I’ve been toying with the idea of getting a smartphone for a while, and tossing up whether to get an iPhone, or an android-based phone. I’m currently with T-Mobile, but I would prefer to be with Orange (I’ve irrationally loved Orange since before I owned a mobile phone, and even bought shares in them at one point).

The phone must also be a light saber

My needs for the phone:

• makes calls
• sends and receives text messages
• stores contact details
• alarm clock
• operates as mp3 player / ipod replacement (lost the last one)
• access to internet including gmail, twitter, facebook
• decent mapping and ‘where’s nearest’
• works in the USA
• light saber app
• shake app
• prettiness

I don’t currently have an account with iTunes and have never owned an Apple product.

The phone must be free and the calls cheap

My needs for the deal are:

• 50+ texts (I’m not a big texter)
• 150+ minutes (the more the better)
• unlimited internet use
• £30 or less per month
• free phone

Basically, I know what I want and how much I’m prepared to pay for it, and I just want the best-est, shiniest phone for the price. I’m also likely to be comfortable spending this amount per month for the next few years. I think I’ve been paying around £25-£30 a month for about the last 7 years already.

shopping around

I had a scout round the deals at Carphone Warehouse and Orange online. I also read as many reviews as I could. I found it difficult at first to work out which was likely to be the best Android phone, but the iPhone was easy to narrow down.

Basically, to get an iPhone 3GS, I need to either spend £45 a month, or spend £125 on the phone. Neither is acceptable, so I’m only looking at the iPhone 3G 8Mb. The best deal with a free phone happened to be Orange. It has:

• 250 texts Anytime Any network
• Unlimited Internet Anytime Any network
• 150 minutes Anytime Same network

This is barely acceptable. And the reviews of the 3G phone seem to say that it’s slow because its an older version. But still, it’s pretty and shiny. In fact, it’s the prettiest and shiniest phone on the market.

For an Android phone, I considered:

• HTC Hero
• HTC Tattoo
• Motorola Milestone
• HTC Desire

This list was based on the reviews I found on the internet, and the phones that were available on Orange. All are available free, with unlimited text messages, unlimited internet and 400+ minutes for £30 a month. But I wanted to see what the phones are like in real life. And I was open to seeing any other phones.

When I hit the shops, I saw a couple of actual iPhones and decided that they are beautiful and the interface is straightforward. I also dismissed all the sliding keyboard models. Too clunky, too ugly and the keyboards were difficult to type on. I also decided that of the 3 HTC models, the Desire was the best. But none of the Android phones had actual demo models to play on.

I was collared by a sales assistant in one of the shops, which was a mixed blessing. I was subject to a hard sell. He tried to sell me a ‘deal’ of £35 or £45 a month, even though I explained that I don’t use that many minutes or texts a month. But he was friendly and I watched him demonstrate the HTC Desire. I didn’t get to play with it myself, but it looked nearly as intuitive to use as the iPhone.

In the end, I decided that the package on offer with the iPhone 3G wasn’t nearly as good as with the Desire. The Desire is second best to the iPhone in looks, but I could see myself running out of minutes with the iPhone sometimes. And I’d need to keep the older slower 3G phone for 2 years at least.

So, I went home to phone T-Mobile to get my PAC and switch to the HTC Desire on Orange. But, I was sweet-talked into staying with T-Mobile. With a 900 minute, 500 text messages, unlimited internet and 60 minutes of international calls package for £30 a month. I felt a bit uncomfortable about having been talked into staying. But thinking about it rationally, I’m getting exactly what I want, a better package. It’s a win-win for T-Mobile and me. Maybe I’ll switch to Orange next time.

I’m picking up my new phone tomorrow. Can’t wait.

identify gaps

You need to make a plan of attack, and that starts, not at the shops but in your own home.

Firstly, what kind of shopping are you thinking of doing? Things for the house, electrical goods, new cds or dvds, clothes, Xmas decorations for next year? Consider whether you received any gift vouchers / certificates / cards for Christmas. What kinds of shops were those for? That will help you decide which categories to shop the sales in.

In any case you probably already have some stuff. Go through the things that you already have in each category and note any gaps. These are the things to buy in the sales. Identify all the things you need – these should get top priority in your list – and all the things you’d want or like to have – if you see a good bargain, you can then choose to buy those. Write everything down in a little notebook to take to the shops with you.

