Friday, May 6, 2022

Inflation -some strategies for avoiding spending money

 In Australia, as in other places, the cost of living is rising sharply at the moment. Interest rates are going up, and for those who have loans and mortgages that means that they will have less discretionary spending money.

Food prices are going up around the world, too. 

One of the best definitions of inflation, that I have read, is 'a time when your money buys less than it did before". For anyone on a tight budget, or a fixed income, inflation is a challenge -how manage when prices are going up? What follows are my thoughts on how someone in my situation -one a fixed budget and at the retired stage of life, might do some hedging against price shocks.

  NOTE: I know many others have it much tougher than we do, and I am sorry, really sorry. If this blog post is not helpful because you just don't have enough money now let alone when prices go up, please know that I have been there too, and I really hope our society can be kinder and fairer to everyone. In Australia that means, at the very least, we should raise the rate of Newstart to something like $80 per day. 

Get it for free

This is a devil's ivy plant, which was given away on our local "Buy Nothing"  site, because it really really needed some plant first aid. Now, I have quite a collection of indoor plants, and enjoy growing them up. They can cost quite a few dollars, but last a long time if cared for and in the right place. 

After a few weeks of tender care the plant is now thriving in a new pot -this one which actually has drainage- and I am using the pot as a cover pot for another of my plants. It was a fun challenge, and it made me happy. If I want to, I can now give it away as a gift.  Free stuff -you might find it in all sorts of places if you are open to it. It is particularly true in gardening -most people are very happy to give away cuttings and seeds, or even whole plants if it is in the wrong place, and you are willing to dig it up for them. Many of my garden plants were grown from cuttings, and often turn out to be the best for this climate, such as pelargoniums and shasta daisies. 

I will also mention libraries as my favourite place to get reading material for free. I absolutely love my library -I am an avid reader. It would cost a fortune to keep me in books, so libraries are a great source of entertainment and education and they cost nothing. 

Books to find at the library on frugal living
The Art of Frugal Hedonism bu Annie Raiser Rowland and Adam Grubb

A Girl Called Jack -recipe book for those who are living in a low cash environment -and all the other cook books Jack Munroe has authored, like "Cooking on a bootstrap" and The Tin Can Cook. 

Regarding free stuff -it may be important to check what subscription items are in your budget that you could replace for free things -I am thinking of subscriptions to various apps and channels. If we are creative, we can find our entertainment and educationw without paying each month for it. 

Lend it

If you can't get it for free -maybe you know someone who would lend you something you only need for a little while. I read somewhere that most electric drills are used for only 4 hours. People want it to do one thing, buy it and never use it again. In some parts of Australia folk have set up lending libraries of things like camping equipment, garden and workshop tools and the kind of things you need for a big party, but don't need very often. If you take good care of the item you borrow, and return it on time, you will keep your friend happy.
Don't forget to return the favour -maybe you have some things you could lend to another. The kind of reciprocity of this exchange builds community. 

Maintenance Pays Off

We have all had that experience of suddenly discovering that the washing machine won't work, or the dishwasher is making odd noises, or the car has a warning light on the dashboard. Not only is it often extremely inconvenient, it is also really expensive. Getting a tradie to visit your home involves a 'call out fee' even before they have started work. 

I try to do routine maintenance on my appliances to ensure that they last as long as possible, and that such emergency service calls are only required infrequently. I am not in any way a technical or mechanically minded person, but I can easily clean the filter on the dishwasher, and often give it an extra clean with lemon juice or vinegar, to clean off scale and mould in the pipes and hoses.  One of my friend's adult daughters watched some YouTube videos before succesfully fixing their washing machine. 

My car does get it's regular service, and now that we use a mobile mechanic who comes to our home, we notice that they do not try as much as the franchise mechanic, to on-sell us extra parts like air filters.

Cleaning out the gutters before the winter rains is a good maintenance tip. Water in the roof can be really expensive to fix. 

If you can sew, a bit of repair on a hem or a button can save money on buying another item of clothing. 

