Monday, 18 January 2010

Spending all you have - and more!

I have read a couple of posts today which have made me think, so I am sharing my thoughts!

I don't spend all we have - I say "I" because I am the chief spender here: the FH spends very little, only £2.50 a week for his art club and £3.50 each Wednesday for his lunch club. That is really it as far as his regular spending goes! He never buys himself clothes and I bully him into getting new shoes now and all our money is generally under my control, and I look after the savings as well. I spent a couple of hours investigating interest rates on Friday morning.

I could spend it all every month, but I would be scared, and stupid, I think, to do so. I firmly believe in living within our means, and saving some money each month. We actually live some way below our means, which enables us to make the savings. It also means that when we decide to splurge, as we do once or twice a year, we have the money to do it without worrying about using credit or going into an overdraft. "Splurging" is what we call doing something we enjoy but which we don't do regularly - like going out for a meal together, or buying the Wii earlier this month. Because we don't eat out often, the girls find that it is more of a treat and a special occasion when we do!

The YFG and I watched "Wife Swap USA" early on Saturday morning whilst we were eating our breakfast: we were both amazed at the difference in the two wives' lives as one was a total control freak and the other was so laid back she was horizontal. She didn't plan an hour in her kids' lives, let alone plan their college educations as the other wife was doing. I think that we are somewhere in the middle - we are planning a little further ahead than the laid back wife but we are not controlling them and their futures.

Part of that planning is teaching them financial responsibility and how the world of money works at our level - we are not merchant bankers or stockbrokers, but we have to have some understanding of banks, interest rates and borrowing to pass on the important points to them about avoiding unnecessary debt. I want to be a decent example to my children and not to let them think that it is possible to lounge around all day at the state's expense (and I say that with no disrespect to the people who have been made redundant, as I am more concerned with some families in which there is a culture of benefits, where no one is working, no one has worked within recent memory and none of the family has any intention of looking for work!).

I can't say what proportion of income people should save, but I can say that at least 10% would be a start, and some months I manage as much as 30% if I am working on lowering the stores, but everyone's circumstances are different.

The other thing that has made me think this weekend is the concept of spending money when you have plenty. Just because one has a fantastic income, perhaps, or great wealth, does that make it right to spend money like water? I can see that there might be an argument in favour of spending as some would say that those who have money should spend it to help keep the rest of us in jobs, but I don't agree with spending willy-nilly. If one has a little extra, I believe it should be used wisely - perhaps on a more energy efficient car or boiler for example, not on wild parties and expensive gas guzzling cars.

If I won the lottery on Wednesday (I won't as I don't participate) I don't think I would buy a posh car although I would certainly get a new one as both of our cars are on their last legs and will need replacing this year or next. I would look into moving house so that I could have a little more land for the chickens, and growing more veg and soft fruit. I would invest in the childrens' educations, for certain, and I would give a chunk of the money away. But I see no reason to stop buying Value tins of peaches, or scouring the shelves for the yellow-stickers on the reduced items - it is still a matter of getting the best value for money (although yes, I have heard the argument that if you have more money, you shouldn't buy the reduced goods as then people who genuinely have less money and therefore more need are deprived of them......).

Other news - another baby born to a family on the street - a baby boy. Must have been born last night or this morning, but don't have any more details yet. And on the chicken front here, no more eggs yet!

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