Thursday, 31 December 2009

What is Downshifting?

How it All Began..

my name is Janet and I have been meaning to do this for a while.

'Downshifting' is what we call it when you learn how to live on less money without having less fun.
It means getting out of debt, having a more meaningful way of life and living outside the groove.
In other words, thinking what you really want out of life and then setting about getting it.
To us it does not mean moving to a house in the country - bad move this financially speaking. It does not mean depriving ourselves yet it does not mean earning lots of money at the expense of our freedom.
It does mean thinking what we really do want and focusing on how to get it. Not in a frantic dream-and-it-will-happen life coachy sense, though. I am talking about working with what you already have here, to make it work for you instead of the other way around.

Sometimes it is hard, just because being your real self makes you stand out. It makes others curious and they ask you questions. They want some of what you have. (That may, however be mainly because I just cannot resist talking about it - hence this blog... )

So here is some of our story.
We have been downshifting for 15 years now. It has become a way of life, entertainment, making friends and most of all a passion for a life style we would not change.

Downshifting is about choice and getting what you want out of life.
15 years ago we had an average income, a mortgage and some credit card debt. We worked full time yet there was never quite enough money left at the end of the month although we would not have said we were extravagant.

Today we have no mortgage, no debt and work part time. We have just worked it out that we could retire and live off our savings if we really wanted to.

All of that was done on an average or less than average middle class income. We are not in the 'executive' class, and have not had any kind of promoted posts except for long enough to discover we didn't like it. That is not to boast, rather to illustrate that changing what you do and how you think can make a difference.

The most obvious solution if you don't have enough money is to earn more. And yet it seems that if people do earn more, somehow their expenses go up and they still don't have quite enough. Whatever their income level research shows that they still think life would get better if they had about 15-30% more money. Research also shows that once we have about £15,000 (or the equivalent in your currency if you live elsewhere) per person per year to live on, more money does not make us happier. In other words it is enough. Interestingly this figure does not go up in line with inflation. That is because inflation figures include consumer goods, buying a bigger house etc.

  • As downshifters here is what inflation means to us: We already have a house and do not need a bigger one. (In fact as you will see on this blog in the future, once we had de-cluttered we got a smaller house because we didn't need to store all that stuff) . Therefore rising house prices don't concern us.
  • We paid our mortgage off 12 years early so rising interest rates do not increase our outgoings, only our savings.
  • Rising prices of goods do not generally affect us. the price of good plain food that you cook yourself has actually gone down over the years. When Bernadine Lawrence wrote her book 'How to Feed Your Family on £5 a day' in 1978,(whilst living on State benefits with 4 kids) bread, milk, most vegetables, fruit, pulses and meat were more expensive than they are today. Watercress was cheaper because you could buy in by the bunch instead of ready washed in a supermarket bag.
    Almost everything else costs less.
  • As we buy almost all consumer goods second hand, the increase in the price of new ones does not affect us. the second hand price has not changed much over the years. Even the price of new ones does not change much if you stick to the plain one rather than the new-with-extra-features one. We bought what was effectively the same washing machine twice at 10 year intervals and it cost £10 less for the replacement.
  • Many consumer goods such as TV's fridges etc can actually be got down the car boot sale or for free on 'freeble' which has online groups around the UK to re-distribute unwanted goods. If people buy the newest model or get one that matches their new kitchen they often just get rid of the old one.
  • Inflation does put the Council Tax up. Income Tax or your equivalent Tax on earned income is a percentage. Council Tax which we pay on our property for local services is not and just goes up as much as the Council thinks it should so far as I can see. the council tax we pay today (£141 per month) is more than I earned per month in 1978 (£132).
  • Fuel bills, household and for vehicles affect us. You can combat that to some extent by energy saving measures but not completely.
  • If inflation goes down our cash savings earn less interest. However as our lifestyle is mainly inflation proof, this does not matter as much as it seems, and looking after money to get the best rates available makes a big difference.

The real secret of getting ahead with money is not how much you earn but how you spend it. We now earn a lot less than we used to but have a lot more money to spare!

So how much did our Christmas dinner cost? about 50p. but get this: we had pheasant that was a gift from a friend and sat outside round a roaring fire, surrounded by 6 inches of snow. (That had not been the plan, but being snowed in we could not visit my sister as intended.) And of course the pheasant went on to be pheasant and butternut squash curry the following day and then stock for soup.

That fire was so warm I sat out there for hours knitting...(hot water bottle covers seeing as you ask.)

And how much did our new year's eve dinner cost? about 70p for 4 of us. We had king prawn and chicken paella. Thanks, Asda for 5 packets of king prawns and one packet of chicken reduced to 5p each.

So read on and see how we got out of debt and ended up with savings, no mortgage, a great social life and able to work part time.

And this blog will not all be about money.

If you are broke and cannot see a way out, there is hope but you have to put the work in.

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