Penny Farthing

From Headlines to Hard Times: I watched Ed Mitchell tell his story

2010-10-01T13:58:00.007+01:00

This week, I went to a conference for Money Advisers working in the charitable advice sector, at which one of the speakers was a former tv journalist, Ed Mitchell, who, because of alcoholism and debt, became homeless for a while. It was very interesting to hear the perspective of someone who was well-educated, and successful in his career, but despite this lost his home and had to file for bankruptcy.

Mr Mitchell, who told his story eloquently and in places humorously, identified one of the reasons for his situation as being a dislike for personal finance generally, and another, a belief that life would be 'all boom and no bust'. Therefore, he never saved money from his high salary and so when he lost his job, was forced to depend on frighteningly accessible and expensive credit to survive.

He has now recovered from his alcohol addiction, and has a flat, thanks in part to a documentary - 'Saving Ed Mitchell' and also to sales of his book 'From Headlines to Hard Times', which describe his experience. (I will now read the book!)

It seemed to me that this story is an answer to those who think that earning a high income - especially life as a television celebrity or sports person - is in itself the route to financial security.

Losing weight - and learning to focus?

2010-09-23T16:03:00.008+01:00

I've recently started a weight loss plan. I am counting calories and eating between 1200 and 1400 calories a day, with a view to losing an initial 9lb. Once I reach that target, I will review and decide whether I would like to lose any further weight. I am not fat, being an average weight for my height, but I once was slim, and would like to be so again.

Leo Babauta, in 'The Power of Less'says that when acquiring a new habit, you should focus on it for 30 days, and not try and make any other changes during that period. I had never counted calories before I started this plan - 17 days' ago - so consider this a habit I need to acquire. So far, I am making quite good progress with the plan, and have lost over 4lb without feeling overly deprived. I noticed, though, that after a fortnight or so this initial success made me feel quite euphoric, and I instantly started thinking about all the other things I could do - start exercising, start learning Korean, and so on.

However, I'm convinced that Leo Babauta is right; as soon as I start thinking about those other new habits or projects I might start, I can feel I am losing interest in my weight loss goal. So I am telling myself repeatedly that 'after 30 days' I will start thinking about those other things, one at a time. In the meantime, I won't distract myself with any new projects until the 30 days is up. Though my weight loss plan may still be ongoing after this time, it should by then be sufficiently automatic that I don't need to think about it too much.

After all, this is the weight gain of a dozen years - so really, concentrating on losing it for 30 days does not seem unreasonable!

Amazon.co.uk Widgets

TV programme call-out

2010-08-27T16:02:00.003+01:00

I've been contacted by a television company who are planning a programme about people with unhealthy relationships with money. In case anyone is interested in applying, here are the details.....

Do you know someone whose spending is way out of control?

Or are you living with someone whose penny-pinching is making life a misery?

Or perhaps you yourself just can’t get a grip on your finances ….

Well, a new series is being developed for Channel 4 that aims to sort out unhealthy relationships with money whatever the problem.

So, if you’re fed up with scrimpers, or frightened of dire debt,
and are over 18, this is the show to teach you about smart spending, healthy saving, how to manage your money and still have a life - despite the credit crunch!

To apply to take part, email money@endemoluk.com and you’ll automatically receive an application form which you can return either by email or to
MONEY, ENDEMOL UK, SHEPHERDS BUILDING CENTRAL, CHARECROFT WAY, LONDON W14 0EE

Take control of your money, don’t let it control you!

Remarkable will use any information provided by you for the purposes of selecting participants for the programme and will only share information with Channel 4 and any independent contractors involved in the programme.

Autumnal weather, and the urge to splurge

2010-08-26T21:47:00.003+01:00

Autumn is in the - very chilly - air, and I'm feeling restless and spendthrift. The autumn Boden catalogue has come through the letterbox, and while I've not been tempted by a catalogue in a long while, suddenly I want something on every other page of this one.

This evening we went out for a mid-week supper, again for the first time in a while. It wasn't very satisfying; we visited an Italian chain we used to frequent quite regularly in the bad old days of being much more stressed and in need of treats than we generally are now. I felt slightly annoyed afterwards that we had spent money on a rather average meal, and that we could have made something nicer at home.

Apart from the weather, and darkening evenings, which do bother me, I'm not entirely sure why I feel inclined to spend money at the moment. Partly, I think it may be a back-to-school feeling; I have to keep reminding myself that I am not about to return to a corporate job I don't enjoy, but for which I feel I should have a new Autumn wardrobe as a small compensation. In fact, J. and I are about to have a week off, after which life should revert to its current varied pattern, just with worse weather. And for which the clothes I have will, for the moment at least, do perfectly well....

My birthday treat

2010-08-22T11:28:00.006+01:00

It was my birthday this month, and I decided to do something a bit different. For a while, and especially since my friend Polly's post about gardening, I have been wanting to start growing vegetables. However, the space in my garden where I would do so was cluttered with awkward to remove plants, like mint, which had overtaken most of the patch. J. and I between us felt overwhelmed by the task of dealing with it.

So, as my birthday treat, I invited my family to a 'gardening day'. Between us, we dug up all the mint. (I'm afraid that I lacked the bodily strength to do much of the actual digging, which was largely done by the male members of the party.) We also cleared some large shrubs, my father pruned many bushes and trees, and we stuffed bags full of the resulting rubbish.

In between our labours, as it was a gorgeous day, we dragged the dining table out into the garden - we have no substantial garden furniture - and had lunch there; my mother and sister had made goats cheese and tomato tart, roast chicken and salad, with meringues and chocolate ganache to follow. Heavenly. The table was decorated with a bunch of flowers J. picked from our garden, and some my parents had brought from theirs.

I had asked for no presents this year, partly as I was asking for help in the garden instead. I did get some lovely presents, though: some books, a pair of fuschia gloves and a purple 'moc croc' wallet that I had bought on holiday and given to J to wrap up, and managed to forget about quite successfully in the meantime, some perfume.

My favourite present, though, was one my father made for me. Following the gardening theme of the day, it was a set of seed markers, made of wood and painted in delicate greens, greys and blue. The paints were testers left over from when my parents painted their house. I cannot think when I was last given a home-made present, and I absolutely loved it.

By the end of the day, we had sowed rows of lettuce, radishes, Swiss chard, and a pot full of rocket. The rocket and chard at least are looking promising at the time of writing, although the other seedlings seem to have suffered after a bout of torrential rain earlier in the week. I am definitely inspired to keep going, though.

Money versus time taken to earn it: I think I have finally 'got' it

2010-08-10T10:55:00.003+01:00

It is a reasonably common piece of personal finance advice that it helps to think of money in terms of how long it would take you to earn the price of an item or experience that you are considering buying.

I've read this tip often, and made some use of it, but found it of limited use when I had a full-time job. It was an intellectual rather than emotional understanding. I had to go to work exactly as much anyway, regardless of how much I spent, I had some spare money, and buying the treat made me feel - albeit very temporarily - better about life and about my job.

Now, though, partly because I have just read 'Your Money or Your Life', which I will write about more later, and partly because I'm now dependent primarily on my husband's self-employed income, this suddenly makes a lot more sense. It has really come home to me that for each say £100 spent, this equates to a unit of his time that could either be saved, or used to buy time off for him at some later date.

If I spent say £10 a week on sweets, coffees and the like, which would not be at all difficult, it would take him more than a day a year of hard work to earn the money to pay for my treats. That really horrified me, as it feels like a terrible use of J's time and energy - I think I have now 'got' this concept. I'm not saying I'll never buy a coffee or packet of sweets again, but I hope I will only do so where I really want to, and as a treat, rather than as a habit.

Correction: it would actually take well over 2 days for J to earn the money for my treats, at this rate. (I knew this really, but somehow could not compute!)

I made a short, but sweet, list of my top possessions. What are yours?

2010-07-30T17:59:00.002+01:00

I have been re-starting my de-cluttering project again recently; our house looks much better these days, but I am sure that there are still some things that we could do without. As part of this, and also while thinking about materialism, and home improvements, I have given some thought to what are my top ten possessions. Not that I'm planning to get rid of everything else, but it seemed worthwhile to think about which, of my possessions, I really want to keep. Partly, this was a useful reminder of how few of my belongings really matter to me.

Here's what I came up with - see that I didn't even get to ten:

My engagement ring.
The blue coat I had made last winter.
A silver christening spoon.
The armchair which belonged to my great-grandfather.
The portable writing-desk my grandfather gave me, which belonged to his aunt.
My Tod's handbag (a 30th birthday present)
My bed, with the headboard a friend made for it.
(Maybe) my apple laptop.

And that is actually about it. Is that odd? I would miss all my many books, but in a way it is not so much the physical books themselves that I need, as the memory of them, and hence the ability to find the information they contain again. I don't value books as objects in themselves, very much.

The temptation to splurge on 'projects' - or spending money on home maintenance

2010-07-27T11:15:00.008+01:00

I am struggling with the urge to buy things at the moment. It is all very well for me to get our day-to-day bills down to a minimum, which I've proudly done - and the process continues; yesterday J. negotiated a better deal for us for phone and internet for the next year - but that is of limited use if our one-off spending is high. The problem for me comes in 'projects'. Once a project is undertaken - and it can be anything, but is almost always something to do with the house - budgets and plans can go out of the window.

Until a month or two ago, we had done very little to our house for some time. Then, our fridge broke, and we decided to replace it with a beautiful, though expensive fridge which we will aim to keep forever. (I am very happy with this decision.)

Next, we finally got around to getting a plumber to replace our dripping kitchen tap with one bought months' earlier. Once that was done, we asked him to come back to fix our leaking bath, which he will do today. He will also replace a cracked wash basin for us.

We had to repair the fence between us and our neighbours - it is our responsibility - and while we were doing that, decided to get a quote to replace the garden gate which was rotting away. The price was reasonable, and so we went ahead.

I am determined that we should stop here, having dealt with the main niggles, although the temptation is to carry on; we could add a sink to the washing machine area, we could build the bookshelves we have been talking about for years, we could get blackout blinds for our room to keep out the early morning sunshine which currently seeps through.

And as I was hoovering this morning, I found myself casting a critical eye over some of our carpets, thinking that some of them could do with being replaced, and others with a professional clean.....

In my view, there are several problems. One is the slippery slope; once a psychological barrier has been broken, it is only too easy to break it again. Secondly, the imperfections that you get into the habit of ignoring daily - like being restricted to showers rather than baths for months at a time, or the fact that the kitchen tap drips - suddenly spring into focus when other work is done. Finally, there's an illogical part of me which deep down feels that money spent on the house is acceptable because it is an 'investment'. There's an element of truth in this, of course, but it is an argument to be used with caution.

Although I recognise it is bad housekeeping on my part, as well as wasteful of water, to leave dripping taps and cracked wash basins un-mended, there may be something to be said for an ability to live with less than perfect conditions. I need to put my critical faculties away and be happy with what I have, while distinguishing between what needs to be done, and what it would be nice to do some time.

Cooking ingredients: where to spend and where to save

2010-07-21T16:19:00.004+01:00

Following on from her kitchen equipment list, here are my chef sister's suggestions on how to eat well, where to economise, and where not to, when food shopping:

It is obvious and much repeated but if you only shop in season you’ll get better value for money. Buy English strawberries only in mid-season and you can eat them every day. Asparagus just coming in is expensive, but hold on a bit for the price to go down.

Investigate the end of line baskets at supermarkets, they often have interesting random vinegars etc in their fancy foreign muck sections which don’t sell, so end up going cheap. The same goes for bin-ends for wine - you can find some interesting things.

Do what peasants around the world have been doing forever – just use a little meat in a hotpot/stew/whatever as a flavouring. One of the loveliest things I ate on a very greedy holiday in Andalucia was a stew of mostly potato, onion and pepper, with just a little pork, all cooked in delicious stock. The potatoes took on all the meaty flavour as they cooked.

Do not scrimp on:

Bread – it is such a major part of our diet but most people make do with the dullest, cheapest stuff. Don’t put up with it! Buy the nicest you can, and then ‘something on toast’ is transformed.

Pasta – don’t ask me why, but supermarket value brand stuff is just not as good as more expensive versions.

Baked beans and tomato ketchup – only Heinz will do in my opinion.

Potatoes – have realized why the value bags are cheap – they sometimes seem to be a random selection of diff varieties and all cook at different speeds, so you end up with a pan of falling-apart and rock hard. Disaster.

Kitchen equipment recommendations from a chef

2010-07-15T21:01:00.004+01:00

As mentioned in an earlier post, I asked my sister, a Leiths' trained chef, for her suggestions on where to spend money on kitchen equipment. Here is her, surprisingly short, list.

Kitchen Equipment List

Knives! One big chef’s knife, one small paring/office for veg cutting, and one steel for sharpening – serrated is also useful for tomatoes and fruit, but not vital.

1 big saucepan, one small, both stainless steel, not non-stick, the best quality you can afford – they will last. A handle that isn’t screwed on, is part of the pan, or it will start wobbling and fall off.

A good big chopping board, wood is good as long as you don’t worry about hygiene! Just don’t use it for raw meat, get a plastic one and keep it only for that.

A frying pan – opinion is divided on this one. I like a good, solid non-stick one which, I admit, won’t last forever unless you’re militant about no metal utensils and watch other people like a hawk if they use it…Or some serious types get e.g cast iron and just season it very carefully. Never seem to manage it myself.

A good large mixing bowl; lightweight metal is good for most things.

A nice big balloon whisk, electric hand whisk also v useful., or see below if you have the funds…

[Digital scales: I recently had to reprimand Penny for using old-fashioned scales for baking. They just aren't accurate enough for cake-making...]

More extravagant items include

A lovely, solid, and supposedly lifetime-lasting Le Creuset. A casserole for 6-8 people is probably your best bet, in whichever colour you won't get bored of.

A Kitchenaid or Kenwood mixer. Kitchenaid is my preference, but Kenwoods are known to be v reliable and long-lasting, though just don’t have the glamour factor.

