Monday, 24 November 2014

How long would you last financially if.....

Hello Dear Reader,

I read some sobering statistics yesterday that 'Millions of Britons are less than a month away from living on benefits if they lost their job.' I'm not just anti-consumerism at Christmas, I'm anti-consumerism all the time! Now many people may wonder why I live a life of 'frugality' when I don't need to. I would argue that I do.

Let me explain why.

None of us can guarantee against financial insecurity. If the rest of the world's finances go down the plug hole then we all suffer. Those with the least suffer first and always suffer most. Then the rest of us follow. Hopefully, we won't get that far. Many people just can't work their ways out of this as they either don't have the skills or qualifications to earn any more than minimum wage. There are also the young people, including graduates who can't find any work at all. I absolutely get the fact that times are hard and they only seem to get harder.

I live with that reality as I well remember DB being made redundant from one job, securing another only to have his salary slashed by 10% due to austerity cuts. We know from bitter experience that even public sector jobs are not as secure as they once were.

I also know that we are in the fortunate position to have downsized our home, paid off all our debts, insulated our home and installed a wood stove so we can heat it cheaply. However, none of that was a gift and we worked for every penny of that. I worked a year at night school to get into college, three years as a mature student who worked her way through uni and then went to work and trained on the job as a teacher. DB trained in his job and worked his way up, studying nights, taking courses and both of us did so when education was no longer free and I took out student loans so I could get to where I am today. We were frugal and thrifty then and we are frugal and thrifty now. We also did extra work and did everything from cleaning caravans, marking exams, tutoring students in the evenings and weekends

Here's the thing. The cost of living has gone up 28% in the last few years and average earnings have gone up by 9%. Public sector wages have risen by 1%. So, we are all affected by the cost of living. The news might say that the economy is getting better but in truth, every one in the UK has got poorer over the last five years. 

This year, I could have taken the money we have saved for a wood stove and new windows and spent it on a trip to somewhere hot, all inclusive and 'let my hair down'. We could have eaten out each week, gone to the theatre and cinema, bought new clothes every month and bought expensive gifts. Instead, we took the sensible option to make our house draught proof and keep it warm for a lot less. This will pay us back over the coming years. We also chose to make an extra £350 a month over payment off the capital of our mortgage so we will have reduced our total capital by one sixth in one year.

Is my frugality a life style choice or a necessity? I would say it's a necessary lifestyle choice. You don't have to be on the breadline to decide to save money, live sensibly and make shrewd financial decisions. If I had done this before I would have a bigger personal pension and no mortgage by now. 

We are doing all we can to keep our living costs low and our life style as comfortable as we possibly can. I menu plan and make sure we eat really well by cooking all our meals from scratch. I still get the very best deals on all the food I buy. We live carefully and make sure we get the very best deals on everything we ever buy and make sure we only buy what we need. If we buy what we want then we make sure we have carefully saved for that, our windows and wood burner being a case in point, is carefully saved for. A trip away for two days meant that we kept money aside for the diesel to get there, the lunches we ate when we were there and some spending money. If we hadn't been offered the hotel stay for free then we wouldn't have gone away at all. Frugality is the wisest choice we can make and continue to practise the best we can.

I'm going to continue to live on as little as possible for the foreseeable future and I advise everyone else to do the same. Why? My advice to everyone, who can do this,  is to save what ever you can. If you are debt free and can, then try and make mortgage over payments. If you can make regular payments into savings plans, even if you think the interest rate isn't worth the bother, then please try and build a saving habit. If you can cut back on spending then please try and do so. 

Being careful with money is the reality that we all have to live by.

That means you and me will have to keep watching the pennies together.

Until tomorrow,

Love Froogs xxxx