Have nothing in your houses that you do not know to be useful or believe to be beautiful

William Morris

So, I’m currently supposed to be decorating my house. I’m about 80% complete on four rooms, and 0% complete on the other two. Sadly, the other two are the kitchen and bathroom, relatively expensive rooms especially as there’s no way around replacing my bathroom suite - not only is it ugly it’s also cracked.

1. look before you leap

Do research before you start. Check out websites like apartment therapy, pick up a couple of magazines, browse interior decoration books, window shop extensively. Formulating your own taste, and knowing where to look for bargains are the key to good frugal interior decorating. Collect cuttings and samples together so that you can see what looks good before you spend money on stuff. This means that you can change your mind if what you originally wanted doesn’t fit your budget.

2. pick a style and stick to it

This is really about making your place look good. If you pick a style and stick to it, everything will go together so it will look good. You’ve got a framework to bargain hunt against and since it will look good you can spend less knowing for greater effect.

3. less is more

Taking your own tastes into account, pick a style that is not reliant on lots and lots of decorative frills to work. Minimalism might not be for you, but if you like a country cottage look, err on the side of plain or shaker styles for example.

4. be flexible on exact colours

You can pick up end of line tins of paint quite often at your local big box DIY store. If you’ve only got a small area to paint, and you’re fairly flexible as to the exact colour that you want, this is a great way to save on supplies. Similarly for wallpaper, fabric, curtains etc - remnants are cheaper. Alternatively, stick to colours that are reasonably popular and you can pick up cheap paint and things in all sorts of surprising places.

5. DIY

It goes without saying that if you have the skills to do it, doing it yourself will probably save money. This doesn’t just include handyman skills, but things like making your own curtains and cushions, prettifying boxes, and creating artwork.

6. measure twice, cut once

Measure your room carefully (at least twice) so you know what will fit. I have known people to get this wrong, funny? yes, but kind of an expensive mistake.

7. invest in good finishing

Expensive tiling looks cheap if it’s installed badly. Similarly, almost anything that’s installed well will look good - which is the goal at the end of the day. And investing in this case doesn’t have to mean money. Take your time and get things right.

8. get used stuff

Gumtree, craigslist, and freecycle are your friends. You can pick up all sorts of bargains, although you should always be mindful of fire hazards in old upholstered things, and lead paint (etc) in items for babies rooms. Bargains may also be found on ebay, in car boot or yard sales, or your local charity shop. Keep your eyes peeled.

9. go to Ikea

Last time I went I picked up a few tea light holders that were 9p (like $0.05) each. Which is almost nothing. Ikea has bargains on a whole variety of small stuff like candles, towels, lamps, clocks, picture frames, crockery and cutlery, fleece blankets and wooden coat hangers (just mentioning a few of my own purchases at random). Unlike other cheap shops most of these things are in the fairly plain category - whilst not exactly exciting it also means that they aren’t hideous.

Other good bargain stores in the UK are TK Maxx, Argos, Matalan and Dunelm Mills. I only know of TJ Maxx elsewhere - add your suggestions in the comments.

10. accents are the place for nice things

Just the other day, I saw a beautiful purple velvet sofa in a magazine, it’s not remotely a bargain, but a touch of luxurious velvet would be lovely in my house. Make the small things the place where you (relavitively speaking) indulge in the finer things. Plain curtains with silk ribbon tiebacks, a small alcove papered in designer wallpaper, velvet cushions on a cloth sofa are all good in living and bedrooms. In bathrooms and kitchens get nice handles, and hardware.

11. if you don’t like it, cover it up

I can’t be the only person in the world that’s had to live with ugly furniture, flooring, or other hideous monstrosity. At the moment, I’ve got two fugly gas fires downstairs that I don’t use. In an ideal world I’d get rid of them, install new fires (one period Art Nouveau, one ultra modern) and replaster the chimney breats. Sadly, I’m not yet living in an idea world.

The short to medium term solution is to cover it up. If your carpet is a hideous pattern, get a cheap plain rug for the floor. If your sofa is ugly, get a neutral throw to go over it. I’m going to be getting some firescreens to go in front of my eyesores. I think the key to this is covering as much as possible of the monstrosity with something very plain and neutral.

There you go, the 11th day of Christmas.