Bill-pruning and increasing my pension contribution

2010-07-12T18:32:00.007+01:00

Despite all my recent efforts to cut down regular bills - as part of which we've saved considerably on home and contents insurance, joined an oil-buying group, and changed our AA cover to save £137 a year, and made various other changes, there was one insurance policy that I had not thought about cancelling. It suddenly occurred to me, a few days ago, that it was something I no longer needed, and so I decided to cancel the plan, and divert the money saved on the monthly premium to my pension. While I was about it, I also made a change to my clothes and spending allowance which I had been contemplating for a little while, cutting it by a quarter and adding that extra money to my pension as well.

So today I rang the pension company and informed them of my increased contributions. The young woman I spoke to congratulated me on making the change, wondering if I had had a pay rise.

I am pleased to have taken this action; it feels good to have immediately diverted the money saved into something specific, particularly into the pension. It does not feel very helpful to save money, if the difference is then swallowed up in general spending.

However, as I have mentioned before, I do like spending money on clothes, so the cut in spending money may be a bit of a challenge for me. I will see it as a test of my ingenuity....We will see how I get on.

One-off actions and easy habits

2010-07-05T08:22:00.005+01:00

I can be lazy, so I like the kind of frugality where just one initial set-up action is needed, with maybe the occasional review.

Some examples of one-off actions that I have taken:

Getting a water butt for the garden several years ago. I like this because it is environmentally friendly, while also providing free water, enough for all our gardening needs. (Though my mother would say that I don't water the garden enough, so that may be why....)
Working out the cheapest way to pay regular bills - for most bills this is by monthly direct debit- and setting up payment accordingly. I first did this many years ago, and do now review the situation every so often.
Putting dryer balls (mentioned in an earlier post) in my tumble dryer.
Fitting water-reducing devices into our lavatories years ago, which saves a considerable amount of water.

We also have some habits which are so simple, and so ingrained, that they are now almost automatic:

Using second-class stamps for all non-urgent post
Putting the end of a loaf of bread in the freezer for later use as toast, before it goes stale
Using plastic carrier bags as kitchen bin liners
Putting vegetable matter, tea leaves, and coffee grounds onto the compost heap
Contributing a proportion of our income to our pensions, whenever we are paid, at the same time we save money for tax. (This doesn't happen automatically, now that we are both self-employed.)

Many of these actions and habits won't result in large savings, but the effort involved is minimal, and over the years these small things add up. What am I missing? What habits or one-off actions have you taken?

Women prefer bonds

2010-07-01T18:27:00.009+01:00

A few months' ago, I wrote a post about Japanese women and their attitude to money. I was intrigued that Japanese women generally have control of their household's budgets, giving their husbands pocket money, and being keen, if conservative, savers. As a follow on, I have just read an article about an advertising campaign for government bonds in Japan, in which a young Japanese woman states her preference for men who invest in government bonds. 'Playboys are no good', she says.

Unseasonal home-made baked beans

2010-06-30T17:49:00.008+01:00

It seems a bit unseasonal now, as it is really hot - for England - here at the moment, but last week I had a go at making baked beans in the slow cooker, something I had been meaning to try for a while. It worked rather well; recipes abound, but I chose one from the useful site All Recipes. Just don't do what I did initially when making the beans and forget to add tomato ketchup and mustard for the last hour of cooking, as without these flavourings the treacle flavour is overpowering, and the dish tastes rather odd. Leftover beans went nicely with pasta and some grated cheese.

Ecoballs

2010-06-27T16:03:00.003+01:00

I've recently bought some Ecoballs (shown here on the John Lewis website) in our local Oxfam shop. They were advertised as an environmentally friendly, and economical, way of washing clothes. They are supposed to last for up to 1,000 washes, and to cost therefore about 3 pence per wash. (I actually bought them half price, so make that 1.5p.) They seem to be working well so far, after three weeks of use, though I have noticed that although clothes smell clean when they come out of the washing machine, they don't have that aggressively clean smell that commercial detergents produce. That is probably a very good thing, chemicals-wise, but slightly disconcerting to begin with. Also, the ecoballs can't be used at very high temperatures, though as I try to keep wash temperatures fairly low, that does not bother me.

I already try to minimise use of the tumble dryer, by hanging clothes out to dry on a drying rack as much as possible, and have long been using dryer balls to reduce energy use. They may work - but they also produce quite a bit of noise when the machine is in use.

Saving nearly £300 on home and contents insurance

2010-06-23T10:52:00.009+01:00

For the first time in ages, or possibly ever, I've been really thorough about getting a good price for our home and contents renewal. We had a renewal notice through from our existing insurer, with what I felt was a very high price, as well as one or two solicitations from other insurers.

Today, I've worked through the process Martin Lewis suggests, involving going through a number of online brokers, as well as getting a few direct quotes, and it really is amazing how much difference it makes to the price. I spent more or less a whole morning on the - boring but still quite satisfying - process. The result is that the quote I'm about to accept is very nearly £300 cheaper than our renewal quote.

This isn't the cheapest quote, however, but about £80 higher. After the poor service I experienced from my car insurer earlier in the year, I've looked at some online reviews, as well as bearing in mind comments I had heard from others about service, before choosing whom to go with. I found some very positive feedback for Direct Line - and the person I spoke to there about a query had also been very helpful - and made my decision accordingly.

So, a slightly tedious process, but thoroughly worth doing when I consider how long it would take me to earn the £300....

Some grocery items I can't bear to economise on....

2010-06-17T22:10:00.001+01:00

I've been talking to my sister, the chef, about some posts she has written for the blog on food and equipment, and where to spend money, and where to save it. (And we've been done some baking in my kitchen and she's been horrified at my lack of a set of digital scales; I have some beautiful, old-fashioned ones, but they are not terribly precise. They may have to be supplemented with something more precise.)

Her posts will follow soon, but in the meantime, here are my own thoughts on food and drink items where economising would be painful and, for me, not worthwhile except in a dire emergency.

Tea and coffee

I like English Breakfast, Earl Grey, and Ceylon, preferably leaf tea. I have drunk economy tea in the past, but now would find it very hard to adjust back to it.

Coffee

I now dislike the taste of instant coffee, and like ground coffee made using a cafetiere or espresso machine.

Butter

Time was, I would make cakes using margarine, but now only butter will do.

Eggs

I think I might, once or twice in my life, have bought non-free range eggs when nothing else was available, but buying non-free-range eggs is not an option as far as I'm concerned.

Sausages

We used to eat economy sausages, and J would still use them for toad-in-the hole or in a pasta sauce, but I have definitely grown out of the idea....The taste of the more expensive sausages is so much better, leaving aside the thought of the ingredients cheaper sausages may contain..

A review of 'The Spirit Level' by Richard Wilkinson and Kate Pickett

2010-06-14T11:11:00.005+01:00

As mentioned in my last post, Jian has recently told me about The Spirit Level, by Richard Wilkinson and Kate Pickett. Although it is not wholly personal-finance related, it covers topics such as financial equality among others, and so I asked him to review it for the blog. Here are his thoughts..PF

As Penny knows, I hadn't heard of this book or its authors when I spotted it at Heathrow while waiting for our flight to Athens. However, it looked like my sort of thing, so off it went into the rucksack for later perusal.

Yes, I paid for it.

The Spirit Level (subtitle: Why More Equal Societies Almost Always Do Better) is basically a popular sociology book by two British researchers, Richard Wilkinson and Kate Pickett. It is a summary of research conducted by the authors about the associations of various social outcomes and variables (including physical health, mental health, drug abuse, education, and imprisonment) with financial equality in around twenty developed nations (such as the UK, US, Japan, and Sweden) and the 50 states of the United States. Financial equality being, basically, how narrow the distribution of wages are in that state or nation. It's not about social equality, or gender equality, or racial equality, though all those are discussed later.

They're pretty clear about how they conducted the research, having mainly obtained the figures from objective censuses and United Nations records. The data is generally presented as scatter plots; there's a nice little chapter at the beginning about how scatter plots work, and how a statistically significant effect might be detected.

(A quick aside for the statistically minded: Yes, this is generally cross-sectional, and so gives at first instance no chronological data, though this is covered in one of the chapters concerning increasing inequality in the US and UK and the effect on outcomes. No, scatter plots are not necessarily the best tool for detecting this sort of association. No, they didn't say how many associations they tested, and so they could have cherry-picked the significant ones; however, the fact that the vast majority of the associations shown are pretty straightforward and not statistically nudged for significance does make this very unlikely.)

The book therefore consists of two parts after a brief discussion of methods: results and conclusions, and what to do about said conclusions. First part: as you might expect, financial equality has been going down the tubes in the US and UK over the last fifty years. And financially equal nations are healthier (both physically and mentally), have less crime, less teen pregnancy (though, in an odd exception, Japan – a financially pretty equal nation – has high rates of teen pregnancy. However, it's almost all married teen pregnancy), fewer people in prison, less drug abuse, and higher social mobility, than unequal nations. Shocker, eh? In other words, there's good hard data that countries with a few very rich people and a lot of very poor people (top scorers: USA, UK, Portugal), are worse off in almost every way than countries with more even wealth distribution (top scorers: Japan, pretty much all of Scandinavia). The conclusion is, unequal countries suffer from an overall lack of trust and security: people don't trust each other, so they're out for themselves, so they commit crimes, cheat on their taxes, and vote for police and prisons rather than health care and drug rehabilitation. As a result, everyone suffers, including the rich.

All the data is, as noted before, from rich countries (the top twenty most developed and wealthy nations); that's what the book is concerned with. So no comparisons with Cuba, for instance, except to note that yes, Americans generally have lower mortality and higher infant mortality than Cubans.

By the way, the same pattern holds across the different states of the USA.

You might be feeling a bit depressed by now, I certainly was; while the analysis presented is hardly invulnerable to criticism, it's very difficult to deflect or write off the argument unless you really are the most blinkered kind of self-deceiving idiot. And I hope I'm not. So, I asked, what can I, or we, do about this? Isn't this the fate of all humanity, to develop less equal societies where selfishness and ambition are rewarded over altruism and co-operation? After all, the equal European way seems to be failing; the financial crisis is driving various European governments to cur public service funding and encourage less equal financial policies.

Well no, say the authors. They cite a game where you form participants into pairs of offerers and recipients. The pairs never meet, and never play this game again, to avoid learning behaviour. All participants are told that there is, for each pair, a pot of £100 (or $100, or whatever). The offerer is asked to offer the recipient, by note or similar, a share of this money. If the recipient accepts this share, both get the money; if he refuses, neither do. The researchers were expecting an average accepted offer of about £30 (in other words, this would be about the threshold at which most recipients will accept a share, however unequal, rather than get no money at all. More would be more than most offerers would be willing to give, and less would be less than most recipients would swallow their pride in order to accept). Actually, the average accepted offer was about £48. It turns out, we are inclined to reward generosity and punish selfishness more than you might think.

The authors continue to discuss how to make society more equal. One way is to encourage companies and organisations who treat their employees more equally or are genuinely co-operative, and discourage those that don't: they cite the Co-op (shocker!) and John Lewis in the UK as good companies to support. Another way is to shake off the Cold War idea that we can't have both equality and liberty; as we have seen, less equal societies are less free societies, with less social mobility and more prisons. We should encourage our politicians and business leaders to stop bandaging the cracks; a measure to reduce drinking by increasing the cost of alcohol (to get all topical in the UK) may reduce drinking a little, but really all it does is increase profits for the government and for drink manufacturers. People drink themselves blind at the weekend because they're stressed, and it's a good escape; and they're stressed, for instance, because they have no money, are in debt, and can't leave their jobs. And these things are worse because of inequality. Change that, and they might stop drinking so much. Similarly, there's no point kidding ourselves that we'll reduce our carbon footprints and save the planet with advances in green technology; if we save ourselves a bit of ecological resource with low-energy light-bulbs or electric cars, we'll just spend it again. And again. Because of the way our societies are.

There are two ways, say the authors, to improve financial equality in societies. One is the Japanese way, which is to have more equal incomes before benefits; in other words, have a society where the most highly paid aren't paid much more than the least well paid. The other is the Scandinavian way, which is to have benefits, taxes, and other governmental measures to increase the effective incomes of the least well off. The second options requires more state input and control, but does at least allow for those who are unemployed to be supported by society. And from our starting point of wide disparity in incomes, it probably makes more sense.

Phew! Sorry if I've been a bit long-winded. Basically, it's a fantastic read, and very well communicated. Whether you agree or disagree with its agenda and conclusions, give it a go. Personally, I think it's a bit thin on practical solutions, but that's hardly very surprising, and it would make a whole separate book in itself. Maybe that's due.

Back to reality with a bump - and a general catch-up

2010-06-08T13:44:00.004+01:00

We got back from holiday at the end of last week. The day we returned to the UK, the sun was blazing, much as it had been as we travelled home from Italy, so the transition to home was quite easy. (We took the overnight train from Venice; a great experience which I thoroughly recommend, by the way.) Yesterday and today, however, it has been raining - a lot. Oh, the joys of the English summer.

Now we are home, we are trying to readjust to not eating out, to having chores to do, and of course to work. We're back on our £50 a week food budget, and it is actually quite nice to be cooking for ourselves again, although I'm occasionally missing the seafood pasta and prosecco of Venice.

I'm planning to start a food growing project shortly, hopefully when the weather improves a little. It is rather late in the year, of course, but I didn't want to leave seeds un-watered while we were away.

Another summer plan is to do some fruit picking, to make jam and for freezing. Strawberries are available now, and gooseberries and other berries are coming soon; my sister made amazing gooseberry jam last year, so I am hoping that she and I will make some together this year.

Finally, J and I both read quite a bit while away; one book that I have not read yet, but which I have been discussing with J. since he read it, is 'The Spirit Level', a book about equality, of which more in due course. In the meantime, because of it we may change some of our shopping habits, and have already opened a new bank account.

On holiday

2010-05-26T14:45:00.004+01:00

In the hurry of preparing to go away on holiday last week, I failed to post a note about my absence. So I am now writing from a hotel computer in Cyprus. I will be back at the end of next week, hopefully full of energy and enthusiasm, with some new ideas to write about. I have to say that I have not been giving personal finance, or many other issues for that matter, any deep consideration.

