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?

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.

Spring has sprung

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Once you start to make positive strides and head in a definite direction,! it truly does feel like someone is on your side.

Since watching the minimalists on Netflix, listening to all their podcasts (some too many times), reading Dave Ramsey: total money make over, numerous blogs on a minimalist lifestyle, frugal living and listening to past Dave Ramsey shows; there is a spring in my step.

My wife said last night: “this minimalist lifestyle combined with frugal living is a lethal pair”. Practicing what is documented first on the minimalist documentary has without a doubt transformed our outlook – on everything. We are better people for it.

Our house is not empty of stuff, but we’ve stemmed the consumption. In applying this very simplistic methodology, savings are rapidly increasing. Well for us anyway. Debt is vanishing. New debt – non-existent. In fact, employing the principles behind us living a minimalist lifestyle wipes debt from our mindsets and lives. Now we consum less with real passion, meaning and purpose. Why? It’s making us have a happier, more fulfilling and stressless life. We are enjoying more (free) experiences.

Even in our jobs, our careers have become at the same time, worthless and worthwhile. Say: “no”. It offers up clarity. I strive for family time not a massive salary and huge stress. Less consumption, less (no) need, less (no) debt, less (no) negative stress; all thanks to an insanely powerful, worthwhile combination that is minimalism and frugality.  It means there is no need for high salaries or high stress. In living minimally we’re increasing our time, improving health, reducing debt and increasing wealth.

This spring has most certainly sprung.

Be prepared

No matter what day of the week or what time it is my mind can very quickly take me back to the prison of debt. It’s valuable to me personally and helps with the reality of my minimalist debt (mortgage) free journey:

Woke up in a complete panic that even though I had just recieved my letter confirming employment I was in fact losing my job. Dismissed. No questions asked. Just dreaming rubbish as the alarm went off. Horrible dream but one that would create mayhem. 

That was quite a pleasant feeling indeed. So yesterday I withdrew £250. My POA to give the other half £50 and then spend the rest on my train fair. 

Handing over £180 cash felt good. My cash. My earnings. My means of commuting. 

Plus my “no debit card plan” can commence. Even got given change back £11.80

Essentially I now have £31.80 cash that needs to see me until next Thursday (fingers crossed until payday).

I have a budget on Google Drive that I can now utilise anywhere so hoping this shall work. It will work. 

It’s strange because reading back over my debt diaries that I kept, makes me realise I was 110% persuading myself everything was improving. Even when it was not. It really wasn’t.

The only time things really improved, really improved – was when every single piece of plastic credit card got chopped up. It’s funny though because each time I was making progress on savings. Each time I thought I was winning, small wins, I’d get flattened in microseconds. Yet another “emergency” not a take-a-way, but like faults on the car or the garage roof repair.

Without that initial emergency fund complete, there was no hope. The moment the protection was there, I seem to be left alone for longer periods of time. That only gave me more chance to save! The comfort of having paper over plastic for protection was great. 

It honestly feels like you don’t get picked on when you’re prepared. Just like the scouts taught me years ago as boy: Be prepared.

My Frugal Month: Week 3

What a difference a week makes. The end of week two saw another positive end, however the first day of week 3 was a fail. Not forgetting, the aim of our Frugal Month is to live off one salary. It is not to become a recluse. So if we do spend on miscellaneous items it can only be from the envelopes. That’s exactly what happened on week 3. 

It is strange because it feels wrong, like cheating or being unfaithful. It is not at all. However, reaching the end of the week once again there was no high five, but definitely reflection. When was the money spent? Why was the money spent? Immediately, I can say it was used as investment to try and kill a disease on our 50+ year old apple tree. Living off the land is cheaper than buying.

I have certainly learnt some intetesting lessons this week too. One of which being: we never seem to spend during the week. Our weakness is the weekend. Finding this out certainly helps us in the long run. Three weeks in of living Frugal, I can definitely see the positives and benefits. Hopefully this preparation will aid us as a family when/if we have a second child – no news 

This is our Frugal Month…

30.4 Days of survival

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Everyday I am moving further away from debt (the mortgage is my only debt), but not seeing the savings grow; I find very frustrating.

It’s frustrating because debt seemed to grow vastly every day. No matter how much you paid towards it, it still went up. That is because there was still bleeding. You’ve got to stop the bleeding to stop debt. The teachings behind a minimalistic lifestyle – less consumption – are of huge value here. It is working seamlessly for us.

Savings growth, for me/us, is a monthly results situation. That’s really when there is a visual difference. However, it must never be forgotten: no matter how slowly the savings grow, it is far better than the rapid decline into debt prison. Never again.

Imagine having no debt. Nothing. Mortgage free. Zero loans. Zero credit cards. Now you’ve lost your job. Essentially your overheads are food, water, fuel (gas, electricity, petrol/diesel). No one is going to take your home or car or other assets. They. Are. Yours. Granted it would be different if you’re renting.

If you were renting though, but had saved, at least you’ve got something. Something is better than nothing.

Take your savings, divide that by your budget outgoings, times that by 30.4 and this shall equal the days you can live on “something”. The aim: save 3 to 6 months. Example:

2000 (saved) / 2000 (budget) = 1 X 30.4 (average days in a month) = 30.4 days of survival