'Now You Know'

Rolling back the frugal years... to the FT.com

At the top of the Merrick for my 48th birthday

Home Economics + Basic Arithmetic = Good Kousekeeping!


Shona Prophett gets into her stride on the state of the nation.

I've been watching the recent news and developments with regards to the petitions that are floating around the place. They are plying us with reasons to pledge our support to their cause, asking us to help bring money matters into schools as part of our basic education system. To be frank, I just don't get it!

School is a place for children learning the basics needed for their future adult lives, isn't it? These lessons are simple, they establish an elementary understanding of subjects that are important to everyone during future careers, regardless of what that career may or may not be. We can choose to listen and learn or we can tolerate these 'lessons' up until the point we have the freedom of choice to leave school and learn in another capacity - through life itself.

Some may see school simply as a place where children get sent during the day so they aren't wandering the streets with nothing better to do, biding their time until they are old enough to earn. School, like nursery, could even be seen as a place where children go so their parents can carry out activities other than childcare, like earning an income or anything else they see fit to do in the absence of their offspring.

Whatever any of us thinks of school, it is our right to have a basic education and our duty to provide similar for future generations. But it is not our duty to accept responsibility for the bad spending habits of others. We each receive a basic understanding of reading, writing and arithmetic, along with the simple concept of economics, be they home or otherwise, so common sense should prevail. But it doesn't!

Those who should know more than us have burdened this society with false beliefs that we should all be classed as equals, that we should all be able to partake of a decent meal, own designer labels, buy the most up to date gadgetry and possess all manner of luxury items. We should all be able to afford hobbies, pastimes and holidays, convenience and luxury should be readily available, en masse.

They led us to believe that we could all own our own homes and have the basic skills necessary to turn us into entrepreneurs or even just start our own businesses. But they overlooked one fundamental flaw in the plan - the fact that money is not a living entity. It cannot grow naturally, it cannot adapt to its surroundings and it cannot learn right from wrong. It is nothing more than paper, plastic and metal developed, manufactured and controlled by the chosen few who, to their disgrace, have been unable to balance the nations' books.

The concept is simple - take one pile of money, divide it be any number to whom you see fit to lend, then sit back and watch them pay dividends, by way of interest. If those payments fail, charge even more, add on penalties and drive the borrowers further into debt. Offer an array of incentives and promises of a better future, more security, better choices and the potential to feel good and then sit back, watch the borrowers borrow more and spend more, lining the pockets of the chosen few or those who chose to become one of them by sheer grit and determination. They all seem to have one thing in common - a total disregard for others when things, not surprisigly, go wrong. But there are always the 'get out' clauses of insolvency and bankruptcy!

This continual building of debt has now escalated to such a height that even they cannot fathom out an agreeable method to stopping it, let alone putting it right. Their solutions are to print more money, cut back on what they think is 'unneccessary' spending and make it even more difficult for 'normal' people to build real, reputable businesses that can grow to prosper and employ others.

They price ordinary people out of the market with legislation governing maternity pay, paternity pay, pension schemes, insurances, restricted working hours and minimum wage thresholds, then sit back and await the next emergency move.

But where do they go when all the previous options fail? They need to cast blame further and wider, so now we see the blame being laid on the children... If the youth of today and the common people had learned more, this may never have happened.

Well that is bullshit!

Those who dragged this nation to its proverbial knees were the very people who allegedly benefited from extra education. All their accumulated wealth of wisdom and expertise led us to where we are now, watching and waiting for the next global catastrophe that can quickly be assigned a few billion that adds to the amassed debt. They need huge tragedies, wars and disasters, so future generations can look back on history and point the finger of blame in any direction except that which is true. Nobody appears to have shoulders broad enough to support the burden of controlling what really cannot be controlled, so let's start again - educate the young.

To whom should we look for this teaching?

How and why are the current teaching methods allegedly failing us so badly?

