Frugal Living

Ok so I received a question about the black boxes that can be fitted to cars to reduce your car insurance premiums. The question asked how they worked and whether they were suitable for everyone.

What Data Is Collected?

The Data the black box collects includes

• The distance your vehicle travels and at what times of day.
• Where the car travels and where it parks.
• On what type of roads the car travels, i.e. motorways, country roads etc.
• At what speed you drive.
• Driving behaviour of the driver. i.e. are you barking heavily, cornering at speed etc.
• Direction and speed of your vehicle if you were to have an accident.
• The force of the collision, were you to suffer an accident.
• At what times of day the vehicle is driven.

How Will This Data Affect My Policy?

Every insurance company will treat you differently from one and another to an extent. But you can expect them to:
1. Increase the policy cost for those that drive after 11PM and before 6AM as this is considered dangerous, with a risk of the driver falling asleep at the wheel.
2. An increase in the policy cost for those that travel significantly during rush hours. Again this is considered to place you at a higher risk of an accident.
3. A lower policy charge for those that drive within the speed limits and do not drive erratically.
4. An increase in the policy cost for those that drive high mileages. And those that drive on the higher risk roads.

So is it worth getting one fitted?

Each case is different. If you drive for long periods during the rush hour. Or drive late at night then it very well may not be in your interest to have one of these black boxes fitted as your premium may well increase. However if you are a young driver, and can live with the restrictions of not driving at night and not driving high mileages. And you can keep your speed down then you may very well find yourself making a saving by having one of these black boxes fitted.

One of the more expensive annual payments we have to make every year is the payment of car insurance. No matter how good our driving record is the price always seems to go up. But there are ways of cutting the cost of car insurance.
1. Don’t drive a gas guzzler. This is the most obvious, but the bigger your car’s engine and the higher the performance your vehicle has the more you will pay.
2. Try to build up as much no claims history as possible, even when you are a young driver. Often it is tempting to go onto your parent’s insurance policy as a named driver, however in the longer term this is often a mistake and can cost you more.
3. Look at getting a mature parent on your policy as a named driver. This is the exact opposite of the advice above. There seems to be a bit of a quirk with some insurance companies pricing schemes that makes adding a mature parent onto your policy reduce the cost by quite a bit.
4. Look at reducing your annual mileage and limiting the annual mileage declared on your policy. By declaring that you will only drive say 10k miles every year you can often cut the cost of car insurance. Beware though, if you get caught going over this limit and have an accident this could cause all sorts of legal implications.
5. Fit a black box. Many insurance companies now offer to reduce your insurance premiums if you have a black box fitted to your car that records exactly how erratically you drive and at what speed, and the time that you drive.
6. Think about driving an older “Classic” car instead of a more modern box. Even though these do not have modern safety features. You will often find that if you through specialised classic insurance broker you can insure them much cheaper than a modern car. These vehicles will often hold a much higher residual resale price than a modern vehicle as well.

In a previous post on this blog I spoke about cutting the cost of the weekly shop as a part of leading a more frugal lifestyle. The number one thing you must do if you are to reduce your weekly spend, Is to set a budget. Write a list of goods you need, and stick to it. All of us end up buying various items nearly every time we go shopping that will be used once or in many cases never and then be thrown into the back of the cupboard and never see the light of day again. If we were to reduce or ideally stop wasting our cash in this way we could free up a significant amount of cash every year that we could use to invest for our futures.

A second way of saving cash is to look for items that are reusable instead of throw away. When buying cleaning cloths, look for those that can be washed and reused instead of one use disposable ones. If you have a young baby, think seriously about using old style reusable nappies rather than the disposable ones. Over the lifetime of a baby these can save a significant amount of money, and if you are not able or willing to clean them yourself there is undoubtedly a service in your local telephone book available? (And if not this may be an idea for a small business?)

