It has come to pass that disposable income has fallen, as state spending reduces and both government finances and stock markets struggle to recover from the recent debt crisis.
For me, I can go even lower than my current position if required, i.e live on less income.
In the UK, there is a minimum wage, which if required, I could revert to and live off. This means, that unless I become unemployable, I am safe. This does nothing to support my future financial goals, thus, I save even when income is low.
As previously detailed, this is done by ensuring all income and expenditure is accounted for by roughing it out on pen and paper and sharing the results with all affected family members.
So, it is back to the early eighties with the theme of daily life, I predict driven by the desire to progressively earn more and find ways to spend less.
My list of principles in this model are not exhaustive but give a framework for saving cash:
- Shop around, don't impulse buy and use many different outlets for your purchases;
- Don't throw it away if it has extra life by renovation or repair;
- Attempt to buy,shop and 'live' local, to reduce fuel consumption and commuting costs;
- Reduce inventory at home of major purchases such as TVs, P.C.'s, white goods by only having what is necessary and selling the rest to generate cash;
- DIY if you can, save on labour costs and VAT;
- Enjoy frugal dining, learn from Generation X and eat your greens, there is no need to diet if more fresh food is eaten and in quantities that are not excessive (no family pizza for one!);
- Live within your means and ditch credit facilities - wean your self off credit and learn to buy cash or save up for major expenditure;
- Finally, know your financial situation and take action on it.
My model is simple, can be self taught and will last through the boom and bust of personal finance.
Thanks for reading.