No need for credit cards

In November 2014, I cut up all my credit cards. That was almost three years ago and I’m still alive today to tell my story. I have lived every month without the need to use a credit card. 

I changed my lifestyle. I changed my approach. I changed mindset. You don’t need credit cards. You think you need credit cards, because you can’t keep up with the Jones’. The funny thing is, most of the Jones that you see, at traffic lights, carrying bags and bags of new “things”; have probably not paid outright for those “things”. Its probably on credit. Now imagine their debt figure floating above their head, or car like a video game gauge system. Granted, there are a number of people fortunate enough to have the latest car, latest gadget and newest clothes, but when you look at the statistics and (UK) average wages;  its not mathematically feasible.

The median average wage UK as calculated by our Salary Calculator is £27,000. [source]

If that’s the case and your renting or paying for a mortgage and not to mention everyday living expenses. How could you buy a brand new car? Without inheritance, lottery win or a pot of gold at the end of the rainbow.

Britons spend around £27,500 on a new car
[source]

It is not rocket science, the new car is more than the average salary. That salary is before tax. So then the car is bundled onto a lease. Why? Because you think the monthly payments make it affordable? cheap? in budget? That can’t be further from the truth.

A new car will break down. An old car will break down too. However a used car only cost you £5000? That’s a cheap breakdown compared to a £27,500 – right?

How have I survived a breakdown with no credit card’s? A £1000 emergency fund that’s how! Since having the fund it’s been used once and through small contribution’s over months and months of frugal living it’s now at £5247.00. Still no credit card’s or loans (I have a mortgage – that’s my only debt)

Its incredible the transformation of no monthly credit payments has made. That includes the car payment, which stood at £234.64 per month – back in 2013. That’s when it ended though. It had been for 36 months. A HUGE £8447.04 spent, but I did not own the car. Have I still got that brand new car? Nope.  

Just live on less than you earn. It IS that simple.

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Excess saver

“Would you like to pay an additional €24 per day incase you have an accident or damage the vehicle etc?”

Over 4 days that’s €96. That’s in addition to the €850 excess if there is an accident or damage. 

Fortunately I have the emergency fund funded; and growing. We said no thank you and sure enough at the end of our trip we were €96 better off. All thanks to the growing emergency fund.

Live on less than you earn. Simple.

A timely read

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I have just been reading about car finance deals soaring to an all time record high, which ties in nicely with my previous post about consumerism. My thoughts on consuming less is very timely indeed. The problem I see with the car finance deal, is that you are essentially thinking it is the best deal out there, but how much does a 3 year warranty, 1 year insurance and no more than 10,000 miles per year really cost? Surely financing a car is more expensive than paying for a car outright with cash?

A second hand car is not the end of the world. It’s just not what the Jone’s are driving. Who cares? No body, but you. I have had a car on finance and it is fair to say; I won’t again. If I’d just been able to fast forwarded to where I am now. Know what I know now, I never would have done so.

Take your current car payments, mine some 4 and a bit years ago, were £264 per month. Now save that for 6-10months. That’s £1584–£2640 in cash that is saved. “What am I meant to drive in the mean time?” Buy something cheaper. “How, I have no money?” This is the vicious circle that (I know) “pushes” you into taking out finance. So “find” £500 to get yourself started. There are numerous vehicles out there for around £500 and if you rock up with £400 cash in your hands, you could probably walk away with the £500 car and £100 in change. A quick search online gave me 2,288 cars under £500 – they won’t all be perfect, but there’ll be one for you. One located:

£500 Volkswagen Golf 1.6 SE 5d 105 BHP TRADE CLEARANCE – GREAT VALUE

If you don’t ask, you don’t get.

Buy the car and drive it until it goes pop. Even use the £100 towards a good servicing, to lengthen its service to you. It’s a car! Not a person. It is meant to be used and used until it is no longer usuable. We, as consumers have a responsibility to slow down in our mindless consumption – the earth is only so big and can only disppose of so much. Where will the “unwanted” stuff eventually go?

That car, based on the £264 saved over two months, gives you £528. Now imagine that the car lasts you 12 months. That there would be £264 saved, over the coming 10months giving you potentially £2640. Even if you could save only half of that, it’s £1320. Although the bracket is slightly higher; there are 23,861 cars available at £1,500 or less! So in theory, in a year you could have purchased another new (second hand) car. Keep repeating this method (use the car until it goes pop) and before you know it – you would have a brand new car, but with no finance. Obviously the newer the car that you keep purchasing the longer it is likely to last. Don’t forget though, brand new cars go down in value before you have driven off.

This is similar to what Dave Ramsey talks about over and over again. Get rid of your car payment. Live on less than you earn. It works. It is as simple as that.

 

How many clothes have you got…

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I keep reading about how debt is a huge problem. How people don’t earn enough to get out of debt. Wages are too low. Families, couples and single people can’t save – perhaps due to debt, outgoings, just don’t earn enough etc. Living on or below minimum wage doesn’t help either. Sadly there are millions of people in this boat. Then reading that if you don’t have enough savings to get a credit card for an emergency?! Without going into the detail or pulling in loads of stats; this whole piece is wrong in my opinion.

Just stop. Stop. Think about it. Everything that is raised in the news (about this topic area) is about savings, debt, minimum wage, the breadline etc.

Let’s just stop and forget all of that for 5 minutes (to a lifetime).

