Nov

4

a confession and sorting myself out

Filed Under budget | 24 Comments 

I have a confession to make.

For a personal finance blogger, my bank accounts are in a terrible state. I’ve exceeded my overdraft limit for the last 3 months in a row, which is costing me about £200+ in bank charges. Naturally, I’m going to be saving the documentation about the charges in the hope that I’ll be able to claim them back inthe future. It’s not really the point though.

I firmly believe that nobody should be paying bank charges because they are just unnecessary. If you need to borrow money then you can use cheaper forms of credit. That extends to me too. I mean I think £35 an item is unfair but it’s still easily avoided.

How did I get myself into this situation?

Well, the short and simple answer is that I have some expenses to claim, and money to resdistribute around my accounts that I haven’t got round to doing. This has given my main current account a cash flow problem.

The long answer is that I’m tired. I’m not keeping a firm enough grip on my finances, but I’m not keep a grip on a few other things either. My house looks like it’s been hit by an explosion of papers and clothes. I haven’t written nearly as many posts on here as I’d like to. I’m doing the bare minimum on most of my other projects. My day job is sucking up the spare energy that I have, which makes sense as I enjoy it and it pays the bills, but I am not my work. Something has got to change.

Given that I don’t want to give up anything that I currently do, and that although my day job could get easier as I get more used to my newer responsibilities but I can’t rely on that, I’ll have to find some more energy from somewhere.

I’m thinking that I need to break up my evenings a little more so that I’m not moving from thinking at work to thinking about blogging. Instead I’ll try doing some housework and practising the oboe first, and then move onto more mentally draining pursuits later.

I also reckon that I could do with improving my diet. I’m too lazy/tired to cook, and I don’t feel all that inspired about making a huge effort to cook just for me anyway. I need to work with this rather than against it, so to get closer to my 5 a day I’m going to be eating more soup. From a tin it takes about 4 minutes to heat up at most, there are several kinds I like that are somewhat healthy although they probably have more salt than is really good.

I’m open to other suggestions on the food front if you have them. To be realistic, my limitations are that I have almost no freezer space, I want to eat within about half an hour of getting home, and I am just not going to do anything that takes more than 5 minutes preparation time - chopping up the vegetables for a stir fry is far too much effort. Yes, more effort on the food front would probably be better, but I need to stick to things I’m actually likely to do.

Finally, I think I need to make more of an effort to improve my sleep patterns. I thin I would feel better generally if I want to bed about 10:30 and got up at 7am. This should have several positive effects. Firstly, I’d be getting around 7-8 hours sleep which is a good amount. Secondly, getting up earlier should mean that I’m not running late which is helpful. If I’m going to be late, I’ll catch the bus. So if there’s less chance of me being late, I’m much more likely to walk and get more exercise, which should give me more energy.

Other things I’m contemplating but not putting in to action yet include

  • cutting back on caffeine - at work
  • starting bouldering again - although where I’d find the time, I’m not too sure
  • complete house decluttering - this needs to be done, but requires time again

If you have an suggestions for this errant personal finance blogger, please let me know in the comments.

Nov

3

gap years are good

Filed Under education and career | 24 Comments 

Some things are very culture specific.

I’ve never met an educated Brit who hadn’t been abroad. Never.

More than half of all Americans don’t own a passport.

I view overseas travel as an important part of life. Really, when it comes down to it, I don’t think there’s a very good substitute and that someone who hasn’t travelled at all has lived a sheltered or narrow life (so far).

I didn’t do one myself, but I now see a gap year as a really, really brilliant idea. There are essentially two main variations. In the first you work at a slightly tedious low-paid job for several months to save money which pays for an extended (say 3 month) trip around the world. In the second, you work for slightly less time at the tedious job and supplement your savings with working abroad. Typically this trip involved more than 6 months travel.

Even 10 years ago, when I could have taken one, they were already ubiquitous enough that there was a gap year circuit for Brits. Fly from London to Bangkok, go overland to Singapore, then fly to either Melbourne or Sydney, overland to Cairns. At this point take an optional aside to New Zealand. Finish up by flying to Los Angeles, travelling overland to New York, and then fly back to London. Working abroad would take place in either Australia or New Zealand, and the main alternative would be travelling across India rather than South East Asia.

