Thursday, 25 February 2010

Bartering and swapping

I was getting my hair cut earlier, and we were discussing the hairdresser's holiday plans.  She mentioned that to get to her holiday location, she needed another vehicle, ideally a people-carrier to fit six people.  Apparently, in August, at school-holiday time, hiring a people carrier costs a massive £400 for a week!  We discussed whether she could borrow one from someone, and we thought it would be great if she could barter for it, maybe offering some free haircuts plus use of her small car, in exchange for the use of their large car for a week.  I guess such an arrangement would only work in a fairly small community - you would want to either know the other party, or know a friend of theirs - as it would involve quite a bit of trust.  But it would be great if such an arrangement could work.  I think I might ask the person who runs the local oil-buying group - which we have now joined - if he knows of any bartering groups in my area.  If not, maybe we could set something up.   In the meantime, the hairdresser is going to sound people out via Facebook.

Anyone else have any experience of bartering, and if so, how did it work out??

Wednesday, 24 February 2010

Public transport & freedom

I am still involuntarily car-less, but the experiment of  managing without a car is going well so far.  Today, I had to get into town in the middle of the day for a dentist's appointment. For the first time I ever, I took the bus from my village; it was on time, quick, and only slightly more expensive than I had expected.  (My ideas of what buses should cost are somewhat late 1990s...)  I had to get the bus rather early, because of the limited bus timetable, but spent a contented hour in a coffee shop in town, getting quite a bit of work done, and also did some useful errands. Rather than wait for the bus home, which would have involved another two hours out, and would have definitely meant buying lunch, I took a taxi, which was cheaper than expected, and speedy to arrive. 

Somewhat to my surprise, far from feeling restricted by my lack of independent transportation, I felt unexpectedly free, not having to drive, or worry about finding a car parking space or being stuck in traffic.  It was also rather refreshing being early for my appointment, rather than trying to 'efficiently' time my arrival so as to be just on time, as I would probably have done if driving.  I am sure that once I have done this trip a few times, the novelty will wear off, but so far, so good.

Monday, 22 February 2010

Could I manage without my car?

Thanks to some idiotic behaviour by my insurance company – for the sake of my blood pressure I will not go into the details - I do not have a car at the moment.  Anyway, I’ve decided to use the opportunity to see how I get on without a car for a little while.  We live in a fairly rural area, and I had, until recently, never seriously considered whether we might be able to get by on one car long term.

My husband needs his car for work – he has to make visits to patients during the day – so my dropping him off and collecting him in the evening won’t work.  I work from home several days’ a week.  At least once a week, I get the train to London from the station about 10 minutes’ drive, and 4 miles, from where I live.  On at least one other day, I need to get to a nearby town in the morning. 

Until yesterday, I thought that there was perhaps one bus a day in each direction to my nearest town. However,  I have discovered that there are three buses a day each way, and they go first to my nearest small town – where the station, dentist, supermarket, public library etc are – and then on to the much bigger town. The bus even stops a few minutes’ walk from where my sister lives! 

So I am considering reasonably seriously whether we could sell my car, and get by pretty well on one car.  

My thoughts so far are as follows:
  • On days that I go to London,  J. already usually drops me off at the station and collects me in the evening.  (This saves us about £6 a day in parking costs, and is reasonably convenient for him.) So not much change would be needed there, except that he would always need to collect me, or I would have to take a taxi home if he were not available.
  • On days that I go to other places to work, I would need to plan my journey ahead, and either a) get J. to drop me at the station or bus station b) take a taxi part or all of the way, c) get the bus into my local town and take a bus or train from there, or d) for major expeditions, maybe hire a car for a day.
  • If I were working at home and either needed or wanted to make an expedition into town, I would need to time my outing to catch the bus either both ways, or bus one way and taxi back.
  • We might occasionally have to make use of online supermarket shopping, something we have not really done so far. 
  • For holidays, evening or weekend outings, we already generally use J's car as it is more comfortable than mine anyway, so no change would be needed there.
  • The main difficulty I see is in my going on a spontaneous outing during the day, or in getting to certain work locations if they are far from a station or bus, but perhaps I just need to become used to taking the bus, or using taxis.    