My main personal financial preoccupation at this moment revolves around the cost of drinking water. Here, the tap water is supposedly not drinkable - at home I always drink tap rather than bottled - and the hotel water from bar, restaurant or minibar costs a huge amount, say EUR$4.50 for a large bottle. So we are taking every opportunity to stockpile bottles of water wherever they can be bought cheaply, at shops away from the resort, or in the nearby supermarket.

That is about as deep as it gets at the moment...... Back soon.

Smart shopping tips revisited

2010-05-12T12:27:00.009+01:00

Thanks to those who commented. From feedback received, my own ideas and habits, and some reading I have done, I have come up with the following:

Buy-one-get-one-frees: only buy if you have cash, space to store, and the items won't go off before they can be used.
If you haven't much space to store bulk-bought items, consider clubbing together with friends or family to buy them between you, and share the benefit of the discounts.
Consider own brands vs branded items: compare the price per 100g, but generally own brands will be cheaper, and taste just as good.
Plan meals, even roughly, before you go shopping, bearing in mind how many meals you need to cater over the week, and buy only what you need for those.
If you eat a lot of ready meals, consider cutting those down and cooking more; this will be cheaper as well as healthier. Something on toast, e.g beans and poached egg, will cost less and be quick to prepare, as an alternative to a ready meal.
Keep a running shopping list on the fridge and add to it as you run out of things, so you don't forget anything when you go shopping.
Don't go shopping when you are tired, hungry, or in a hurry.
Set a cash budget for food per week; take cash out at the beginning of the week, and use this to pay for groceries until it runs out. (This will help with budgeting, and also it is psychologically harder to spend cash than use cards.)
Try to last one day longer than you think you can manage without going food shopping, and make that last meal with what you have left in the cupboard.
Try and make enough food for two or three meals, in one go: e.g make enough spaghetti bolognaise to turn this into chilli the following day, or freeze half of what you make for another day.
Pick-your-own fruit and vegetables when it is cheapest, and store in the freezer or use to make jams or chutney.
Even if you don't do PYO, then still buy fruit and vegetables that are in season.
Keep cleaning products to the basics: supermarket own-brands will generally be much cheaper and no less effective than branded products.
Buy Christmas paper, cards, and birthday cards when you see them on special offer, if you can store them. (Or make your own.)
Check washing instructions before you buy new clothes, and avoid those which need dry-cleaning.
Buy shoes with soles which can be repaired or replaced.
Sign up to receive nectar or clubcard points, don't buy things in order to get extra points, however.
Processed cereals are expensive and not very nutritious; porrige or homemade muesli are filling, cheap and healthy.
Avoid, or minimise, fizzy drinks. Squash, or one nice idea I read, lemon juice and sugar, make an alternative soft drink.
Compare prices online before you go shopping, e.g at http://www.mysupermarket.co.uk/
Watch the cash register and look at your receipt before you leave the shop, to avoid mistakes.
If you are going to the shop to buy a pint of milk, don't pick up a basket; if you are planning to buy a few items, take a basket rather than a trolley.
Toiletries will likely be more expensive in a supermarket than chemist.
Check whether loose or packaged fruit and vegetables are cheaper; loose generally cost less.
If you do buy bags of fruit and vegetables then weigh them to ensure you are getting the correct weight.
Instead of cooking large portions of meat, cook pasta, rice or beans to accompany a small amount of meat.
If you are a meat-eater, try having a few meatless days a week.
PS - If carrier bags are charged for where you shop, take your own. Otherwise, use the free ones for reuse as bin liners.

Smart shopping: any good tips?

2010-05-04T21:15:00.006+01:00

As part of the financial capability scheme I'm volunteering for, I've been asked to prepare a 40 minute presentation on 'smart shopping'. I need to get this done before going on holiday in ten days' time, and am quite busy with various other projects in the meantime. While I gather my thoughts, I thought I'd - rather cheekily - invite suggestions.... I would love to hear from you if you have any suggestions for tips you think I should include. The audience will be a group of older people living in sheltered housing; the main things they need to pay for from their pensions are food, clothing, entertainment, and Christmas and birthday presents.

Some good web resources on personal finance

2010-04-30T15:08:00.004+01:00

As part of my financial capability training, I've been directed to various good financial resources online which were new to me.

Everybody uses Martin Lewis' excellent site, of course.

Other useful sites I've started using, which include various calculators and resources, are:

The BBC's raw money site

The FSA's money made clear

Money Matters to me

Spring de-cluttering

2010-04-26T09:58:00.004+01:00

I've been working quite hard on de-cluttering our house, over the last few days. Although the house generally looks reasonably tidy to me, apart from the study, which tends to be full of pieces of paper, I've realised how much junk we have accumulated over the last few years. This is I think one of the disadvantages of having a reasonable amount of space, and not having moved house for seven years. I've also realised that as we've bought replacement kitchen equipment, bedding and so on, we have often not got rid of the items we were replacing, hence our increasingly full home.

Now, I am trying to imagine that we are about to start packing for a move, and to try and picture what we would want to take with us, and what we would want to give, or throw, away. This has been quite effective so far. I've managed to de-clutter several kitchen cupboards, including the baking tin cupboard, the worst, which has now been thoroughly cleaned, pruned, and organised. We've also identified a pile of clothes, books, saucepans, bedding, and other miscellaneous items which need to go. At the moment, I've put everything we no longer want into one room; the next stage of the project is to determine what is worth giving away or selling, and what is just rubbish.

As part of this project, we've also decided to buy a few new things, where we were using things that were unsatisfactory or didn't work properly; a new cake tin, as I was using one with a lid which didn't close properly; a new duvet cover; and a new filing cabinet.

The filing cabinet is needed for the next phase in our project, which is to sort out our office; at the moment our filing system is so complicated, having grown from one concertina file to several plus two lever arch files and several box files, that I only catch up with filing very occasionally, and with gritted teeth. What I am aiming for is one central system so that things can be easily filed as soon as the post arrives. (I would be interested in comments on how others manage their filing, by the way....) I've added the Unclutter blog to my reading list, as well.

My sister, and spending money on food and kitchen equipment

2010-04-15T17:27:00.009+01:00

My sister has been staying us for the last couple of days, with her baby girl, as my brother-in-law, whom I interviewed in an earlier post, has gone away on a job for a few weeks.

As I may have mentioned before, my sister is a - very good, though I'm possibly rather biaised -chef. She is therefore slightly horrified, though I think interested, by our £50 a week food challenge, as her standards of food and cooking are rather higher than ours. We are still sticking to our food budget, by the way, although occasionally it is a bit of a stretch.

My sister and I talk quite a bit about food, what is worth spending money on, and where economies are feasible. Despite her training and general preference for use of the best quality ingredients, my sister and I are both influenced by our grandmothers' wartime and austerity Britain recipes. Yesterday, we attempted to recreate one grandmother's flapjack, which had a treacle-y, chewy toffee-ish texture that we have not found in flapjacks eaten since. We read through dozens of recipes, then made two batches, using slightly different proportions of fat, sugar and oats, in an attempt to create the perfect flapjack. We do not yet know if we've achieved it, as one thing we can recall about our grandmother's method was that it involved leaving the flapjack to go chewy for several days before being eaten.

I've asked my sister to contribute some thoughts in future posts on economical eating, areas where she feels it is particularly worthwhile to pay for high-quality ingredients, and also to comment on the best, minimal, kitchen equipment she can recommend, and where it is worth spending on high quality. Whenever she cooks at my house, I'm always a bit ashamed of my rather blunt knives and scrappy baking tins, and so once she's formulated her list, I'm hoping to persuade her to come shopping with me to help me choose a few new pieces of equipment.

More to follow in due course...

Thoughts on growing your own vegetables for the first time

2010-04-08T19:34:00.005+01:00

This is a guest post from my friend Polly, whom I interviewed earlier in the week.

As I'm a keen amateur gardener, Penny has suggested I write a piece about the joys of growing your own. I should make it clear up front that I'm hardly a qualified expert, but having acquired a garden a few years ago I can testify to the trials and tribulations of a new vegetable grower.

The eagle-eyed among you will have noticed that it's already April so a post about growing your own is perhaps a little late. But that brings me to my first tip - I think that one of the main things I've learned is not to be put off if I don't do things exactly as it says on the instructions. If you're using seeds, it's well worth taking a chance on a late sowing as the price of a packet of seed is not a large stake. And with the late spring this year, seeds planted last year are only now germinating, so it's not too late to get started (as I finally did, today - ahem).

The other factor which works in your favour is a greenhouse. There's no need for a fancy glass walk-in one - I use a very basic plastic one which you can get for around £10 from discount stores (it's also great for small gardens as it doesn't take up too much space). Failing that, a sunny windowsill is perfectly good for getting your seedlings off to a good start. Once it gets to June and there's no more risk of frost, seeds can be planted out into the ground or else transplanted into containers if you don't have much space.

Third tip in, and you'll have noticed that I've been talking exclusively about seeds. It can be very tempting to buy the 'baby plants' which are everywhere at the moment, but personally I've never had much success with them and have consistently had better results from seed which is of course also much cheaper. But I can't speak for every gardener, so you may want to try both to see which works better for you.

It's been a matter of trial and error as to what will grow in my garden and what won't. I've really struggled with brassicas (I've tried sprouts and purple sprouting broccoli) as they get decimated by caterpillars, but I've found that peas and beans are easy to grow. The other plus for peas and beans is that you can plant them outside directly without having to start them off in the greenhouse. In previous years I've grown some vegetables in containers and some in beds, but due to a glut of slugs and snails the last couple of summers I'm opting for containers as much as possible this year for damage limitation. I've sown peas and beans in large round pots, and radish and little gem lettuce in long troughs. The courgettes will need to go into the ground when they're big enough.

One of the tips I've seen elsewhere is to grow what you like to eat, which seems rather obvious. What wasn't perhaps so obvious to me though is that it's worth thinking about the quantity you want of the vegetable and when - so I've kept back a few pots for subsequent sowings so that I don't end up with just the one crop. The instructions on seed packets are very helpful in this respect, though I've often found them over-optimistic about how late you can do a final sowing.

Finally, if you are on the late side with sowing your seeds, don't despair - I've quite often been surprised by what's germinated in the spring, such as a beautiful patch of honesty which I'd forgotten I'd sown as it had failed to germinate the previous summer. And I've overwintered cherry tomatoes on my kitchen windowsill before now.

So what do I get out of gardening? I can hardly say that I'm self-sufficient, but growing my own does mean I spend a bit less buying veg, and I probably do end up in profit. But the quality of eating my own veg outweighs the financial savings for me. Eating a freshly cut salad, or a handful of peas straight from the pod, can't be compared with produce which has travelled hundreds of miles to get to the shop. And, food aside, it's a very cheap and healthy hobby which gives me a new appreciation of my environment - from the beautiful Jersey tiger moths in my garden last year (quite possibly the same caterpillars which ate the broccoli) to the pair of robins who are currently nest-building in the neighbourhood. So I would heartily recommend growing your own for both economy and quality!

Interview with Polly, my super-frugal friend and future guest-poster

2010-04-05T20:35:00.004+01:00

My friend Polly, whom I've known since university, has always been extremely frugal and good with money. I've asked her to contribute some guest posts, beginning with the subject of vegetable growing. In the meantime, I've interviewed Polly about her money habits.

Q -You've always been careful with money; where did you learn to be so?

A- I learned the value of money quite early on through the influence of my parents who had a strong belief in the need for responsibility when dealing with money. I remember having to save up for a tape recorder at the age of 13 and appreciating it all the more because I had had to choose to save my pocket money rather than spend it on magazines or sweets.

Q-What do you most dislike spending money on?

A- I find it incredible how much money goes on utilities, insurance etc. I could probably save money by shopping around more, but constantly changing deals and limited time mean I feel I'm always playing catch-up.

Q-What do you enjoy spending money on?

A-This is easy - holidays. I wouldn't say I'm a big spender, but I enjoy making the most of my time off work and love trips to interesting places such as Syria and Russia.

Q-Do you have a top money-saving habit?

A -Until a couple of years ago, I used to record everything that I spent, cash or electronic payment. I'd then regularly review what I was spending money on, which meant that I could target areas for savings if I felt I was spending too much on eg clothes or nights out.

Q-What has been your biggest financial challenge so far?

A -I think my biggest challenge was being a student - really having to count every penny as I didn't have a huge amount of savings. That said, this was before tuition fees, plus I was lucky enough to get a grant - I find it sad that these days students start their adult lives with the expectation that it's normal to be in debt.

Q-Do you have any financial goals that you are prepared to share with us?

A-My big goal is to pay off my mortgage - I recently calculated that I should be able to do this by 2015. Then I'll be looking to enhance my pension arrangements (not that I'll be needing them for some time yet!).

The ladies of Cranford: role models for the 21st century?

2010-03-29T19:54:00.000+01:00

I haven't been around much lately; a combination of freelance work, financial capability training, and other bits and pieces have taken up my time. For a while, however, I have been meaning to review one of my favourite books, Cranford. (There is also a very good BBC television series, starring Judi Dench, which is true to the books in spirit, if not in the letter of the plot.)

Elizabeth Gaskell's wonderful town of Cranford is populated almost entirely by lone women. Miss Matty Jenkyns and her sister Deborah are the main characters when the stories begin. They are the daughters of a clergyman, with limited means, who live in a small, comfortable house in the centre of the town. They are generous, thoughtful friends and hosts, but there is no formality or grandeur about their lives.

They have a single servant, and practice economical habits - Miss Matty for instance being particularly concerned about not wasting candles. New dresses are a rarity for them and their friends, although Miss Matty relishes the process of choosing a dress when the occasion arises, and the ladies buy the occasional pretty new bonnet for variety, and to show that they are following the fashions.

After Miss Deborah's death, and a subsequent disaster, Miss Matty's financial resources are reduced considerably. Movingly, Miss Matty's friends, themselves all relatively impoverished, contribute without her knowledge to supplement her income, and Miss Matty sets up a small tea shop from her home, which she runs quite successfully until she is rescued from her financial troubles...

'There [in Cranford] economy was always 'elegant' and money-spending always 'vulgar and ostentatious'; a sort of sour-grapeism which made us all very peaceful and satisfied'.

I am thinking of adopting the Cranford ladies as my role models in their approach to life, as well as their finances.... They enjoy life, adapt to changing circumstances, are imaginative, thrifty, creative, and charitable. Within the limits of their society and time, they take control of their lives.

