Russian Woman Journal

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Point of view

Thursday 10 April 2008

DOUG R. (England)

Skimp or Skint ?  

In this article I consider the benefits of living within your means, and suggest ways to do so.

Slang words   ‘skimp' means ‘leave out everything’ or ‘make do with very little.’

‘Skint’ meaning ‘without cash or wealth’

Remembering them will ‘keep your feet on the ground’ 

Remember the realities of life.

A famous English writer- Charles Dickens- explained the situation thus:

Weekly income £1.05     weekly expenditure £0.95   result happiness.

Weekly income £1.05     weekly expenditure £1.10   result misery.

Which do you prefer?   It is a choice, not inevitability.

I assume you are part of a family with a partner and at least one child.

I have itemised this article into the following sections with opportunities and problems;

Accommodation, Appearance, Children, Clothes, Driving, Transport.   

Children

I take this subject first because it follows on from my recent article where I discussed the power and impact of children on Western modern family life.

All children naturally want to fit in and be accepted by other children in their chosen group. This can be very awkward for them and you. Their need to be accepted can over-rule other social rules. 

They may resort to stealing. They wish to keep up with their group.

‘Owning’ some gadget proves they belong.

Group membership is displayed in public by dressing in similar clothes, having the same gadgets or games, and generally doing the same as everyone else in that group.

We have the phrase ‘keeping up with the Jones’ some local family, called the Jones family, who are accepted as local leaders.  

Others aspire to copy their lifestyle, whether they can afford to or not.

Substantial cash outlay may be required for unnecessary and useless articles, because the Jones family has them. 

‘Don’t buy stuff you don’t need with money you don’t have.’

There is one of your problems. You cannot afford this cash outlay. Maybe you borrow against a future income to do so?  I hope not. 

Clothes

This minefield for men is my first challenge. I have always been staggered by how women buy clothes on impulse, maybe wear once and discard. Or even worse, just pack away after the first outing, never to be worn again.

They use words like ‘therapy’ or ‘retail therapy’, meaning their personal treat.

I prefer ‘indulgence’.  

It is so easy to throw something into the supermarket trolley on a whim. It is buried in the family food bill. Usually such cheap items can be ‘lost’ in the weekly shopping. 

Then there are the matching shoes and the matching accessories and, these days, hats seem to be coming back into fashion …..  

The National Consumer Council says 80% of clothes bought are thrown away after one use.

Solutions and potential benefits include drawing on your own creativity. Find ways of recycling what you have.

Clothes bought but never used ‘because their colour was unfashionable.’  Have you heard of dyeing?

Out of date fashion lines or cuts can soon be modified by alterations even if done by a specialist if you are not capable. Dry cleaners often provide an alterations service.

Keep those old buttons. One day they will make such a difference to some stored garment suddenly discovered. No one else will be wearing a dress like that.

When your favourite dress finally falls apart, why not salvage those buttons, buckles, belts, zips, embroidery, trim 

How many teenagers today are happily wearing grandmother’s sixties clothes? Very fashionable you know!

Makeup.     

No not with him, with your face!

Now that I’ve got you really wound up let me comment on makeup and cosmetics.

I read the following annual spends according to Debenhams;

London women £175, Edinburgh £179, Glasgow £134.

A quarter of women never leave the house without putting on makeup.  Half claimed ‘it cheered them up’ especially when they felt down hearted.

Other spending figures gave a total of £8500 with break down details of lipstick £1342, mascara £1404, £1144 on evening shadow, £1998 on foundation. The balance goes on blusher, bronzer and eyeliner.

I’m not complaining. Like most men, I am greatly cheered up by women taking pride in themselves and their appearance.

Accommodation

We all have to live somewhere. Our main decision, if we have the choice, is whether to rent or buy.

At this moment the property markets are nervous. Even if you have the financial capacity to buy maybe this is not the time.  As with any commodity decision timing is essential to profitable trading.

But you still need somewhere to live. So profitable trading is not the point, you need to live somewhere.

This is not the place for in depth discussion on where to buy a house. There is plenty of advice on offer, not all of it good, by the way.

To pay for a house you will presumably need a mortgage. Therefore you will need a credit history.

 

Credit History.

It may seem ridiculous advice but, whether or not you need loan, take one out. Make it a small loan well within your capacity to repay. Make sure you pay it off on time and within the terms you agreed.

This gives you a credit history, short and small but good.

You will now appear on credit reference agencies. The important ones are;

www.experian.co.uk  0870 241 6212

www.callcredit.co.uk 0870 060 1414

www.equifax.co.uk    address Equifax Credit File, Consumer Advice, PO Box 1140 Bradford. BD1 5US.

Anyone lending money will look up your record on one or all of them.

