The true cost of decorating.

While we were away on holiday a month or so ago, I watched a 'house makeover' programme on TV.

I was intrigued to hear the makever guru describe how the new dining room table and chairs she was advising people to purchase was an 'investment piece'.  it cost £2,000/$3,000 and was white.  The chairs were covered in white leather, which, we were assured, would wipe clean.
Now this house belonged to a young couple with small children, and their kitchen was too small for a table, so presumably their kids will be eating at the white dining room table and the parents will now be getting tense about them dropping food on the new and expensive dining room carpet.

I remember how my kids used to sit at the table and play.  They used felt tip pens, paints, water and so on and it was great for them to be able to do that without worrying about our table, which was permanently covered in a heavy pvc coated table cloth.  So with a cloth on top of it, an expensive table would have looked just the same as a cheap one, and we bought a second hand good solid Ercol dining room table set for £35 from a local charity (thrift) shop.

In what sense, exactly is a dining room table an 'investment'?  An investment is something that increases the value of your money and can be sold (quickly and easily - ie when you need the money) for more than it cost.  A Chippendale  chair may be an investment, but not one you would make unless you already had money in easily-accessed tax free, safe savings.  But a white table will get stained.  And the chairs may be wipe clean but the leather will soon look used and the white will rub off in places.  The minute it leaves the shop the value becomes less than half of what you paid for it - and how on earth would you sell it anyway?  No investment this, then.

An investment has to be a realisable asset.  For most of us, even our house is not an investment.  
We need to live in it and cannot therefore easily sell it if we need some money, even if it has gone up in value.  It costs money for maintenance and to pay the mortgage, especially if we spend money on things that give no return like furniture, and is therefore actually a liability in financial terms.  It becomes an asset only if it can earn us money is some way. 
That could mean taking in a lodger so at least some of the costs are off-set.  It may mean using it to earn money such as by working from home as a child minder or moving your office to the house and therefore saving on rent for business premises if you are self-employed. It may even mean selling it, buying a cheaper one and investing the money.

We recently got a grant and interest free loan to install solar panels.  These give an electricity generating feed-in tariff in many European countries, so we get paid to generate electricity.  We used Renewable Resources and were very happy with them. give this blog a mention if you get in touch!  www.rr-ltd.com
The panels should be paid for by this tariff in ten years (using calculations of the average amount we should expect to generate).  The tariff is guaranteed for 25 years and is index linked.  Those are the magic words.  Anything that is index linked keeps up with inflation of course and that is very important.  For us it means the tariff will go up every year when there is any inflation, which will quite possibly make the payback time shorter.

So how else can you make your house an asset?
By spending money in a way that helps it to earn its keep.  That doesn't usually mean an expensive kitchen, bathroom or conservatory which are depreciating and unrealisable assets.
It does mean doing the sums regarding any money you spend on it.  For example, if you add insulation or double glazing what is the pay back time? If the payback time is long, are there other benefits, such as wanting to go out less or just getting a lot of pleasure from it?

We recently installed a wood burning stove.  It cost us quite a lot of money but is worth every penny.  We are spending more time at home, and both ourselves and our friends enjoy spending time here more. 
We are enjoying getting our exercise collecting and chopping free wood.
We had had a stove at our last house so knew we would enjoy wood gathering, and I have always preferred to get exercise in ways that are useful.
Once we have done something that saves us money and adds to the quality of life at the same time, I love to find yet more ways that it can save us money.  So the wood stove has a kettle on it right now, boiling water for tea.  The kettle cost me 50p/80c at a car boot sale.  It also has a saucepan on it cooking potatoes for tomorrow's dinner.  We have managed so far to resist spending money on trailers, wood sheds, chain saws and other things that tempt new wood stove owners!

So I am sitting here toasting nicely whilst not spending a penny keeping warm and cooking a meal at no extra cost.  In other words, our money is earning its keep.
Our stove cost about the same as the white dining table and chairs in that make over programme by the way.

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.