I’m looking for clothes, and going through my existing wardrobe I have the following gaps, compared to my ideal wardrobe:

• casual trousers (up to 2 pairs)
• work trousers (up to 4 pairs)
• fine knit sweaters (up to 3)
• long sleeved t-shirts (up to 3)
• chunky knit cardigans (up to 2)

So, with my clothes shop gift card I should be looking out for only those things in the sales. Since my existing clothes have worked out ok for the last 2 or 3 months none of these are strictly essential, if I can’t find things that I like.

In the electrical goods items, I don’t have but would like the following:

• microwave
• toaster
• freezer
• ipod
• printer
• george foreman style grill

Of those, probably the most urgently required are the microwave, grill and printer. I received some cash for Christmas that could be usefully spent on some of these items.

thinking about specific shops

Where exactly are you going to hit the sales? I have no car, and live about 45 mins walk from a major city centre, so that’s where I’ll be going. There’s one electrical goods store, so I’ll see if I can get a bargain in there. Otherwise, I’ll tackle the shop that I have a gift card for, and a couple of others that stock clothes in my difficult to buy for (short, round) size.

Maybe you’d be better off buying online? That could certainly work in some categories (not clothes so much) and might be a better use of your time. It’s not normally worth hitting more than one or two major shopping centres for the same types of items. especially clothes – the discounts don’t vary all that much from town to town.

setting price limits

It’s oh so easy in the sales to spend more than you intend to because the bargains are so good. Once you’ve identified all the things that you want or need, set maximum prices on them and write these down. This stops you spending more just because something has been reduced a lot even though it still costs more than you’d really want to spend.

With my clothes selection, I’d set limits on categories plus an overall limit – e.g. no more than £40 on casual trousers, no more than £30 on long sleeve t-shirts, and no more than £100 all together. I’d do the same if I was looking to buy books or cds or dvds.

With electrical goods, I prefer to set a price limit for each item, and an overall limit. I’m not going to spend more than £60 on a microwave for example.

research

Some things benefit from a little research in advance. This mostly applies to electrical goods. Do this before you go, and write down any suitable brands and model numbers.

hitting the shops

Time to put the plan into action.

Wear comfortable shoes and layers as the temperature can vary wildly. Take enough money to cover tea breaks and lunch out and ideally a reasonable sized bag with you. If you will be trying on clothes, wear something easy to change in and out of.

Only go into the shops that you identified previously. Don’t veer off the list. Stick to your price limits. Take a break every 2 hours or so. When you can’t carry on, stop and go home. There will be other sales.

Good luck.

It’s not really that I don’t want to give gifts to my friends and family, I really enjoy getting them stuff – thinking about what they might like and wrapping and so on. It’s just that for the last 5-6 months, I’ve very rarely been proper shopping (as opposed to food shopping). When I went browsing in the shops the other day after work, I found the whole experience overwhelming. There were too many people, and brightly coloured shout-y posters telling me about all the money I could save if I just spent my money in their shop.

my accidental advertising diet

I think I’ve inadvertently been on an advertising diet. I don’t watch a great deal of tv, and much of it is BBC, so ad free. And I have relative online advertising blindness. Most of the posters I pass on my way to work are either public service or for products I’m really not interested in, like car insurance (I don’t own a car).

This accidental advertising diet meant that when I was surrounded by lots and lots of ads, I had a bit of sensory overload. It was like the whole town was shouting ‘buy me, buy me, I’m a nice bright shiny bauble’.

still left me wanting to buy stuff based on ads

But, even though the ads in the stores in town overwhelmed me, they also made me feel like I wanted to buy things. I’m not sure exactly what things, but I definitely wanted to buy.

Fortunately, for Christmas shopping I need have to a list and buy for difficult people (aka men). So I didn’t actually get sucked in to buying things I didn’t need.

so I’m back to avoiding ads

I’m going to try and keep up this advertising diet, now that I’ve noticed it though. I don’t need to spend money on things that I don’t need, or want. I’m supposed to be a grown up these days, and I want to save my money for fun stuff that I actually do want, as well as slightly less fun stuff that I need.

And yet, I feel like I’m matching the overall mood. I’m not so inclined to go out drinking, I haven’t eaten out nearly as frequently as I used to, I haven’t been to the cinema in months, and I am much less interested in international travel than I would normally be.

Some of this is because I feel the need to improve my house (to both increase it’s value and to improve it’s functionality as a home). I’m saving up for things like new bathrooms and boring fixes to the fabric of the place. I’m also trying to bump up my emergency fund – I never seem to get past the mythical £6k figure. (Around 4-6 months expenses depending on how frugal I could be.) And some of this might just be me settling down a bit as I approach my 30th birthday.

