Friday, 23 September 2011

Minimum Wage Need Not Apply...

How Much Money is Enough?

Fresh quail egg omlette with organic tomatoes

No matter where you live, there is a simple way to follow a frugal lifestyle and help beat the blues - if you have them.

Frugal living is not about sacrificing the good things in life, it is about living in a way that makes them affordable to you. And only you can decide what those good things really are.

What may be a luxury to someone in the town or city may be commonplace to someone from a more rural community. Think fishing, sailing, equestrian sports or even just wide open spaces, deserted beaches, bluebell woods in spring, snow-clad slopes in winter and few people around to care how you look or what you do. (Within reason, of course.)

As a prime example of the 'luxury' perception, my own children were practically reared on quail eggs. For much of their early lives (and my own, before that), they had poultry and game birds, a large garden, goats or lambs and the usual horses, ponies, dogs, cats and other assorted furry or feathered creatures. This was, and still is, our version of normal. I have things like pheasant and scallops in the freezer, prefer venison to lamb, will hopefully have a wild goose for Christmas dinner and quail eggs can be eaten like sweets. Handmade cookies, preserves and assorted confectionery, organic herbs, saffron, asparagus, freshly harvested globe artichoke... gourmet foods that stores like Harrods pride themselves in having on their shelves.

Organic produce, freerange eggs and handmade or individually designed anything can pretty much be taken for granted if you live in the country and run your suburban garden like a smallholding (or microholding), growing fruit, vegetables and herbs while keeping a few chickens. But a high-flying city career doesn't allow time for endless hours in the garden while also looking after livestock, running a household like a business, spending hours in the kitchen cooking, baking and preserving or earning a living  from home. Living and working in the city means paying a premium for such 'luxuries'.

On the flip side, city or town dwellers may take other things for granted, things that those of us living in a more rural location might look upon as absolute luxuries - mobile phones (no network coverage), fast and affordable broadband, supermarkets, night clubs, clothes shops, a local gym, buses and taxis, train stations, shopping centres... even things like mains gas, water and sewerage cannot be taken for granted. The lists are endless. But we still all pay the same taxes & National Insurance, road tax, TV licence fees, petrol, diesel, oil and unit rates on utilities bills.

Annual Council Tax in rural Scotland (and many other areas) is about double what it costs in Westminster but, lest we forget, here in rural Scotland, we can buy a 3-bed house outright for under £60,000.00

In Westminster, £60,000.00 could rent you a 3-bed flat for less than 2 years. (Quite a nice flat, in Sufflok Street, a stone's throw from Trafalgar Square!)

Let's look at the financial differences between both sets of lifestyles. At the moment, the UK Government sets the national minimum hourly rate of pay that an employer needs to pay an employee. Note the bold type - here in ruralite land, there is a relatively low percentage of employees being paid by regular employers. In fact, I'm hard pushed to think of anyone I know who is employed fulltime, most are self-employed and/or working part-time jobs in order to earn their living.

The Department for Business, Innovation and Skills has announced the national minimum wage rates from 1 October 2011:

•the adult rate will increase by 15p to £6.08 an hour

•the rate for 18-20 year olds will increase by 6p to £4.98 an hour

•the rate for 16-17 year olds will increase by 4p to £3.68 an hour

•the rate for apprentices will increase by 10p to £2.60 an hour

Consider this:
 
If a frugal household can live on £5,000 for a year with no rent or mortgage to pay, how well off would that household be if all occupants earned £6.08 for every hour they worked?
 
With 3 adults sharing, how many hours would each need to work on minimum wage to earn the £96 in total per week to live in Frugaldom?
 
With 3 adults sharing, what rate of pay would each need to earn the £696 in total per week to live in the 3-bed, Suffolk Street flat in Westminster?
 
Interesting number-crunching result, isn't it?

10 comments:

  1. Archie Sparrow would say; "how long is a piece of string?" That's the baling variety!

    Everything is relative. For example the minimum wage in Ireland is 8.65 Euros for an adult. Which is seven Pounds fifty five an hour.

    However it's twenty percent more expensive here than the UK.

    So people go to the cheap overseas supermarkets.
    You pay 22 cents for a can of "el cheapo" baked beans. Then you walk up the middle aisle and end up spending five hundred Euros on a speedboat or a 52 inch Colour television!

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  2. Cor, our 'el cheapo' baked beans are 29p, which is cheap in comparison to 64p for a tin in the local village store. But a racehorse can still cost a packet! Savings on that score need to be made by hoping the trainer will let you muck out your own stable and travel in the box with the animal and only race on Sundays for the appearance money. LOL

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  3. 64p for a tin of beans? Ouch! Then they say shop local!

    A lot of the holiday home owners "weekenders".. in West Cork, shop in the supermarkets in the big city and don't support the local community. I suppose you can't blame them really! We have to go over five miles to our nearest shop.

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  4. Blimey, the UK minimum wage is very low. In France, for an adult, it is euros 9.00 per hour, pre-tax of course. And of course, you've got to find a job first.

    ps. 9 euros equates today at £7.85 an hour.

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  5. And here's me thiking £6.08 is a fortune! LOL

    I like to try and support local, mainly because nearest shop is 3 miles away and nearest supermarket closer to 20 miles from here. Will post a short blog soon about yesterday's shopathon, as it's one of my micro-challenges.

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  6. In answer to my earlier number crunching question, the 3 sharing the flat in Westminster need to clear £6.19 per hour, each working a 37.5 hour week.

    Based on that same rate, three of us here would work nearly 5 hours each, with the proceeds of the other 32.5 being available for other things.

    If only it was that simple.

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  7. I find it amazing how some people can't see the wood for the trees. Or should that be that they can't see the pennies for the pounds? The cost of living isn't all that expensive if you're prepared to put a bit of thought into whay, where and how you spend.

    The problem is that there's always something new comes along that could easily lead us into the temptation of spending more than we can afford... like a house, a horse or, in Dave's example, a 52" TV and a speedboat.

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  8. How much would you pay for a bag of coal in Scotland Frugaldom? We have to pay 13.80 Euros = 12.0422 Pounds. That's for Polish coal. Solid Fuel (can't afford) is 18 Euros or Fifteen Pounds seventy in Sterling.

    What happens when or if the Euro collapses in six weeks?

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  9. September special runs all month here for coal, so I've just bought in my half tonne to hopefully last me to the end of the year. It worked out at £108 for 10 x 50kg bags but it's usually £11.80 per bag. That is the cheapest coal I can get here.

    Others are paying around £16 per bag for the 'expensive' types and even more than that for smpokeless or anthracite, from what I can gather.

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