Getting my car back

2010-03-18T19:29:00.001Z

I've mentioned in earlier posts that I had to manage without my car for several weeks, because of bad service by my insurance company. During that time, I practised living without my car, and found it surprisingly easy, and occasionally actually liberating. Now that I have my car back, I am making some use of it, but am definitely still considering selling, and having us move to a one-car lifestyle. I know that there are some times, like today, when I drove over to my parents' house twenty miles or so away, when it would be very inconvenient not to have my car - I could get to them, but it would involve at least a two stage train journey plus bus or taxi - but I'm still weighing up whether those times are worth the cost in money, and also importantly in time and trouble, that having two cars between the two of us necessitates.

I've been reading 'The Power of Less', by Leo Babauta, which I'm sure I will review in more detail soon, but some of the ideas he puts forward, including looking at what your key priorities are and getting rid of other things, are encouraging me in my view that getting rid of my car might be quite a good thing.

I've also been reading Wojciech's posts at Fiscal Fizzle on his car-related thought processes and decision, and those of his readers, with some interest.

An interview with my brother-in-law, the abseiler and former mortgage adviser

2010-03-11T14:56:00.007Z

Writing this blog has encouraged me to have conversations about money with some of my friends and family. This is an interview with my brother-in-law, a former financial professional, and an excellent planner...

Q:So you now have a very exciting, outdoor-type job. (PF: He is an offshore rope access supervisor, meaning in layman's terms that he sets up and oversees abseiling work on oil rigs.) Tell me about the financial advice work you used to do?

A: I used to work as a mortgage adviser for a bank, so had to help people create budgets when they were applying for mortgages to see what would be realistically affordable and so on.

Q:What was the biggest mistake people you saw would make in their finances?

A:Most people underestimated how much they spent, particularly their personal spending. They were too optimistic, and this meant that it wasn't possible for them to budget properly. Regular bills are easy to estimate but the little things like extras at a petrol station, taxis to restaurants etc soon build up and become significant yet nearly every person I interviewed ignored these outgoings.

Q:What was the best habit you acquired from doing this job?

A:The ability to plan ahead. I now note the due dates of all bills on a calendar, so I can see what is coming, and have time to prepare. Being self-employed, and having a varying income, this is particularly important and saves a lot of stress when the bills arrive.

Q: What would your advice be to anyone in really dire financial straits?

A: Prioritise; if you have more to pay out than you can afford in a month, you need to work out which payments you really shouldn't miss and how to miss the least number of bills in order to receive the least amount of penalties possible, as it is generally better to miss 1 bill rather than 5! Stop any payments that you can't make as far in advance as you can, so that you aren't penalized if they bounce. And if you need to feed yourself on pretty much nothing, eat lots of potatoes for a little while....this one is from personal experience when retraining myself nearly backfired!

Q: You have a tiny, and absolutely adorable - I am a very proud aunt – baby daughter. What lessons would you like to teach her about money?

A: Enjoy your money as much as possible!!! But pay your bills first, and make sure it's your money you're enjoying not the bank's, and remember you live in England, so a rainy day is always just round the corner!!!

What difference has self-employment made to us so far?

2010-03-09T20:53:00.002Z

My husband has been self-employed for the last six months, and I have since the beginning of the year. It has made a difference to us in various ways, both practically and psychologically:

There is no longer such a thing as pay day, so we have to make sure we end the month with money to pay our expenses for the following month. We get paid regularly, but not on a set date each month.
We are more motivated to build up our savings, in an attempt to make good use of a high earning month, and also because this helps us to feel more secure.
We have to actively invoice in order to be paid, which still feels odd to me, and to keep track of money coming in from different sources and chase it up if it does not arrive.
We need to make sure we save a proportion of everything that comes in, to pay tax, rather than this being deducted automatically.
We have to keep track of expenses which may be tax-deductible.
We need to actively make pension contributions, rather than have them deducted from pay automatically.
We have both started to think more in terms of the value of our time; if we want to take time off we have to pay for that by working at another time. We no longer have paid holiday or sick pay.
There is scope for a greater variety of types of work; I'm doing contract work in my industry, but also setting up another part-time business, and trying to write as well as do voluntary work. We both feel more entrepreneurial.
One of us sometimes works at weekends, but we often have a day off together in the week instead; not every day involves an early start.
There is less of a routine; it is possible to forget what day it is. On the other hand, the dreaded 'Sunday night feeling' before the start of a traditional week's work is no longer a problem.
If work becomes a bit quiet for a week or two, it can become disconcerting, although having the extra free time is nice. (My husband wrote a detective story during a slightly quiet phase at the beginning of the year.)

Lessons from February

2010-03-05T15:57:00.001Z

I like the way many personal finance blogs, particularly US ones, include a goals and net worth update at the end of each month. I'm a bit too inhibited to do the same, even anonymously, but this month felt I'd learnt various financial lessons, and had a few small successes, which I thought I would document. This may even become a habit....

Here's my list:

Joined a local oil-buying consortium and cancelled my oil direct debit
Continued using up toiletries, cleaning products and freezer contents
Kept within our £50 a week food budget
Saved most of my freelance earnings
Experimented successfully with life without a car for a few weeks. (The experiment continues, beyond my control...)
Learned that if an oyster card is not swiped firmly enough, the gate may open, but extra money will be deducted from the card as a penalty. (I got most of the extra few pounds re-credited when I queried how my card could be down to a £0 balance after a very few uses, but am not sure I have heard many things as nonsensical as this explanation. Others may not be aware of this quirk in the system....)
Was charged interest in a catch-22 type situation by my credit card - but managed to get it deducted after pointing out the unfairness of the charge. (I had been asked to re-register my payment details after a new card was issued, did so immediately, but not in time for the next payment due date, and my payment was therefore inevitably late.)
Discovered the dangers of buying cheap car insurance through a broker. Next time, I will check feedback on car insurers before renewing, rather than just going for the cheapest quote, as my current insurer was, for many days, completely failing to progress an insurance claim. (It is now ongoing again, after much pestering from me, thank goodness!)
Learnt much about the handling of debts, budgeting, and the UK benefits system, as part of my financial capability training course. These budgeting tools from Martin Lewis's site were recommended to me; I intend to try some of them out in the

Making a salt body scrub

2010-03-03T17:04:00.006Z

I'd never tried making cosmetics or toiletries before, but thought I would try making a salt scrub, rather than buying one, and found many recipes on e-how. It was very easy, quite satisfying, and definitely cheaper than buying one. (I used grapeseed oil, which was cheaper than almond, but more appealing than sunflower for this purpose, and a few drops of lavender essential oil.)

I might try making some other toiletries next, though I am still trying to use up the odds and ends in the cupboard before buying anything new.

Bartering and swapping

2010-02-25T12:23:00.005Z

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??

Public transport & freedom

2010-02-24T17:54:00.005Z

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.

Could I manage without my car?

2010-02-22T21:04:00.005Z

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....

The cupboards are feeling bare...

2010-02-17T17:24:00.006Z

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.

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

2010-02-16T15:41:00.020Z

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!

Financial Capability volunteering

2010-02-10T17:31:00.003Z

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...

Carnival of Personal Finance 243 Valentine's Day Edition

2010-02-08T12:29:00.005Z

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:

http://www.getrichslowly.org/blog/2010/02/08/carnival-of-personal-finance-243-valentines-day-edition/

Japanese Women and their secret savings

2010-02-05T16:24:00.016Z

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.

Is debt ok if it leads to self-improvement?

2010-02-04T11:12:00.013Z

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.

A heating oil collective

2010-02-03T18:19:00.004Z

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?

Using up odds and ends in the bathroom cabinet

2010-02-01T17:23:00.003Z

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.

Planning for a decreased, or decreasing, income

2010-01-28T15:39:00.006Z

One of the reasons I started this blog was because I had decided to change jobs, and do something different. (More on that another time.) I have now left my full-time corporate job, and am working as part-time freelancer for my old employer. So far, the resultant drop in income has been manageable, but I am preparing for the fact that in a few months' time, I may well have no income at all for a time. And my husband works freelance, currently on a contract until mid-May. And when he finishes that, we would like to take advantage of some free time by going travelling for a few weeks.... Hence my heightened interest in saving money.

So far, we've made a few changes, which I've written about here:

-Trying to keep track of everything we spend, on excel. I think that we spend less as a result, and it is a useful exercise.

-Starting a weekly food jar. I mentioned this briefly, and will no doubt write about it more at some point, but allocating a set amount of cash, and using that to pay for all food, is something we've been doing for the past few weeks. So far, it is working well and we have stayed within budget each week, and quite enjoyed the process.

-Reviewing all our regular outgoings more stringently, and making another attempt to cut, or reduce, those that we think aren't really necessary. (Having read more about pet insurance, I cancelled that, as it is true that I cannot envisage a situation where we would be able to actually claim on it. However, the cat may now develop a rare disease needing expensive treatment....)

-Saving as much as possible, and in my case making full use of my ability to contribute to a pension, while I can.

I do think that having more time to spend on watching our outgoings and planning ahead, and so far being happier and less tired, means that we 'need' less to live on at the moment. Fewer meals out, less impulsive shopping to cheer me up, more time to plan meals and so on.

If we do end up living on one income for a while, then I'm determined that even if things are a bit tight in other areas, we a) keep allowances, even if they are small ones, for personal spending, and b) that we both keep paying into pension schemes. (His is automatic, and a much more valuable scheme than mine in terms of benefits, but I will keep up a contribution of some kind even if I am not earning.)

Clothes buying, and resisting the urge to splurge

2010-01-13T22:28:00.004Z

I haven't posted anything for a while, because I have been on a work trip to the US, from which I returned a couple of days' ago.

While there, I couldn't help noticing how very well-dressed and groomed the people I saw were, and possibly as a result have been battling the urge to go out and spend money on clothes, make-up and so on since my return.

I have bought a pair of pointy-toed, purple shoes, which I had had my eye on for a while and went into the sale at a very good price, and which I had money in my allowance for, but have otherwise resisted temptation.

Here are some of the things I do when the urge to buy things comes over me:

Bookmarking links to things that are of interest. Sometimes I stalk them, see if they go in the sale. By that time, if they are still available in the right colour and size, I may have lost interest in buying them, if not, I should be able to get a better price for the thing.

Writing down the details of things I want. This works both ways: if have a list of most-needed or wanted items, I am less likely to stray from it when I do come to buy something. Also, if I have somewhere to record details of things then I can avoid an impulse buy, and return to it at a later stage, if I want to.

Unsubscribe to shopping e-mails: ignorance can be bliss!

Avoid going shopping, unless going with someone else who will discourage you from buying things, or go window shopping, or go without a credit card.

Browse my library catalog if I feel in the mood for an online spree. It sounds ridiculous, but it really works. Doing this, you might rack up some reservation fees, but even if you try probably won't be able to spend more than a few pounds!

Either do something else - cooking, or housework, or reading - or give into the shopping in a controlled way, perhaps by buying something small, and enjoying the process of choosing, and the experience of going shopping.

Also, having an allowance for personal spending really helps; it means that you feel able to spend a certain amount on clothes, make-up and treats, but you know your limitations.

Reporting back on the crock pot

2010-01-13T22:07:00.003Z

A week or two ago, I mentioned the crock pot we had got for Christmas. As we have been away quite a bit lately, we have only used it a few times. However, we have made two batches of chilli in it. The first time, I used a recipe which didn't involve browning the meat or onions before adding to the pot, and in which the crock pot was left on the low setting for eight hours. The result was edible, but rather insipid in taste and appearance, and generally rather disappointing.

The second time, Jian browned the meat and onions first, started off the cooking on high for half an hour, in the interests of speeding up the cooking time, as well as improving the flavour, and then turned it down to low for several hours. This worked really well, and smelt delicious as it was cooking, which was nice for me, as I was working from home that day.

The only other recipe we have tried is a 'pulled pork' recipe - not something I'd tried before - which we found on the internet. This involved no pre-cooking, but the meat and vegetables were cooked on high for the whole cooking time, for four hours or so. This was also very good, though a slightly longer cooking time would have made it even better.

In summary, so far the crock pot seems worth having, although it is another gadget to store...

Frugality versus conspicuous consumption - or what about a middle way?

2010-01-12T18:06:00.002Z

I've just read Thomas Stanley's latest book, 'Stop acting rich, and start living like a real millionaire'. Although it contained some interesting information, I didn't enjoy it as much as his other work. My intepretation of his views is that unless you are a 'glitteringly rich' person, there are really two options in terms of how you live. You can either consume mindlessly, for status related reasons, or you can be frugal. What I didn't think rang true about this was that people have different priorities, and perhaps some of their consumption habits are about appreciation of real and lasting quality in certain areas of their life, for which they are prepared to pay more, while they may be frugal in other things.

I wondered how Dr Stanley would categorise me, as I think my lifestyle is, like many people's, a mixture.

-I always pay off my credit card. have no debts apart from mortgage, save money regularly, and have always contributed fully to a pension
-I spend most evenings eating home-cooked meals and watching programmes recorded from television, or reading books - many of them from the local library
-I usually take a packed lunch to work
-If eating out, I often use vouchers when going to a pizza or pasta restaurant; otherwise I may well eat at a noodle bar for around £5 for a main meal
- I have very rarely spent more than £10 on a bottle of wine; I have recently started buying wine in bulk from Majestic.
-I buy cheap cleaning materials, tinned tomatoes, tissues and kitchen towel.

On the other hand,
-I have recently bought a new coat - written about at length here - at great expense. I bought this not for status, and in fact it does not have a recognisable label, but because it is a beautiful thing which I intend to wear for many years.
-When not eating at a chain Italian or noodle bar, I sometimes go to lovely restaurants or gastro pubs, and eat steak or venison pie.
-My last holiday was in a rented cottage in the Lake District... but I have spent a weekend in New York.
-I like buying some food at Waitrose as a treat.

I could go on. My point is essentially that I am concerned by a mentality which promotes frugality in every area of life. I absolutely agree with the view that there should be more to life than spending money, and many of the things I enjoy are free, or cost very little. However, there are experiences and possessions which can enhance life, and I would query an approach which would deny all of these to someone with reasonable financial stability. (This does not apply to anything bought on expensive credit, especially credit cards; I think elimination of such debt should always be a top priority.)