Look online for vouchers or discount codes. Over a year, if you were to cut out and use the vouchers from newspapers, magazines and hunt around the various voucher websites. The savings will soon mount up. Some people may look down on using these but they have obviously got money to waste, but why should we? After all the more we can save by leading a more frugal and thrifty lifestyle, the more we can invest and save for the items we really do want?

1. To save fuel when driving upon a motorway, reduce your speed. There is a lot of evidence to prove that driving at 50mph instead of the legal limit of 70mph will save you around 30% on your fuel usage.

2. Make sure your tyres are correctly inflated. It is claimed that incorrectly inflated tyres can add up to 8% to your fuel usage.

3. Drive as smooth and as consistently as possible. When approaching traffic lights and roundabouts try to reduce you speed and keep your vehicle moving rather than sit at the junction burning fuel. By being smooth and consistent rather than braking violently and accelerating harshly you can save up to 10% on you fuel usage.

4. Keep your engine at the point where its maximum torque is rather than maximum power. This can save up to 25% on fuel usage.

5. Remove the roof rack! A full roof rack or roof box can add up to 30% to your fuel usage.

6. Switch off the air con. This can save up to 10% on fuel usage.

When it comes to buying a new or even a used car one of the most important things we generally consider nowadays is the fuel consumption. Due to their ability to return higher MPG figures. A lot of us in recent years have been buying diesel cars rather than petrol. But do the figure stack up and is this actually the right thing to do?

A recent report by Which has stated that due to the higher initial purchase price and the higher second hand residual price it is often not in your best interest to purchase a diesel car instead of a petrol engine one. When buying a diesel car it can cost from 1K upwards more than a petrol engine vehicle and this can take up to 14 years for the average motorist to recoup in fuel savings.

The case for petrol engine vehicles becoming more viable is made even stronger by the fact that diesel has become significantly more expensive than petrol in many cases and a lot of small car manufacturers are now producing small petrol engine vehicles that are capable of exceeding 50+MPG. Something that would have been unthinkable just a few years ago.

Although the current financial climate may seem to be making things tough for a lot of us, things were a lot harder for previous generations. Our Grandmothers and Great Grandmothers would have had many tips and tricks to make the weekly budget stretch just that little bit further. This however doesn’t mean that we cannot stretch our own budgets, and make our money go just that little bit further.

Small changes, big savings

Some ideas to get you started…

1. Swap from branded products to a supermarkets own brand. Most supermarkets have their own cut price options hidden away somewhere and these can be a great way to make significant savings on your weekly shopping bills.

2. Have a ‘use-up’ week. Most of us if we are honest have significant numbers of tins and other food items that have lying in the back of cupboards and freezers for some time. With a little planning you would be surprised at just how many meals you could prepare from these items. And who knows you may even get a “free” week without having to buy and food products?

3. Write a Shopping list, and make sure you stick to it. Most of us wander aimlessly around the supermarkets throwing whatever takes our eye into the basket. And this is what the Supermarkets rely on to make large profits. As a lot of the items we pick up are not essential to our weekly needs, and the supermarkets deliberately put these items at eye level at strategic places around the store to relieve our wallets of more and more cash.

4. Check unit prices! And make sure that that “Special Offer” actually is special. It is not unknown for supermarket special offers on say a fours pack of beans to cost as much as say five individual tins. So always check and compare the prices before buying. This also applies to loose foods against prepacked. Often they will charge a huge markup just for placing the food into a small piece of packaging.

5. Bulk buy and share Buy One Get One Free Offers with friends or family and split any costs between you. Anything that may go off could possibly always be frozen? (A big freezer will soon pay for itself) Also check online to see if there are any wholesalers in your area that would be willing to sell to you if you make a minimum purchase? And maybe club together with friends and family?

6. Buy Out of date/clearance food – There have been numerous online dealers springing up that sell food that is very slightly out of date or maybe has a dented tin. Some even offer next day delivery. In the vast majority of cases there is nothing at all wrong with these food items, and it is just the way we have been raised to expect everything to be in a perfect unblemished condition that has left them unsold previously.

