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.

1. Swiss Army Knife

Of all the items that exist on a Swiss Army knife (or Leatherman tool) I’ve only ever used knife blades, scissors, tweezers, bottle openers, corkscrews and nail files. On an actual penknife, the only ones I can use myself are tweezers, nail files and knife blades – and the tweezers suck.

All of those items except bottle openers will definitely be confiscated at Heathrow. Emery boards are cheap and light, I have a very cool bottle opener key ring, and when travelling I either drink wine in a restaurant or bar (where they open the bottle for you) or stick to beer. As I said, the tweezers on Swiss Army knives suck, so if I can, I’ll bring separate ones anyway.

That just leaves knife blades and scissors. In my regular day to day life I do occaisionally need one or the other of these items. However, a simple penknife costs only a few £/$ - a lot less than a complicated multitool – and a pair of scissors even less. If I’m checking a bag, or not flying, I’ll usually put in a pair of nail scissors – they do most jobs if they need to. If I’m doing carry on only, I do without and haven’t had a problem yet.

2. Sewing kit

This might just be a personal one. I rarely have buttons come off stuff disastrously, nor do I regularly rip my clothes. It takes me forever to mend things when I’m at home, so I’m not going to waste my holiday doing the same. At British airports sewing kits are sometimes confiscated, which kind of defeats the point, and if something becomes unwearable, I’m probably in a place where I can pay someone to fix it for me or get a replacement, or make do until I get somewhere where I can.

3. Compass and/or Whistle

One of the fundamental rules of travel should be that if you don’t use it at home, why on earth would you use it whilst travelling. Compasses and whistles are cases in point. Outside North America, many/most cities are not arranged on a regular grid pattern, and it’s just as easy to navigate with a map, particularly if you are not a regular compass user.

Similarly, whistles are only useful in a few tiny situations – if you’re mugged then you should just handover your cash, if you’re attacked then the whistle needs to be round your neck already, and preferably in your mouth. Which is just a recipe for falling over and knocking your teeth out, or swallowing it.

Naturally, if your trip is in a wilderness area, or you use these items in your day to day life, feel free to disregard my reasoning above. Otherwise, save your cash.

4. Inflatable travel pillow

I have a (short) list of things wrong with these:

• the look stupid
• they aren’t very comfortable
• they get punctures
• they are a pain to blow up

5. Immersion heater

Ok, I don’t have one because I only drink hot drinks from time to time (I’m not a proper Brit either – I don’t like tea). But in any case, pretty much anywhere you want to go there will be coffee on sale, most places can do hot tea, and if you can get coffee, you can get hot water.

Otherwise if you take one, you’ll also need the right plug adaptors, and a mug that won’t break whilst you boil the water. Also a fire and electrical hazard.

6. Travellers cheques

Only worthwhile if you are going somewhere where you can’t rely on ATMs. And that people, is almost nowhere – Mongolia, Burma, some of the ‘stans’. Everywhere else, travellers cheques (or travelers checks) are more limiting.

Outside the US, travellers cheques are not like regular cheques. You can’t normally use them in hotels, restaurants, etc. So, to use travellers cheques, you tend to need regular office hours. (Inside the US, just use ATMs like everyone else.)

Travellers cheques are replaceable, but that is quite a hassle – there aren’t Amex / Thomas Cook offices on every street corner. Also, especially in places where the script does not use the Latin alphabet, your signature will need to match exactly in order to cash them. In Thailand, I once had to sign my name about 15 times before they would give me any money.

7. Special travel clothes

These are really good. They wash and dry quickly, have millions of pockets, come in a myriad of sensible colours,…

Except that they tend to be ugly, styled to suit men and in colours that I really, really hate and will refuse to wear. They make you stick out like a sore thumb, in the same way that that middle aged men in shorts stick out in Paris. Wear your regular clothes. If you wouldn’t wear travel clothes on a day trip in your home area, or to the shops, (assuming the weather is right) then why would you want to wear them whilst away?

1. collapsible water bottle

The best are made by Platypus and cost up to about £10 depending on the size you get.

good for

They are good for people who travel by plane to developed destinations and don’t want to buy multiple bottles of water. You can fill them up after security in the airport and then repeatedly in hotels/hostels whilst you’re away. Because they are collapsible they don’t take up valuable space whilst empty.

less good for

If you travel frequently by plane, the money saved in water at the airport by itself might make these worthwhile.

