Friday, 14 June 2013

Bringing the Frugal Budget up to Date!

My Year so Far!


McGonks
End of the tax year has been and gone, my annual tax return is staring at me in pity and the annual statement of interest from the ISA is barely worth the paper, ink and postage it cost to get it here. In all honesty, the new financial year is already a disaster.
 
The business bank account, which is run in true frugal fashion without an overdraft facility, states credit interest = 0.00% while the possibility of running into an unauthorised overdraft would incur a 23% pa interest charge. It is all wrong! I don't blame anyone for charging through the teeth for unauthorised borrowing - it's a bit like stealing, isn't it? But not being able to earn interest on savings while the financial institutions are using our money is a disgrace!
 
The interest rates may have held for a ridiculously long time at their ridiculously low 0.5% historic low, but borrowing is NOT cheap! In fact, it has become so bad that many more, sadly, are turning to 'pay day' loans attracting phenomenal interest rates, rather than simply calling a halt to their own spending and reassessing their own spending patterns.
 
It's beyond me why anyone would want to have those sort of debts hanging over their heads rather than do without luxuries. I scratch my head so often that folks must think I have lice!
 
At the beginning of 2013, I listed all my personal challenges on here, but feel compelled to remind myself so I can take stock of the situation and see if I am making any real progress. Here goes!
 
  1. Live on £4,000 for the year (2013 will be year 7 for this)
  2. Grocery Challenge - included within the above total - increased to £1.25/person/day
  3. Frugaleur Challenge - Establish a new micro-business
  4. Get fitter, not fatter - always trying!
  5. Hand make gifts for friends and family
  6. Save all loose change
  7. Eco-renovate the house without incurring any debt - this is a 5-year challenge, started in 2011
  8. EEK - Everything Else Kitty - all other spending must be cost or cash neutral
  9. Do without a car - cycle, walk or lift share for the full year
  10. Tick off a few more items from the 'to do before 50' list.
Best to work through this numerically, but I can already see where I am failing and where my priorities for the second half of the year must lie.