Controlling a company, household or personal budget is nothing more than a combination of basic arithmetic and home economics, so why are so many people so bad at it?

Why isn't a closer look being taken at the education system itself?

Why are teachers failing to teach the basic principles of addition, subtraction, multiplication and division?

Why are parents failing to teach their children the basic skills necessary for survival in a capitalist society?

Is it not possible that some form of brainwashing has swept through our entire Western civilisation, engulfing an entire generation, and that generation is not the youth of today! Nor even is it their parents' nor their grand parents' generations.

There has always been poverty, unrest, unfair division and class differences. YES! I dare to suggest that we still live within a 'Class' system and I dare to deny the existence of this so-called 'classless society' or equality that was dreamt up by some 'numpty' who thought the only way to cast off blame from those who should have known better, would be to invite society's minions into their lifestyle of wanton greed and waste - offer them more credit, hold them down by debt, if they come out fighting, let them take the blame when it all goes wrong.

So, I guess what I am trying to say here is that, in my humble opinion, people won't learn lessons that they don't want to learn, even if it is taught in schools. Brainwashing is everywhere - it's called advertising! Unless we ignore all of that and accept that debt is caused by spending more than we have, then what gets taught in our schools matters not one jot.

It is up to us, as individuals, to challenge ourselves to live within our means and if speculative investments need to be made, have a back up plan in the event you don't quite pull it off in time.

Shona Prophett
www.shonaprophett.co.uk

How Much is 'a Living'?

The Raven
By Edgar Allan Poe

Once upon a midnight dreary, while I pondered, weak and weary,
Over many a quaint and curious volume of forgotten lore —
While I nodded, nearly napping, suddenly there came a tapping,
As of some one gently rapping, rapping at my chamber door.
"'Tis some visiter," I muttered, "tapping at my chamber door —
Only this and nothing more."

The question of earning a living sprang to mind while discussing the differences between town and country life, mainly in the context of earnings and self-employed income. Being a follower of frugal living, I seldom dwell on the prospect of counting my millions, or any other such trivialities for that matter, it is simply a case of survival in a manner found to be acceptable to the society in which we live.

The latter may seem irrelevant but, on closer investigation, it is indeed very relevant.

The United Kingdom is made up of four countries, each consisting of four completely different social dynamics. Seldom are these differences highlighted when we listen to the idle chit chat and false promises of politicians based in London; what they say can become fairly meaningless to some of us. Some of these people have never been into the countryside, other than for their own political gain or pleasure, protected from what's around them by cash, blinkers and spin. So, without further ado, let us take a closer look at what we all call 'earning a living'.

Edgar Allan Poe, in my opinion a fairly dubious character, is said to have been the first 'well-known' American writer to try to earn a living through only writing. This resulted in many financial difficulties, most of which I can fully understand. But cast aside any notion that I should ever compare my own scribblings to those of such famous names. (I have never relied on alcohol, nor have I ever married my 13 year-old cousin, so the comparisons are null and void from the start.) Still, I do wonder how much he needed to earn and what sort of life he was able to afford to lead on his meagre earnings?

Living a frugal lifestyle is perfectly normal for me - I know how much I need each month, therefore I need to live within those means to avoid debt, malnutrition and destitution. It's perfectly simple to me, one of the most obvious 'things' to grasp. But we are all different. The villages, towns, cities, counties and countries are all different.

"One man's loss is another man's gain. One man's pleasure is another man's pain."

