Tuesday, 29 September 2015

The Epic List of Fail

In my reading of multiple other Frugal blogs it occurs to me how often they seem to be living a life of perfection. While I utterly admire what many of them are doing to achieve their own personal version of financial freedom, I'm also struck by how unattainable some standards seem to be.

Get this - they seem so perfect that I occasionally rebel and sneer inwardly. It's unfair of me, and it's jealousy rearing its head, so I want to make it crystal clear that I am absolutely imperfect, and I screw it up quite often. In fact, there are some areas in which I am unashamedly a money-waster. I will eternally be a work-in-progress at this frugality thing.

With this in mind I have a few imperfections terrible habits and I am going to own up to them here and now.

#1 - Meal Preparations. I've said I'm lazy before, but for perspective, I am tonight cooking schnitzel and oven wedges, both of which arrived in my house pre-prepared. Yes, I am wielding the frypan and the oven tray, and they will be accompanied by my home-made coleslaw, but (a) the mayo in the coleslaw was not home-made, (b) I made no effort to prepare or crumb the schnitzel myself, (c) I didn't cut potatoes to make the wedges. As you can gather, I would have had the time and capability of saving more money on this meal. This makes us only partly frugal in regards to eating at home on the cheap.

#2 - We Still Eat Takeaway. Not all that often, but more often than just for special occasions. Sometimes fast food comes home with my husband simply because I can't be bothered cooking. This is bad, especially since I barely work, and I want to try and work on this. I hope my determination wins out.

#3 - My Coffee Addiction. I say addiction, but more than actual addiction it's part of a ritual when I sit down to catch up with my online friends and play games on the computer. This is one expense I'm really not tackling and if I'm honest, I probably won't in future.

#4 - Soft Drinks. Actually, at home I drink almost none, because I drink a lot of water. It's when I do my work that I tend to "reward myself". One or two cans of drink in a week is hardly breaking the bank, but it's still money I don't need to spend and rewarding myself is just another way of saying I want to waste money. Update June 2016: Habit mostly gone. I no longer drink anything at work at all and buy far fewer of them to take home. 

#5 - Electricity and Water use. We're fortunate that our heating and hot water is at a fixed price, shared throughout our apartment block. Living in Helsinki there's also no need for air conditioning (saves big bucks). But even so I could be doing more to limit my usage of utilities - I've noticed that the tv seems to be on despite nobody really paying any attention to it, for example. Update March 2016: Habit broken! The tv is now almost always left off. We rarely use it AT ALL, my son turns it on some evenings while he eats dinner but he turns it off when he leaves the room. At first the apartment seemed "too quiet", but we've quickly become used to it and it's no longer strange living with an absence of mindless tv. Small victories :)

#6 - My Toys. By this I mean my computer because there's very little else that I spend majorly on. Another area I won't be changing anytime soon, because it supports pretty much all of my entertainment, with a couple of exceptions.

#7 - Movies and Games. I am not a movie fan really, but Netflix also gives us access to a bunch of TV shows. More irony since I don't watch much tv, but I do have a penchant for a good British comedy or three. The Netflix subscription easily trumps the cost of pay tv (seriously, who pays for that anymore?) and the bonus is that all four of us can use it to watch shows on our computers. As for games, there's one particular online game that burns a hole in my pocket. It also forms the bulk of my social life but even so I'm aware of the predatory nature of such game developers. I really should spend less on it and it's something I'm working on, but I won't be stopping playing completely.

What's your biggest spending indulgence?

Friday, 25 September 2015

On my travels

I came across a blog which is rather interesting. http://earlyretirementextreme.com/

I am currently wading through the bowels of their archives, but even way back then it contained some thought-provoking things, like alerting me to the existence of retirement calculators. And if you find a decent one it can tell you when you can afford to retire.

