Friday, 30 November 2012

Frugal Friday...

I've mentioned before I think, that a few years ago circumstances meant that with little warning I found myself taking the plunge into becoming self employed, and our household income fell by a third, overnight. Thankfully, three years before that we had (with the aid of a good friend) found Martin Lewis' fantastically helpful  site, and it's excellent and informative forums, had overhauled our finances and started overpaying our mortgage, but most important of all, we had adjusted our mindset. This was what made the drop in income easier to bear in some ways. As things stood, we were paying around an extra £300 per month to the mortgage, and stashing a good sum into savings too - once those were taken into account, the drop in income didn't actually need to affect our day to day standard of living to a great extent, particularly as along with the drop in income, there were also some drops in expenditure - notably me no longer doing around 1000 miles each month commuting to and from my old workplace.

As commutes go, this one would be OK...
For anyone in debt and struggling to get out of it, looking to bring your household expenditure down to a level which more closely matches your income, or simply looking to improve your monthly cashflow, save some pennies, and learn about budgeting,  I couldn't urge you more strongly to visit MSE if you haven't already. There you will find everything from hints and tips for minimising fuel use in your car, to suggestions as to how you might live more cheaply, to advice on how to find the best price for home, pet or car insurance. If your concern is debt-related, then the Debt Free Wannabe board on the forum is your first port of call, this is just a massive fund of really REALLY good advice, from people who understand your situation. I pop in there occasionally even now - it does no harm to remind yourself from time to time just what true hardship is - there are people posting there in utter desperation, having been in many cases left knee-deep in debt through no fault of their own, but as a result of a partner leaving them unexpectedly, or even, in some cases, through bereavement. Some of the tales are truly heartbreaking - I've been left in tears on many occasions and your heart just goes out to these folk. All though, have finally found a place where not only will they be listened to, but where also they can get excellent advice on what to do - and in some cases more importantly what NOT to do - next.

We truly are fortunate. Yes, our combined income is still some way below where it would have been before, but we are still able to make that - for us - all important overpayment to the mortgage each month. It's not massive, it's true, but it's sufficient that if we continue at the level we are, we shall hope to have the mortgage cleared by this time in 2018 - having paid it off in 15 years rather than the scheduled 25. Saving these days is tricky - there is little spare at the end of each month, but what there is gets stashed away into savings, and we make a point of setting money aside each month towards Christmas, car repairs, and the all important Hebrides trips. We refuse to compromise on the food we eat - I've said before, we will not put processed crap into our bodies simply to save money. Nor will we eat foods that we know have been produced more cheaply by economising on the quality of life of the animal they originate from - so this means no battery eggs or EU pork. We have all we need, and a good many luxuries besides. We don't say we "can't afford" things - as mostly, we could, if we wanted to, but we choose to spend our money elsewhere.

"But I'm HUNGRY! Really I am!"

We are well above the poverty or "survival" line - if you are in doubt about how much survival would cost you, then write down all your absolutely necessary expenditure - the things you HAVE to pay - rent/mortgage, council tax/service charge if you pay it, water, electric, gas. If you have central heating then reduce the figure you currently spend on heating by half and go and put a jumper on. (We spend a combined total of £45 per month currently on gas & electric - and bear in mind our heating is electric too - this costs more to run for the same amount of heat than gas central heating. I refuse to allow the house to get so cold that damp starts forming - this is no good for either the fabric of the building or your own health)  Food - we spend £150 per month tops on food for us and HRH The Cat, and cleaning materials - if needed this could easily be reduced to £100. Travel to work needs to be included, as do basic toiletries - and by basic, you can buy a basic set of deodorant, toothpaste, shampoo and shower gel for under £2 from the supermarket value ranges. Insurances too - failing to be insured correctly is a false economy. Finally if you *need* to run a car (in our case our work commute is far, far cheaper by car than it would be by public transport - in fact, we run two cars for a fraction of the cost that public transport for our commutes would cost - we always joke that in effect MrEH's car is "free"!) then the cost of tax, insurance and a basic maintenance/depreciation budget.  Add the lot together - that figure is your survival budget. You can leave out telephone (a cheap PAYG mobile used for essential calls only would be far cheaper than line rental on a landline), TV (the license alone is £12 per month, before you think about the cost of cable or satellite), internet, any travel beyond that which HAS to be done, makeup, new clothes (Charity shops are excellent these days). All these things are nice to have,  and even the most hardened voluntary frugalista is unlikely to actually give up all of them, but none of them are actually essential.
Categorically NOT a luxury!
Next time you find yourself saying "We can't afford...." or "we can get by, but only just, it's a struggle" stop and think - are things REALLY that tough? When you actually have money, but are choosing not to spend it on "stuff", then frugality is little more than a game, essentially. It may be a means to an end, enabling you to save money on mortgage interest, save for things you want, or simply in order to live more simply, but be careful to make sure that you keep realistic and are prepared to acknowledge that, in fact, poverty and real hardship is a long way off. Apart from anything else, failing to do this is nothing short of a downright insult to those for whom life genuinely IS a financial struggle!



Gill said...

Am in admiration of your gas and electric at £45 a month. Even in summer without the heating on, ours costs almost that.

Robyn said...

Ahh, but remember we're in a flat, double glazed all bar one window (OK, it's crap double glazing, but it's still better than single) and we have no central heating so our only use of gas is cooking. Every Little Helps! ;-)

Scarlet said...

There are blogs I no longer read because reading that the writer 'can't afford to put the heating on' or has 'no money for x,y or z' when they are overpaying the mortgage each month/ putting into savings, an amount greater than my monthly income, is laughable.

Robyn said...

Yes, I know a number of other people who've said the same thing Scarlet -it's just downright insulting to those who are on a genuine income is my thinking. I'm fortunate to be able to overpay - not by a massive amount, true enough, but it all helps chip away. I do try never to lose sight of the fact that it is, at the end of the day, a choice, rather than the genuine hand-to-mouth existence suffered by so many out there. Thanks for reading & commenting!