In order to earn a living, I need to afford a roof over my head. After years of saving, that roof is bought and paid for, so there's no need to worry about rent or a mortgage. But there's always the council tax. It's compulsory!
Let's call it £1,000.00

We need heat and light. I live in a fairly chilly part of the UK (Scotland), albeit probably the warmest part of Scotland (deep southwest), but it still rains and it still freezes or gets frosty for at least six months of the year.
Let's call it £1,000.00

Without food, water and clothing, we would perish. All these things cost money, even if we are tending the garden, microholding or smallholding to grow our own 'edibles'. Preparation and storage costs money. All the extras cost money.
Let's call it £1,000.00

Living in a rural location with no shops, post office, bank, entertainment/recreational facilities or public transport, we need to take all of that into account and keep a car on the road.
Let's call it £1,000.00

We do have TV (£145 for a licence), telephone (£120 line rental) and unlimited Broadband (£240) but all of these cost money.
Let's call it £500.00

We have a fairly large garden that's home to several hens, ducks, quail and the rabbit. These all cost money to feed and house.
Let's call it £500.00

As you can see, the cost of living soon mounts up before we even factor in the more luxurious items. It is our understanding of the differences between our needs and our wants that determines how happy we are with what we earn. Bowing under peer pressure isn't really anything to worry about when there are no nearby Jones families with which to 'keep up' and the local school has less than 30 pupils.

We ruralites can often be stuck for choice. As far as grocery shopping is concerned, our biggest choice in the local corner store is take it or leave it, or we could travel to the nearest town to see what the supermarket has to offer. But now we have the Internet, in many cases we have Broadband, albeit slow, and we have delivery companies trekking miles off the main roads to reach us. We have access to the world of commerce, department stores, online banking, shares trading, cashback, savings and investments and all of these things can be fun! Why would someone like me opt to travel 200 miles each week for the sake of attending a dead-end job that paid minimum wage of £6.08 per hour when I need only £100 each week to 'live' my current, happy-go-lucky lifestyle?

A trip into the 'big town' is a full day's event for us, whereas those who care not for reviewing their spending habits (then moan that they are skint) fail to see the domino effect caused by continually fuelling up the car to make a 150-mile round trip for the sake of saving a few pounds on a pair of shoes. Travel costs, including car running costs, amount to around £25. Postage & packaging costs online are around £5. It's a no-brainer!

Downsizing isn't always the easy option. Selling up your 3-bed town or city dwelling for a packet to pack up and relocate to a cheap, cash purchased fixy-up cottage in the country may not be what you are expecting. Self sufficiency is an urban myth, 'The Good Life' was nothing more than a hit comedy on BBC and Hugh Fearnley Whittingstall still has a job to earn him the kind of income he needs to live his fairly affluent, possibly extravagant, lifestyle.

No, frugal living is certainly not for everyone. It's either a way of life you have grown accustomed to through a weak financial situation or it is a learning curve forced upon you by circumstances beyond your control. It may be a lifestyle choice you choose in pursuit of your 'dream', but that's where money helps initially. It may cost you more money than you'll save trying to launch yourself into this because of some quaint, fairytale notion that country living without the security of guaranteed income looks fun and stress-free.

Some of the people who have, in the past, been part of the Frugaldom forums have become classic examples of how not to do it and it is a simple fact that they just didn't understand the concept of earning a living while isolated from old friends and family, then living within their means after their security blanket incomes had gone.

Then again, given the choice, I'd buy as close to my dream 'forever' home and do whatever was needed to keep it, safe in the knowledge that I'd worked for it and, therefor, deserved it. The bottom line will forever be the bottom line. £100 per week could be seven days of gardening, scraping out chicken poop, attending LETS meetings, sharing bulk bargains with friends and typing frantically in the hope of being paid by someone who will publish your words, but if it all goes to pot, it's still only 16 hours per week for one person earning minimum UK wage.

There's truth in my madness and it's only mad if you can't see the bigger picture.

Happy living with everything you need does not cost a fortune. It's those rogue 'wants' that mess up that system. :)

Comments appreciated.

NYK Media
http://www.scottishmultimedia.co.uk/

 Pursuing the Dream of Microholding


We're supposed to be out of here by the 7th April, according to the notice we were served at the start of February. I've been reliably informed, this morning, that 15th April will be the earliest we can even get the keys to the next place, which is currently uninhabitable!