Now basing it on my current income levels is kind of laughable because I am actually supported quite a bit by my husband's wage. So for the purposes of research for you, dear reader, I based it on my income alone. And I found, to my surprise, that based on what I (alone) bring in from my unemployment benefit and part time hobby-job, that if I continue to save as I do now (50%-ish), I will have saved enough to retire when I am 54 and will have that income streaming in until I am 90, provided I'm content with three-quarters as much cash each month once I retire.

For context, my income is approximately the amount of income that the Finnish government considers the bare minimum to survive and which it demands of EU immigrants coming here (unemployment benefit pays half of the "survival" amount).

Those who earn even an average wage, I cannot imagine why they shouldn't be able to save far more and retire even faster. Actually I can, but it has to do with spending on things that will slow down retirement horribly.

For those who are interested to see their own numbers in action, here's the calculator I used.

https://www.calcxml.com/do/ret31?ctry=ca

Tuesday, 22 September 2015

Stock

I will admit, I am not a super-duper magic-handed chef extraordinaire. I don't make my own stock (despite what the title may have led you to believe). One thing which I DO do, however, is keep pan drippings and use them as stock anyway.

Who-what? Well now and then we cook roast objects in the oven, meaning a chunk of meat sitting on a pan and heated until it is of a suitable done-ness for the eatering. Often they're not even seasoned by me (pre-marinated... guilty). But whatever it is, I keep the dirty pan once the meat is all gone, scoop all the leftover juices and scraps into a container, and stick it in the freezer. It's my version of stock. I use it in soups or casseroles.

Tonight we had Lamb Soup. It didn't really have much in the way of actual lamb chunks, but it had vegetables and the stock from our last lamb roast (special roast lamb dinner when my dad had visited). The soup smelled fantastic with plenty of small scraps of lamb, plus it tasted pretty dang lamby and good, even if I so say so myself - just vegies, one stock cube, and the lamb shenanigans stock. Not bad as far as feeding about six people goes.

Saturday, 19 September 2015

Records Broken

I've mentioned before that I run a tourist apartment - we let it on AirBnB. This is a strategy I have for making what's a rather expensive investment not only pay its own way, but pay us a little something extra at the same time. (Can I just add - it still amazes me how many people are thrilled when the rent covers 80% of their mortgage - in my immodest opinion some of them are just settling for "ho hum" - I've told you that I'm greedy, ours covers about 180% - 200%.)

For the month of August we booked 29 out of 31 days. Or putting it another way, a 94% occupancy rate and 400e income over my previous best month. To say I'm pleased is an understatement.

I told hubby we'd beaten our previous record income, but he was absolutely shocked at the total we had booked. Can't ask for better than 94%!

Well, we can (by asking for 100) but if it happens it will just be a bonus kind of awesome, not par for the course!

Do you have real estate in your investment plans? Maybe you have different investments?

Tuesday, 15 September 2015

The Big Mortgage Con: Are We Aiming Too High?

The great Australian dream (or American dream, or British dream, or wherever you come from) - it seems to be, to own your own home. I totally understand this bit. But I will confess to being perplexed at how a lot of people go about that.

So the dream goes: get a job, save the deposit, get a huge loan, work hard, pay it off. Almost uniformly, people seem to get the biggest loan they can qualify for and buy the most expensive home they can manage to get.

Does anyone stop and think about that? We would not shop around anywhere else for the most expensive of some other item (if we're only driving to the corner shop, we don't insist on a Ferarri). And yet this is how home-buying seems to work: go for the biggest and best.

The costliest, the nicest, the best location. Yes, of course, somewhere in the reasoning is that the more you spend, the better the investment. But first and foremost, if this will be the place where you are living, and you are buying this as your primary, long-term home, then it is not an investment in the early days - it's a home. It's a money pit. You will barely even touch the debt in the first few years, thanks to the interest/fees/taxes, so it's nothing but an expense. (I'm not going to touch on investing home equity here; that's for a later post.)