  1. £4,000.00 - I began the year with a household account balance of £4,000 and have tried my best to spend accordingly. After deducting approximately 25% of this for Council Tax, £145.50 for the TV licence (a luxury) and £165 for home insurance, I was left with £2,728.46 to 'live' for the full year. That's an average of £52 per week for the household. Winter was long and harsh, we were snowed in for about a week, lost power on numerous occasions and spent a small fortune on electricity trying to heat the place. Now, as of 14th June, I have £1,192.53 remaining to last until 31st December 2013. With 200 days remaining, if I am to succeed in this year's challenge, I have only £41.73 per week, on average, to spend!
  2. GROCERY CHALLENGE - Since we're one less in our shared household this year, I thought I would be rash and increase the budget from £1 per person per day to £1.25, giving me a grand total of £912.50 to last the year. This includes toiletries, cleaning products and laundry products, so it's still quite a tight budget, but I know that it's part of my job to make it work - and work it must! I have £458.20 remaining and have just spent £32 via a Groupon offer - 135 luxury 3-ply toilet rolls with free delivery. Sorted in that department for the next year, at least, and I'm sure I can stretch the balance over the next 6 months by supplementing it with garden produce, even if we do need to eat copious amounts of salad leaves, rhubarb and blackcurrants, not to mention all the eggs produced by the hens ducks and quail. The homemade laundry 'detergent' is a must, as is bulk buying, batch cooking, preserving and taking advantage of bargains anywhere available.
  3. FRUGALEUR CHALLENGE - This is really difficult because I had planned on making some spare cash from a craft-related project but then ended up selling the items to raise funds for a local charity. On the plus side, the new 'McGonks' (www.mcgonks.com) project paid for itself quickly, based on the fact that everything being used was either given to me or bought cheaply as offcuts or surplus. A serious effort will now be made to try and make it financially sustainable while also helping fundraise for charity. Besides that, it ties in well with items 4, 5 and 10 of my personal challenges list. (£675 cash for charity raised to date.)
  4. GET FITTER, NOT FATTER - We don't need expensive gym memberships here in the frugal living sector. We live in a fairly rural location within easy reach of lochs and seashore. We can walk, cycle and swim without it costing us a penny and any cut back on food consumption can only mean further savings on the grocery budget. A frugal diet is fairly healthy anyway, as it means cooking everything from scratch and growing whatever fresh produce you can either in pots or in the garden. Making the McGonks has helped this challenge as we now have a photographic diary of where they go, a fundraising challenge and even a frugal trip to the top of Ben Nevis, which was fabulous! Tied in nicely with item 10 on my list!
  5. HANDMAKE GIFTS - I'm notoriously bad at this as I am not very artistic and don't really have any real talent for crafting. I can do the basics of knitting, sewing, embroidery, crocheting and other stuff like that but actually getting my head down and concentrating on it for any length of time seems beyond me - I talk too much! If there's no company, I get easily distracted and lose focus on what's supposed to be getting done. Must try harder - I wonder if the nieces and grandchildren would like McGonks for Christmas? I doubt it very much! :)
  6. SAVE ALL LOOSE CHANGE - Still saving it religiously, dropping it into the appropriate jars for coppers or silver but spending so little cash means there's seldom much left over by way of change. Still, it mounts up into pounds eventually, then can be spent on something more substantial.
  7. ECO-RENOVATION - That's now two full years since we came here and we have managed to save quicker than we spend while doing little bits about the property. The new roof is on the back of the house, we now have proper windows in kitchen and bathroom, we have running water, electricity, a multi-fuel stove, the main hallway refloored, new cupboards in the temporary kitchen and the outbuilding has been rebuilt. The house still looks like a bombsite to the uninitiated, what with no plaster on walls, no ceiling in living-room and the old fireplace currently ripped out to leave a hole in the wall, but progress is slowly being made without too much waste. Indeed, the old fireplace has already been turned into another spiral herb bed in the garden.
  8. EVERYTHING ELSE KITTY (EEK) - This has taken a bit of a battering, as I'm aiming for a cash neutral year. Things that get paid from this include keeping the poultry, reclaiming and rebuilding the garden, National Insurance contributions and all manner of things not included in a basic household budget. The weekend holiday trip to Fort William, for example, had to come from this, as had several items of necessary clothing for the walk up Ben Nevis. It's the 'everything else' things that mount up and can kill a budget stone dead before we've even had time to notice. When you look at it from the point of view of having £8.75 per person per week to spend on groceries, toiletries and cleaning products, you can see the massively negative impact the likes of a takeaway meal might make, or the fact that the poultry may stop laying for a month but they still need feeding and bedding. Unexpected events crop up, charities need supporting, a pet needs a vet, a car needs repairs... the list is endless. Thankfully, we no longer have a car to drain funds but the extras still mount up, especially when things in the household need replacing. Year to date I have spent £445.29 but have only accrued £340.08 in extra income, generated from cash-back sites, sales of surplus eggs and, lest we forget, the whopping great £108 compensation from the power company after the 4-day power cut during the snow storms. The amount of interest generated from my meagre ISA savings is negligible, amounting to a ridiculous £1.50 per £1,000 per month! It's an absolute joke! As for the Premium Bonds, (I kept a few) they have won me nothing for the past 2 years! My free Lotto tickets, on the other hand, have given me three wins! Such a pity that the £5 or so had to be split twenty ways in the syndicate! Bottom line is that my 'EEK' is currently running in deficit at a rate of £105.21 This needs to be remedied soon, as the next load of poultry feed is due this month! Oh, and I also bought a tent! (Don't even ask!)
  9. DO WITHOUT A CAR - So far, so good! Working from home helps, as there's no commute anywhere, but as the sunny weather approaches, the urge to wander is creeping back in again. The shortest route to the local village store is just over 7 miles round trip, so cycling is much faster than walking and I'm limited by what I can carry on a bike, so spending is capped. However, getting further afield is going to be a challenge. I have several places I'd like to visit but each involves at least a 20 to 30 mile trip, so this challenge is being tied in with numbers 3 and 4 of my challenge list. I should get fitter cycling and I can thoroughly research my Frugaleur project by bike. One day, I may even invest in a newer bike.
  10. THE BUCKET LIST - Well, it's kind of a bucket list, it's my list of things to do before I'm 50, developed from my list of things to do before 40, which eventually became my list of thing to do before 45. One of those things was to go up Ben Nevis, so that was happily achieved on 25th May, at the same time as promoting the McGonks and fundraising for the local lifeboat. Also, I'd never been hostelling before, so that was another new experience. I found it a little expensive compared to camping, so bought a friend's tent when she was decluttering. I am sure 'tales of the tent' will be forthcoming in the not so distant future.
That's it, my 1 to 10 of challenges and the current state of the budget. I'd like to become more pro-active in the moneymaking side of things but creating the microholding and developing the McGonks project now is my job, so where do I draw the line? I have no more binding contracts - last one was paid up to March - so now it's time to take the bull by the horns and go it alone, so to speak, in the self-sustainable living stakes. How difficult can it be? :)

Please feel free to ask any questions and join me in the forum at http://frugaldom.myfreeforum.org if you'd like to discuss any of the items mentioned in this blog.

12 comments:

  1. I know you are strongly committed to charity - but if you cannot make it on what you earn perhaps you split revenue from the McGonk project 50/50 with charity and to your own personal revenues? As for Christmas I have a suggestion. I use Swagbucks.com (available in UK/India/USA/Canada) to do my websearches and have accumulated up to $100 per year in gift certificates that I can either use for my own household like amazon GCs or many other shops depending on your country of origin. I save mine up and then order things around the beginning of November to help with Christmas. You do searches, there is a daily poll, you can play games and even do surveys to get these bucks. If at all interested I have a link at the very bottom of my website which is a referral link to join (although that is not at all why I bring this up, just wanted to try and give helpful suggestions for Christmas). Cheers. You are the master of frugality, it is just that many costs keep creeping up and up.

