Saving nearly £300 on home and contents insurance

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....

Could I manage without my car?

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

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

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

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

My thoughts so far are as follows:

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

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

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

A heating oil collective

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

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

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

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

Budgeting for the not-very-budget-oriented

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.

Savings - different purposes - annual bills

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.