My preferred approach is to eliminate debt, establish some savings, and a pattern of saving, and to allow some luxuries, prioritising those areas where you feel that spending money will enhance your enjoyment of life, and spending less on things that do not matter to you as much. It is of course possible to minimise spending in all areas, but unless you are doing this with a specific goal in mind, or as a short-term solution, is that really going to lead to a happy life?

Amazon.co.uk Widgets

2010 so far: snow, food, and financial resolutions

2010-01-11T18:18:00.004Z

It has been a while since I posted anything, partly because of the distractions of Christmas and the New Year, and also because of a week away last week - of which more later.

Now I am back to reality, with the slight excitement of the snow - which I for one am still enjoying - to mitigate the usual January flatness.

In terms of goals for 2010, I haven't made any specific financial resolutions, as I have noticed after many years of error that as soon as I make something a resolution, I lose all desire to do it. Instead, we are trying out some new ways of doing things.

One thing, that I started in November and am going to try and continue for a few more months, mentioned in the budgeting article, is the practice of recording all our expenses on an excel spreadsheet. This does have a slightly preventative effect as far as spending is concerned, but also provides information on where small to medium sums are going each month. (I'm noting where the money was spent, as well as its category.)

A second new thing, which I've read about in various places recently, is the idea of an envelope system for expenditure. We are already using virtual envelopes - specially-named jars within our mortgage offset account - to save up for cars, holidays and fun, but I thought that this was impractical for food, as we would be constantly transferring small amounts of money in and out of the current account for each food purchase.

So instead, we have started a cash jar for food, which we will top up with a set amount each week. The idea is to see if we spend less money because we are using cash, which feels more real than cards, and also because we know that once the jar is empty we can't spend anything more until the next week's money becomes available. This is a new initiative for this week, only started on Saturday, so it is too early to say if it is working, except that we currently have well over half our budget left, as well as over half the week left for it to last!

(Tonight's dinner, to which I am already looking forward, will be toad in the hole with green beans, from 'The Pauper's Cookbook'.)

Christmas review

2009-12-30T16:31:00.002Z

We hosted Christmas this year, for a change. Surveying the wreckage, I thought I'd review where we did well, and what was less of a success:

The good:

-The Christmas cake I made – Delia's light Christmas cake – worked out quite well, and will go into packed lunches and serve us for teas for some time to come. I now have various leftover ingredients, such as crystallised ginger, which will need a home, although the angelica ended up, most appropriately, on the top of my sister's lovely Boxing Day trifle.
-The trifle – my sister and I took responsibility for this, but she actually made it. We went for a retro one, with frozen raspberries, tinned peaches and madeira cake on the base, and the aforementioned angelica, flaked almonds and multicoloured glace cherries as decoration.
-The goose – my husband cooked the goose, which we ordered from a nearby farm shop. It was not cheap, but, with its stuffiing of mashed potatoes, (Nigella, Feast) made a great Christmas lunch and yielded plenty of leftovers.
-Wrapping paper – I finally bought brown paper and wrapped many presents with that, prettied up slightly with gold ribbon.
-The Christmas tree – topped up with some new lights and one or two extra decorations (Homebase, 49 p each), the artificial Christmas tree had its seventh year of use.
-Kedgeree followed by warmed mince pies and brandy butter turned out to be a highly satisfactory Boxing Day lunch.
-The presents: with my family, we tried a new system of exchanging stocking type presents - including plenty of chocolate- and each specifying one or two larger items we would like. I, at least, liked this arrangement.

The bad:

-My Christmas pudding, which burnt slightly and stuck to the bottom of the pudding basin, as I stupidly let it boil dry at one point.
-The mince pies: the bought ones were so good, and I so lazy, that I never got around to making any myself. (I'll probably use the mincemeat in an apple crumble instead.)
-The various defects in our home which become apparent when we have a few guests: taps that are a bit stiff, guest towels that are frayed or tatty.
-The frying pan, already nearing the end of its life, which did not survive the festivities.

The ugly:

-My artificial Christmas tree – see above...

A Christmas present crock pot

2009-12-29T13:53:00.003Z

At his request, I bought my husband a crock pot for Christmas. We're trying it out today, making chilli con carne, in a break from the Christmas leftovers. More to follow on how it works in due course....

Budgeting for the not-very-budget-oriented

2009-12-18T21:25:00.001Z

I dislike spreadsheets, and it might be said of me that I am 'better with words than numbers'. The concept of a budget, as described by some experts, is therefore mildly horrifying to me. However, I am interested in making sure that my finances add up, and that I am able to pay for things that are important to me, and also to save for the future. My preferred approach is therefore as follows:

Every year or so, or whenever we have a significant change in our finances, we review and update an ongoing list of our fixed monthly direct debits, for mortgage, electricity and so forth, and make sure that this is up-to-date, looking through our bank statements to check that we have captured any changes, and giving some thought to any direct debits we might want to cancel or amend. The list of regular fixed payments includes a separate allowance for each of us, as well as payment to a 'fun', 'holiday', and 'car' jar.

The list of direct debits includes one to an 'annual bills' jar, which is calculated using a list of those bills which need to be paid less often than monthly, for instance car servicing, insurance and car tax. These are added up and the total is divided by twelve, to come up with an average monthly amount. (Money is transferred from the annual bills jar to the current account as these irregular bills need to be paid.)

We then check that the amount we have estimated for non-fixed expenses like travel and food is still appropriate, by looking through our credit card expenses for the last few months, and taking an approximate monthly average.

We check, and update as appropriate, the amount we have listed as income.

Once this has been done, we have an approximate idea of how much money we have spare each month, once essentials have been paid for.

This is where our system becomes rather chaotic; we have never found it practicable or helpful to allocate fixed amounts for different types of expenditure, but instead prefer to operate the 'pay yourself first' system. Under this, and taking account of the calculations above, we transfer out a certain amount of money to savings each month as soon as we have been paid. Sometimes we need to transfer some money back later for particular purposes, but as a general rule this works fairly well, and because the money is not sitting in the current account, it cannot be spent quite as easily. And as both savings and regular payments have been accounted for, the money spare can be used however we see fit, without us having to worry about whether we have over-spent on travel, or entertainment, or eating out, that month. (Over the last month or two, however, I have been trying to get a more precise idea of our spending, by tracking our expenditures on a spreadsheet.)

The paragraph above assumes that there is some money left over for saving once essentials have been taken into account; I will look at the question of reducing monthly outgoings in future posts, as well as the subject of self-employment and budgeting for taxes. I will also include some more expert opinions than mine on budgeting, and its value.

Cooking without waste 2: Basic recipes

2009-12-14T16:38:00.002Z

This is the second guest post on frugal cooking from Jian.
Every culture and person in the world is going to have a different idea of what a basic recipe is, depending on their answers to the questions in my last post. What might be best, would be for me to talk about what we tend to use, and how we've answered the above questions.
1)Penny and I chop and change our preferred recipes a lot; this comes of reading the paper and recipe books a bit too much, I guess. Still, our basic recipes tend to stay fairly stable, mainly because they're reliable, comforting, and easily made from long-lasting ingredients.
2)I'm quite an improviser myself; I prefer to learn basic principles through practice and then never follow the recipe, and don't plan ahead much. Penny follows the recipes closely, adapting and changing based on experience and common sense, and prefers to plan ahead.
3)We cook for two. It's a very easy number.
4)We have a hob, grill, and oven. We have a kettle, toaster, food processor, blender, rice cooker, and microwave. We have a fridge-freezer. We shop at various supermarkets (Sainsbury's, Tesco, Waitrose) and at the local farm shop, which I think came up in a previous post.
The basic recipes we most often use are:
1)Tomato sauce for pasta, which Penny's mentioned before. Basically needs onions and tinned tomatoes, which both keep well. Useful as the base for a hundred and one meals, including bolognese, chili con carne, puttanesca, jambalaya, vodka-sauce pasta, minestrone, lasagna, ratatouille, and bouillabaisse. Like all basic recipes, practice often to make it as reliably as possible; it's difficult to screw up.
2)Noodle soup. I suppose you could use a packet but really I mean good stock, probably some miso, and dry noodles (of any kind; egg noodle, ramen/lo men/ramyun/etc,, soba, thin rice noodles, thick rice noodles, udon, or even spaghetti or linguini). Add any chopped vegetables (spring onions, peppers, mushrooms, bok choy, bean sprouts), sliced grilled or fried meat (teriyaki beef, grilled or foil-baked salmon, marinated or char sui pork), and anything else that fits with the sort of taste you're going for (seaweed, won ton, a raw egg or two, coconut milk, ground peanuts, chilli peppers, lemongrass, ginger, kimchi) to endlessly customise into a quick, simple, warming meal. For a different take in the summer, try it with soba, cold clear stock, sliced cucumber and pear, and ice: nengmyun. Sometimes, though, only packet ramen will do.
3)Chips. By which I mean oven-baked thick fingers of potato, made like roast potatoes (which, indeed, basically differ only in shape and are more appropriate for some dishes, like roasts). Basically, take some floury potatoes (waxy ones will do, but work less well), peel, and cut into the shapes you want (more or less even and about 2” across for roast potatoes, or long and more like 1” thick for chips). Meanwhile, heat the oven to about 200 and put in a suitable oven dish with some oil in the bottom. Parboil for 5-10 minutes, drain, and then put back in the pan with the lid and shake about so it goes all fluffy on the surface. Add oil (and salt and pepper and even occasionally a dash of chili oil, but that's just me) in the pan and shake to coat evenly. Put in the pre-heated oven pan and cook for about 40 minutes, turning over once or twice, until nicely and unevenly browned and crispy. Serve with suitable main (sausages, with or without some good greens such as green beans or steamed green or black cabbage, or with braised red cabbage; steak, of course; home-made battered fish, occasionally), or as the main focus (chips with two boiled eggs and a nice salad or well-seasoned vegetable like beetroot, red cabbage, or mushy peas work very well).
4)Stew. Now, this takes a while, so it's not really one for the weekday evenings unless you have a crock-pot (which we don't) and can cook it all day beforehand. But diced floured meat (beef or lamb, usually), potatoes, carrots, onions, tinned tomatoes, stock, herbs, maybe some barley, maybe parsnips – hard to go wrong. I quite like making it with a herby scone topping (like a cobbler, but savoury), or with additional spices and flavours (they have to be fairly sturdy to make it through the overwhelming lovely meaty-vegetably goodness) like oranges, chorizo, or chili pepper. Still, a bit wintry and rib-sticking, you wouldn't want it every day.
5)Prepared food. Sometimes, you want to bake fresh bread and cook all day from scratch with beautiful organic local fresh ingredients. Sometimes, you just want beans on toast in five minutes. And there's nothing wrong with that.

Making things: Christmas puddings

2009-12-07T18:15:00.004Z

This weekend, I made two Christmas puddings. I'd never made Christmas puddings before, but as we are having Christmas here this year, I thought it was time to attempt it. I used the Hugh Fearnley-Whittingstall recipe which was in the Guardian, a few weeks' ago. The ingredients weren't particularly fancy or expensive; lots of dried fruit, suet, breadcrumbs and marmalade were the main components.

Although not time-consuming to make, the puddings needed to be simmered for six hours; they have since been topped up with brandy, and will be cooked for another two or three hours on Christmas Day.

It is a good, satisfying feeling to have the puddings ready, though of course it remains to be seen how they will taste.

Cooking without waste 1: The questions

2009-12-03T20:05:00.003Z

This is a guest post; the first in a series on frugal cooking, from Jian.

Since Penny's somehow formed the opinion that I'm a fairly frugal cook, and good at using up leftovers and ingredients, she's asked me to write something about buying food economically and cooking without waste. Very topical these days. Few cookbooks seem to go out without at least a small section on how to stock your larder with most bang for your buck, and avoiding throwing away food.
I would say we throw very little food away; mostly, the waste we generate from food shopping is packaging, which is a bit of a pain. I think that in order to cook economically, one needs to ask and answer some basic questions about priorities. The main questions one needs to answer seem to be:
1)What do you most often cook, what do you most like to eat, and what do you most like to cook? The three categories do not necessarily overlap much, and it's therefore best to try and make them so as much as you can. Once you know what you will cook, you can be prepared with the right sort of ingredients, and avoid waste. It's a pain to buy a nice ingredient (like bok choy, or halloumi, or venison) that you like the look of, and is in season or on special offer, but to have to throw it away because you didn't have a plan for it.
2)How do you plan your cooking? Are you the sort of person that likes to plan a whole week's menu in advance, with cascading recipes (e.g. spaghetti bolognese to chili con carne and meatloaf, using a tomato-based mince recipe as the base), or do you prefer to improvise? This is, I suspect, as much a matter of personality as anything else, though of course you may be a very well-organised person who's rather chaotic about their cooking, or vice versa. Also, do you follow recipes closely, or do you prefer to make it up more as you go along?
3)Who do you cook for? Cooking for yourself can be wasteful, sadly, since proper cooking for one can be quite uneconomical in ingredients. Cooking for several people will raise the issue of differing preferences, and if some of them are children or eat at different times, things get progressively harder, more expensive, and more wasteful. Penny and I are in the happy position of only cooking for each other, which helps tremendously, but that won't be of much use to you.
4)What cooking resources do you have? Just a hob, or a grill as well, or an oven too? Do you have a kettle or a toaster? How about storage – a fridge, a larder, a freezer, even a chest freezer? How about less common equipment such as a crock pot, deep-fat frier, blender, kitchen mixer, microwave, sandwich-maker, or low-fat grill? What utensils do you have? Finally, what ingredients are available to you at your local shops: what's at your supermarket, do you go to farmer's markets, delicatessens, or ethnic food shops?
That all said, it's clearly going to be very difficult to give any useful advice that's generally applicable to everyone who'd like to cook more economically. I will, however, give it my best shot in future posts.

Christmas present thoughts

2009-11-29T19:57:00.002Z

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.

Spending my allowance - and a new coat

2009-11-23T19:27:00.004Z

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.

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

2009-11-18T16:25:00.003Z

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.