It is very nice having my own transportation, but I am not sure whether that comfort and convenience is worth the nearly £3000 a year I estimate that my car is costing me.  (I do not have a car loan, but that figure takes account of car tax, insurance, servicing costs, petrol, and an estimate for depreciation.) 

I wonder if it is mad of me to think that I can manage without a vehicle, living where I do, or whether this could actually work?  Further consideration is definitely needed, but advice or comments from others would be welcome....

Wednesday, 17 February 2010

The cupboards are feeling bare...

I've mentioned that we've implemented a cash food jar each week; although we've managed to stay within budget - £50 - every week so far, one of the side effects is that we have been using up some of the odds and ends in our larder and freezer, to keep within our cash limit.

However, I'm now starting to panic slightly at the fact that our stores of food are running unusually low; I suppose that the only time this would actually matter would be if we were snowed in, or overtaken by some other natural disaster, and  I think that if that happened, we'd find enough to eat for quite a few - probably rather dull - meals. In the meantime, I should probably try and get used to our new 'just-in-time' system.....

P.S I am not sure whether £50 a week is a lot or a little, for two people (and one cat)?  It is definitely less than we were spending before we started this system.  We have included small-scale entertaining and wine in that figure, and lunches, as we pack these ourselves.   Any meals out come out of our 'fun' jar.

Tuesday, 16 February 2010

A Myers-Briggs practitioner writes about types and attitudes to money

Today, I have a guest post from my fellow UK-based personal financial blogger, Anastasia at  Living on a Budget on a subject of great interest to me.  Among her many other qualifications, Anastasia is qualified as an MBTI practitioner, and so I asked her to write about the impact of a person's Myers-Briggs type on their attitudes to money.  (I'm an INFJ, and what Anastasia says below pretty much rings true to me....)

Many people do not handle money effectively. But why? Laziness? Ignorance? Apathy? Fear? Can so many people really be so inept at handling money? Or is there something else? Do other factors, such as personality type and gender, also play a role?

The question is an intriguing one… 

Myers-Briggs Type Indicator (MBTI) was developed by Isabel Myers and Katherine Briggs to try and understand the differences and similarities in human personalities. The test is based on the work of Carl Jung, a Swiss psychologist who believed that personality traits are innate. Each year, more than one million people take the MBTI, which analyzes people by these four ranges of personality traits.  

Thinking-Feeling: This range focuses on how people make decisions. Thinking (T) people prefer to decide on the basis of logic, analysis and reason. They tend to follow their head rather than their heart, whereas Feeling (F) people usually decide first on the basis of personal preferences, second, on the basis of logic. 

Judging-Perceiving: This range suggests the type of lifestyle and work habits people prefer. Perceiving (P) types are more spontaneous and seek out additional information and options. Judging (J) types tend to be planners, preferring more order and structure.  

Sensing-Intuition: This describes how people take in information. Sensing (S) people prefer concrete facts, organization and structure. Intuitive (N) people tend more to hunches. They want to know the theory first before deciding what facts are important.

Extrovert-Introvert: This category focuses on how people get their energy. Extroverts (E) are more energized by interaction with others, Introverts (I) by the inner world of reflection, thought and contemplation. 

One survey found that based on the Myers-Briggs Type Indicator (MBTl) two preference dichotomies are especially relevant to personal financial management: the Judging / Perceiving, and Thinking / Feeling preference combination. 

The Judging types of both genders are more interested in and more savvy about managing their finances. They actually enjoy managing their finances more, and are better diversified in their investments, than the Perceiving types.  

The Feeling group is less likely to own a property, have a brokerage account or measure their progress. 

How else could your preferences affect the way you deal with money? Let’s have a look at each preference and its implication:

E - Extroverts would rather deal with money in a social situation. Prefer face to face banking rather than on line, for example. Pictures of the stock market traders that I've seen on TV seem like prime examples of Extroverts (and an Introvert's worst nightmare). 