For 5 minutes think about consumption. We as consumers, consume too much. I’m talking everything from food, new smart phones, new cars, plastic toys to clothing (and many many more). But why? Think about the behaviour behind it all. The mindset. The reasoning. Why consume so much? Surely it isn’t rocket science? Maybe for 5 minutes if we stopped consuming, or better still, in our lifestyle consumed with 110% purpose and need we’d be better off.

With less consumption comes less spending. Less spending means less consumer debt. Less need for loans, credit cards and financial prison. This would then mean more money at the end of each month, rather than too much month remaining and not enough money.

I am no financial expert. I am not offering financial advise. I have no money qualifications. I did have – at its peak – £40,291.54 of debt: credit cards, personal loan and student loan. This did not include the mortgage. As of today, I have one debt, the mortgage – I see this as a good as repayments are thankfully low. And almost 3 years later I have stayed out of my overdraft. This does make me a real life debt expert, as I faced personal financial chaos. It was my fault. Essentially from what I have learnt, I do have some knowledge of what not to do. The best way to learn in life is via your mistakes. However, don’t let the mistake become too big. It will become a life sucker. I know. I’ve been there. I’m still reminded of it. Oh, and I have not had a single credit card or personal loan in almost 3 years too – I had 4. Never again. I digress.

Why mention it though? Well since watching the minimalists documentary, my behaviour, mindset and most importantly consumption have completely altered. Thanks to my consumption altering, my savings are growing and I have become increasingly happier day-by-day. My worry, anxiety and stress diminished. I sleep far better. I read more. I have more time. I have more space.

In conclusion, I think, we should stop focusing on the debt, wages, savings etc. We should focus more on our consumption, living on less than you take home (earn) and stop trying to be like them. They’re probably up to their eye balls in debt, work all hours and never have time. With less consumption the debt, wages and savings will from my experience adjustment for the better.

Did you need to buy the new smart phone; really need to buy it? How many clothes have you got now, with tags still on?

Less (really) is more

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Without a doubt less (really) is more.

Since our frugal month and combining our “new” minimalist lifestyle, we are gaining more from less. I have found that with more “free” time on my hands, I do things with real purpose and meaning. I have – shock to the system – started to read more. I have dyslexicia, which (for me) meant I struggled and not did not enjoy. Now though, with more time available, I am enjoying and searching out articles to read. Things I like. Things I love. I am interested.

I am consumsing less (physical stuff), far less than I ever thought I would, when I started on this journey. I am seeing things on TV about living mortgage free, with less and becoming excited by the challenge of it all. I am being even more selective with what I watch on television. Giving more time to the family, saving money, gardening, grow your own, cycling and saying “no” to invites.

Saying “no” is a hidden benefit that we should all do more often. Just try it and see – it works! It means you shall probably be less committed at the weekends (and work), but more focused on the few things you said “yes” to.

Consumerist journey

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I’m writing. Writing my thoughts, opinions and experiences as I continue my minimalist journey. Not everything I say will resonate with everyone who reads my words. Some may completely disagree, some may like, others might love and want to share.

I embarked on this journey back in 2016. It has felt slow to start, but the progress is certainly noticeable. The slow feeling of progress is due to the quantity of worthless stuff that I/we have. Every day is a school day and everyday we’re learning to release the grasp on stuff, that essentially has not been touched for days, weeks, months, years. The worst place is the loft. I moved to a new house over two years ago and transferred one lofts stuff to another, then didn’t touch it. These boxes have now been touched, but only to go in the recycling or donation boxes.

Think of the space that you can create by donating, recycling and/or consuming with purpose. That bigger house, storage unit or extension you’re planning on paying for won’t be needed. In turn you won’t be spending additional money. That money can then go on debt or better still savings and experiences. That’s what we’re doing. Clearing debt, saving and having some of the best family experiences going.

I wonder if our minimalist journey is actually a consumerist journey?

Consuming my anxiety

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I’ve stopped worthless consumption and my anxiety has near enough gone.

I knew the car was due to go in for the MOT. The last time this happened – it does every year – I was anxious about stuff being needed or it failing. Sure enough, those expected additional tasks were needed. That feeling was the same every time the MOT came round and had been for years. With those needed fixes, come costs. Costs that I could; not; afford. Back into debt I went.

This time, the feeling was different though. I went in with the emergency fund funded. I went in with the actual money needed to pay. I walked out content. Nothing further needed. The difference, when I walked in this time, I had a buffer. I had the reassurance of having cash to resolve most problems if they came up. But nothing was wrong. No need for additional money. Money, which can now be used elsewhere if needed.

How did I have this buffer? I put this down to my meaningful consumption of less. Thanks to consuming less, I’m saving more. In saving more, I can give myself more financial support with required worthwhile things like MOTs and servicing. There was a time when it was a heightened anxious sensation, with fear of yet more un-affordable issues. This is life. It is happening right now. Welcome to life. It happens everyday, but yet living beyond my wage created a debt prison.

Now though, living far below my wage. Reducing the amount of stuff that is consumed, I am saving more. In having more financial stability; worry, stress and anxiety is reduced in most cases, if not, than non-existent. All thanks to the minimalist lifestyle.

The chat about working more hours, living on less than you earn and hitting debt hard is one thing. However, just approaching it entirely by a simplistic outlook, for us, wins. Before you know it, the minimalistic lifestyle will deal with everything. Once you’re behaviour, your mind-set and a habit is formed: you will win.