The 12 Days of Christmas - Personal Finance Style:

• Day 1 -The First Rule Of Personal Finance @ I’ve Paid For This Twice Already…
• Day 2 - Two Financial Goals - Less Debt, More Income @ Cash Money Life
• Day 3 - 3 New Year’s Worksheets @ Mrs. Micah
• Day 4 - 4 ways to be better prepared for Christmas next year @ Gather Little by Little
• Day 5 - 5 Golden Rules To Follow During The Holiday Season @ My Two Dollars
• Day 6 - 6 Ways To Give @ Moolanomy
• Day 7 - 7 Savings Strategies @ Being Frugal
• Day 8 - Eight Simple Snowflakes @ I’ve Paid For This Twice Already…
• Day 9 - 9 Year-End Money Moves @ Moolanomy
• Day 10 - 10 Personal Finance Essentials @ Cash Money Life
• Day 11 - here, of course
• Day 12 - @ Being Frugal

Let’s start by saying that I am an out and out liberal, in both the British and American senses. The chances of me voting for the Conservative party are slim, and (were I given the opportunity) for the Republicans, non-existent. I also vote primarily on social issues rather than economic ones - taxes are less important to me than civil liberties and freedoms.

I should probably also point out that, as evidenced by the current recession, the British *way of doing things* is far from perfect. Our economy is heavily dependant on financial services so this recession is predicted to hit us hard.

On the other hand, there are a few things that we do differently to the Yanks, where I think they could learn a thing or two.

healthcare

Oooh, the big taboo issue amongst personal finance bloggers. My friend David at My Two Dollars has seriously been vilified for his wish - based on his own experiences - for healthcare reform. I don’t agree with him about everything, but I think he’s quite right to point out that if you have a socialized fire service then - ideologically speaking - a socialized health care system is no worse.

Now, I’m not exactly proposing that Obama institute a version of the NHS. But, the issue that I have with American healthcare is that it’s anti-entrepreneurs. The question that comes up most when an American says that they are planning to become self-employed is “What about health insurance?”. Do you know what? The most common answer is that their spouse has good health insurance. If you can’t see why that’s not good enough…

The great thing about the British system is that in that sense, healthcare is a non-issue. It should not be prohibitively expensive to get healthcare if you are self-employed. How do businesses start? They start small, usually by someone taking a risk with their own money. I don’t know where taking a risk with your health should also be coming in to it.

tax

In the UK there’s an organisation called the Campaign for Plain English. There mission is for information to be provided clearly, and in a way that most people will understand. As a result of their work, all government departments have guidance and require that public documents are written in plain English.

Now, what does this have to do with taxes? Well, I’ll just ask if you’ve ever had to fill in an American tax return? I have.

Several years ago I spent a summer as a J1 exchange visa student working in North Carolina. In order to get back the taxes I was owed, I had to fill in a 1040EZ NR. It’s a good job that I pronounce “Z” as “zed” because I wouldn’t have described it as particularly easy. And I do know that it’s the easiest one.

Having the tax stuff easier to understand would, on average, save people money. If it was easier to understand, more people would be able to complete their tax returns without paid assistance. They would also be more likely to file the right taxes and earlier, saving potential penaties.

Maybe in the great scheme of things, this is not all that big a money saver. But I’ve seen what’s happened over here. When you make government documents easier to understand, people feel empowered - it’s almost like the government serves the people rather than the other way round.

but, don’t do this…

Well, we don’t do it as much as we used to, but the British government has had a terrible habit of buying up failing companies - particularly car manufacturers - and then not performing miracles on their balance sheets. I’d advise against anyone else doing this either.

Sure, a well managed decline is better than a sudden bankruptcy but what on earth makes anyone think that a bunch of politicians are good at interfering in stuff that they don’t know anything about?

Apparently 3m Americans are indirectly employed by the big three *auto manufacturers* - about 1% of the population. No matter what Obama or anyone else does, I bet this proportion is going to decline. Any money would probably be better spent helping people re-skill themselves than in propping up failing companies.

remaining unsaid…

As I said earlier, I vote on social rather than economic issues.But I was asked to write about economic issues, and so I have.

I’m a values voter and I value non-discrimination, ending poverty, promoting peace, preventing torture and not wrecking the entire planet for future generations. In some of those areas, I think the Americans really could learn a little from the British.

Free e-book - Money Saving Tips for the Holidays

Now, is a good time to get it because there’s only like a month to go before the big day, so why not download the book, and let me know what you think.

Merry Christmas.

This e-book is copyright M-Network; however you are allowed to distribute to anyone as long as the e-book is unmodified and free. Please feel free to distribute this e-book to anyone else that you think might benefit from reading it. Each of the articles is copyright to the respective authors and is not allowed to be distributed outside of this e-Book without express permission of the author. Special thanks to Gather Little By Little for assembling all of our ideas into this one book!

Not ever.

credit crunch

The credit crunch has probably made this a lot clearer to a lot of people lately. Savings accounts which are generally considered the least risky investments have been buffeted by wave after wave of bank collapse. Investment funds have been going down in value rather than up. Big financial organisations including household names have gone under.

risk-free investments

Almost every investment advert in the UK that you’ll ever see includes something like the phrase:

the value of your investment may go down as well as up

Plenty of people are pretty risk averse, and this kind of thing gives them the jitters. Now, whatever I might think about the level of risk I am willing to take on, I think it’s very important that your finances don’t keep you awake at night. You should only take on as much risk as you understand and are comfortable with.