I - Introverts need down time away from people in order to recharge. This doesn't mean that we don't like people, so I'd bet Introverts deal with most of their money stuff online. Online budgeting communities like Wesabe and blogging are both good examples of how Introverts can interact with other people, and still get their down time. 

N - Intuitive people probably play the stock market, where their inclination to find patterns for the future can get a workout. 

S - Sensing types are probably more into automatic deposits into a retirement funds, ISA, or other high yield but predictable returns. (I'm also guessing more Sensing types end up with a sizeable retirement nest egg.) 

T - Thinking types probably make the best math based financial decisions. When they do have to pay off debt, they work on the one with the highest interest rate first, and then work their way down. Or they would be at least inclined to apply some sort of debt repayment method rather than “just somehow” pay debts off.  

F - Feeling types, however, probably buy stocks on how much those stocks are ethical, environmental etc. (depending on values most important to those people) 

J - Judging types have a plan. They have a budget, and have mapped out how much to save, spend, and invest for their goals. I think Judging types would do the math to see how much money they would save (or lose) by taking out cash on a very low / 0% interest card, and putting that money in a savings account (shtoozing), making only minimum payments until full interest rate kicks in. 

P - Perceiving types probably would prefer very flexible investments with immediate access and no strict deadlines.  

It is important to know and understand your MBTI type as it can help you to make decisions based on your personal strengths rather than on what other are telling you! 

Wednesday, 10 February 2010

Financial Capability volunteering

In a recent post, I mentioned that I had plans to do some different things now that I have left my full-time job, and am working freelance.  One of them is becoming a part-time volunteer financial capability adviser with the Citizens' Advice Bureau.  This is part of a fairly new UK scheme whose purpose is to train individuals on good financial management.  

I've always thought it odd that in the UK, at least, we aren't generally trained on money management at school or university, so as soon as I heard that this scheme existed, I decided I wanted to take part. I had previously considered training as a debt counsellor, or general CAB adviser, but I think I will find it more satisfying to prevent people from getting into debt in the first place, and to help them plan for their futures.

I start my training next week.  Apparently, once I'm trained and have observed a few sessions, I am likely to be presenting to groups in the Armed Forces, at Colleges of Further Education, and some charitable bodies.  

Sounds like fun to me - I will report back in due course...

Monday, 8 February 2010

Carnival of Personal Finance 243 Valentine's Day Edition

Get Rich Slowly is featuring this week's carnival, and I'm delighted that Thursday's article on debt and self-improvement was J.D's favourite submission in the debt category.  Shame he didn't like my writing style, though I blame the lawyer in me for my wordiness. Must try harder next time!

Anyway, here's a link to this week's carnival:

Friday, 5 February 2010

Japanese Women and their secret savings

I've long been intrigued by the fact that in Japan, it is reportedly standard for women to control the family budget, giving their husbands pocket money.

Having read some more about Japanese women and money, I've learnt a few things:

  • Japanese housewives tend to control the family budget, as this is seen as part of the role of the homemaker.
  • Food shopping in Japan is often done on a 'little and often' basis. This seems to be partly because of an emphasis on the freshness of food, limited storage space in small flats, but also because of a concern about avoiding waste. It seems that the Japanese would rather pay slightly more per unit, than bulk buy and then throw food away.
  • Credit cards are much less-used than in the West.
  • Women have traditionally made savings from their shopping budgets which are kept secret from their husbands, and the rest of their family. This money, called 'hesokuri' which may eventually be used to buy stocks, or property, is often kept in cash, in their homes.
  • When couples marry, they are both expected to have saved money, often through living at home with their parents while earning, until they marry.

See recent Bloomberg articles, however, on the fact that Japanese women have had to dip into their savings, over the last year.

Thursday, 4 February 2010

Is debt ok if it leads to self-improvement?