They are not so great if you are going somewhere where you don’t want to drink the water, you’ll need to buy bottles anyway because you won’t be drinking from the taps. If you’re not travelling by plane, that often then you can just bring your water or whatever with you.

personally recommended?

I don’t have one yet but I might get one if my next holiday involves spending time in Europe, N America, NZ or Australia in hot weather.

2. cheap mp3 player

I’m thinking of the ones that have maybe 1Gb of memory and cost less than £20 and are recharged via a USB port.

good for

Ipod type things are awesome and amazing for travel. If you’ve ever sat on a long bus/train/ferry ride without entertainment you will truly appreciate having music available on tap. However, they are easily stolen, so you might not want to take your prized possession with you on a trip, it’ll cost you both money and hassle to replace. Which is where a cheap (inferior) product comes in. They are also easier to recharge - no need for adapters, pretty much everywhere has an internet cafe to use - but you might want to get one with reasonable battery life.

less good for

The extremely fashion conscious who wouldn’t be seen dead without something in the right brand/style. Also if you don’t like music or talking books you probably wouldn’t get much use out of one.

personally recommended?

Yes. I have had (and lost) a basic one of these. It recharged via a USB which was very hassle free, and I could store enough music to last me through the trip. Note that I managed to lose it.

3. money belt

Somewhere hidden to keep your money, passport, tickets, visa etc so that it doesn’t get stolen. Money belts should be worn under the clothes.

good for

Travelling in the parts of Europe/Asia/South America notorious for pickpockets - for example Italy and Spain. There are different versions that you can get - some go round your neck, others look like regular belts (but don’t normally fit a passport or tickets in), there’s one I quite like which loops onto a regular belt and then is worn inside your clothes - which means that there should be something for everyone. They are great for nervous, especially first time, travellers.

less good for

People who will insist on wearing them outside their clothes anyway. It’s like asking to be mugged. If you like to look very stylish whilst away they can be challenging to work with. If you’re going somewhere safe, and so won’t be carrying round any valuables and hardly any money, they won’t be worthwhile. Similarly if your idea of travel is to spend all your time away from people, they aren’t great value.

personally recommended?

I have previously owned one. I was 21 and travelling round the world. It was the cheapest I could buy, and I think I wore it once. I haven’t used one since, but I’m used to (and feel safe in) big busy cities, mostly have electronic travel tickets, and carry only as much money around with me as I would be comfortable doing at home - ymmv. I also claim to be super short, and these all seem to be designed for men. If I go somewhere *interesting* again, I might get the belt loop one and see how that feels.

4. travel insurance

For what is usually a fairly small sum of money in the great scheme of things, an insurance company will pick up the tab when the universe moves against you. Always shop around for a good deal, prices vary massively for the same coverage.

good for

Anyone who is travelling with passports, non-refundable or expensive travel tickets, or quantities of stuff. Or who is travelling somewhere where they are not entitled to free medical care. If you are British and you are travelling anywhere outside the EU you need this for the medical coverage alone.

less good for

People travelling very near to home, who have luggage they can afford to lose or replace, aren’t using a passport, can rebuy their tickets, and have their medical care covered in some other way.

personally recommended?

Good heavens yes, never travel without it, except for non-flying trips within mainland Britain where I’m covered partially by household contents insurance, plus have access to the NHS, and don’t need ID to get home. On one of my first exciting trips, my friend had her camera stolen. I’ve also known people need the medical coverage.

5. silk sleep sheet

A sheet made into a sort of sleeping bag shape, the smallest and best quality are made from silk and are reasonably priced from New Zealand.

good for

Anyone travelling using hostels where they charge extra for linen - on a longer trip those few extra $ add up to quite a bit. They’re also handy for extra warmth when you’re using a sleeping bag (and are more easily washed)  or where you’re less than convinced by the cleanliness of the bed linen.

less good for

People using 3* or better hotels, or staying with friends, or in decent rentals.

personally recommended?

Yes, I have one. I love it. I enjoy hostels, but I like having nice sheets even more. I have also used it in less than clean surroundings in Egypt. It’s so small that I tend to take it wherever I’m not certain that the bed/room will be nice.

So there you go, there are all my suggestions for travel buys that might save you money in the long run. Why not add your ideas in the comments.