I’m thinking that on a personal note, it’s not so much of a bad thing if I’m spending less and saving (and investing) more. For the economy, as a whole, it’s not so brilliant – although the investing is good – but we’re in a bit of a prisoners’ dilemma. In any case, I’m not really cutting back deliberately, I’m cutting back because intuitively it feels the comfortable thing to do, and I can’t think of a logical or objective reason to spend more.

Is anyone else spending less in the recession for no particular reason? Or have you felt the effects more directly and are adapting? I guess it’s sort of consumer sentiment thing, but there must be a name for this sort of phenomenon. Let me know what you think in the comments.

When we were talking about this we came up with three basic financial options, which we called communist, socialist, and capitalist, for convenience.

1- Cuban option: all money except retirement and savings go into one account, from which all expenses are paid. This eliminates having to figure out who pays how much when one party earns more than the other. This is only for people who really trust each other (both financially and otherwise) and who are willing to have very little privacy. I think of this as more appropriate for people who are already married, own property together, have kids, etc.

2- French option: create one account from which all shared expenses will be paid, like rent, insurance, gas, cable, car expenses if you share a car, etc. Figure out how much needs to go into that account to cover monthly expenses, and then contribute from your respective salaries in the proportion you think is most fair. We chose this option, and we are contributing roughly in proportion to our respective salaries. If you make $60k and he makes $30k, you contribute 2/3 and he contributes 1/3. Then you keep separate accounts for everything else. We liked this option because we could have some autonomy with our money and we could buy gifts or take each other out with our separate money. At the same time, we are learning how to run a household together and we have to trust each other enough to have a shared account.

3- US option: no shared account. Put the bills in both names and you each pay whatever is fair from that. You pay electricity, he pays gas, you pay rent and he gives you half, etc. If you are early in the relationship this is likely the best choice. More like roommates than potential lifetime mates.

Although I’ve never had the fortune/misfortune to share a home with a significant other, I tend to have opinions on everything anyway. I couldn’t easily do the first option – I’m too independent, and I like a bit of financial privacy. Either of the other two could be fair game though.

I know we’ve talked about this before, but am I right that these are the only options? I think that amongst people I know there’s a fair split amongst them, what’s your experience.

I’m not claiming to be really financially savvy, self-restrained or aware. I just can’t think of a good reason to take out a loan. However, that doesn’t necessarily mean that I’m right. Kevin, a commentator at Get Rich Slowly said:

Furthermore, “financing” something just means you’re paying more for it than you have to. However, if that difference lets you enjoy it sooner, then the real question is, “how much would you pay to have that item/experience now, rather than later?”…

…phrasing it in the proper context like that serves to highlight the real, underlying value judgement being made, rather than simply adhering to some blanket “never finance anything” dogma.

Objectively speaking, I think this is true. Taking out a loan just means paying a premium to have the item or experience now, rather than in 6 months, or a year, or however long it would take to save up the money (or pay off the loan).

Of course, there’s always the likely possibility – if you don’t think you can save up for it, then why should you think you’ll be able to pay more for it later? Also, taking out a loan for some purchase means that you are also carrying extra risk – there’s the possibility that your income will decrease and you’ll be unable to make the loan payments.

But maybe there’s a case that sometimes it’s worth taking out a loan?

If I had an emergency that extended past the reach of my savings then I would take on debt if I could, because there is little other choice. When I am into my retirement, I shall probably consider a reverse mortgage against my house, because I don’t feel any need to pass on an inheritance.

Are there other circumstances in which it’s sensible, or at least acceptable, to take on debt? I can see how it might be more true as you get older. Everyone’s lifetime is finite, but the older you get the more important that fact becomes. It might be worth taking on debt to enjoy an experience that you might not be able to participate in fully if you left it until you had saved up.

What do you think about taking on consumer debt? Let me know in the comments.

food

The other day I was talking about the food that I eat. I really don’t enjoy cooking unless it’s for other people, and I live alone. This is a fairly recent thing for me, so to start with, even though I couldn’t be bothered to cook I would buy sensible, ‘make from scratch’ food – like fresh vegetables, minced meat, chicken breasts etc. Good idea, right?

Wrong. I basically wasted all that money, because I couldn’t be bothered to cook the food and had to threw it out. Instead, I’ve moved towards putting more emphasis on preparation time when choosing food. I’m doing what works for me, even if it isn’t ideologically the best thing.

cash and cards

For a long time my spending money has been placed into a separate account and then I’ve been spending it on a card, and rarely used cash. That worked for a long time, but I started to get slack and then the card rules changed, which meant that it was too difficult to track.

