 3 months then I would have been £68.19 worse off so I am still counting those towards my total.

My discretionary spending (i.e. everything except for the essentials) is £158 over budget largely due to problems with my car costing me £574 during the quarter. This is actually quite pleasing as without the problems with my car I would have been under-spent so I am hopeful that I can make this up during the rest of the year.

One of the problems I highlighted when reviewing my 2007 spending was the £798 that I had categorised as misc throughout the year and had no clue what it was come the end of the year. So far I am pleased to report that I have absolutely nothing in misc so I now know exactly where I have spent all my money!

In summary I think I have made some good progress and am confident that if I continue like this I will be under-budget come the end of the year.

Now economists Ian Ayres and Dean Karlan have taken it a step further by launching a new website StickK.com. The theory is that good old-fashioned financial incentives are the most effective tool for motivating people to meet their goals, in this case it’s the risk of losing substantial amounts of money if you fail. StickK.com is a free to join website where you choose your goal, choose your stake and even select who you want as a third-party referee to rule on whether you have succeeded or failed.

Now if you fail to meet your goal StickK.com will donate the money you paid to charity. Effectively you have entered into a legally binding contract, what they call a commitment contract, that hopefully motivates you to succeed and thus win back your money (shame you can’t make more money than you originally staked!).

It will be interesting to see how this site does over the next couple of months as money can definitely motivate people, hence why the majority of us go to work. But to go back to my original gym example all those people that go every week in January are still paying £30-£50 per month when they stop going for the rest of the year, so money is obviously not enough of an incentive for some!

The lack of success in sticking to new years resolutions was backed up in a more scientific study by Professor Richard Wiseman who found that whilst half of those in his study believed they would be able to stick to their resolution, only 12% had been successful come the end of the year. 

As MillionaireAdventure started off as a new years resolution I thought it would be a good idea to follow his advice that I should think through exactly what I will do, where I will do it and when.

So I will pursue every opportunity to become a millionaire and I will write about it at least once a week here on this blog. Here’s hoping that this is specific enough to help me become one of those 12% that succeed.

MillionaireAdventure was a result of a new years resolution to embark on a journey to fulfill my dream of becoming a millionaire. It started well with the blog set up in just a few days and the first couple of posts written, and more importantly the first couple of £’s made!

Then came the news I wasn’t expecting, I had passed the three CIMA finals I sat in November 2006 and now faced just one more exam before I became a qualified accountant. Yes this was great news but it now meant I had 6 weeks of hectic studying to prepare for the last exam, rather than the 4 months preparing for resits that I had expected. This meant I couldn’t dedicate as much time to MillionaireAdventure and although I continued to try and keep MillionaireAdventure going I soon found that I was writing posts several weeks after I had actually made the money. The blog had become a chore rather than a fun thing to do.

When the summer came (or what little of summer there was in the UK) I finally lost the battle to keep the blog alive. I had always hoped that visitors to the blog would write their own comments on my posts but the only comments I received were spam and it became more and more demoralising deleting this rubbish from the blog. My lack of motivation resulted in me failing to keep the WordPress installation that this blog runs off updated and someone took advantage of this to hack the site. I gave up.

Well not quite. Whilst it was easy to walk away from the blog at that point, the millionaire dream stayed with me. So here I am, back for another attempt!

The difference this time is I am not just focusing on making money but to make the blog more interesting I’ll be writing about anything and everything to do with money. If I think it’s interesting and fun then I’ll write about it. So roll on 2008.

Short-term plan 

I have reviewed my spending from 2006 and I quickly realised why I am not already a millionaire, quite simply I spend every penny I earn and some more. So my short term plan is to create myself a budget that focuses on me spending less than I earn. I already know that February is going to be a challenging month for my finances because I am celebrating both my parents birthdays and the girlfriend will expect something for Valentines day. This would normally be one of those months where I borrow a bit on the credit card so the goal is to avoid borrowing anything.

Medium-term plan

I need to focus on developing the website because as more people visit the site then I will start to earn more money from advertising on the site. And as this helps get me closer to my millionaire target the more people that will want to read my blog and thus begins what I will call the ‘millionaire cycle’ proving the theory that money does attract more money.

I will also need to start speculating to accumulate by risking what I have already earnt in investments that can provide good returns. The problem however is that good returns tend to mean that there is more risk involved. I also can’t afford to have money tied up for long periods of time so I will be looking for quick returns which will only add to the amount of risk.

Long- term plan

I am kind of hoping that I’ll never need a long term plan because I would like to be a millionaire soon. So for the time being there isn’t a long term plan.

If you are an early adopter of my blog then I hope you enjoy reading millionaire adventure and I wish you a happy new year!