These agencies are obliged to inform you of the information they hold in your name for a fee. You may dispute this information if it is wrong or unduly negative. The agency is required to publish your statement giving your reasons for any such dispute.

Problems for willing lenders include Identity Fraud. 

People are not who they say they are. They do not live where they say they live.      

One countermeasure for lenders is that you are identified on your local authority’s Electoral Roll.

Another check for lenders is to ask for proof from a local utility provider that they supply you at that address and that you have paid them. 

If you opt to rent, good references will be useful when negotiating with potential landlords.

A good credit history will save you money by being offered lower interest rates. 

Food

After accommodation something to eat must rank next in importance.

Finding supplies is not a problem. Paying for them may be.

Our modern structure offers a choice of old style small corner-shops or supermarkets.

When they first opened supermarkets offered many genuine advantages.

Their opening hours included late evenings and weekends.

They offered genuine price reductions on standard grocery items particularly tinned goods.

By selling goods in their own name they negotiated large discounts from suppliers and packers. Such produce was also made by the same manufacturer as the heavily advertised branded goods although often from the same supplier.

This cost benefit was best on tinned food or where shelf life was long.

They claimed to offer much bigger variety to shoppers.

The public trend for both parents to work made late evening shopping popular.

Shift work also promoted shopping at unsocial hours, particularly in the larger cities.

Slowly the supermarkets gained a larger share of the family food shopping expenditure. The small shops lost out. 

Supermarkets employed clever experienced specialists in marketing and sales gimmicks and tricks. Simple acts such as stocking the eye level shelves with popular brands or, more likely, with those brands offering their best profits.

Stocking small confectionary items and products attractive to children displayed at check outs . High profit items lined both sides of the queue so public had the time and their children the motivation (a treat) to ease the boredom of the queue by buying something they didn’t mean to.

I hope I have conveyed the simple explanation of why someone wanting to live frugally should not buy food at supermarkets. They are surely the most expensive place for you.

 Have you noticed those display boards they use to publicise their prices? How their prices are cheapest?

 Did you notice they only mention other supermarkets?

They don’t mention the small shop on the corner. Their vegetable prices do not mention the local greengrocer, nor their meat prices the local butcher. Why is that?

Take the time to compare prices of a small local greengrocer and a supermarket.

Shopkeeper carrots at 17p / lb don’t compete in price with supermarket carrots at 45p / lb.

Shopkeeper carrots were natural shapes and sizes, packed loose in their box for you to pick what you want, weigh it and pay.

Supermarket carrots were immaculately packed in regular rows without a blemish, priced,   ready to pick up and go.

Most buyers chose the immaculate blemish-free supermarket ones.

I bought 10 kegs of carrots for £1- as feed for family horses and ponies.

What was wrong with these carrots? Why were they so cheap? 

They had been rejected by the supermarket vegetable packer for ‘lack of uniformity!.’

Who paid for my cheap carrots?

So why do housewives buy at supermarkets? It can’t be to save money, because they clearly don’t.

It isn’t.

But it is what the public want. Supermarkets supply the needs of their customers.

Why? It is only partly the convenience.

I believe it is something to do with being able to pick out their own choice without asking an assistant for assistance. That would make public their personal lack of knowledge.

Many modern housewives have little knowledge about food. They rely on instructions and information printed on food labels.

The combination of bright lights, a clean environment, the convenient opening hours, the facility of being able to buy all you need at the same time, may justify buying at a supermarket .

But they are not the place to save money on food. 

What’s the Alternative?

One way to save money is to buy in bulk.   Two problems follow; storage and finance.

How?

For storing fresh food a large domestic freezer is a substantial asset. But it must be used carefully and intelligently.

A full freezer costs less to run than half-empty.

A chest freezer uses less electricity than other types.

Economics of freezers requires effort.

It must be de-frosted regularly. Don’t delude yourself that those thick layers of ice ‘are helping with insulation.’ They reduce it and cost you money in the form of unnecessary electricity usage.

Pack the food in the same portions you wish to eat. Do not freeze a large block which then has to be defrosted before cutting.

Label everything before you freeze it. Use indelible ink pens. Write on plastic or metal, not paper or cardboard which become unreadable if wet. Writing the date of freezing or packing will help you later.

If you don’t take care in packing at this early stage you will have a frozen solid mess within weeks and not know what is where.

If you don’t have a freezer you can still make economies by buying in bulk.

Buy in cases not retail packs.

Careful stock control will help to control costs.

Seasonal fresh vegetables can make substantial savings.

How about cooperating? Buy for a group, so spreading purchases and savings over several families?

Some products need to be protected from frost and stored appropriately. Only buy what you can eat within a sensible time scale to avoid throwing away excess uneatable food.

An excellent way to save money is a modest ‘further processing.’ Many fresh vegetable items can be processed on a domestic level, made into soups and frozen, or washed, repacked and frozen in convenient sizes.