If the concept is entrenched in the UK and I think Ireland, it is positively compulsory amongst Antipodeans. Based on my own encounters, for Aussies and Kiwis the overseas experience often seems to include a stint working in London, extensive travel around Europe and North America, plus I think South East Asia and/or India. I’m not sure whether the circuit is as well-defined as it is for Brits - most of the Australians and New Zealanders I’ve met seem to be pretty well travelled and get to a wide variety of places.

On the other hand, whilst I’ve met a few Canadians who are on the road for a long period, Americans seem to shun the gap year concept. The same arguments that I remember from reading the paper in the UK 15 years ago about the damage gap years could do to your career prospects seem to be still in vogue amongst US writers.

Apparently, although almost everyone who takes a gap year between school and university in the UK returns to complete their degree, in the US students are much more likely not to bother. And this would be a terrible thing? Quite frankly, if you’re going to be aimless, far better to do it whilst earning money than spending it on expensive tuition.

Although, in other countries the experience of travelling abroad for an extended period of time teaches young adults valuable life skills and broaden their horizons, the only thing it would do to Americans is destroy their ability to concentrate in classes. The people that I started university with who had been on gap years didn’t feel like a year older than me, they seemed more like 5 years older - and much more ready to start studying again after their time off than those of us who hadn’t been off the education treadmill.

If I had the opportunity, I would encourage everyone under the age of 25 to take a year out, make plans, and travel for an extended period. Working abroad for a few months is even better. I feel like living proof that once you start a career, you’re much less inclined to give it all up for a while to travel (but you still should if you feel you have the opportunity).

Although two or three week vacations are really good - they are how I intend to finish off seeing the world - extended 2+ month trips are a completely different beast and can really test and develop you in a way that few other experiences do.

If you know anyone in high school or college, suggest they take a gap year.

Oct

29

what motivates you financially?

Filed Under philosophical | 16 Comments 

Lots of people suggest that the best way to motivate yourself is to have a big goal. You know, like a house that you want to buy, or a vacation that you want to take. You’re supposed to picture yourself doing it and  then ask whether you want the house/vacation/whatever more than the pair of shoes in the window, or the meal out.

I’m not sure why, but that’s never worked for me.

goals

The thing about saving towards a goal is that it needs to be of a certain size. One that is neither too easy, nor too hard. It also has to be something that you really want.

I’d love to travel overland from London to Singapore over 4-6 months. I reckon it would cost me in the region of £7k-£10k plus expenses in the UK of around £3k-£5k. Which is sort of doable if I really try singlemindedly for 3-5 years.

Only, I don’t want to give up my job, blog, house or oboe for 4-6 months. Nor do I want to cut back on the fun that I do have. I’d love to do it, but I don’t want it enough to sacrifice for as long as that.

sacrifice

I’m rubbish at this too. I’m not too bad at keeping to a generous budget, but if I have to really cut back a lot, I can’t keep it up for long. Like crash dieting, in the long run it seems to make things worse.

Mostly, I actually feel like I don’t have that much to sacrifice. I keep relatively well to an allowance, I don’t normally have a penchant for wild impulse buys. Undoubtedly my money leaks in small ways, but for me, right now, life is too short. As long as I spend less than I earn and save/invest the difference I’m ok.

the plonkee way?

I kind of half-heartedly motivate myself. I’m tired all the time. I really like everything that I do, it’s just that I spend too much time at work. In an ideal world, I’d only work 3 or 4 days a week.

The plan (formulated a year ago, more or less) is to maintain my income at around the level it currently is (inflation adjusted) and get payrises/promotions at work until I’m in a position to be able to only work 4 days a week.

This means being happy with the amount that I currently live on as a more or less permanent thing. So, I need to make sure that I spend (within my budget) on the things that I want to do because I’m not all that likely to find a magic way to afford them in the future either.

It means working for a promotion. (Another one). I’m earning around 15% less than I need to be to make the 4 day week thing work.

It’s a goal of sorts, but the whole point for me is that it isn’t one that I need to wave in front of myself to stop me buying. It’s got to be much, much more integrated than that. It means being happy with now and not waiting for the future, because the future’s going to look much the same but with more sleep and fun stuff.

It means working out how to live my ideal life with the budget I have now. Since travel is important to me, I’m taking regular budget trips abroad. I’m going to comedy clubs, meeting friends for drinks, and wearing clothes that suit me.

Now, is just as important as the future. That’s what motivates me.

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