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.

 

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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?

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.

My Frugal Month: Week 1

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There was a massive high-five, whilst the shopping list was being written tonight. We totally made it!

The end of My Frugal Month: Week 1 is done. £30 put in an envelope seven days ago and still there is £30. It has been a mixed week, but the end result is successful. Nothing spent from the envelope for this week. One day at a time. Seven in total. Zero spent. It proves that it is possible.

We have taken the decision to split the £30 between the remaining three envelopes. So we now have £40, £30 and £40 in our envelopes. Although, My Frugal Month is not like other methods, ours is specific about living off one salary. Can we do it for a month? If we can then how much can we save? The end goal is all about the potential second child – no news – and how we can survive on one wage. It is doable. One week down and it is a great boost to morale.

You think that it is not possible, because you have lived everyday up to this point; off two wages. At the same time living with and for worthless stuff, clutter, endless consumption, debt and mindless thoughtless existence. Now; everything is thought through. Every gear change, litre of fuel that goes in the car, every slice of bread, every ale – gave alcohol up for lent too – every chocolate bar, every t-shirt and every-single-thing that you consume, you question: is this worthwhile?

My Frugal Month: week 1, has, definitely been made easier to succeed by asking this question everytime: is this worthwhile? Even when I have been at worked. I’ve questioned; is this worthwhile? is it adding value? I am quickly coming to realise that the combination of ‘the minimalists’ and ‘Dave Ramseys’ principles and teachings could easily be the perfect two. We’ve been living a more meaningful life the last few months, but this new-found frugality added to our minimalists journey is tremendous. Live on less than you make. Simple. Isn’t it?

One day we’ll reach a point of the debt free scream (clear the mortgage) – I did a mini one when I made my last ever Student Loan payment – and a more “polished” minimalists lifestyle.

This is my frugal month…

 

My Frugal Month: Day 5 – tempting 

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As always I have been for my lunchtime walk. It clears the head. Freshens you up for the second half. Gets you moving. However, I have the burning desire to buy a chocolate bar! Defeats the object of going for a walk. More importantly it will upset the Frugal Months positive direction.

How do you conquer temptation? This is day 5; I’m at work. Am I bored? Is boredom why I, we spend or consum worthless stuff?

Thankfully on my return to work for the second half I blinked and the afternoon vanished! Plus I never purchased the chocolate bar. That’s the first real temptation I have had defeated!

Different story when I got home, hence the late update to Day 5. Had to take our child to an out of hours Dr. Following a weekend of high temperatures and being poorly; after his injections. We found a rash this morning that appeared to have grown by the time bedtime arrived.

Left the house tonight with no plastic because of leaving in a rush. Just the week 1 envelope. Anyway, all is fine with our child and we’re good to crack on with the rest of this week. What was also awesome from our frugal perspective, was the parking cost nothing. Dr was happy and just explained should be be concerned then do take them to their Dr.
This is my frugal month…

The DVD collection.

The collection of DVDs I have kept for so long as if they were like ornaments, are being minimised. It’s going to be a slow process as I have tens, if not hundreds of them. However, I can already feel the effects of the first three I have digitally stored and put in the donation box. These have definitely been space grabbers!

I think I’ll find several that won’t be digitally stored. The main focus though, is they have not been watched for years. They gave reasoning behind one factor of why debt came into my life. That’s why I hadn’t been able to part them until now. I realise now they physically aren’t worthwhile. They are physical and mental space grabbers. I was physically holding on, not now. Mindless consumption.

Make that four I’ve digitally stored. And counting.