Sunday, 29 November 2009

Christmas present thoughts

I suppose it is because I have been in discussions with my family about Christmas plans, and have just ordered a goose for Christmas dinner, that my mind turned to present-buying. I am keen not to accumulate too many "things", ior to clutter other people up with them unnecessarily, but there are certain gift ideas that I do like. (These are things that I've enjoyed being given, and will occasionally ask for; I'm noting these rather than gifts I have given to others..)

-Consumables - luxurious food items are nice, including pickles, luxurious, though preferably small, chocolate items, mustards, homemade jam, honeycomb honey, Chinese tea. Homemade jams, truffles and so on are lovely to receive. These are the sort of things which I would not usually buy as part of my everyday shopping, but which it is good to have in stock.

-Toiletries - I know it is a cliched gift, but I really like to be given nice-smelling and beautifully packaged soaps, bath oils and lotions. I think that anything for the face or hair is best avoided, unless specifically asked for, as I think many people have their own preferences about such commonly-used items.

-Tights and socks - I sometimes ask for colourful, luxurious or patterned tights, or extra-soft socks. Sounds odd, but they are items which wear out quickly, so a supply of appealing replacements is always good to have.

-Padded coat hangers - although the plastic ones are serviceable - I have completely purged my wardrobe of the hateful wire ones- padded hangers are much better for jackets and dresses, and give a sense of order to the wardrobe.

-Small kitchen items - again, this may be strange, but I have enjoyed being given tea towels, pastel coloured washing up cloths, unusual washing-up brushes, colourful spatulas, and storage jars.

-Books - I am less keen to receive the latest paperbacks, as I am likely to borrow those I am interested in from the library, but it is always nice to receive: unusual books in a subject of interest, particularly if rather obscure, other books by an author I am keen on, and do not already own.

-A single large gift may be preferable to lots of smaller things; this year, my family are discussing buying one collective present for each member of the family, which they have chosen, or at least offered suggestions for, to simplify matters.

Monday, 23 November 2009

Spending my allowance - and a new coat

A couple of weeks' ago, I collected my new coat. I had this made for me by a tailoring service. This sounds very extravagant, and it was certainly expensive. It is early days, but my initial view is that this was a worthwhile investment. (The style is a fairly classic, hopefully understated military one; sharp shoulders, double-breasted, and the coat reaches to mid-calf level. The colour, which is not understated, is a very bright blue.) And because it was made for me it fits me really well, including properly long enough sleeves, which does make quite a difference.

Being solidly wool, it also feels very heavy, rather like being wrapped in a blanket, which is very comforting. (I mentioned this to a friend, who said, and knows from her work, that weighted blankets are often used in psychiatric treatment. I can see this would help.)

All the traditional style books I have read suggest that it is worthwhile having a really good quality coat, and Mme Dariaux, whose book I have reviewed here, recommends a very good quality and brightly coloured coat. My last coat was deep red, with a fake fur collar, and I wore it happily and more or less constantly for about seven years; it is still wearable, but showing its age rather, and had to be mended last year because of a very worn sleeve.

Having spent so much of my allowance on a coat, I will be looking after it properly, with a view to wearing it for many years to come. This means hanging it up on a good hanger as soon as I take it off, and brushing it carefully. At the moment, I am going so far as to put it back in the breathable garment carrier that the dressmakers gave me, after each wearing, but we will see how long that habit lasts!

I will also not be buying any other new clothes for a while, so will have to make the most of the clothes I bought last year and early this year, or sometime before then. I acquired a good stock of shirts last year, and having read India Knight's tip about the use of spray starch in 'The Thrift Book' am hoping to bring some life back into them.

In terms of colour coding, I have a lot of black and purple in my wardrobe at the moment, so various options for reasonably coordinating outfits. (Mme Dariaux's tip, which I have read elsewhere, is to match winter outfits with your winter coat. I can't quite manage that at the moment, but am hoping that the colours I have coordinate reasonably well.)