As you'll probably all know, we follow the frugaldom lifestyle in pursuit of our dream of microholding. Smallholding is completely out of the question, as we just aren't in the financial position to look at properties with that amount of land - buying is expensive, renting can be extortionate - so it's microholding for us.

Microholding should provide a semblance of self-sufficiency with a lifestyle sustained by working from home. And before anyone cocks an eyebrow or utters a sigh, we are NOT on benefits! It always amazes me the way some people automatically assume that anyone attempting to follow 'the good life' must be shirkers or social security leeches! This is completely untrue.

• Yes, we enjoy gardening and growing our own fruit and vegetables wherever possible.
• Yes, we're comfortable sitting at home earning our crust in whatever way we can.
• Yes, we bake our own bread and make our own laundry detergent.
• Yes, we keep poultry for eggs anf yes, we sell our surplus in an attempt to offset all the associated costs. 

We also keep long hours and have to budget to within an inch of our lives to afford an otherwise 'normal' life. Self employment means no sick leave, no redundancy pay-outs or unemployment benefit if things go wrong and no automatic pension plan. But it means freedom to live and work to meet whatever goals we set ourselves. As long as I can afford to live debt free and cover the costs of my National Insurance payments, I'll be happy. It's all relative!

In order to take up the challenge of saving enough to buy a house without a mortgage, I began costcutting and debt-busting around 10 years ago. It has been difficult, it has been fraught with setbacks, there have been major expenses to meet throughout that time, including daughter's 21st birthday, an engagement party, a wedding, my son's 21st and, along the way, trying to pay off previous debts and welcoming not one, but two grandchildren into the extending family. There have also been 8 house moves stretching between Aberdeenshire and Suffolk. We want our next move to be the last for many years. The family is now grown and settled into married life and work here in southwest Scotland, so the ultimate move will still see us living and working in the same area.

Becoming debt free is a most liberating experience. From thereonin, it is all about saving, so the frugal lifestyle does not stop when the bank balance moves out of the red and the reminder letters stop arriving. On the contrary, becomig debtfree urges you on to squeeze the budget even tighter in a bid to save as much as possible. We are still several years from having achieved our goals, but fate, as always,can throw a spanner in the works at any time. That spanner was the arrival of our notice to quit this house.

We have been happy here. When we arrived, the house had been empty for months. It was extremely cold and damp, there was no garden to speak of and the roof leaked - badly! However, we overcame each problem gradually - the landlords eventually fixed the roof a full 20 months after we moved in here! I have a full diary of photographs and updates of our progress turning the 'garden' into something productive. It was beginning to look like we might even achieve our dream of microholding, despite being in yet another rental.

I have to admit, the mile and a quarter long driveway that's here being lined with all sorts of foraging wonders has served us well. I have a year's supply of jams, jellies and wine stored, much of it made from free fruit, berries and flowers. I also make fresh lemon curd from our freerange garden hens' eggs. These are the things we can most enjoy about frugaldom - the release from the pressure to buy into a consumerist society. Make do and mend, preserve, bake, grow as much fruit and as many vegetables as you can and make space for some hens, ducks and/or quail. I even compiled a list of 101 things to do with eggs!

Costcutting is the most important factor affecting how much we can afford to save. Apart from the obvious things, like monitoring electricity use, cutting down on transport costs, sharing with friends, only buying what you need rather than what you want and always shopping online through a generous and reliable cashback site, I have found that grocery shopping is, by far, the easiest place to economise on a regular basis. Thanks to bulk buying, batch cooking, shopping for bargains and growing/producing our own, we have succeeded in honing our grocery spending skills to an average of £1 per day per person. I find this to be a comfortable amount. We eat well, the cupboards, fridge and freezer are always full and there's always a variety to our diet. OK, so it completely cuts out fast food, takeaways and eating out but once you are attuned to such frugal shopping, there's always a way of getting more for your money.