A Christmas craft-making event

2009-11-16T18:25:00.003Z

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.

'The Thrift Book' by India Knight

2009-11-12T17:09:00.005Z

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.

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A weekend away

2009-11-10T21:19:00.005Z

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.

Wasting money on a taxi

2009-11-09T16:48:00.003Z

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.

The Millionaire Mind by Thomas Stanley, and home-buying

2009-11-06T10:35:00.002Z

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....

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Cold cream and vanishing cream

2009-11-04T20:21:00.002Z

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.

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

2009-11-02T11:46:00.007Z

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!

Frugal habits

2009-10-29T22:43:00.001Z

Elizabeth Gaskell, in Cranford - about which excellent book more, another time - observes that most people have odd habits of frugality, for instance in their use of candles, or writing paper, and that there are certain areas where they will go to great lengths to save money, though they may not always be as frugal elsewhere.

Reading this reminded me of my first boss, who told me once that thirty or so years' earlier he had resolved never to buy a biro, and never again did so. He had a nice fountain pen, used for signing letters and for personal correspondence, but for everything else he made a habit of using free pens, picked up whenever they were on offer, and using those. I usually seem to be using a free pen acquired at some conference or other, and perhaps I have also absorbed the notion that pens are something which one should not have to buy.

For another, my mother-in-law, who is extremely careful and orderly in all things, was the first person I had ever met to make rubber bands out of old rubber gloves. I always seem to have a plentiful supply of rubber bands lying around, but do occasionally follow her example, although mine always have jagged edges and look a lot messier and more uneven than hers.

I suppose this is further evidence of how much we are all creatures of habit; I'm not aware that I have any particular frugal ways myself, except perhaps for an occasional fondness for second-class stamps, but perhaps I wouldn't know it; I'd be interested to hear of any other habits that others have observed in themselves or other people.

Possible re-discovery of a family heirloom

2009-10-28T12:30:00.005Z

Yesterday, my grandmother and mother were visiting, and as we were having tea - coffee and walnut cake made by me; fruit tea loaf made by granny - my grandmother suddenly asked whether the standard lamp in my sitting room might have come from her childhood home. We traced back how it had come into my possession; my parents had given it to us when we bought our first house, and it was, inexplicably, then painted bright blue. ( It was the nineties....I later painted it off-white, which it now is.) My mother had inherited the lamp from her aunt, who had inherited it in turn from her mother, my great-grandmother. So, indeed, it was the same lamp my grandmother remembered from her mother's living room, from the early 1930s.

It was pleasing to think how much use that lamp has given to several generations of the family. Given its age, I thought it would be nice to see how it would look back to its original wood finish, and I have started to look into removing, or having removed, the various layers of paint, so we can see how it looks underneath.

Earning extra income: the rent a room scheme

2009-10-27T20:45:00.004Z

I was speaking to a friend the other day who mentioned that he was thinking of letting a room in his home to a lodger. I mentioned that I vaguely remembered that there was a scheme allowing this to be done tax-free. I have checked on this since, and in fact the 'rent a room' scheme allows you to rent a room tax free for up to £4250 per year. This is possible whether the home is one you rent or own, although if you rent then it is likely that you will need permission from your landlord before sub-letting.

There are more details on this scheme at the direct.gov website, at the link below.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

Making things: ice-cream

2009-10-26T17:25:00.004Z

A couple of years' ago my sister gave us a lovely present, of a low-tech ice-cream maker, and so every so often, we make our own ice-cream. (We bought some cream today so we can make some to have with apple crumble, when my parents come for supper later in the week.) The machine we have is about the size of a small mixing-bowl, and needs to be put in the freezer for a while before being used. Once it has been chilled, it only takes about half an hour for the ice-cream maker to turn your cream, sugar, and other ingredients into ice-cream; if you taste the mixture before putting it into the machine, it may taste horribly sweet, but it will taste quite different once frozen.

In terms of flavours, we have added chocolate chips or gratings – creating something along the lines of the straciatella ice-cream we liked so much in Italy, and, another time, peanut butter to remind us of amazing ice-cream eaten at an ice-cream farm in Scotland; another successful flavour was brown bread. (I hope I do not sound too greedy when mentioning the major food associations we have with all our holidays?) By the way, as well as the peanut butter the Scottish ice-cream farm made some other wonderful flavours which we have not yet tried to replicate, including turkish delight and rhubarb crumble..

It is fun using the machine, though it does make quite a bit of noise, and the ice-cream produced is definitely cheaper than the fancy brands we like eating as a treat. (It probably does not work out cheaper than margarine-style ice-cream, but is a rather different experience from that.)

'The Millionaire Mind' and the economically productive household

2009-10-25T18:39:00.004Z

Following on from last week's post about 'The Millionaire Mind' and vocation, this week I am looking at what this book has to say about household spending. In one chapter, Thomas Stanley analyses the spending patterns of the wealthy, and notes that the members of wealthy households are more likely than others to be in the habit of doing the following things:

-Changing telephone providers to benefit from cheaper deals
-Having shoes repaired
-Having furniture re-upholstered instead of buying new
-Using discount coupons when shopping
-Buying household supplies in bulk

He points out that although doing each of these things may result in a fairly small weekly or monthly saving, over many years, the amounts saved will be significant.

I found one of Dr Stanley's examples interesting: that of a wealthy woman who, together with her husband, lived in a very nice house in an expensive neighbourhood. She bought high-quality clothes, but from second-hand shops rather than bought new; she ate good-quality, healthy food, but used coupons, planning her meals in advance, and cooking from scratch, and did not drive an expensive car. She was happy to spend a lot of money on antique furniture, partly because good quality furniture would last for a long time and be worth repairing or re-upholstering, but also because antiques would generally hold their value over time, if not increase, and could be passed on to future generations.

The lessons I took from this chapter were that it is worthwhile taking a long term view as small habits can lead to significant savings of time; it is worth prioritising what you want to spend money on, and allocating resources accordingly; and that it makes sense to spend money on things which will hold their value, or increase, like property or antique furniture, rather than consumer goods, expensive cars, or cheap furniture, which will not.

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A letter about overdraft charges

2009-10-24T11:55:00.009+01:00

My bank sent a letter to me this week, telling me that they would soon be introducing more 'straighforward' overdraft charges, under which they will be charging a pound a day, so three hundred and sixty five pounds a year, for having an authorised overdraft, whether for £1 up to £2500. I had to read the letter more than once to check that I had not misunderstood. The account involved is a personal account into which I pay my personal allowance, for clothes, books, and so on. The amounts going in and out are fairly small, but as it has an overdraft limit, up until now I have been pretty relaxed about going slightly overdrawn on it within the limit, when it suited me to do so, and this has cost me a few pence a month. I have learned my lesson now, however, and intend to close my account as soon as possible.

P.S After writing this post, I heard a discussion about this issue on the Moneybox programme, on BBC Radio 4, and there is a relaetd e-mail discussion on the BBC website.

De-cluttering the larder

2009-10-23T13:14:00.000+01:00

I have been reading the recipe book "Economy Gastronomy", by Allegra McVedy and Paul Merrett, from which we've cooked some good recipes lately, and have been rather horrified by the figures on the vast amount of food wasted in the UK. Although we are fairly good about using up things in the 'fridge and freezer, sometimes packets or tins get forgotten about at the back of the cupboard.

I'm going through our larder at the moment, finding those things which should be used up before they need to be thrown away, and working out what to do with them.

Amongst various other bits and pieces, I've found the following:

Two packets of barley - there's a great barley salad recipe involving goats' cheese in Economy Gastronomy (p.199), but an even simpler meal is barley cooked in stock with some vegetables or salad and grated cheese. (The barley needs to cook for around half an hour, but needs minimal preparation.)

The end of a bag of couscous - also good with cheese or bacon and vegetables or pesto.

Red lentils, nearing their sell-by date - 4 oz can be made into lentil soup with a tin of tomatoes, an onion, and about a pint of stock. (Again, extremely easy, to make and takes about half an hour to cook.)

Green lentils - with onions, stock and garlic, could be made into a mush to accompany sausages.

Half a pack of walnuts - will be used to make a lovely coffee and walnut cake - a normal victoria sponge with a dash of strong coffee in both the cake mixture and the icing, and decorated with the walnuts.

Nuts, seeds and dried fruit - I found quite a few ends of packets - could all be added to homemade granola. (By the way, I've found that keeping all small baking supplies like nuts and cooking chocolate in a small box in the cupboard helps to reduce the chance of my buying duplicates.)

"Orchids on Your Budget, or Live Smartly on What You Have"

2009-10-22T22:23:00.000+01:00

I mentioned that I had ordered this book a week or two ago; I have now read it, and been delighted by more than the title. The author wrote the 1930s bestseller "Live Alone and Like it" before writing "Orchids on Your Budget". This book is not aimed at those with serious financial problems, but at people interested in living well, responsibly and stylishly on moderate means.

It is filled with creative and inspiring ideas, some of which I will definitely revisit in future posts, but the main points I took from it were the following lessons:

-Don't feel you have to maintain a front of a fancy lifestyle to impress others, while scraping a miserable existence behind the scenes. Instead, forget others' expectations, take down the front and spend the money saved on things you care about.
-Work out what you want, and then work away of having that, whether by generating more money - and she offers many creative suggestions for doing so - or by making savings in other areas.
-Know the difference between real luxuries and habits. E.g don't buy a daily newspaper out of habit if you don't actually read it.
-Don't spend so much on housing, or food, that you don't have enough money for miscellaneous extras, whether those are orchids, holidays or theatre trips, or savings. The author is an advocate of getting a slightly smaller house or flat than you think you can afford; this will save not only on rent or mortgage, but also on the extra maintenance of a larger place.
-Plan ahead, whether in relation to your clothes - she suggests adopting a single colour for your wardrobe each year, and sticking to it fairly strictly - or entertaining.
-Play to your strengths, in terms of your assets and skills. My favourite example was that of a woman with a lovely silver tea service, whose preferred form of entertaining was therefore to have tea parties.
-Enjoy the challenge of doing a lot, and having fun, on a little money.
-Don't assume that you would be happier, better dressed and so on, if you were rich. The author considers that those who know about clothes will be well-dressed regardless of how much money they have; they spend time and effort instead of money.
-Do your social duty; return invitations, even if you can't afford a lavish party, and take responsibility for your problems if you do get into serious financial difficulty.
-Don't follow other people's rules on budgeting too slavishly; everyone is different, and you need to adopt a system that makes sense to you.

Amazon.co.uk Widgets

Is National Trust membership worthwhile?

2009-10-21T18:40:00.000+01:00

I was taken to many National Trust houses and gardens during my childhood, and have had my own National Trust membership for most years of my adult life. Looking through my list of direct debits recently, I briefly considered the value of my National Trust membership, and concluded that this is thoroughly worthwhile. First, the National Trust is an organisation which does a great deal to preserve the English countryside, including many historic houses and much beautiful scenery. Therefore, even if I didn't not use my membership fully, this would feel like a useful charitable donation. Secondly, if I make even a few visits to National Trust houses or gardens each year I will soon save myself more than the cost of membership. Thirdly, because I can visit houses for nothing, if I want to make a flying visit somewhere, or go repeatedly to the same house or garden it is possible to do so without feeling that I am wasting money on entrance fees. (I was taken to a National Trust place near my grandparents dozens of times during my childhood, and never tired of it, and I quite often visit my nearest National Trust garden for a walk.) Fourthly, I find it educational to visit National Trust houses and gardens, always learning something in the process, whether about the history of the family involved, or the plants in the garden or the china or furniture or paintings.

National Trust membership also makes a sense for holidaying in the UK - English membership was, last I heard, recognised by the National Trust of Scotland - as wherever you are staying, you are likely to have some places to visit nearby. In the Lake District recently we found that some car parks were National Trust ones, helpfully saving members a few pounds here and there on parking fees. Alternatively, if you are staying at home for your holidays, you can use your membership for some inexpensive day trips.

Finally, many of the National Trust properties have cafes and restaurants, with good and reasonably-priced lunches and very nice cakes and ice-creams, with an apparent recent emphasis on local produce.

What to do with a lump sum?

2009-10-20T17:15:00.000+01:00

I talked recently to someone who had come into a chunk of money, and asked me what I thought it was best to do with it. This is of course a good question to have to answer. I think it makes sense to do some planning and to try and strike a balance between enjoying your bit of good luck now, and benefiting from it in the future. My suggestion would be to do something along the following lines:

1) Pay off any high-interest debts, with the highest interest ones - almost certain to be any credit cards - first, then any other loans, apart from mortgage and student loans.
2) Once that is done, set up an emergency fund if you do not have one already, or top it up if you do. (As mentioned elsewhere, it is a good idea to have about six months' living expenses tucked away if possible.)
3) If you have done both of these and have some money left, I would designate some of the money for fun; a holiday, really nice meal out, home improvements, presents for your family, or whatever. The amount depends somewhat on how much money you have received, what your general financial situation is, and what you would like to do as a treat.
4) Next, you may want to look at your pension. For instance, if you are not paying the maximum into your pension to benefit from your employer's maximum contributions, it would be worth considering doing this for the future, and back-dating these contributions if you are allowed to do so. (If you work in the public sector you may be able to make additional contributions to your final salary scheme, which would be worth looking into, as this could make quite a difference to your final pension.) The advantage of doing this is that it should improve your pension situation in the long term. Because of the tax position of pensions, pension contributions are quite an efficient use of the money.
5) Another option, either as alternative or in addition to 4, is to consider paying off a chunk of your mortgage, although you should check first that you won't incur fees for doing so; this will probably depend on the amount of the planned overpayment, and the terms of your mortgage. Although interest rates are fairly low at the moment, paying off your mortgage will still reduce your outgoings and commitments generally, and will involve a greater monthly saving once interest rates go back up.
6) If that still hasn't used up your windfall then you are very lucky indeed! You may want to look at other investments such as stockmarket-based unit and investment trusts, and you may benefit from specialist investment advice at this point.

The Millionaire Mind by Thomas Stanley, and vocation

2009-10-19T20:56:00.000+01:00

I have recently re-read "The Millionaire Mind" by Thomas J Stanley, partly to refresh my memory about this very interesting book, and also with a view to reviewing it here. I realised, however, that it addressed so many themes that I would prefer to write about a few of them in turn. If you have not encountered this book before then I do recommend it; following on from "The Millionaire Next Door", by the same author, it covers the characteristics of those who become wealthy in America.