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  2. Thank you for taking the time to respond. I have been doing this for quite some time now, so the posts go back several years on various websites and forums. I realise that readers here may not associate this particular blog with the other associated ones, but there are posts about my 'free cash' generation challenges, which are all still on-going. Each year, we introduce a new moneymaking challenge to add to previous ones - this year mine is McGonks. :)

    If you'd like to see some of the previous topics and challenges, you can find many of them in the www.moneysavingexpert.com at http://forums.moneysavingexpert.com/showthread.php?t=4350077 - links go back to December 2007, so there is a huge amount of reading. :)

    I'll take a look at Swagbucks soon but I already use paid searches. Each year's challenge includes new income generation to build on previous projects. It's not so much about how much I earn, it's about how I spend.

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  3. I dont feel I can advise as I dont really know your situation or qualifications.
    Have you thought of leaving your area maybe in the winter months and going to a resort area to work,maybe in the hospitality industry. Have you thought about data-entry or processing insurance claims etc. something you could do at home. Could you do a bit of B&B (I did that when I lived in Scotland) I did nt have to take people if I did nt want to.
    Could part of your garden be used for campervan storage or any kind of storage for that matter. Can you take surveys online ? Can you do focus groups or market research ?
    As you have to live on so little consider making meals from lentils and chickpeas and quinoa everyday. Frugal in Norfolk did a WWII food diary which was very interesting.


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    1. Dear Lizzie, thank you for your lengthy reply, but I suspect you aren't a regular reader and haven't actually read much about the challenge. I am not asking for advice or help, although comments and feedback are always appreciated.

      This is an annual challenge as part of the Frugal Living sites, forums and blogs I run. The past few years' worth of posts on here and elsewhere fully explain the Frugaldom Challenges. (I'm sorry if I don't make this clear.) As per my response to the previous poster who commented, you will find many more posts pertaining to this challenge on the Moneysavingexpert.com site, where we ran it from late 2007. Prior to that, we ran under a site named 'Cyberdosh' while also encompassing 'eBid'. Going right back to the start, we began simply as NYK - Now You Know - and posted the frugal living, moneysaving and money making challenges on Motley Fool, but that's going back to the 90s, so most of what was written then has now gone.

      I will endeavour to make things much clearer in future and hope that you will stay with us and take the time to read through some of the previous posts. :)

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  4. Sorry, I misunderstood - will go back and read - good luck in the future !

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    1. No need to apologise, it's a huge amount of reading if you're new to the blog or forums, I should probably do a recap on the previous 14 years so newcomers know what it's all about - it included clearing all debts and then saving to buy a house without a mortgage, so it has taken years fitting it in around all the other huge expenses that life has in store for us all. :)

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  5. wow Have you ever thought of teaching workshops at local places? I know my FIL would attend he lives in Dumfries and Galloway. And then there is always the WI. I think my WI pays for speakers. I would be most interested to listen to talks about retro-fitting your cottage.

    You are a real inspiration. I hope to do a little of what you do and then build on it.

    Thanks

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    1. I prefer the basic anonymity of the online publishing world where I can share whatever I can for free. If people are in debt and struggling to survive, it's nice to think they may find some hope in hearing or seeing how others deal with such financial situations. If it's business related, www.nykmedia.com is where I'm 'at'. :)

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  6. Thank you for posting this update chck in fromtiem to time to see how you are doing, as although I dont live on £4000 per year, your posts and website help me stay focused and live as frugally as possible

    Sharon
    www.onelifeand3kids.blogspot.com

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    1. Thank you for your comment, I'm glad you find the posts helpful in some small way and I hope you'll continue to embrace the frugal lifestyle. :)

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  7. Hi there. I haven't read all your previous posts so don't know all about your situation, but I was wondering what kind of ISA you have. Is it one you are locked into for X amount of years or is it one that you can use almost like a normal savings account, taking money out etc.? I only ask because I got a letter from my bank saying my ISA interest rate would drop to 0.05% this year so I threatened to look around for an alternative (other places were offering around 2% or just under) and after a talk with the financial advisor at the bank he gave me their new customer rate in order to keep my business...so its always worth asking. And if they say no then you can definitely look for a better deal and move your business elsewhere. Hope you don't mind me mentioning this.

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    1. Hi Helen, thanks for commenting. :) I'm not locked into the ISA, I can use it like a savings bank account and have shifted it a couple of times. At one point, I moved the whole lot into a high interest account and then shifted it to where it currently is. When we started the first of the 'make free money' challenges, there were loads of options and savings interest rates were at 6.5% so there was quite a bit of 'ditching and switching' going on then. Likewise with the credit card shuffles, but that was before they all introduced transfer fees. I think it's probably time for a round up of the entire challenge so folks can see what's already been done over the past 14 years. :) Only about 7 of those years remain online, so it shouldn't be too difficult to relocate the posts. IT may take some time, though. :)

      You can find a few details in the 'archives' section of http://frugaldom.myfreeforum.org where there should be a list of links to previous challenges.

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