Finding the chase and cutting to it

I don’t normally use capitals in titles, this isn’t a tabloid newspaper, after all, but proper nouns need that distinction…

Eh? What?

The Micawber Principle is this: expenditure less than income gives happiness, expenditure greater than income is penurary, as per https://en.wiktionary.org/wiki/Micawber_principle.

This is a universal truth no matter religion, upbringing or income. Living within your means is a peaceful way to live. Some religions and philosophies say you should never, ever borrow. Everything should be done by saving up and then buying. Great to do, if you can, but that assumes you have somewhere to live already that doesn’t need a big deposit and furniture and linens etc.

So, some debt at some points of your life are unavoidable. The trick, according to many, is to sort out your debt as quickly as you can. The only debt you should ever, really have is for your mortgage. Given that focus, let’s do some basic sums.

Expensive debt

Some debts are more expensive than others. Anything that is more than 2% over the Bank of England base rate is by its nature, expensive debt.

Day to day, we encounter this debt through (in no particular order): store cards, credit cards, and of course, overdrafts, and car loans.

Any of these you are paying interest in need to be “prioritised”, i.e. make savings to pay these off (also called settling the debt). Most of these you can agree an amount to pay them off or potentially consolidate in a single loan.

Luxuries

OK, this is the depressing bit when you have debt. Little treats are expensive: alcohol, cigarettes, petrol not for work, an adults clothes, adults shoes, cinema tickets, chocolate, any food cooked by a business, any ready meals, sugary or diet drinks, sugar, crisps, snacks, etc. The best bit about these savings though are the fact that you can live without them. Tea and coffee made at home is a fraction of the cost of the same drink in a cafe. When you have a little spare money, buy a flask. Biscuits are not nutritially useful, so are luxuries.

Swap alcohol at home for fruit juices: still pricy but with vitamins and minerals that keep you healthy. Squash is less beneficial than fruit juice but way better than carbonated drinks in terms of cost. Limit the use for during meals. Water is cheap out of a tap between meals.

Crisps are expensive for the nutrition you get. Nuts are expensive but way cheaper than meat. If you’re having a couple of vegetarian days a week, nuts can make up for the protein you are potentially missing.

You are unlikely to need a bath or shower every day. You need shampoo and soap – these are not luxuries but there are different price points for these and you don’t need to wash hair everyday. Don’t blow dry – wash hair in the morning and let the air dry it. A longer style only needs cutting every 3-4 months as opposed to 8 weeks.

You need deodourant and toothpaste. These are essential.

Spending strategies

This works wonders and after I graduated and was buying my first house, this is what I did with my wages – I was paid monthly, but I used to do this when I was paid weekly too.

Take out the money you have for the month as cash. Never take out your plastic cards when shopping instead take a weeks’ worth of budgeted money and keep that in your wallet – this is what you are using for your groceries, etc. When the money for that week is gone, you can’t spend anymore. If you have any left, you can use that to put towards something for that month or as emergency money.

Physical money is very easy to keep track of: it’s immediately obvious when you are paying for something. It is slower, but if you are settling big debts, this is magic. It also allows you to protect the money for the rent/mortage, council tax, and of course, water, electricity, and gas bills. They sit in your bank account and do the work for you.

Kids clothing is the hard one, they grow and that can be unpredictable. Secondhand is a god send, school jumbles, charity shops. These are all great sources of cheap clothing. If you’re handy, knit childrens jumpers, gloves, and hats – an adults woolen jumper can be recycled when worn out into a child’s one. Every winter term, my mum would take a Sunday afternoon to make wooly hats and gloves. Mittens are significantly cheaper, simpler, and quicker than gloves. Use scraps to make pom-poms. If buying secondhand coats for the winter, ski gear is amazingly warm and you can often get trousers which can be a boon when the temperatures plumet. A secondhand coat and salopettes are around £8. If you are really lucky, they’ll match too.

Don’t be tempted to buy more than 2 sizes too big. Kids grow but not that quick. Young children may see two or three winters out of a coat, but teenagers might not.

Portion sizes

If I have one tip, it’s this. 50g of dried pasta or rice per person is a portion. Same with potatoes. Keep potatoes in the fridge, about 4C. Large bags from a grocer or supermarket are cheaper than buying for a day – depending on the size of the family, work out how many meals will be covered. A 5kg bag of rice lasts for 100 portions – how long that lasts depends on how many grown ups you have. Anyone over 12 is eating grown up portioons. Children 5-11 are eating half to three quarters, kids under that, about a quarter.

Don’t be tempted to cook then reheat food. You’re paying twice to cook it. Only make too much if it’s a cold item (like a salad) or you are storing it before cooking it. I do this with pasta.

Left-over meat is the exception, roast dinners are brilliant for providing protein for more than one meal.

Big pieces of meat are the way to buy and then follow the roast on Sunday, stir fry or stew Monday, mince on Tuesday. That’s three meals. A £8 joint is looking a bit more worthwhile. Apart from poultry (chicken), we separate out the meals before doing the roast. A set of scales and a knife and that’s cheap eating. Fresh veg are cheaper than frozen. Keep veg in the fridge and a bag of potatoes can last six weeks. Look out for offers, especially on a Friday or Saturday evening or Monday when things didn’t get sold on Sunday. Peel, wash, and process them yourself – loose veg are cheaper than prepackaged.

Don’t buy mince beef – quorn is incrediably cheap, tasty, and a source of protein. Chilli, bolognese, and pies (shepards and pastry) are very good with quorn. It does need freezing and typically cannot be bought in bulk but such a great way to make money spread further.

Shop once a week. Chips are expensive to cook, because you need to cover them in oil and oil is more expensive than water. Stews are amazing in terms of cost and only need 20 minutes or so to cook for a good bit of meat. A tougher cut may need a little more. With veg, 20-30g is enough per person. Rabbit is cheap but doesn’t contain much is the way of useable nutrients, so best avoided more than once a month, especially for children.

Milk is more expensive than petrol typically but essential for children – if you are eating meat, you can get all the calcium you need from other sources. Plain yogurt is much cheaper than sweetened yogurt. Buy some fruit for the kids and make you own from your supermarket’s own brand plain yogurt. From Tesco’s, 500g of plain yogurt costs £0.85p. Seasonal fruit or even jam can be used to flavour it: that’s a do it yourself Muller fruit corner for a bargin – strawberry jam is £0.90 for 454g for many portions where-as a Muller corner is £0.50p a pop.

500g of yogurt at £0.85 and a pot of jam for £0.90 and you have 10+ portions for less than two Muller corners…