It's the Final Quarter of 2011
As a long-standing fan of the Frugaldom lifestyle, I find myself gearing up for the next great money-saving challenge, as set by NYK Media in the Frugaldom forum.
For the past five years, a household budget of £4,000 has been set as the target. This excluded rent/mortgage, council tax or work-related expenses. For 2012, we are looking at setting the challenge budget at an average of £15 per day for absolutely everything, council tax included. 2012 being a leap year means the Frugaldom annual budget will be £5,490.00
I should add that this lifestyle has paid dividends, as the savings made over the past five years bought the house outright, so no rent or mortgage to worry about, only the council tax. (For anyone with children, the challenge allows for whatever extra Child Benefit provides.)
The cost of living is extremely 'way out' if we incorporate the costs associated with how we earn our living. Before setting out on this 2012 epic journey, I would recommend you all assess how much it costs you to earn an income.
It has often been discovered that the cost of working far outweighs any previously preconceived ideas about how much benefit it brings the household. A prime example is the low-paid, second income. Often, the person earning that meagre income can save more money by being home running the household as their business than they can financially contribute in extra cash from the job. A penny saved is a penny earned. Do you really need two cars, for example?
If I tell you that it is possible to run a household on an average budget of £1000 per person, can you tell me how much it costs if I include the costs of working to pay a mortgage and all that entails? I realise that it's dependant on where you live and work, but commuting looks like a complete nightmare to me.
Of course, sharing your household with others is usually much less expensive than living alone, so it pays to have someone else sharing your space. Letting out a spare room can net you enough to live off for a full year and that extra income, through the rent a room scheme, is tax free! One need never worry about being alone and penniless while that policy is in force.
Here in Prophett HQ, the work costs are minimal - we work from home because we can and because we don't need all that much income in order to survive and enjoy a simple lifestyle. 'We' are 3 adults. I run the household on my own income and anything else gets banked. I don't charge my son the equivalent of room rent, but he does contribute around half the allowable amount. When he chooses to leave home, the option will be there to take advantage of the rent a room scheme. I don't charge 'the other' any housekeeping or rent, as he is the completely independent other with whom I pooled my savings to buy a property.
For anyone who has followed the Shona Prophett updates in the past, you will know that I've ventured into such weird and wonderful challenges as 'comparative investments', involving gambling in all its forms.
For those of you who followed me through my 'Penny Shares' challenge, you will have witnessed the trials and tribulations of watching my Tadpoles (TAD) emerge from the murk, before that murk sank into the LSE mud pile, never to be seen again. A lucky escape, if ever there was one!
Going back further, you might even remember the NYK challenge involving owning a racehorse and getting that out onto a racecourse, more as a stunt to show that it could be done, than for any other reason. That was fun!
All of these things can be done on a tight budget, you just need to be prepared to leap at every opportunity that can help you on your way. You need to adopt an obsession with numbers, a love for number crunching, an eye for a bargain and the attitude that nothing is beyond your reach.
The only certainty in life is death, so make the most of the breathing times.
(c) Shona Prophett
01 October, 2011
Scottish Multimedia
As a long-standing fan of the Frugaldom lifestyle, I find myself gearing up for the next great money-saving challenge, as set by NYK Media in the Frugaldom forum.
For the past five years, a household budget of £4,000 has been set as the target. This excluded rent/mortgage, council tax or work-related expenses. For 2012, we are looking at setting the challenge budget at an average of £15 per day for absolutely everything, council tax included. 2012 being a leap year means the Frugaldom annual budget will be £5,490.00
I should add that this lifestyle has paid dividends, as the savings made over the past five years bought the house outright, so no rent or mortgage to worry about, only the council tax. (For anyone with children, the challenge allows for whatever extra Child Benefit provides.)
The cost of living is extremely 'way out' if we incorporate the costs associated with how we earn our living. Before setting out on this 2012 epic journey, I would recommend you all assess how much it costs you to earn an income.
It has often been discovered that the cost of working far outweighs any previously preconceived ideas about how much benefit it brings the household. A prime example is the low-paid, second income. Often, the person earning that meagre income can save more money by being home running the household as their business than they can financially contribute in extra cash from the job. A penny saved is a penny earned. Do you really need two cars, for example?
Expenses (work-related) that we seldom take into account include:
- transport
- clothing
- footwear
- lunches, snacks, drinks and hot beverages
- social activities
- gifts for fellow workmates
- increased costs for groceries, when there's insufficient time to bake and cook from scratch at home
- takeaways, when there's insufficient time to cook at home
- nursery care and/or out of school hours care for offspring
- extra wear and tear on a car that you possibly wouldn't need if you didn't go out to work
- bus, train or taxi fares
- a family holiday that seems necessary in order to convince yourself that work is worth it
- gym membership because you haven't the time of day to keep fit in more usual ways...
The list is endless, the costs phenomenal, so start counting up your non-household costs and weigh them up against the overall benefits. Include the stress factor and any other health-related issues.
If I tell you that it is possible to run a household on an average budget of £1000 per person, can you tell me how much it costs if I include the costs of working to pay a mortgage and all that entails? I realise that it's dependant on where you live and work, but commuting looks like a complete nightmare to me.
Of course, sharing your household with others is usually much less expensive than living alone, so it pays to have someone else sharing your space. Letting out a spare room can net you enough to live off for a full year and that extra income, through the rent a room scheme, is tax free! One need never worry about being alone and penniless while that policy is in force.
Here in Prophett HQ, the work costs are minimal - we work from home because we can and because we don't need all that much income in order to survive and enjoy a simple lifestyle. 'We' are 3 adults. I run the household on my own income and anything else gets banked. I don't charge my son the equivalent of room rent, but he does contribute around half the allowable amount. When he chooses to leave home, the option will be there to take advantage of the rent a room scheme. I don't charge 'the other' any housekeeping or rent, as he is the completely independent other with whom I pooled my savings to buy a property.
For anyone who has followed the Shona Prophett updates in the past, you will know that I've ventured into such weird and wonderful challenges as 'comparative investments', involving gambling in all its forms.
For those of you who followed me through my 'Penny Shares' challenge, you will have witnessed the trials and tribulations of watching my Tadpoles (TAD) emerge from the murk, before that murk sank into the LSE mud pile, never to be seen again. A lucky escape, if ever there was one!
Going back further, you might even remember the NYK challenge involving owning a racehorse and getting that out onto a racecourse, more as a stunt to show that it could be done, than for any other reason. That was fun!
All of these things can be done on a tight budget, you just need to be prepared to leap at every opportunity that can help you on your way. You need to adopt an obsession with numbers, a love for number crunching, an eye for a bargain and the attitude that nothing is beyond your reach.
The only certainty in life is death, so make the most of the breathing times.
(c) Shona Prophett
01 October, 2011
Scottish Multimedia
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