In the short time that I have owned my coat, two strangers in shops have admired it enthusiastically, so I am encouraged in my belief that I have done the right thing.

Wednesday, 18 November 2009

The case for personal allowances in a joint financial set-up

I will be writing more about budgeting in due course, including some expert input, but in the meantime wanted to write about personal allowances, as I seem to have had conversations about them with several people recently.

I think that if you are part of a couple, it is a very good idea for each person to have an allowance for their own spending, outside shared household spending. (This is assuming that your finances are generally joint, of course.)

My reasons for this are:

-It allows people to spend money on what matters to them without feeling that they need to justify their purchases to their other half. (I buy more clothes than my husband does; he buys more books than I do, but his habits don't bother me, and hopefully mine don't alarm him, because we each know that this spending is within agreed limits.)

-It encourages spending on things that each of us wants to buy. Illogically, but possibly not entirely surprisingly, before I had an allowance, several years' ago, I used to feel that buying an item of clothing for about £30 was pretty much always acceptable, but I would generally have hesitated in spending more, even for something really worth having.

I wouldn't have considered not buying anything for months, and then buying something costly, even though this might have added up to the same thing in terms of expenditure. Now, though, if I want to spend money on a really expensive item, or save up and buy several things all at once, that is up to me. Also, there is no need for the item to be useful, if it is what I've decided I want.

-It is a way of separating out personal spending from everything else that needs to be paid for, and makes it easier to keep track of your money.

How to track your allowances:

-Until the recent bank charges issue I wrote about with Halifax, we had separate bank accounts into which our allowances were paid, from our joint account. Now, though, we have closed those accounts and set up 'jars' within our offset account into which our allowances go automatically. I think the important thing is to be able to see and keep track of the money somewhere separate from the household accounts.

How much should it be?

-I can't really answer this; it depends on how much you earn, what you have decided it needs to cover, how much income you have, and how much you want to spend. For clothes allowances, I have heard the figure of 10% of net income suggested as an appropriate figure.

Monday, 16 November 2009

A Christmas craft-making event

Last week, we went to a Christmas craft-making evening at a nearby bookshop. The purpose was to make Christmas decorations for their shop window, and to learn how to make them for ourselves. Some of us made snowflakes from pages of remaindered and damaged books, wreaths from polystyrene and yarn, and others made robins from scraps of fabric. An appealing thing about making these items was that they were all quite simple. At the beginning of the evening, many of us in the group were rather self-conscious about our craft-making abilities - definitely me included - but we all relaxed as the evening wore on, and mince pies and wine were consumed, and ended by feeling quite pleased with our efforts.

Thursday, 12 November 2009

'The Thrift Book' by India Knight

India Knight, who wrote an earlier book 'The Shops', about her love of shopping, writes here of how she recently came close to bankruptcy, from a lack of attention to her money, rather than low earnings, and thereafter changed her spending habits. She is also keen to encourage preserving resources from an environmental point of view, and her writing is influenced by that.

This book is largely about living well without spending huge amounts, and includes sections on food, clothes, beauty products and so on. It also includes a chapter on personal finance where she explains important financial terms and concepts in a very basic way.

I have a different sort of life from the author in many ways; I do not live in London, and have never had her self-confessed phobia about financial issues. However, there were quite a few ideas I liked, and some useful tips.

On clothes, she recommends buying a small number of quality items of clothing, including possibly vintage clothes, and looking after them well. (She reminded me of the existence of spray starch, and I have now bought some to use on my shirts; it definitely makes them feel newer.) The Lakeland home dry cleaning kit she mentions is something I will definitely be trying out.

On making things, she pointed out many inspiring websites and blogs.

On beauty products, she includes a section on how to look expensive, and useful information on home hair dyeing and the differences, or lack thereof, between some cheap and expensive make-up brands.

She also writes about growing food; this is something I am keen to start doing, but am rather nervous about, and her approach, and the websites mentioned, made me feel this was definitely something worth attempting.