Although received wisdom says that you spend more money when it’s on a card, I used to live primarily on cash, and I’ve long known that it burns a hole in my pocket and slips through my fingers. Cards are normally a better solution for me, but I need to know how much money is left to fritter in the month, without having to look it up somewhere.

I decided to take the plunge and experiment with cash only. I started a couple of months ago, and it’s going fairly well. The way that I’ve made it work is to take out all the money I’ve allowed myself for the whole month (so that I don’t need to track withdrawals), and then ration it carefully at home. I basically limit the amount of money that I have on me to the minimum possible. I’m rubbish at delayed gratification, so I avoid daily challenges on the issue by removing temptation as much as possible.

what does it all mean?

For me, doing what works means being honest about my own limitations. It means accepting that I have both strengths and weaknesses, and doing what is needed to ensure that I don’t sabotage myself and my plans. It means being auto-magical because I’m lazy, and writing everything down because I’m forgetful.

One of my favourite quotes/cliches is that ‘done is better than perfect’. Life is more pass-fail than about scoring the highest grade for the neatest work. It’s about what you learn, playing to your strengths. I try as much as I can to drop pre-conceived ideas about what ‘someone like me’ should be doing with their time and money, and try to do what I think will make me happy, and/or what will mean that I’m least likely to screw it all up.

What non-perfect tactics do you employ that work for you?

• 600g speciality cheese ~ £4.50
• 1/2 french stick ~ £0.40
• bag apples or bananas (about 7) ~ £1.25
• 12 flapjacks / cereal bars ~ £4
• 5 500 ml bottles diet pepsi ~ £5
• 1 bottle concentrated fruit drink ~ £1
• special offers for dinner <£2 per meal (around 6 meals)

The dinners are things like couscous, pizza, soup, ready meals, etc. Not exactly the healthiest diet one has ever seen.

Unsurprisingly I was called out. You can eat much better for a similar amount of money, apparently. I probably shouldn’t have been quite so detailed, now I feel the need to attempt to defend my food purchases.

frugal lunches?

DoingHomework said

When I look at your food budget I see that about half of it is spent on cheese, cereal bars and soda. There is nothing wrong with that if that is what you like. But replacing the ceral bars with bulk whole grain mix, the pepsi with water, and stretching the cheese out would save an enormous amount per year.

Yeah, it looks bad because it’s unhealthy. In reality, cheese, fruit, soda and cereal bars are my breakfast/lunch every day at work. They cost me £2.65 a day (which is about US$4). That’s boring, but I don’t think I can do it cheaper whilst also eating food that I like and having to do no preparation whatsoever.

I’m lazy. I’m too lazy to make sandwiches every day (or even one day a week). I’m too lazy to chop vegetables and make carrot or cucumber sticks. I’m a little bit fussy. I don’t like milk, so don’t eat cereal. I could stretch out the cheese, but what with? If I used half the amount, I’d save 32p on the cheese, which I’d need to replace with something. I can’t think of anything that would be any better from a laziness/money point of view (but I’m not particularly imaginative).

The cereal bars are expensive and I’m paying for the convenience. The only cheaper item I can think of that is equally as convenient is maybe biscuits/cookies? They come in larger packets, I guess. The pepsi is definitely unnecessary. It’s my latte factor. If I could cut it out, I would save around £220 a year. I’m not motivated to do so consistently, but from time to time I stop buying it.

Aside from the soda, I don’t think my lunches are too expensive, although I’ll admit that I should aim for more fruit/veg. I can’t think of ideas that are as cheap and convenient which are actually better for me, and ensure that I cant get through the day without being ridiculously hungry.

I think lunch at work is the hardest to make frugal, healthy and easy. What do you guys do?

frugal dinners

I was less specific about the dinners that I eat. I put convenience and price ahead of healthiness. Whenever I see frugal tips on food, they always involve cooking from scratch. I enjoy cooking from scratch, but only for other people – it feels like a waste of time to spend 30 minutes cooking something just for me, when it’ll take me 10 minutes to eat it.

Otherwise, if you want something quick, usually stirfry is suggested. Although I happily eat stirfry other people make, it’s never something that I choose to have for dinner. But I accept it could be a good way of eating quickly, cheaply and healthily – I’ve never bothered to price it up myself.