Contrary to what you may expect from the title, and my description above, this is not a self-help book, and there is nothing gimmicky about it, but instead it is a very detailed academic analysis of how those who become wealthy do so, and the factors in terms of personality, profession, and financial approach which contribute to their success. (The author is an academic and university teacher.)

On re-reading, I was particularly struck by what Dr Stanley says about the importance of vocation for those who become wealthy. I have sometimes felt that one seems to have to choose between earning a good salary and doing enjoyable and interesting work. I have recently concluded, and this was reinforced by what I read here, that it might actually be unwise to stick with a career one does not love, quite apart from the unhappiness involved in doing so, because of the need to compete with others who are more genuinely motivated and enthusiastic, which over time would begin to tell.

I found it very interesting and encouraging to read the probably obvious-to-everyone- else fact that those who are financially successful in their work generally have great enthusiasm for what they do, not purely as a means of making a living, but as a vocation which uses their talents and suits their interests fully. It was also good to read the story of one highly successful sales man who left, or was dismissed from, 9 sales jobs before finding one to which he was ideally suited, and in which he was highly successful and contented.

Amazon.co.uk Widgets

Making things: granola

2009-10-19T20:03:00.001+01:00

I recently tried making granola for the first time. Most breakfast cereal didn't seem to taste of much, but to involve a lot of packaging and to be rather expensive - and the more interesting-tasting cereal seemed very expensive. It is quite a satisfying exercise, and very easy, to make your own granola instead, and a good alternative to porridge - another wholesome breakfast - if you don't have time to cook, or don't feel like it. I used Nigella Lawson's recipe from Feast, although on second making adjusted the quantities, as the Feast recipe involved large quantities of rather expensive whole almonds. As well as eating for breakfast, it works well sprinkled over ice-cream as a pudding. Similar recipes to the one I have used can be found at : http://allrecipes.com/howto/great-granola/detail.aspx

Mending

2009-10-18T12:24:00.001+01:00

Today, I have spent a satisfying hour or two mending clothes. I am not a talented seamstress, but have been sewing on buttons and mending tears in a few shirts. It is a good feeling to make these repairs, and to put some garments back into circulation which have been on a mending pile for some time. I have a small sewing kit which includes a twist of threads of all sorts of different colours, which I have had for years. When I come to mend an item, I can generally find a piece of thread of approximately the right colour for the garment involved; I don't need to buy or store reels of cotton of many different colours.

Using credit cards

2009-10-17T08:25:00.000+01:00

I recently read an article on get rich slowly - www.getrichslowly.org - where the author suggested abandoning using credit cards and using cash instead. I thought this was an interesting suggestion, although one I might find it inconvenient to implement in practice, but I do agree that it is best to simplify one's credit card situation as much as possible. My thoughts on using credit cards are as follows:

1) Credit cards are a terrible way to borrow money; the interest rates are huge compared to any other type of loan.
2) Credit cards can be a useful way to pay for many purchases, but only if you already have the money for them.
3) It is worthwhile signing up for a credit card with reward points or airmiles. (Mine gives 2% cashback.) These benefits are only worthwhile if you pay off the full balance every month, however, as they would not come close to offsetting the interest payable.
4) Having used various cards in the past, I have now simplified my situation to the following; using one Mastercard for all household bills and most large items.
5) I have online billing, meaning a) you can check the state of your account at any point, and b) it is set up to pay the full balance every month, so you don't need to bother with a bill and worry about avoiding late fees. If you do not have this option, make sure that you have a way of keeping track of the due date of payments, so that you avoid running up charges for late payment.
6) If you need to have a back-up card, for instance for travelling or to pay for large one off items, keep it tucked away somewhere safe, and not in your wallet, when not needed.

Business travel, and money

2009-10-17T08:01:00.000+01:00

I went to Germany for work this week, and while away gave some thought to my rules on business travel and money. (The day I set off was also the day that the next phase of the MP expenses scandal began!) I find it quite easy to fritter away money while travelling; here are my thoughts about how to avoid doing so.

1) Keep a container of miscellaneous currency, and make a habit of checking it, and taking relevant currency, when you go away.
2) Designate a wallet or envelope for expenses for your trip when you set out, so that you have all your receipts in one place.
3) Try to avoid spending money on anything that while potentially justifiable, you won't feel comfortable claiming back on expenses. (E.g extra snacks, slightly expensive lunches, or taxis, if the policy is to use public transport.)
4) Make sure you get receipts for anything that you do intend to claim back. (I felt slightly embarrassed reminding the air steward about the receipt for my airline bottle of water this week, but it was a very expensive bottle of water, and I had this article in mind!) If you are in danger of forgetting why you have kept the receipt, write on it.
5) Be prepared for time waiting around by taking plenty of reading matter, so you will be less tempted to succumb to airport newsagents and book shops.
6) Be careful about phone calls home from abroad; if you are entitled to claim the costs of a phone call home, keep the appropriate records; be aware of the hotel or mobile phone company's charges for overseas calls.
7) If you are expected to use your own credit cards for large items, e.g hotel bills, take the opportunity to pick up reward points, or airmiles.
8) If you have the opportunity to do any personal shopping, take advantage of this to buy things that may be cheaper, or better, than at home, if you have decided you can afford to do so. However, do make sure you are up-to-date on the exchange rate, and watch out for hidden sales tax, not marked on goods in shops, in some places.
9) When you get home, return any unused currency to your miscellaneous box, and fill in and submit your expenses claim as soon a possible.

Book Review: "A Guide to Elegance" by Genevieve Antoine Dariaux

2009-10-12T17:49:00.002+01:00

This may sound like a frivolous book to be reviewing for a blog supposedly about personal finance, but actually I found the advice it contained extremely useful and practical, assuming that the topics of clothes and style are of interest to you in the first place. As I have mentioned before, I find clothes-buying an area where I am naturally inclined to spend money.

This book, whose full title is "A Guide to Elegance for every woman who wants to be well and properly dressed on all occasions" was originally published in 1964, though was updated and re-published in 2003. Though some of the advice, written as an A to Z of clothing-related themes, harks back to a more genteel era, with the suggestion of different outfits for morning and afternoon, cocktail parties and weekends away, sounding in many cases more like 1934 than 1964, much of it remains entirely applicable.

Mme Dariaux considers that Frenchwomen tend to have far fewer clothes than their American counterparts, partly because they are less exposed to advertising, but that the garments they do own tend to be of far better quality. She notes, and this was one of my favourite points in the book, that a woman's aim should be to own a single perfect outfit for every possible occasion, and that there is no stigma attached to wearing the same dress on many occasions.

Other advice is to invest fairly heavily in a good quality, and ideally colourful, winter coat, possibly bought with a skirt in a matching colour, as this should last for several years, and to take the opportunity of a prosperous phase in life to acquire some good jewellery, handbags, a gold compact, a nice umbrella - rather than to buy fashionable dresses which will not stand the test of time.

Under the heading of "budget", is the surprisingly short list of items that the author considers essential to a woman's wardrobe; this is expanded upon in the "Ideal Wardrobe" section.

Her advice on bargains is that whether an item is really a bargain has little to do with its initial cost, and everything to do with how much use and pleasure you derive from it over time. The author also wisely counsels against buying anything, particularly in a sale, because it is bound to be "useful"; you should love it.

In summary, I thought this was an excellent, and very encouraging book. It left me feeling that if I could manage to take a long-term view, plan, and save up for clothes that I really wanted, I would end up better dressed, without having spent too much, and with less clutter in my wardrobe.

Amazon.co.uk Widgets

The local shop

2009-10-11T19:25:00.000+01:00

About a year ago, a small food shop opened in a village a couple of miles away. This was quite an exciting development, as until then we had been dependent on a not very interesting or convenient selection of food shops. The village shop sells fairly local fruit and vegetables, meat, and cheese, as well as a small selection of everyday grocery items.

We try to support this shop by visiting fairly regularly, buying fruit and vegetables, occasionally meat, bread and special cheeses where needed, essentially those things where it feels worthwhile to buy really good quality local food. As a special weekend treat, we also sometimes buy almond croissants; these are huge and the best I have ever had. For a recent family picnic, we bought a meat pie, good cheese, and a large crusty loaf.

Another advantage I find to the village shop is that it is quite refreshing to have fairly limited choices about to buy, as the shop is extremely small; this makes shopping trips very quick and straightforward.

Out of hours, we go to a local co-op to stock up on other things, and we occasionally - maybe every month or two - go to a discount supermarket to stock up on non-perishable items, like tinned tomatoes, kitchen towels and cleaning supplies, which it seems worthwhile buying cheaply and in bulk.

Making things: greetings cards

2009-10-10T17:54:00.000+01:00

I am not very skilled at crafts, lacking artistic ability and not being handy, but I like the idea of making things, and generally enjoy doing so when I do attempt it. A while ago, I bought some cardboard, rubber stamps - one a futuristic swirly pattern, and one a rather pretty rose, and some red ink, with the intention of making some greetings cards. I have just tried doing so, and made a few rose-stamped cards. The ink pad had dried out rather, so I added a little water, in the end possibly too much, so the roses ran slightly, and one looks rather more like the man in the moon than a flower. But the exercise was quite satisfying, and I was mildly proud of some of the results, which I think are usable. And the craft materials I bought have at least now been put to some use.

"Orchids on Your Budget, or Live Smartly on What You Have"

2009-10-09T19:49:00.001+01:00

I spotted this wonderfully-titled book in Vogue earlier this week, where it featured in a money-saving feature. It is about living elegantly on a small budget, and was written in 1937. I can't wait to receive my copy....(Sadly, this was not featured in my library catalogue, but I decided that it sounded worth buying.) I will report back in due course.

Lifestyle deflation

2009-10-09T18:40:00.000+01:00

I used this term in an earlier post, but didn't explain what I had in mind. I have read various references recently to 'lifestyle inflation" meaning the tendency for one's spending requirements to expand with a growing income. I have been thinking back to when we first started working, ten years' ago, and had two small incomes, yet felt better off in many ways, and certainly much less cluttered up by life, than we do now.

Part of it is of course the benefit of hindsight, but I also think that our expectations and needs were much less, and simpler, than what we have become used to as the years have gone on.

Life was not entirely simple back then; we had a house, but it was brand new and low-maintenance, and contained IKEA furniture, some books, a few clothes, and not much "stuff". We had a car, but only one, and lived close enough to work for me to walk there. (Not an advantage in every respect.) We still lived a student-y lifestyle, and our tastes in meals out, clothes, food and furnishings were less sophisticated - possibly in a good way - than now.

Something I have been trying recently is to intentionally deflate our lifestyle. I've reduced my clothes allowance - only just, so cannot yet report on how painful, or manageable, this will be - and will be trying out a much cheaper hairdresser than usual. (I had been going to a lovely hairdresser, but the cost was high.) We are intentionally eating out less than had become our habit. So far, I do not feel deprived, but we will see how it goes. I definitely think that there is an element of habit in many of these expenses. While I do not want us to feel deprived I think, like the routine of buying lunch mentioned elsewhere, that it is possible for something which should be a treat to become an everyday "need", and then it is no longer appreciated, and just leads to further treats seeming normal.

Planning

2009-10-08T20:58:00.000+01:00

I've been working quite hard recently, including some time away from home, and consequently haven't been as well-organised in various respects as I might have been. As well as being inefficient with time and energy, my lack of proper forward planning has also led to some financial inefficency.

For instance, I recently ignored the telephone calls from the car insurance company about my renewal until the last possible moment, meaning that I didn't have time to shop around properly for a quote, as I had intended to do.

I've also forgotten to take my packed lunch in to work a couple of times, and therefore had to buy lunch out. I used to feel that a bought lunch was a nice treat on those days - two or three a week - when I was away from home. Nowadays, except on these few recent occasions of forgetfulness, I am in the habit of taking a packed lunch, and save buying lunch for a special occasion, usually a social gathering.

If I am in a hurry I am also more likely to leave making travel arrangements to the last moment, so not being able to take advantage of cheaper rail fares, as well as more likely to eat out for convenience rather than pleasure.

When things are going well, I enjoy planning ahead, and find it quite easy to do so, but I have noticed that my natural instinct is to put my own affairs on hold if feeling under pressure, and find myself living from one day to the next. I'd like to think it is partly the result of a conscientious nature, but is probably not ideal for my own health and happiness, and this is something I am resolved to work on. (A classic example of this is my old habit of leaving my expenses claims to languish for months before submitting them - though that is one habit I have now more or less broken.)

Savings - different purposes - retirement

2009-10-07T18:52:00.001+01:00

I've tackled emergency funds, paying annual bills, and saving up for large purchases, and this time am going to begin the subject of saving for retirement. (Remember - I am not an expert, so deal in these questions in fairly broad terms...)

In summary, while most of us working now may receive some kind of state pension on retirement, it seems likely that the vast majority of the money we need to live on in retirement will have to come from our own resources.

There are various possible sources for this income, the most obvious and generally applicable being a pension, to which we will have contributed while working.

There are essentially two kinds of pension; one, a 'final salary' pension which is based on receiving a proportion of the salary you are earning just before retirement, for the rest of your life, and often involves a lump sum being paid on retirement as well. The proportion of your salary which you will receive will depend on how many years you have been a member of the scheme. Final salary schemes are currently available to those working in the public sector, as well as in a very small, and declining, number of large corporations. The advantages are obvious, and the contribution you will have to pay as an employee relatively small compared to the benefit of a decent, guaranteed income in retirement. It may be worth making additional contributions in order to get the maximum benefit from these schemes, if you join late and can afford to do so.

The second type of pension is a 'money purchase' scheme. Under this scheme, employee and employer will usually each contribute a percentage of the employee's salary into a pension fund, which will build up into a sum that can be used to buy an income for the rest of the employee's life when he or she retires. Usually the pension will be held with a financial institution chosen by the employer, but the employee will often have a choice about which funds they invest in, and which are most appropriate will depend on your age, and how much risk you are prepared to take.