Where?

Find a local greengrocer retailer who is prepared to supply your bulk needs at a discount. Some will, some will not. Ask around until you find a cooperative one. Your purchasing power represents a good additional cash flow. It will not be rejected without reason.

Depending on your attitude they may decide you will be more trouble than you are worth. 

Be prepared to accept product in the same cases supplied to the retailer. This allows a retailer to keep margins low and therefore your costs in proportion. You also retain the retailer’s knowledge, trade expertise and goodwill. 

He may also offer you his own surplus at suitable discounts when he knows you. 

What?

Vegetables are the simplest commodity to break bulk and store in this way.

Potatoes are an excellent example. Work it out one day. You will be amazed.

The further processing quoted above- soup and small packs- will make for substantial savings.

Meat is not so simple but nevertheless worth taking the trouble to do.

Prices move according to season. Lamb prices are lower during July August and September. Turkeys and Christmas type cuts such as legs of pork or hams are also cheaper in those months. 

There are other regular price movements... Shoulders of lamb are cheaper just before the Christmas rush since buyers want legs and chops, no-one wants the front end cuts.

Prices of rump and other grilling cuts rise as barbecue time approaches. Cheaper stew cuts reduce in summertime but rise as winter arrives.

There are changing waves of consumer interest happening all the time, usually according to season or holidays. You need to take advantage of these. Make unseasonable purchases.

I knew a guy who made a comfortable living. He bought unwanted lawnmowers in the winter, selling heaters he had bought the previous summer, and so on…

It is the same principle. You need storage and finance and to play the seasons.

Transport

The alternative to public transport and taxis is having your own car. Do you think by ignoring the realistic costs they will go away?

It is easy to deny the facts when emotion dominates the decision.

The cost of operating a car is about £2250 -every year. This ignores charges for bank or other finance such as hire purchase. £50 per week, is it worth that for you?

The AA quote 44p per mile for running costs after you has bought it.

Most will deny these figures as unreal. Or explain them away by saying they need a car for business, or to take the children safely to school or whatever.

These are emotional justifications for your desire to have a car. Reasoning is irrelevant.  Just be aware of the true costs.

 

Car Costs.

Why are second hand cars cheaper than new ones?

The biggest single cost is depreciation. As soon as you have bought it a car, it loses value.  The highest rate of loss is when it is new.

After this initial period of value drop, the running costs stay lowish. They usually start to rise towards the end of a car’s life when repair costs rise alarmingly. The usual long term problem is rust. The various moving parts can usually be replaced but once rust appears that is the end, economically.

So you need to buy somewhere within this deprecation cycle. Not too new and not too old.

If you can justify operating a car, you have several choices of keeping costs under control.

Insurance.

Powerful cars cost the most. Young drivers (under 25) are charged the highest rates.

Passing various driver training courses such as ‘Pass Plus’

The longer a driver has drive without a fault claim the lower the rate quoted.

Many other reductions can be negotiated;

Paying the first percentage of collision damage.

Only you or specifically named drivers are covered.

Park it in a garage, not on the road.

Remove windscreen cover. Pay your own charges if it happens (it is quite rare, and cheaper to get done your self anyway.)

Pay the premium at the time to avoid finance charges on monthly systems.

Investigate ‘pay as you drive’ schemes. You pay according to where and when you drive (Do you commute?)

Agree not to drive during specific hours.

There are many such possibilities for controlling insurance costs.

Would you buy a second hand car on the phone?  No? Why not?

Because there are too many variables; you don’t like the colour or the interior, or it smells of dog or whatever... You need to look at it.

How do you know what it is worth?

Avoid the worst of deprecation by buying a three year old car. Before paying out your cash, go to a car auction near you. Not to buy a car, but to see what the professionals pay for them. The value of anything is what a buyer can be persuaded to pay for it.

Where better than an auction?

You can negotiate with a car dealer much better if you know the auction valuation.

Scams abound in the world of car dealing as in so many other activities. There are honest and dishonest dealers as everywhere.

You need protection.

You need protection from buying a car that still carries a debt of unpaid hire purchase, or has been stolen.

You need protection from buying a car unfit to drive.

Buying privately leaves you open to these and other scams. Buying from a dealer gives you some legal protection against a rogue trader.

The AA and other motoring organizations offer a professional examination service to help with these problems.
If you don’t know what you are doing you would be a fool not to use one of them, whether you buy privately or from a dealer.

My next article deals with warning signs you may be loosing control of your finances.

I suggest possible methods of further savings without disrupting your life. How your habits need to change for lasting benefits.

 

 

DOUG R. (England)

 

Published in Woman's Magazine Russian Woman Journal  www.russianwomanjournal.com -  10 April 2008

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