If you have your appliance handbook, there may be some tips about regular maintenance and what to do if it stops working. I have mine in plastic pockets in a lever arch folder, and this has saved the day many times. Like the time we somehow put the child lock on the induction cook top -and nothing worked. before panic set in completely, we remembered the manual, which  told us how to fix it, without a call out fee! 

Plan for replacement -or do without

We are using YNAB for our budgetting, and I love it. One of its rules is that a good budget knows the difference between an emergency and a 'true expense'. True expenses are things like buying new tires for the car -usually not an emergency, we should be able to predict that we will have to do this at least months if not years in advance. Similarly, we should be able to predict that a 7 year old appliance is probably going to need replacing sometime in the next year or so. If we set aside small amounts regulary to cover such replacements, we should not have our budget wiped out by them. In fact, if it works well, we just pay it! No drama at all! 

Of course, if there are too many things which need replacing all at once, before the budget has enought in it, we might be in difficulty. At such times we might just have to get by without the appliance for a time. In an inflationary environment, it will possibly be much more expensive to replace our appliances than when we bought them some time ago, and so knowing how to do without for a time, is a really good strategy. I know that I can wash all the dishes by hand, even though I would rather not, but I would struggle to wash clothes by hand so I would priorities a washing machine over a dishwasher if it had to be one or the other. 

Of course, you can budget this way without YNAB -we did for years with a spreadsheet, but the idea of true expenses is important to know. 

Do It Yourself

Some years ago I was part of a website and forum which taught frugality. One of the people there was a woman who had suffered an injury at work and so was unable to contribute cash to her family by paid work. She worked hard on finding ways to replace the things they had bought with cash, with things she could make using the time she had once traded for dollars at work. If she had been used to purchasing a packet of biscuits, for example, she made biscuits. If they were used to buying soap powder, she made her own. She actually went to the shop, studied the list of ingredients, went home and researched and experimented to find replacements. If you have the time to give, you can replace many consumer and manufactured products with your own ready made items, at cheaper cost, without fancy packaging, shelf stabilisers and funny ingredients. 

You can make your own curry powder, grow your own herbs, bake your own bread, culture your own yoghurt and make clothes. I learned a lot from this woman's example, and now have many items we regularly make ourselves.

In the garden I make compost, which uses up things we would otherwise throw away, and get a soil amendment to help me grow fruit and vegetables which saves me money too. Our worm farm makes the best soil amendments. Sometimes I simply take the 'do nothing' approach -if the plant is a bit sick, and I have watered it and fed it, and it still has problems I wait to see if the ecological niche it lives in will support it or whether it was just wrong for this place. I don't buy poisons and amendments for the garden. 

DH is a handy person who has helped us a lot by putting up shelves, painting walls, making and repairing furniture, repairing loose screws and such. Often a simple tool kit, picked up cheaply in garage sales, can make a big difference-every house should have a screw driver or three, a hammer and a pair of pliers. Dh often recycles things we get for free from our local Buy Nothing group, or cheaply from the Tip Shop. These lovely windows came from a neighbour for nothing.

Just today he replaced a towel rail in the main bathroom, which had actually broken off at the part where the rail joins the supporting plate attached to the wall. Imagine if we had to get a tradie in to do that job -it would have taken a lot more than the $70 for the new rail.

Don't forget to Pay it Forward

If the times are bad, our community can be a powerful force for good. It is hard to face hard times alone, so if we can, we should offer our surplus to others. This is a basket of limes from my tree which I have put near the letterbox for others to take.

If we have free time we can volunteer at a community organisation -it costs nothing, but can be very rewarding. If we are living in a tight economic environment, and feeling pinched, giving back to the community by volunteering might be something which gives us a feeling of bounty, of abundance and of connection. Both DH and I volunteer in community organisations and we love it. He is treasurer of a mediation community and I work in the garden of a play centre. 

Finally my advice is to try to be content with things -and here is a small article which may assist 

Home renovation of a modest budget