One sort of product that attracts conservative investors is one that promises a guaranteed capital return after 5 years, and a share of any profit if the stock market increases. I can see why people like this idea. Of course, at the moment, there’s an excellent chance that you could be relying on the guarantee to get your money back.

safeguards

In so many ways we are all fortunate people. In the nineteenth and early twentieth century, a bank collapse meant depositors - and they really were people like you and I - lost their money. That’s no longer the case. Savings accounts and investment accounts belonging to private individuals are insured by the Financial Services Compensation Scheme (FSCS). Which means that in the event of a default we can claim a good portion of our money back.

However, this only applies if they company that adminsters the product is unable to meet its obligations.

guaranteed equity bonds

The problem with guaranteed equity bonds, aside from their not that exciting performance, is that it would seem that the guarantee is insured by a third party.The way that the third party manages to make the money is through the use of derivatives. Even if your plan adminstrator is solvent you are dependent on the third party remaining in business to ensure that you get your money back.

enter Lehmans

The name should be ringing alarm bells already. Some guaranteed equity bonds had Lehmans Brothers as a third party insurer. And now, Lehmans is no longer in business. Those guarantees, it turns out, aren’t quite as rock solid as they first stand. Aside from potential mis-selling issues there is pretty much nothing that anyone can do about it.

if you’ve been caught out

If you have one of these investments and the risk involved wasn’t made clear to you, you might want to investigate whether you can make a claim against whoever sold you the plan for mis-selling.

lessons for everyone

The real issue is that people shouldn’t be investing in something if they don’t understand how it makes money. This is how you avoid pyramid schemes, and other scams.

Guaranteed equity bonds are not intrinsically bad products. But if you can’t tell me how they work, and you don’t understand the risk involved then you shouldn’t be buying them. Sensible personal finance is not that difficult - if I can understand it, anyone can.

Are you ready? Get set, Go.

In the middle of the Olympics, I thought it would be a good idea to issue a personal finance challenge, one that I need to take myself. It’s in three parts:

1. Establish how much you actually spend on stuff
2. Look at ways of cutting costs
3. Save and invest the extra money that you find

establish how much you actually spend on stuff

The most important thing about this step is to be honest. It doesn’t matter what you should have spent, or that you’re feeling pretty guilty about the beautiful shoes you bought a month ago and want to pretend that didn’t happen. No can do.

collect your bank statements and utility bills

To complete this step, you need records. Ideally you keep a diary for three months to see where your cash goes, but clearly that’s far too much effort for me. My shortcut way is to look at the most important bank and credit card statements. For me, that means 2 current accounts, and 2 credit cards. If you have any utility bills to hand, they are pretty helpful, especially if you have seasonal electricity use (e.g. higher heating bills in the winter).

make a list

Now make three lists of all your expenses, one for things (like bills?) that you would be willing to spend less on, one for things that you would like to spend about the same (like vacations?), and one for things you would like to spend more on (like charity?).

Group together in categories, but have a separate line for each of your recurring bills and Work out how much you spend on average on each in a month (total over the year, divided by 12). The following categories might be helpful:

things we would spend less on

• Rent
• Mortgage
• Insurance
• Gas
• Water
• Electricity
• Phone and Internet
• Debt Repayment
• Any other categories that are appropriate to you

things that we might want to keep the same

• Spending Money
• Any other categories that are appropriate to you

things that we might want to increase

• Investing
• Saving
• Charity
• Any other categories that are appropriate to you

The majority of my bills are set up so that they are the same every month, so I can put those in my spreadsheet (paper also works well) by just looking at one set of statements. At this stage, I tend to lump all “spending money” together. This includes clothes, cash, groceries, but do whatever works best. I split out travel as a separate item because that’s helpful to me, but you might want to split out groceries, or some other item that you are willing to cut back on. The most important thing is to include the really irregular purchases, as these will make a hole in your budget and it’s often possible to save money on them.

These lists must all be based on what you’ve actually spent – not what you wish you’d spent. Now add it all up. With any luck the monthly total will be less than your monthly income. If your good on budgeting, it should be about the same.

plonkee’s part of the challenge

This is my list:

My grand total is £1672.

Don’t forget to keep these lists and your grand total safe for part 2.

Image of Men’s Team Pursuit Medal Ceremony by Martin Dougiamas

Six years ago, the Darwins were facing bankruptcy so in stupid idea number 1 they somehow decided that John should fake his death in a canoeing accident whilst his wife Anne claimed a total of about £250,000 on various insurance policies.

