plonkee money an english-er's thoughts on personal finance

September 24, 2009

do what works, because done is better than perfect

Filed under: philosophical — Tags: , , — plonkee @ 10:03 pm

I’m a firm believer that you need to do what works for you. Ignore ideology and what ‘should be’ the right answer – you don’t need to do what’s best, just what works and is good enough.

food

The other day I was talking about the food that I eat. I really don’t enjoy cooking unless it’s for other people, and I live alone. This is a fairly recent thing for me, so to start with, even though I couldn’t be bothered to cook I would buy sensible, ‘make from scratch’ food – like fresh vegetables, minced meat, chicken breasts etc. Good idea, right?

Wrong. I basically wasted all that money, because I couldn’t be bothered to cook the food and had to threw it out. Instead, I’ve moved towards putting more emphasis on preparation time when choosing food. I’m doing what works for me, even if it isn’t ideologically the best thing.

cash and cards

For a long time my spending money has been placed into a separate account and then I’ve been spending it on a card, and rarely used cash. That worked for a long time, but I started to get slack and then the card rules changed, which meant that it was too difficult to track.

Although received wisdom says that you spend more money when it’s on a card, I used to live primarily on cash, and I’ve long known that it burns a hole in my pocket and slips through my fingers. Cards are normally a better solution for me, but I need to know how much money is left to fritter in the month, without having to look it up somewhere.

I decided to take the plunge and experiment with cash only. I started a couple of months ago, and it’s going fairly well. The way that I’ve made it work is to take out all the money I’ve allowed myself for the whole month (so that I don’t need to track withdrawals), and then ration it carefully at home. I basically limit the amount of money that I have on me to the minimum possible. I’m rubbish at delayed gratification, so I avoid daily challenges on the issue by removing temptation as much as possible.

what does it all mean?

For me, doing what works means being honest about my own limitations. It means accepting that I have both strengths and weaknesses, and doing what is needed to ensure that I don’t sabotage myself and my plans. It means being auto-magical because I’m lazy, and writing everything down because I’m forgetful.

One of my favourite quotes/cliches is that ‘done is better than perfect’. Life is more pass-fail than about scoring the highest grade for the neatest work. It’s about what you learn, playing to your strengths. I try as much as I can to drop pre-conceived ideas about what ‘someone like me’ should be doing with their time and money, and try to do what I think will make me happy, and/or what will mean that I’m least likely to screw it all up.

What non-perfect tactics do you employ that work for you?

September 23, 2009

food frugality

Filed under: frugal — Tags: , — plonkee @ 10:08 pm

My eating habits are pretty much indefensible. At the moment, my weekly grocery shop as posted on the GRS forums looks like this:

  • 600g speciality cheese ~ £4.50
  • 1/2 french stick ~ £0.40
  • bag apples or bananas (about 7) ~ £1.25
  • 12 flapjacks / cereal bars ~ £4
  • 5 500 ml bottles diet pepsi ~ £5
  • 1 bottle concentrated fruit drink ~ £1
  • special offers for dinner <£2 per meal (around 6 meals)

The dinners are things like couscous, pizza, soup, ready meals, etc. Not exactly the healthiest diet one has ever seen.

Unsurprisingly I was called out. You can eat much better for a similar amount of money, apparently. I probably shouldn’t have been quite so detailed, now I feel the need to attempt to defend my food purchases.

frugal lunches?

DoingHomework said

When I look at your food budget I see that about half of it is spent on cheese, cereal bars and soda. There is nothing wrong with that if that is what you like. But replacing the ceral bars with bulk whole grain mix, the pepsi with water, and stretching the cheese out would save an enormous amount per year.

Yeah, it looks bad because it’s unhealthy. In reality, cheese, fruit, soda and cereal bars are my breakfast/lunch every day at work. They cost me £2.65 a day (which is about US$4). That’s boring, but I don’t think I can do it cheaper whilst also eating food that I like and having to do no preparation whatsoever.

I’m lazy. I’m too lazy to make sandwiches every day (or even one day a week). I’m too lazy to chop vegetables and make carrot or cucumber sticks. I’m a little bit fussy. I don’t like milk, so don’t eat cereal. I could stretch out the cheese, but what with? If I used half the amount, I’d save 32p on the cheese, which I’d need to replace with something. I can’t think of anything that would be any better from a laziness/money point of view (but I’m not particularly imaginative).

The cereal bars are expensive and I’m paying for the convenience. The only cheaper item I can think of that is equally as convenient is maybe biscuits/cookies? They come in larger packets, I guess. The pepsi is definitely unnecessary. It’s my latte factor. If I could cut it out, I would save around £220 a year. I’m not motivated to do so consistently, but from time to time I stop buying it.

