I was a bit negligent posting about the challenge in February. In fact, I was wondering if it was worth continuing with the challenge at all. We were getting nowhere very quickly on account of the car costs in September (£1000), the boiler costs in November (£600) and then cutting down of our tree in January (£800). The problem was that on each of these occasions we had put all our money towards the mortgage and had none in savings for these three unforeseen costs. It was not a very sensible position to be in and, to be honest, it felt like it would only get worse. So we regrouped.
We had looked into Dave Ramsey’s financial university a few years ago and Ticia had left a message about checking him out again. It was good advice because his steps to financial freedom include saving a £1000 emergency fund and saving 3-6 months salary before trying to pay off your mortgage. Of course we could now see the wisdom in this and it is this which has become our new goal rather than mortgage reduction. This will take time, but I never want to find myself in a position where we have to choose between our family’s safety or getting into debt.
However, sometimes tricky situations can give you a nudge like no other and the whole experience has forced us to get more organised with our finances. And at last I am managing to reduce our food budget using one very simple idea. Waitrose delivers groceries for free if you order over £50, so I now put in an order twice a week. Once on a Monday, once on a Thursday, both for exactly £50. This feeds us from Monday through to Saturday lunch. I always shop with mum on a Saturday morning and buy what I need for the rest of Saturday and Sunday for £30. I am thus feeding my family of seven, with 9 animals for only £130 per week, savings of £20 per week (that’s over £1000 per year). An added advantage is it is much easier to shop for a few days than for a whole week, and we have the freshest of ingredients delivered to our door every week.
A few other things we have done to organise our finances is to allot a certain amount of money to each member of the family for extracurricular activities. If the activities they choose to do is above this amount they must pay the excess. This prevents us paying more than we can afford for activities for the children. There is enough money for each child to do one paid activity each year, if they choose wisely. It has been very good for the children to have this limitation (the girls receive their money when they turn 12, T already has his and chooses to spend it on fencing). The children also receive a certain amount of money each month to buy their clothes. The girls get £5 and need to buy products, undies and pyjamas, when they turn 12 they will receive the same amount as T (£10) and be fully responsible for all their clothing needs. It has been very interesting just recently watching the girls find creative ways to meet their needs on such a small clothing budget. For example, L needed summer pyjamas and looked in all the local shops and online, including eBay, for a pair she could afford. In the end she went to a charity shop, which whilst there were no pyjamas available she was able to buy a pair of soft cotton jersey cropped trousers for 40p and then chose a white t-shirt to go with it, again for 40p. A whole summer pyjama set for less than £1, saving most of her clothes allowance for undies which she would of course need to buy new.
So although I have no success to report on the mortgage front, it has nevertheless been a good couple of months of rejigging and feeling like we have regained some control we had lost over the past wee while. We’re still hanging on in there, although we may need to take a longer view in the future. The greatest benefit by far has been sharing with the children how hard things were at the beginning of the year. We had offers from all the older children to help pay for the tree removal. We wouldn’t dream of taking money off them, unless there was no other way, but it was good to hear them offer and it was good for them to know that life as an adult is sometimes tough and full of surprises. They have now seen the benefit first hand of having savings and an emergency fund.
We have decided that as part of their school work next term, they will listen to Dave Ramsey’s CD, and we will do some hands on practical work related to it. We have already set each of them up with a current and savings account, and over the next four months or so we will teach them how to use them, emphasising the need for an emergency fund to cover their responsibilities! (Hopefully they’ll learn from their parents mistakes!)
As a side note, I apologise for not answering some of your comments, we’re all down with a cold at the moment, and even my blogging time at night time has been severely diminished by the constant presence of my three year old, who is finding it almost impossible to sleep with her nose as bunged up as it is. Hopefully life will return to normal soon!