Essentially, the harder someone works and the less they spend, the faster they will pay the home off. But the end result still takes 20 or so years, perhaps longer if there are also debts from education, or if they upsize or move to a nicer area. And at the end of that, they will have worked for 20+ years for a roof.

And during that time, many people will have been too busy working to take proper advantage of the home that they bought. Quite often the home does not actually match the way that they will be using it. We're talking big formal dining rooms that never get used, because people sit in front of the tv with a takeaway dinner after a long work day. State-of-the-art kitchens when people don't have the time to cook. Second living rooms which sit empty. The only use of the yard is to be watered, weeded and mown every weekend, which is either more work or the expense of paying someone to do it. Guest bedrooms which sit empty for 50 weeks of the year.

Am I missing something here? Is it worth having a huge mortgage debt and long work hours, once you consider what they're giving you in return? Is it even worth buying, or would renting make more sense? Do people even ask themselves these questions or do they just jump onto the mortgage treadmill like their neighbours?

I'm not anti-home-ownership... merely asking whether people truly think, before these enormous spends happen. One thing that true Frugalists have in common is that every single spend is examined and questioned, and they consider how that spend will fit in with their lifetime goals. If one of your life goals is simply "buy a home" without any further detail, it's likely that you have (or will) go down the usual path of buying a place that doesn't fit your needs as well as it could, or spending far more than you need to. But imagine the goal was more specific, like this: "Buy an apartment, save like crazy for a few years, then buy a family home and rent the apartment out while we raise a family on one income." Suddenly the first mortgage would be automatically smaller (it needs to be, because their goal is to save like crazy for the second property). Or how about this one: "Buy a small house, pay the loan down as fast as we can, and be mortgage-free in ten years." This family knows what they want to achieve later on - not just "be in a house".

The point is, mortgages are long and sort of painful. So it's a good idea to figure out where you want to be at the end of that road, because it might impact quite a bit on how much you spend and what you spend it on.

Thursday, 10 September 2015

Thursday's Lunch

Today I ate for lunch:
* One mega cookie thing that I left for a previous guest and which they inexplicably mangled while still in the packet
* One banana that I found sitting on the top of the rubbish (rinsed, but hey, it was still in the peel)
* One chunk of custardy bread product that the lady at the mall was offering to taste
* One single prune in its own packet, handed out by a lady at the station.

Today I brought home from my apartment:
* Half a tub of cream cheese
* Half a packet of sliced ham
* Two packets of Austrian chocolate wafers left for me as a gift.

Earlier this week I brought home:
* Half a packet of Colombian roast coffee
* Most of a packet of digestive biscuits

Earlier this week I rejected:
* One container of someone's leftover curry and rice (thank you, but no).

Earlier in this job I've rescued / been gifted:
* Eggs
* Beer
* Wine (sometimes left for me as a gift, sometimes opened)
* Fruit juice
* Yoghurts and desserts
* Fruit, vegetables
* Cheese, cold meats, butter
* Lollies, chocolates
* Packets of soup, spices
* Clothes and towels (did try to return them, but got no reply)
* Books
* Shampoo, conditioner and body wash

I was thinking of these kinds of things last week, and whether it's crossing a line to rescue the half-used things, when a forum of holiday-home-owners argued: Would you use left-behind toiletries? I lurked and read, and it seems as if most of them bin it all. As if things like shampoo become diseased by someone pouring some out of the nozzle. I quite liked that one lady unashamedly said she just squeezed a bit of toothpaste out of the end then took it home. So far nobody has left toothpaste behind in my apartment so I'm not sure whether I would do the same. Jury's out.

Granted, opened food might be a bit different. I take into account the state of the apartment in general. For example, I took the wine home because the wine glasses had been used and were sitting in the drainer, suggesting they hadn't drunk out of the bottle. And opened butter has probably only been touched by knives. But I'll admit I've eaten sliced meats and cheeses out of opened packets.