Aside from the soda, I don’t think my lunches are too expensive, although I’ll admit that I should aim for more fruit/veg. I can’t think of ideas that are as cheap and convenient which are actually better for me, and ensure that I cant get through the day without being ridiculously hungry.

I think lunch at work is the hardest to make frugal, healthy and easy. What do you guys do?

frugal dinners

I was less specific about the dinners that I eat. I put convenience and price ahead of healthiness. Whenever I see frugal tips on food, they always involve cooking from scratch. I enjoy cooking from scratch, but only for other people – it feels like a waste of time to spend 30 minutes cooking something just for me, when it’ll take me 10 minutes to eat it.

Otherwise, if you want something quick, usually stirfry is suggested. Although I happily eat stirfry other people make, it’s never something that I choose to have for dinner. But I accept it could be a good way of eating quickly, cheaply and healthily – I’ve never bothered to price it up myself.

Actual ways of eating frugally for dinner when you’re a family of one or two (and willing to cook) include:

  • having a small range of staple foods that you use all the time to make a larger number of meals. Normally includes:
    • rice
    • pasta
    • tinned tomatoes
  • cooking in batches and freezing the extras for lazy days
  • planning meals in advance so that you can use up leftovers
  • keeping a reasonably stocked store cupboard so you can wait for sales
  • taking advantage of coupons and special offers
  • buying produce when it’s in season
  • eating primarily vegetarian-ly
  • downgrading brands (generic rather than branded, value rather than generic, etc)
  • shopping at discount supermarkets
  • keep a price book, so that you know when an offer is worthwhile

Many of these ideas are attempts to create economies of scale so that you can take advantage of usually cheaper unit prices on larger quantities. It’s also about gaming supermarkets – they have plenty of loss leaders, so if you can exploit your opportunities you can save money that way.

What they tend to have in common is time. For pretty much anything, you can generally have 2 out of 3 from the following list:

  • budget – cheaper food
  • quality – healthier / better quality food
  • timescale – more convenient food

but the most important is time. It takes time to make decent food, and it takes time to shop cleverly for frugal food. The more time you’re willing to devote, the better luck you’re likely to have in finding good frugal food.

What are your favourite tips for frugal dinners? Bonus points for suggestions that are quick or convenient.

September 21, 2009

keeping going keeping going

Filed under: investment — Tags: , — plonkee @ 7:14 pm

A lot of personal finance is the long boring slog.

I am what’s politely described as a ‘flexible organiser’. You can assume by that, that I’m not particularly organised, in addition I choose to use my organising skills mostly at work, where it’s more important. It means that I’m not very good at periodic tasks. I’m also lazy, really lazy. To compensate, I have pretty much everything set up as auto-magical.

automatic investing…

One of the things that is automagical is my investing. I invest through work in a stakeholder pension – exactly enough to get the match – and I also invest in a stocks and shares ISA. I use these financial products to save money in tax, but I just think of them as my investment accounts.

At the moment, I have £400 a month going into investments each and every month. I started my investment accounts with £70 a month when I got my first job.As you can probably tell, the amounts have generally increased over time, although I’m not sure whether that’s always been true, I could easily have taken an accidental break because I didn’t open a new account in time or something.

…takes a while to build momentum…

Money just rolls into the accounts every month, but I’m not yet at the stage where it’s built up into a massive sum of money. Off hand, I think I have in the region of £10k-£15k in my investments. That might sound like a lot of money, but I think I’ll need something in the region of £1m or more to retire. It can feel like it’s not really worth the effort – the money goes in but doesn’t seem to work for me.

The recent performance of the stockmarket doesn’t help. I’m primarily invested in FTSE All Share index funds, which over the past 4-5 years has been up and down massively, but is pretty much back where it started. 0% growth isn’t exactly what I’m hoping for long term.

…but when it gets going, it really goes

Fortunately for me, I can still remember the basics of mathematics. The power of compounding returns is really just an example of how exponential growth is so much larger than straight line growth. The money I’m putting away now won’t really work hard for me for another 10-15 years, but once it does it’ll just keep powering on.

And I’m savvy enough to realise that you can’t rely on the stockmarket in the short term, but chances are pretty good that you can in the long term. I’m still young, I’ve got just under 40 years until retirement and I’m confident that the stockmarket is most likely to be up over that period.

So, I’m going to keep going with my current plan. I’m about 20 years away from fundamentally needing to alter my investment strategy into a more conservative asset allocation. For me, investing is not fun, but it’s also not something to worry about. It’s more like brushing your teeth, something you do without particularly thinking about, because it’s going to be good for you in the long run.

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