I find that ordinary folks like us don't get given much of anything, let alone luck. Take the weather, for example. I feel as if we're living in one of the coldest, wettest areas of Scotland at the moment - not that there are many dry and warm parts - so that's always conspiring against us. Can you tell it's raining here, yet again? But in a funny old way, we have turned around the ill-fortune of facing impending homelessness to a positive thing. We are embarking on our next big adventure, sailing on the winds of hope and then paddling like mad to stay afloat when the reality of this all kicks in. I recently began a new challenge - find a house and move in 45 days - but we won't be able to do that. So now what? We have requested an extention to our vacating these premises date and, in the meantime, we are gathering together every single penny that we can in preparation to exchanging the lot for a fixy-up.

ARE YOU IN YOUR COMFORT ZONE?

How People Spend and How You Could Easily Earn - or Save -  Extra Cash.

This is a quick post to update those interested in my current research. It's based on a subject close to my frugal heart - shoestring budgets and how they get spent. It also ties in with how best to earn a few pounds extra when the going gets tough in the earnings race.

Analysing accounts, in any form, can reveal a great deal about current trends, mainly by highlighting what people, households or small businesses are prepared to spend on during times of austerity. For these purposes, alone, I always work with my very good friends, the spreadsheets.

Research is one of the things that can be carried out anytime, anywhere for FREE, so only a fool would risk dismissing the findings. Admittedly, I do seem to have an Obsessive Compulsive Desire to crunch numbers, but it's always for the benefit of maintaining a debtfree and self-sustainable status and I usually share my findings for FREE. Number crunching - it's what gets us out of debt, it's what keeps us solvent, it's what allows us to speculate and, hopefully, accumulate.

For the purposes of this research, I am analysing accounts from 40 individuals to take a sneaky peak at what they are most likely to spend their hard earned income on and what they are not prepared to give up, regardless of what austerity measures need to be put in place. My initial findings are surprising, to say the least.

COMFORT - FOOD
82.5%

Luxury food items! As expected, the top item traded within the marketplace is food. No surprises there, we all need to eat and drink, so it's good business practice if you can incorporate something edible into your portfolio. However, my findings show that most people don't cut out the luxury items. More importantly, even those on the tightest of budgets will indulge in non-essential or luxury foodstuffs - takeaways, meals out or the odd treat, be it organic, freerange or gourmet. Food sells and that's all there is to it.

COMFORT - HOUSEKEEPING
57.5%

My first surprise came in the form of the runner-up in my preliminary findings - domestic help! It seems many people hate household chores and would do without other things in order to get out of doing what they refer to as 'the mundane stuff'. From basic cleaning to sending the laundry off to be ironed, some folks just hate housekeeping and, for anyone prepared to put in a few hours work, there's an income to be earned right there. Anything, it seems, that helps keep the household or small business premises spick and span is not a luxury, it's an essential at all costs! There's certainly space to create a booming business by oiling those wheels - cleaning, ironing, window cleaning, carpet cleaning, painting & decorating, mending...

COMFORT - FREEDOM FROM GUILT
50%

Now we come to the great outdoors. There's some fairly brisk trading going on within the gardening and pet sitting categories. I guess spending all your time trying to make ends meet means there's a chance you could neglect the garden or leave the dog shut in for too long while you're at work. But fear not, salve your conscience by hiring a gardener for an hour or two and having someone walk your dog or do some pet sitting for you.

COMFORT - THE FEEL GOOD FACTOR
35%

Finally, in this brief update, is health related - alternative, complimentary or holistic therapies and feeling fit. If a shortage of money is getting us down, it seems help is always at hand and always within budget, no matter what. Massage, reflexology, crystal therapy, meditation... feeling better is worth the expense, it seems, even if it means buying a cheaper brand of everything in the supermarket.

I cannot guarantee that these findings will translate to all other areas of the country, but I would be interested in discussing this further. Feel free to contact Frugaldom through the forum or via Twitter.

What might this tell us? Well, it tells me that, regardless of the situation, people still want to feel good about themselves and their lives. I can completely relate to this and am now off to paint my nails a rather fetching shade of purple.