Earlier this week, I read an article in the London Evening Standard, entitled, 'Debt Hurts but it still pushes up the ladder'.  The article discussed a book by John Lanchester about the financial crisis, 'Whoops, Why Everyone Owes Everyone and No One Can Pay'.
The reviewer, Sarah Sands, suggested that, contrary to Lanchester's view, debt is not necessarily a bad thing.
She argues that she would still argue school-leavers to go to university, despite the debts that might involve.  I agree with her on that score, I suppose partly because I think that an education is an irreplaceable experience, but also because the debts involved, at least in the UK, would usually be fairly light.
However, Ms Sands also cites the example of  the writer Robert Harris, who bought an expensive car, impliedly on credit, to spur on his efforts at writing his next book, as well as of a young married couple whose career ambitions are fuelled by the debt they have recently taken on to buy their own home.  These examples do worry me; whilst I am all in favour of home-ownership as an aim, a mortgage should be proportional to one's means, and a large mortgage sounds to me not like a motivational tool but a potentially weighty burden.

Although there may be an adrenaline-based, fear-driven motivation to be gained from a fierce necessity to earn more money, I would argue that that is generally unsustainable, and that motivation that comes from within, from an interest and pride in what you are doing, is likely to be more genuine and more sustainable over the long-term. 

Quite apart from the fact that heavy debts of any kind minimise, if they do not remove, one's freedom of action, often preventing a voluntary change of job or relocation, what about involuntary changes?  Suppose that an ambitious, debt-laden person loses their job, or becomes ill; what is to happen to them then?  
My suggestion would be that greater satisfaction would be had from minimising debts, and building a financial cushion, so that work can be enjoyed for more than its money-earning possibilities.   Stability, whether financial or otherwise, leads to choices and freedom, and the prospect of a more peaceful and enjoyable life, if possibly a less exciting one.

Wednesday, 3 February 2010

A heating oil collective

We got a flyer through the door yesterday, inviting us to join a local - heating, not olive - oil collective. Not to sound too Cold Comfort Farm, but 'there's no gas in the village', so for the last few years we have had a direct debit with an oil provider who tops up the oil tank regularly. I'd been planning to check out oil prices and suppliers again, as part of reveiwing all our direct debits, so was interested to hear about the local scheme.

The collective is run by someone in a nearby village, who takes advantage of representing a large group of individual buyers, now around 150, to shop around and get a discount on the standard price. He's also keen to reduce the impact of having oil tankers making frequent trips to individual buyers; I completely agree with him on that, and is exploring a collective boiler servicing scheme, another excellent idea.

I will be filling in the membership forms shortly; it looks as though there are discounts to be had, and it is the sort of initiative I would like to join in on.

It made me wonder what other collectives might exist, or be worth setting up, for joint buying?

Monday, 1 February 2010

Using up odds and ends in the bathroom cabinet

Partly as an exercise in postponing buying anything, and also in the interests of de-cluttering the bathroom, and the cupboard under the kitchen sink, I am trying to use up all sorts of odds and ends before buying new toiletries or cleaning products.

I keep reading frugal tips suggesting that all you need to clean your house - and possibly yourself?! - is a tub of bicarbonate of soda and some white vinegar, but I haven't reached that stage yet.

I do, though, avoid name-brand house-cleaning products, and buy supermarket own brand instead, often from Lidl, and in as large a pack as possible. I also try to buy a small number of fairly generic products - i.e a cream cleaner, multipurpose cleaner, bleach and glass cleaner, but despite my best efforts the cupboard contains various other odds and ends. My aim is to use, or throw away, all these, and try to replace only those that are really necessary.

On the toiletries and cosmetics front, I tend to buy those things that I think I need, but pick up a lot of freebies on my travels. I often think that I'll use them next time I travel, but of course then I pick up more, so it is time to use up the odds and ends, and make a fresh start. I also sometimes buy extra bottles of shampoo on 'buy one get one free' offers, and it is time to catch up with those, before acquiring any more. I've emptied out the drawer containing these bottles and tubes, and begun to work my way through them, throwing out those that are no good to me.

I don't expect to save very much money doing this, but it is better than nothing, gives a virtuous feeling, and will clear some space.