On eating out, she encourages people to go for a set lunch at a really special restaurant, rather than either spending a fortune on dinner at a fancy place, or a fair amount somewhere less inspiring.

In summary, I did enjoy this book. I thought that her perspective, as someone who has come close to bankruptcy, was an interesting one, although many of the tips would only really apply to those who had been used to a high-spending, city lifestyle, involving a lot of shopping and eating out. It would be quite useful for anyone not very interested in, or familiar with, personal finance, as a starting point. Although it is very up-to-date, I actually much preferred 'Orchids on Your Budget', which I found more inspiring.

Tuesday, 10 November 2009

A weekend away

Last weekend, I met a friend for the weekend. We met halfway between our respective homes, which are very many miles apart. We had both decided that we did not want to spend too much money, while having as good a time as possible, and did the following, to this end:

-My friend found a hotel with good reviews and a reasonable two night with one night's dinner deal, and booked us in for that. (It was a very nice hotel, and the food, especially breakfast, was excellent.)

-She also suggested a book-swapping arrangement; we each bought some extra books with us, so got to read some different things from usual, without needing to buy them.

-I had initially planned to take the train, but discovering that even by booking ahead the cost would be double that of my petrol, I reluctantly decided to drive. (I realise this is not ideal from an environmental point of view, though my car is at least small and pretty fuel-efficent.)

-Driving would mean of course that I wouldn't be able to drive or listen to my ipod, so I rented the audio book of ' The Small Bachelor' a P.G Wodehouse novel, from the library. This was excellently well read and entertained me for very nearly all my journey there and back, and my husband is now listening to it on his commute. £1.50 well-spent.

-For once, I planned ahead and took sandwiches and some extra apples for the journey so that I would not need to stop for food.

-While at the hotel, we took full advantage of the very good English breakfast, which it suited us to eat late, meaning we did not need lunch.

-Instead, we had afternoon tea back at the hotel which took us through to late evening and a plate of cheese and bottle of wine. (I realise that from a nutritional point of view, this sounds pretty poor, but one can't have everything, and this was part of the fun.)

-We were staying a little way out of town, but walked in rather than driving, so as to save the bother and expense of parking, as well as getting some exercise and seeing the sights.

Monday, 9 November 2009

Wasting money on a taxi

Last week, on fireworks night, we arranged to go to the fireworks display in our village with my sister and brother-in-law. As I was due to be in London that day, and had a fairly late meeting, we arranged that I would catch up with the others later, if I missed the train home which would get me back in time to see the fireworks. My meeting did, as expected, end late, but instead of accepting this, and settling for catching a later train, I asked a taxi driver how long it would take him, and how much it would cost, to get me to the station from which my train left. (I usually take the tube.) His answer suggested that we could make it, so I decided to make the attempt. In fact, the traffic was so bad that I ended up missing the train I was aiming for, and catching exactly the same train I would have caught if I had taken the tube as usual. And the cost was several pounds more than the driver's estimate.

I thought later about what I could learn from this, and decided that my mistake had been my unrealistic expectations of the time and cost involved in getting to where I needed to be. I should, had I been sensible, have accepted that I could not make it home in time, and carried on on that basis, but I had attempted to solve my problem with money, and had ended up just wasting it.

Friday, 6 November 2009

The Millionaire Mind by Thomas Stanley, and home-buying

This was the final element of Thomas Stanley's book that interested me, particularly because most people imagine that the wealthy live in huge mansions with swimming pools, and hundreds of bedrooms, and that is evidently not the case.

-Most of the wealthy people Dr Stanley surveyed for his book had lived in the same home for many years.
-Over half of them lived in houses with fewer than four bedrooms.
-They tended to live in 'nice neighbourhoods', where the houses were not newly built. (He describes them as old houses, but this is by American, not UK, standards!)
-This was partly because these areas tended to have good state schools, but also because better historical price information would be available for areas with older houses.
-These people would not take on large mortgages in order to buy a house, in the hope of benefiting from future price rises, because of the risks involved.
-They would not take advantage of a high-earning year or two to sign up for a huge mortgage.
-They would not generally build their own houses, unless they had knowledge in this area – lawyers were particularly averse to doing so! - because of the time, risk and expense involved.
-They would take their time to research an area, and never buy a house in a hurry, particularly not in an unfamiliar geographical area even if they had to relocate for work.