The pension contribution offered by different companies will vary, and companies generally match the employee's contribution up to a certain maximum, normally around 5%, maybe up to 10% if you are lucky. It is worthwhile thinking about making the maximum contributions in order to get the greatest benefit from the employer contributions, if you can afford to do so. On retirement, the money in your fund, which will hopefully have grown considerably over the years, will be used to buy an income for the rest of your life, called an annuity. There are various factors which will influence the value of your money purchase pension, including how much you have managed to contribute, which funds your money has been invested in, how much these have grown, and annuity rates - the rate at which it is possible to buy an income - at the time you retire.

Public libraries are wonderful things....

2009-10-06T20:36:00.000+01:00

I am not the most patriotic of people, but I do greatly appreciate the UK public library system. I have always visited my local library regularly, to stock up on general reading material; I enjoy reading greatly, and can get through several books each week. However, until fairly recently, I felt somewhat limited by the selection of books in my local library, which as I live in a small town, is not huge, and I would be tempted to supplement the books I borrowed with online purchases.

However, when I lost my library card a few months' ago, and went to sign up for a replacement, I found that the library now offers online reservation services. If you are not already using these, then I strongly recommend investigating them. You can search your county's library catalogue, find out where any copies of the book you are interested in are held, and if the book is not held at your local branch, summon it to you.

This service costs 85p, at least in my county, but will have the book delivered to your local branch within a few days, if it is not out on loan. I find that using this means that there are many books which I do not now need to buy, and am changing my book-buying approach. Now, I buy those books I have read and decided it is worth owning, as well as those which I strongly wish to read, and cannot find through my library catalogue. (This is sometimes the case for US personal finance or business books, for instance, though most fiction I am interested in is available.) I find that many books I read I may enjoy, or get useful information from, but I really do not need to possess a copy.

Another advantage of the system is that if I feel the need to do some online shopping, as well as other spending-deferral techniques which I will discuss more later, I find that reserving books via the library catalogue is a good, and wholesome-feeling, alternative to buying them.

As well as books, libraries can be a good source of DVDs as well as audio-books on CD. I recently hired, for little over £1, an audio book which lasted for most of a trip to the Lake District and back.

While I am in the library, I may take the opportunity to flick through the magazines they subscribe to - yes, I enjoy Good Housekeeping, especially the recipes - and the various newspapers held there.

Lifestyle deflation - a simple meal involving tinned tomatoes and not much else

2009-10-04T19:53:00.000+01:00

When I think back to the food I ate during my childhood - and I think I ate particularly well - it seems to me that the meals we ate then were a lot simpler than the meals eaten now. This was during the seventies and eighties, and although we had some instant meals, butterscotch angel delight, miniature frozen pizzas and mousses being among the greatest treats, pretty much everything we ate was made from scratch. My parents were, at times, at least semi-vegetarian, so we did not seem to eat much meat at home, and our meals seemed to be quite economical. We virtually never ate out, had few take-aways, or even bought cakes, and our ready meals were limited to the occasional pizza and chips. Like my mother, both my grandmothers are good cooks, and we ate many post-war type meals cooked by them.

Meals I remember with particular fondness were: bacon, egg, macaroni and peas with plenty of tomato ketchup; a bean and vegetable stew, baked potatoes topped with paprika and grated cheese, apple crumble, homemade chocolate sauce, millionaire's shortbread (though we did not know it by that name and called it "Granny's chocolate stuff), and macaroni cheese.

One of my all-time favourite meals, an incredibly easy, comforting and economical one, still one of my favourites, begins with tomato sauce and pasta. There are million recipes for tomato sauce so you hardly need mine, but here it is anyway.

Tomato sauce and pasta

For two people, cook one small or half a large onion on a low heat in sunflower oil, possibly combined with a small knob of butter, for around ten minutes, after sprinkling lightly with salt. You do not want the onion to brown, but become translucent, and when you taste it, it should have sweetened and lost its raw onion flavour.

Then add one tin of tomatoes, chopped if you have them, but if you are using whole tomatoes, it is best to mash them up with a spoon to break them up. Add a chopped or minced clove of garlic at the same time. If you feel like adding any other vegetables, and have some lying around, you could add some sliced peppers or mushrooms at this point, as well as a dash of oregano or basil if you have it. Bring the sauce to a simmer, and cook for 10 minutes before putting pasta on to accompany it. Spaghetti is good, but you can use whatever pasta you like, or have to hand. (Or a mixture of the ends of bags, as long as you start with the longest-cooking pasta, and watch the timings carefully.) As the sauce is not a very filling one, I suggest you err on the generous side in your per person pasta allowance. (I normally allow 75g per person, but you might want closer to 100g.)

Serve with grated cheese: cheddar or parmesan are both good, or I like a combination of the two, but again, whatever you have is fine. Alternatively, you could chop up a piece of mozzarella and stir that into the sauce just before you serve it. If you have any pesto you could serve a dollop on the side. Equally, if you have any salad leaves those would be a good accompaniment. You will definitely want some freshly ground black pepper.

Ice-cream and chocolate sauce

The pudding I associate with this main course is ice-cream and chocolate sauce. To begin, take your ice cream out of the freezer. I suggest using vanilla, whatever kind you like. Whilst I now prefer to avoid the margarine-style of vanilla I associate with my early childhood, you definitely do not need to use anything fancy. If you would like any accompaniments with your sauce - crunchy cereal, sliced almonds, sliced bananas, tinned pears - get those lined up now.

To make the sauce, for two people, put a desert spoon of margarine into a small saucepan on a low heat, then add a desert spoon of golden syrup, melt the two ingredients together, then stir in a desert spoon of cocoa, and simmer very gently for about 30 seconds. You want the sauce to bubble very gently, but not to boil. Then pour over the ice- cream, and leave for a few seconds to set, before adding any accompaniments, and eating.

I have not actually calculated the exact cost of this meal, but it is very little indeed, and its comfort and nostalgia value is considerable.

Clothes shopping - clippings file

2009-09-30T22:48:00.002+01:00

I love clothes shopping, and find it easy to spend money on clothes. I am making a conscious effort to do so less, partly to save money, and partly to reduce waste; it is so easy to find oneself accumulating excess possessions, and does not feel particularly healthy or environmentally friendly to do so. I find planning ahead a bit does help, and this is a topic which I will address in future posts.

When I receive mail-order clothes catalogues in the post, I have adopted the habit of quickly skimming through them, and tearing out pages showing any looks I like, and putting them in a clippings file. When I have time, and feel inclined to do so, I review the torn-out pages, analyse what about the pictures appeals to me, whether the outfit is one that would suit my shape and colouring, and then try and work out how to create a simliar effect with my existing wardrobe. I generally find that I have most of the components for a similar ensemble already, or I may decide that the addition of one or two small items would make a difference. In that case, I write a note in the notebook I carry with me, for future reference. For instant, this week I admired an outfit which was essentially a smart shirt, tank-top, and trousers - a combination I wear often - but with a patent belt added. Rummaging through my wardrobe, I found a patent belt belonging to another dress, which I decided would work well for this.

I do something similar with online sites, looking at garments that appeal to me as part of a combination, where the website allow this function. I then bookmark the page concerned for future reference. I have, though, recently unsubscribed from the all clothes-shopping e-mails that I used to receive, so that I now make a conscious effort to visit websites of interest, rather than finding myself drawn into them unintentionally.

Book review "Anybody Can Do Anything" by Betty MacDonald

2009-09-30T22:44:00.001+01:00

I don't buy many new books these days - I'll write more about that in another post - but on a recent trip to Hay-on-Wye spent many happy hours browsing through the secondhand bookshops there, and as many the books were £1 or less each, I picked up some interesting bargains.

One of them was "Anybody Can Do Anything" by Betty MacDonald. It was an old-fashioned red hardback, and I was drawn to it as I am susceptible to self-help books, and the idea of a 1940s self-help book was rather appealing. I randomly opened it, read a paragraph or two, laughed, and decided to invest 50p. Anyway, it is a marvellous book; not a self-help book but very topical, as it is an autobiography of a woman in depression-era America, with stories about the bizarre jobs her resourceful, if rather bossy, sister Mary finds for her and other members of the family, and the economical lifestyle her family adopts. I particularly liked the idea of her mother's Saturday evening chilli evenings to which a random assortment of friends are invited, and the clothes-sharing system operated between Betty and her sisters, under which whoever wakes up first gets the best outfit for the day.

It is a very heart-warming story, as the title suggests, and I did find myself believing that anybody really can do anything; Mary enlists her mother to write a radio play, which runs for years; their brother undertakes a series of swaps of his possessions which get him a car so beautiful that Betty's colleagues won't speak to her after they've seen her in it, and Betty herself, hilariously self-deprecating about her lack of office skills, eventually becomes a successful writer.

(Since reading the book, I have discovered that it is part of a popular series, beginning with "The Egg and I", which describes her experiences of marriage to a chicken farmer; I am looking forward to reading that, and the rest of the series.)

A bizarre coincidence: driving home one evening after discussing this book with my sister, who loved it, too, I heard it being read as Radio 4's "book at bedtime".

Amazon.co.uk Widgets

Savings - different purposes - saving to spend

2009-09-30T20:31:00.000+01:00

Today, I'm tackling saving up to buy something in the future. For example, you may wish to save up to buy a car, or home improvements, or perhaps a wedding or holiday. I have also saved up for an occasional expensive item of clothing, and in one case a watch. I contend that these expensive purchases don't make me financially irresponsible; I didn't use credit to buy these items, but chose to save my personal spending money to buy them in place of a number of smaller, more forgettable, treats. (While saving up for the watch, I decided to forgo new clothes for several months in order to buy it; maybe a sign that my priorities are a little peculiar, but it worked for me.)

Anyway, my point is that if you want to buy something expensive, it is, in general, with some exceptions which I will tackle in future posts, more efficient to buy it with money you already have than to borrow the money to do so. And while you are assembling your cash, you may as well get some interest out of it. You will probably want to keep the money somewhere accessible, although if you are planning fairly long-term for your purchase, you could sign up for an account with some notice attached, if that gets you a better rate.

My recommendation would be to consider the following: using your Cash ISA allowance if you are a taxpayer and have not already done so; using an offset facility on your mortgage if you have one; or, failing either of these, using an ordinary savings account with a good interest rate. Unless you are planning fifteen or twenty years ahead, I would not invest the money in anything stockmarket-related.

You might also consider buying some premium bonds with the money. There are sites you can visit which show how to calculate the effective interest rate, and this may be worth considerable. I had quite a few bonds for a while, but wasn't lucky enough to win more than a very few small prizes, so I eventually decided to cash in all but a couple of them. (This was rather illogical of me as the more bonds you hold, the more likely you are to win, but after all I am not a computer!)

I suggest deciding to save a certain amount towards your goal each month, bearing in mind what you can afford and when you plan to buy the item, and setting up a direct debit to the designated account each month. If you have the chance to name the account to suit your goal, which is sometimes possible, that may help you. As mentioned in a previous post, I use my mortgage offset account to save, and have recently set up a "car" jar, into which I will save a small monthly account towards the next car I expect to buy several years' from now.

Finally, it may be that it is unrealistic to save the full amount you need for the purchase in question before the time you need the money, but even if you are able to send 20% or 30% of the money needed, that will reduce what you need to borrow, and therefore save interest, and will help you to get into the habit of planning ahead.

Savings for different purposes - the emergency fund

2009-09-28T20:35:00.000+01:00

The next category of savings I'm looking at is the emergency fund. Unlike the annual bills fund, this money is intended not to be spent, all being well, but instead to serve as a back-up fund for use if you lose your job, become ill, the roof falls in, or a similar emergency arises.

I would suggest putting your emergency fund in an account with the best interest rates you can manage, while still keeping the money accessible on either no, or very little, notice indeed. (You may be confident enough to rely on credit cards or overdraft facilities to tide you over until you can access your fund, but I'd strongly suggest not tying up the fund for too long.) If you are a taxpayer then it is definitely worthwhile making use of your cash ISA allowance for this purpose. Alternatively, if you have an offset facility on your mortgage, you can use that, as I do.

In terms of the amount, the sum of six to eight months' living expenses is often recommended by experts. Depending on your income and other commitments, that may be an ambitious target, but is I think a good one to aim for.

Savings - different purposes - annual bills

2009-09-28T19:55:00.001+01:00

While I've long recognised that saving was a sensible and probably virtuous thing to do, and have been in the habit of saving money where possible, it has taken me quite a few years to work out that there are several different categories of saving, which it makes sense to treat separately.

In this post, I'm looking at annually recurring bills: saving for these this is not really saving at all, just spreading the cost of household bills which need to be paid for irregularly. I used to find that my savings account would get a severe beating in mid-summer every year, when several insurance policies, car servicing, not to mention holiday costs, all fell due around the same time. A few years' ago I read somewhere about the idea of an "annual bills" jar. The way it works is very straightforward; you need to add up all the bills which you need to pay less often than monthly, estimate their amounts, ideally add a bit to allow for miscalculations or increased premiums, divide the total by twelve, and then set up a direct debit from current account to savings for that amount each month. You can then transfer money back to the current account to pay the irregular bills, as they come up.

Another advantage of this approach is that it should avoid the temptation to sign up for any regular payment schemes which you may be offered with insurance and similar; they usually include a hefty amount of interest and are therefore best avoided.

If you like, as well as annual bills you could include a payment for Christmas and Summer holiday expenses, as they are also recurring and standard; I used to lump these categories into my annual bills budget though I have recently, possibly over-fussily, set up a separate jar for holidays.

Why am I doing this?

2009-09-27T21:54:00.000+01:00

I'm a mid-thirties British woman with a long-standing interest in personal finance, developed through reading and practice over the last ten years in particular, my working career so far. In this blog, I will attempt to record what I have learned about the larger issues of financial planning, as well as ideas for money-saving on a smaller scale. I'm particularly interested in personal finance as a tool for individuals to build some security, and have the freedom to choose work, and a way of life, that suits and pleases them. I am an interested amateur rather than a professional, so please approach my comments in that spirit. You are unlikely to find specific product recommendations here, but may find recipes, book reviews, and my thoughts and advice.

Aside from personal finance, my interests include literature, particularly classic detective fiction, as well as fashion and food.