Actual ways of eating frugally for dinner when you’re a family of one or two (and willing to cook) include:

• having a small range of staple foods that you use all the time to make a larger number of meals. Normally includes:
  • rice
  • pasta
  • tinned tomatoes
• cooking in batches and freezing the extras for lazy days
• planning meals in advance so that you can use up leftovers
• keeping a reasonably stocked store cupboard so you can wait for sales
• taking advantage of coupons and special offers
• buying produce when it’s in season
• eating primarily vegetarian-ly
• downgrading brands (generic rather than branded, value rather than generic, etc)
• shopping at discount supermarkets
• keep a price book, so that you know when an offer is worthwhile

Many of these ideas are attempts to create economies of scale so that you can take advantage of usually cheaper unit prices on larger quantities. It’s also about gaming supermarkets – they have plenty of loss leaders, so if you can exploit your opportunities you can save money that way.

What they tend to have in common is time. For pretty much anything, you can generally have 2 out of 3 from the following list:

• budget – cheaper food
• quality – healthier / better quality food
• timescale – more convenient food

but the most important is time. It takes time to make decent food, and it takes time to shop cleverly for frugal food. The more time you’re willing to devote, the better luck you’re likely to have in finding good frugal food.

What are your favourite tips for frugal dinners? Bonus points for suggestions that are quick or convenient.

I am what’s politely described as a ‘flexible organiser’. You can assume by that, that I’m not particularly organised, in addition I choose to use my organising skills mostly at work, where it’s more important. It means that I’m not very good at periodic tasks. I’m also lazy, really lazy. To compensate, I have pretty much everything set up as auto-magical.

automatic investing…

One of the things that is automagical is my investing. I invest through work in a stakeholder pension – exactly enough to get the match – and I also invest in a stocks and shares ISA. I use these financial products to save money in tax, but I just think of them as my investment accounts.

At the moment, I have £400 a month going into investments each and every month. I started my investment accounts with £70 a month when I got my first job.As you can probably tell, the amounts have generally increased over time, although I’m not sure whether that’s always been true, I could easily have taken an accidental break because I didn’t open a new account in time or something.

…takes a while to build momentum…

Money just rolls into the accounts every month, but I’m not yet at the stage where it’s built up into a massive sum of money. Off hand, I think I have in the region of £10k-£15k in my investments. That might sound like a lot of money, but I think I’ll need something in the region of £1m or more to retire. It can feel like it’s not really worth the effort – the money goes in but doesn’t seem to work for me.

The recent performance of the stockmarket doesn’t help. I’m primarily invested in FTSE All Share index funds, which over the past 4-5 years has been up and down massively, but is pretty much back where it started. 0% growth isn’t exactly what I’m hoping for long term.

…but when it gets going, it really goes

Fortunately for me, I can still remember the basics of mathematics. The power of compounding returns is really just an example of how exponential growth is so much larger than straight line growth. The money I’m putting away now won’t really work hard for me for another 10-15 years, but once it does it’ll just keep powering on.

And I’m savvy enough to realise that you can’t rely on the stockmarket in the short term, but chances are pretty good that you can in the long term. I’m still young, I’ve got just under 40 years until retirement and I’m confident that the stockmarket is most likely to be up over that period.

So, I’m going to keep going with my current plan. I’m about 20 years away from fundamentally needing to alter my investment strategy into a more conservative asset allocation. For me, investing is not fun, but it’s also not something to worry about. It’s more like brushing your teeth, something you do without particularly thinking about, because it’s going to be good for you in the long run.

Now, I’ve done some DIY work on the place, but I need to save up for the things that I have to pay someone else to do (new bathroom, more loft insulation etc, etc). These are either tasks beyond my competence, or just far too much for one small person to do on their own. But, it means that there is no money for frills and frippery in the home decor department.

However, thrifty and frugal ideas for home decorating can be found all over the internets. If you’ve never read Apartment Therapy, you should. As a blog, it’s annoying – you need to register for comments, and there is so much repetition and so many round-up posts. As a resource for improving your small space in a cool way, it’s unsurpassed.  At the moment they’ve got a post containing links to 15 frugal ideas for decorating.

For more ideas check out:

• Tightwad Tuesday: Frugal Decorating @ Being Frugal
• Save up to 85% on paint @ That One Caveman
• Use what you have @ Remodeling this life

My most successful frugal decorating was to buy a roll of wrapping paper, and liberate a selection of wallpaper samples, and use them to cover plain magazine files and archive boxes. All my paperwork is now stored in custom boxes in my hot pink, black, white and grey colour scheme.

Do you have any resources for frugal decorating? Or some major successes to share? Let us know in the comments.