I haven't died yet. Will get back to you if I do.

Tuesday, 8 September 2015

A Terribly Challenged Day

Today I was sorely tempted to spend aimlessly (which I'll talk about in a moment). In the interests of fairness, I should at least detail the Backstory Of My Day™. Just imagine that's a thing.

I actually had quite a satisfying day at "work" today. (Side note: because I don't earn a full-time wage or anything close to it, and because I get paid for the few hours it takes me, I struggle with calling this my job. It feels like I'm cheating. But I do certain houseworky-type things, they take a little time, and I get paid for it, so I guess that's a job, right? Anyway, I digress.)

So I actually had quite a satisfying day at "work" today. Like any other "work" day, that mostly consists of me procrastinating as long as possible and not wanting to actually go, but once I'm there it's fairly easy and once it's done I feel tremendous satisfaction that I did a thing that makes people happy. (Seriously, I get to make peoples' faces light up at the lovely place they've rented. Hopefully. I get to give them a comfy bed to stay in for their holiday. Although nobody sane wants to clean or scrub toilets or wash sheets or make beds voluntarily, I don't have a boss ordering me around and I'm in charge of my decisions. There's a reason I say that I really do feel like I've got the best job in the world.)

So anyway it was all done and I had the usual tired-but-not-exhausted going on. And I was walking home through the shopping mall (can't be helped) and wheeling my granny trolley along (shut up, you wish you had one) when I had this inexplicable urge to just go shopping.

Do you know how UN-Elisa that is? Shopping sucks. Seriously.

First I wanted a new plant. Something vibrant and growy and interesting. Then I went past a gadget & cool things store and I wanted to just browse. Which for me means "come home with ten things I don't need".

Then I got annoyed at myself for wanting to spend money and then I was even more annoyed for denying myself "just a few euro" and then I tramped / rolled to the train station in annoyance. I was even ALMOST annoyed enough to take a book from the book exchange without leaving one there first. (I only didn't take one because there was nothing good in English).

When I got off the train I decided I wasn't too tired to buy dinner fixings to save poor husband the trip. I did well in there, successfully selecting budget foods, and then I spoiled it by buying frozen pizzas for dinner and a whole packet of donuts.

And after the pizza I ate two of the donuts. I'm blaming hormones.

The end.

Saturday, 5 September 2015

Standard Life Patterns

One thing that I love to do is to try and understand what makes people tick. I am no psychologist and I admit, usually I can't figure people out. Maybe it's just me? Here is what I mean.

Nearly everyone - rich, poor, smart or not - seems to follow a "standard life pattern". The sheer number of people who march through their lives in the exact same way, to me is quite striking. See how many people you know who do most or all of these.

1. Complete their education or training
2. Get a job and work very hard
3. New wardrobe to look good at work - because you can afford it
4. Grab takeaway lunches or dinners, because work is exhausting
5. Take an expensive holiday abroad as a reward for working hard
6. Buy a nice new car with a personal loan - you commute long hours
7. Buy a home, with the highest loan that the bank will approve
8. Buy shiny things on credit because what the heck, you deserve it
9. Have kids, lose an income
10. Suddenly realise money doesn't grow on trees

If you consider each item one by one you may notice that several of them seem to be a result of the items above them. And this is critical, because so often people begin to spend according to their income and not their needs. Worse, the typical way to get some of these things is via debt. It's normal, the bank says yes, and we live in a consumer culture being told to Buy All The Things, so when the cash isn't at hand, we just add it to our bills.

What it boils down to is this: "Escalated spending" is a standard life pattern. Earn more, spend more, then you need to work more/work longer, in order to continue spending more and pay off more debt.

You'd think that more people would want to try and end this cycle - either by working less, owing less or spending less. And if "working less" seems like a crazy way to spend less money, you would not be alone in your thinking. In fact, you'd be completely standard. But there's a small (albeit growing) army of people out there who are actively looking for ways to work fewer hours, fewer years. People who radically limit their spending in order to work less. And I mean radically.