The next stupid idea to come to light was John walking in to a police station last December claiming to be suffering from amnesia. His wife, of course, said how delighted and relieved she was that he had reappeared. The story appeared in all the major newspapers and tv news shows.

The nail in the coffin of this harebrained scheme was the other stupid idea. The Darwins had been planning to move to Panama on the proceeds, whilst they were looking at an apartment in 2006, they posed together for a photograph. Which of course quickly made it’s way into the public eye. Both the husband and wife received have just received prison sentences for the scam.

That’s pretty much all the farce - the tragedy is that the couple had two grown up sons who were not in on the scam. They had spent nearly six years grieving their dead father, who turned out not so much dead as to have simply been lying, as had their mother.

Of course, it’s all completely ridiculous, fraud is not a good way of avoiding bankruptcy. In fact bankruptcy isn’t that bad, plenty of people do it and come out the other side perfectly well. If you have vast mounting debts, you can get proper advice from the following charities: Consumer Credit Counselling Service, National Debtline and the CAB - and plenty of support on the Money Saving Expert forums (try the debt-free wannabe, and bankruptcy and living with it boards).

I went to another oboe lesson yesterday. One of the interesting challenges of learning a wind instrument that I wasn’t prepared for is how tired practicing makes the muscles around your mouth. This means that you can only practice for a limited amount of time, and as a beginner, we’re talking about 10 minutes or so. Well, you can’t get much done in that time, so ideally, I prefer to practice three or four times a day. As the oboe is pretty loud (and I sound like a duck) I can’t do any practice late in the evenings as I don’t want to annoy my neighbours. All together, this means that my day job is interfering with learning the oboe.

It got me thinking about what I would do all day if I didn’t need to go to work. It goes without saying that I love this website, and so I’d want to spend more time writing for plonkee money, and probably work on some other web projects. As I explained above, I’d also want to spend more time practicing the oboe (and probably the viola, which I also play). There are a couple of other things that I’d like to have more time to do. Finally, I actually like what I do for a living now, and some of the challenges and so that I get at work couldn’t be easily replicated elsewhere so I’d still like to keep the same job.

It looks like my best combination would be working at my current day job for the equivalent of 3 working days a week, working on web projects for the equivalent of 3 days per week, and then spending a couple of hours a day on music practice and other projects. This might sound like it’s still a lot of work, but it would actually be less that I currently do.

The difference between my best combination, and what I actually do, is that I spend more time on my day job than I’d like, and not enough time on everything else. I am working towards changing this though. This year I have started to take at least one day off per month to work on web stuff and other things, on top of the regular hours that I put in each evening.

If you didn’t need to worry about money, what would you do all day? And how are you working towards it? Let me know in the comments.

Image by orangeacid

Still, you’re here now, and that’s the important thing. If you want to check out what you missed last May on plonkee money try:

• getting out of debt would be easier - I still don’t have any consumer debt, and I still think it’s psychologically easier to get out of debt than to start with a little and save and invest. If you disagree, read the post, and let me know in the comments.
• single and aiming for a financially stable partner - nothing much has changed here in the last year either. I’m not currently looking for anyone, but if I was they’d have to be a believer in sensible personal finance.
• starting a business will not make you rich - I mean it plausibly might, but it probably won’t. Something for the more entrepreneurial readers to oppose .
• overpaying the mortgage, or investing for retirement - which are you doing?

Should that not be enough retro plonkee money to be going on with, browse the full archives and read some more.

If you want a different point of view, lately I’ve liked:

• using a freedom account to prepare for the unexpected @ get rich slowly - irregular expenses needn’t cripple your finances any more
• when we received a collection letter @ mrs. micah - fortunately I haven’t had one yet myself, but I’ve had them for other people (previous tenants) and it’s best to open and call them up to let them know that they’ve moved. It cuts down on hassle.
• what is an annuity? @ moolanomy - important information as in the UK it’s almost (but not quite) compulsory to purchase an annuity with your pension funds, something about not squandering it and relying on the state I think
• how to feed a family of five on $200 a month @ rocket finance - where Mrs Rocket explains how she feeds the family, and rocketc admits to eating both seconds, and thirds at meal times

My blogroll consists of every personal finance blog that I read, or it’s supposed to anyway. If you’re not on there, and you’d like to be, either contact me, or leave a comment below with your blog url in the relevant field and I’ll subscribe.

Also, I’d welcome your input into improving the plonkee money design and layout. Anything you hate, anything you love, let me know.

Finally, I’m soliciting good guest posts from regular readers. If you’ve got something to say and you’re looking for a platform to say it, maybe plonkee money could be the place.  Email me.