So, in summary, they generally buy old, reasonable-sized houses in nice areas, near good schools, and intend to stay there long-term rather than trying to make a profit and move on. And barely a swimming pool in sight....

Wednesday, 4 November 2009

Cold cream and vanishing cream

Looking for inexpensive toiletries, I recently discovered the very reasonably priced Boots range of 'original recipe' cold cream, vanishing cream, and so on, which apart from the price, partly appealed for the old-fashioned names. (They don't seem to have an equivalent range for men; I am not sure what this could consist of, except possibly for shaving soap and maybe hair oil, which sounds very unappealing, and always seems to be used by unscrupulous and vain characters in 1920s and 1930s literature.)

The retro Boots range smells good; although the cold cream is rather solid, it is beautifully packaged, in black-lidded glass jars and green and cream boxes with lovely swirly writing.

Monday, 2 November 2009

The World's Greatest Money Maker: Evan Davis meets Warren Buffett

I watched the programme where Evan Davies met Warren Buffett, which was on BBC 2 last week, with some interest. I only knew a few things about Mr Buffett, apart from the fact that he is currently the richest man in the world, is known to be eccentric and to favour a simple way of life.

Although the programme neatly set out the Warren Buffett approach to investing, the things that struck me were the following:

-His investment strategy seems to be amazingly simple, and to involve a great deal of common sense. My lay-person's summary of it is that he believes in buying a small number of stocks which he has researched thoroughly, and where he understands what the company does, and holding those stocks for a very long time. He cited 'The Intelligent Investor' by Benjamin Graham as a key book. (There were some aspects of his strategy, involving insurance companies, which seemed more complicated, however.)

-In some cases, he buys whole businesses, in which case he appears to adopt a hands-off management style, and to be full of praise for his managers; those Evan Davies spoke to seemed genuinely delighted by Mr Buffett's public expressions of his approval.

-He clearly knows who he is and is supremely confident – he came across as someone who is extremely good at what he does, and enjoys it, and doesn't need to pretend to be anyone else. He seemed modest about his peculiar talent, however, taking the view that some people are good at making money, and others are good at singing or other things.

-He is evidently a creature of habit – one of his colleagues said that he was someone who worked out what suited him and then stuck to it; that seems to apply to both working practices and to his eating habits. (He prefers to go to a particular steak house in Omaha, where he always orders the same meal.) It seemed that he had tried to simplify decision-making as much as possible, in many areas of his life.

-He knows what is important to him and what makes him happy – he said that he lived in the same modest house he has lived in for the past fifty years because he likes it and it suits him, and he could not see that he would be happier anywhere grander. 'If I thought it would make me happier, I would move'. Also, he was prepared to spend only a small amount of time with Evan Davies, because he had his order of priorities, and more important things to do in the limited time alive he had calculated he was likely to have left.

-He does not seem to need to show off – his office is in a very un-showy location, and he has a small staff, and an ordinary car. About charity donations, he said that he did not feel the need to leave his name on a foundation, saying that the ability to name buildings was a valuable asset for charities. They need not waste this on him, as he would leave his money to charity anyway.

-His children seemed to live normal lives, and to have no expectation of inheriting money from him, and to be more than happy with that. They were amused by the reaction others had to finding out who their father was.

In summary, I thought that Warren Buffett was an interesting person; Evan Davies summed it up well by saying that was sometimes exceptionally ordinary, and sometimes deeply unconventional. While I have no ambition to be the richest person in the world, or anywhere close, there were some aspects of his philosophy and approach to life from which I felt something could be learnt. I will not, however, be adopting his coca cola and steak diet, nor moving to Nebraska!