It does mean taking a good, hard look at those Standard Life Patterns. Every single one. And questioning: do I need to do this, or is there some other way? If I stop buying this, will it allow me to retire earlier and spend more time doing what I love?

I am very new to the "thinking about retirement" game. I wasted many years. But now I'm thinking about the future, thinking about whether I want to be still working when I'm 60. The answer is no.

11. Kids finally leave home - enjoy the empty nest with a holiday or three.
12. Buy a new car every five years
13. Pay off mortgage in 50s
14. Have very little in the way of savings - begin putting some of that spare cash away for retirement
15. Realise it's too little, too late, and not enough to retire on
16. Be unwilling to sell their only big asset (the house they worked 25 years to pay off)
17. Stay in the work force far longer than they wanted - perhaps never retire at all.

When it comes to spending on something we don't really need, I guess mostly we just think about whether we want it right now. Or maybe whether we can afford it right now. But now I realise that my spending habits now will have a huge affect on my future. I don't want to follow that standard work pattern of everyone around me - I don't want to be working when I'm 60 just because everyone else is. They think there's no alternative, but quite often, it's a choice. Or more accurately, a thousand small choices made for years, choices which will keep people locked in the workforce in their 60s. With every passing day where we spend instead of saving - even just one euro, one dollar - we have lost another opportunity to retire an extra day sooner. Profound, right? :)

So now when I look at something for sale - big or small - I think: "Do I want to be working when I'm 60?" and it's amazing how often I can put it back down, keep that one euro in my pocket, and walk away. If I do that every single day, then in twenty-one years' time when I'm 60, it will be worth one million.

1,000,000.00

And it's not an exaggeration.

One million.

Wednesday, 2 September 2015

Hand soap.

Fascinating subject, no? I'm even going to jazz it up by talking about shampoo as well. And dish detergent. And body wash. Hold onto your seats.

When my kids were younger I used to gasp at the sheer amount of bath products they went through. But kids will be kids, I just sucked it up and went with cheaper stuff for them, and anyway, cheap stuff was all my budget allowed.

When we got to Finland they were suddenly pouring someone else's money down the drain with that body wash (my poor husband's money, that is). In a mini-epiphany I put the kids' body wash into a small pump container.

Literally overnight their consumption of the stuff dropped in half. My husband, confused by the container, used it as well, so we all ended up using less. We then adopted pump packs for the shampoo and conditioner.

Along those lines, while out shopping (and armed with a dictionary to try and understand the labels) I found a place selling 3 litres of hand soap for the same price we'd been paying for one litre. Score! Not only that, but it's actually sold for use as hand soap AND body wash AND shampoo. Turns out that this stuff is a little too squeaky to enjoy as shampoo, but it's fine as body wash, and it comes in five different scents, just for variety. I bought some for the AirBnB let as well, but often guests leave products behind and I in turn leave those for the future guests to use.

As far as shampoo is concerned, we love the sweet-smelling fancy anti-dandruff stuff but prefer the price tag of cheap stuff that smells like air... we compromise by using a mix of half and half in our pump and it works just fine.

Now I also promised to talk dish detergent. No pump pack here, but my kids (again) were squirting it in huge amounts. I melted/squished the nozzle half-closed and now it allows only a little to come out. Another victory in cutting down the amount wasted.

It all comes down to measuring - if you pour it freestyle you end up pouring more than you need. So along those lines, I now always measure my clothes washing detergent and conditioner. Goodness knows how much I used to use when I was just eyeballing it and pouring it in...

What sort of effort does it all take? Well apart from refilling containers once a month, none really. I was about to say that the savings are not enough to buy an apartment with, but actually, it all adds up and is a substantial saving over the course of a year. The more frugal I can be, the earlier we can retire. And I'm very lazy, so the more effortless frugal things that I find... the better. :)