Going to go off on a little bit of a tangent before we get into this post…
Long term readers of this blog will know that I have a long commute to and from work. Between the two of us, we travel almost 140 miles every day. Not only is this costly from a fuel point-of-view, but it means we are putting serious mileage on the clocks of both our cars. In previous posts, I have discussed how Driving at 50 MPH can increase economy by up to 30%, but choosing the right car is fundamentally important. What is the point saving 30% fuel by driving a gas-guzzling sports car at 50MPH so that you can increase the economy from 15 to 20 MPG, when you can start with a car that has a fuel economy in the 60s and drive at a normal speed?
I like to compare this idea to personal finance – there is no point trying to shave 10% of the cost of your lunch by not buying that extra side portion, when you spend a £5 a day eating out; where you could take your own lunch and enjoy a few extra bits on the side; and still save a fortune. Sometimes we have bigger problems than saving just a couple of pounds on a loan, or being extra frugal so we can make a few extra over-payments on our mortgage – when really, we shouldn’t have bought such a fancy car and that big a house in the first place!
Frugality is NOT Always a Good Thing
The most popular post (by Search) that I have ever written is called ‘Defining Purpose and the Importance of Moderation‘. Looking back on this post, I am very proud of it and always want to live by it – the key message that it tries to convey is that it is OK to spend money, it is OK to drive at the speed limit and to eat out. It is OK to buy a house and to go on holidays. The moderation part however is that we need to ensure that we have the right car to drive at the speed limit, we eat at the right restaurants that we can afford, we buy a house that we can comfortably afford the mortgage for and that we go on holidays where we still have money left over to do activities.
Why buy a Ferrari and drive it at 40mph to save money on fuel?
Why buy a house that you can’t afford to furnish?
Why eat at restaurants that we can only afford a starter or a desert?
Why buy a motorbike when you can’t afford the insurance?
Live Within Your Means
My mum said this phrase to me at University countless times. I always just brushed it off as another one of those ‘Mum Sayings’. Don’t drink too much, Be Careful, Don’t stay out too late, Make sure you get a good night sleep – You know, one of those ones! In reality, this is probably the best piece of advice that I have ever been given.
I think we can apply this phrase to almost every single expense that we have:
Clothes – If you like designer labels, fine; just buy a label you can afford. Gym – Don’t join a fancier gym with an off-peak membership, when you would better use a cheaper gym with a peak membership
Rent / Housing – Choose somewhere that is convenient and affordable, not somewhere that is too big to take care of
Mobile Phone – Don’t choose an expensive phone at the detriment of inclusive minutes / calls
I think you get the point. As I said before, there is no point having a Ferrari if you can’t afford the fuel!
Back to the Cars
Going back to the example of commuting, I have come to terms with the fact that I am never going to have a ‘sporty’ gas-guzzler of a car so long as my commute is this long. A few months back, it came the time to upgrade my car and I searched for the best possible model for a combination of ‘true’ fuel economy (i.e. what you get traveling at 70) and longevity. I narrowed my choices down to either a Ford Focus or Honda Civic; both cars had comparable safety stats, fuel economies (diesel) and reliability ratings.
I chose between two cars that would enable me to drive at a normal speed and still save a lot of money on fuel. Instead of frustrating myself (and other drivers) by traveling at 50, I could drive a bit faster knowing that this would not adversely affect how much it would cost to fill the tank.
What YOU Should Do
Consider your own lives and take a few minutes to think about areas where you might be living outside your means. Whether it be shopping at supermarkets that you can’t really afford to buy all the things you really want, or planning a holiday where you may not be able to do all the activities you want – there is definitely something we can all do to make our lives a little better.