7. Use Dollar/Pound stores. You would be surprised at just what you can pick up in these stores at significant savings over their usual retail price.

Whether you believe in the stories of global warming or not? There is a good case for cutting back on the amount of energy that we waste. Year on year energy prices are increasing with no signs of stopping. And this is forecast to lead to a large number of people in the western world being left in fuel poverty.

So how can we cut the amount of energy we waste? The obvious place to start is your home which loses large amounts of energy through its structure. In the middle of winter it will be losing heat which will cost you money to replace with a source of central heating. And in the mid summer it will be losing cool air which will often need to be replaced by either a fan or form of air conditioning.

So where does a home lose heat energy?

• Walls
• Floors
• Windows and Doors
• Draughts (air leakage)
• Ceilings

The obvious assumption would be that these lose equal amounts of energy. However this is not the case. Energy loss from draughts is over 3 times the amount of that lost from ceilings. And energy loss from substandard doors and windows is just under double that of energy loss via the walls.

• Draughts: 35%
• Windows and Doors: 18%-20%
• Floors: 15%-18%
• Walls: 12%-14%
• Ceilings: 10%

Hence whilst the automatic assumption is that that insulating the walls and roof spaces should insulated first. You will save more cash is were to go around checking for draughts and fixing them. However this does not mean that you should block up all of the vents into your property. These are generally there to allow the structure to breath. And if these are blocked can lead to major damp problems throughout your home which can be expensive to fix.

It is also a good idea to check as to whether there are any grants available to improve the energy efficiency of your property. Obviously this changes from country to country and state to state but it is not unknown for local governments and energy suppliers to offer free or subsidised insulation of roof spaces and walls.

For most of us the increase in our energy bills over recent years has been alarming. Increases in excess of 15% per year are not unknown. And this has been forecast to continue for many years to come. So how can we cut down on our energy use without impacting on our daily life? One easy way is to switch off items that are sitting there on standby mode doing nothing.  A joint study between the U.S. Environmental Protection Agency and several other environmental agencies around the globe indicate that you could save as much as 10% on your monthly energy bills just by switching off items that are on standby mode.

These include items such as:

• TVs
• VCRs, DVD players and DVRs
• Cell phone chargers (and any other battery chargers)
• Clock radios
• Computers and printers
• Coffeemakers
• Power strips
• Microwave ovens
• Answering machines
• Any device with a remote control
• Any device with a clock
• Any device that is programmable
• Any device with a power light or standby indicator light

And all you have to do to make this saving is switch them off when not in use, of maybe invest in a Smart Strip which will switch off the power to the device when it is not in use.

One way to save money on what we spend every week is to cut down what we spend on our food budgets. A lot of people would assume that this would entail cutting back on the amount or quality of food we end up putting on our table at the end of the day. But in many cases this is not true. In fact you could end up getting more food and of a higher quality, and all it would cost you is a little more time.

In the modern day world most people do their weekly shop at the nearest and largest supermarket so that they can do all of their shopping under one roof, for ease and convenience. However this is not always the cheapest way to go about things. Often the food you buy is pre prepared which may save you a little time. But comes at the price of a huge mark-up in what that food item will cost you. And often you not only pay more for this food item, but you also get less in quantity as well. So for just a little time spent on preparing the food yourselves you could easily shave 10-20% or even more off of you weekly shopping bill.

Another way to save cash on your shop is to buy from places like farmers markets and small retailers. Often when buying from places like this you may get some room to bargain a little on the price of an item, where as in large faceless supermarkets they will in most cases be ridged in their pricing.

For a great many people out there. Money is tight and the everyday items that we all take for granted increasingly seem to be become more and more expensive. The question is though do we need them at all? Or is there a cheaper way of doing things without cutting corners?
Can we increase our income with secondary jobs? Or maybe even start working for ourselves? So that everything we earn goes into our pockets rather than those of an employer?
These are the things I will hopefully be trying to look at throughout this blog. And maybe with some input from the readers find some ways of making life a little easier for us all?