The Frugaldom understanding of self-sufficiency is one of self-sustainability. It's about earning your own living and then spending accordingly, living within your means, regardless of how great or how meagre these may be. It's a lifestyle choice. Frugaldom is freedom from debt by way of living and working in frugal ways.

Over the past few years we have organised various challenges relevant to moneysaving, clearing any debts and building a lifestyle that fits in with the whole ethos of sustainability. With a little bit of planning, this lifestyle can enbrace greener living or a more environmentally-friendly way of conducting business within the household and workplace. Frugaldom is about taking on the responsibility of providing for yourself and, hopefully, being able to share skills, goods and services in a way that can both benefit others and cover all associated costs.

True, cash free self-sufficiency, in my opinion, isn't legally possible within the UK. In order to live and work, we need shelter and that shelter incurs a tax. In order to live we need food and water - we could attempt to rear and grow all of our own food and pump our water from a well, but in order to do so there are welfare issues and legislation to be considered - these things cost money. We still need to earn and, as long as we earn, we need to pay taxes where and when due. Some might trade and barter or move around but, at the end of the day, everyone needs an income and earing that income costs money.

True Frugaldom means the ability to provide all things for the household in order to sustain a chosen lifestyle and afford everything that it entails. There should be no need for State hand outs but neither should there be an aversion to seeking financial help where and when genuinely needed.  In this respect, it is time to start building our self-sustainable business in order to help secure our future.  We are our own employers, without working (for ourselves) we can neither pay ourselves nor keep a business running.

On the surface, it's always handy to grow whatever fruit and vegetables you can, as everything you can produce from home is one less thing you need to spend money on, allowing you to focus your hard-earned cash elsewhere. Over the past few years we have documented the costs involved in setting up a garden to produce as much as possible, including eggs from the assorted poultry. We can make each micro-project self sustaining or cash-neutral; hens lay eggs, selling the surplus can pay for their keep. Quail lay eggs and are quickly hatched and reared - the sales of surplus birds and eggs can cover the costs. Cash generated from any source can be used to neutralise each of these individual budgets, each of these projects can be built up to combine into one business. It's what microholding is about - all these small, self-financing pieces of the jigsaw fitting together to form a much bigger picture - that picture is your business of the future.

Christmas and all the festivities have now passed and we're halfway through the first month of the new year. For those who are still relying on other people's money, the credit card and bank statements will be arriving, reminding you of the dire state of your finances. But not for all of us. For the debt free, each statement is a reminder that there is an alternative route, one that can and should be followed carefully if Frugaldom is to be achieved.

I have estimated that for every £1,000 it costs you to exist each year, you NEED to save £2.75 each and every day that you're not earning. So, if life is costing you £12,000 a year, you need to save £33 for every day that you won't be earning, weekends included. The figures are simple - the less life costs you, the less pressure you are under to earn or save extra.

Building a business isn't so different. Everything has to pay for itself, some things need to pay more to cover the inanimate objects that house them, some need to cover the cost of storage and distribution. In the case of gardening, plants need to cover the cost of the patch of land they take up each and every day it takes them to grow - fertiliser, protection from pests, time in planting, tending and harvesting... consider all costs, don't ever assume that because you did it that your time is completely free.

Any legislation governing what you do needs to be accounted for, just like the costs involved in owning a car to enable you to go about your daily life. If that car costs you £500 to have it parked in the driveway for 365 days of the year then that's almost £1.37 that needs to be earned every single day without even driving the car. (The figures get much bigger when you factor in the percentage that's needed to cover tax and National Insurance etc.) Only by analysing the true costs of living and working can we begin to understand the basic principles of self-sustainability and self-sufficiency. After 10+ years of lifestyle planning, 2011 is my year of Frugaldom business planning.

Fel free to follow Frugaldom on Twitter or join me in the Frugaldom Forums