Frugal fails: 2015 housing edition

This spell of my life isn’t the first time that I’ve tried to cut back on my spending. I’ve been in tons of debt since 2010 and made various attempts at sorting out my lavish spending from 2011 till 2016. Since I didn’t know that my day-to-day spending was my biggest issue, I tried to do the sensible thing and made an effort at reducing my fixed spending – rent and transport.

  • In 2012, I moved out of my £1200* room in a 2-bed Canary Wharf house that I lived in mostly alone, to share a 4-bed house with some mates near Turnpike lane. This saved me £500 a month in rent and bills.
  • In 2013, I let my girlfriend move in with me. She paid me £250 a month for her share of the rent and bills. She was also a keen cyclist so I started cycling about 80% of the time, saving a total of around £300 a month on rent, bills and transport for a few months.
  • In 2015, I made some radical (at the time) changes. I moved out of London into the cheapest place I could find for £400 a month including bills. It was also 3 miles / a 15 minute bus ride / an hour’s walk to work. I was certain this would be the move that allowed me to kill debt fast. IT ALL WENT SO WRONG!

Shattered piggy bank

Credit: thenews.coop

How could this dream turn into a nightmare?

I wasn’t allowed to cook at home

The room I got was in a rather pretty loft space with its own bathroom. I was lodging with a woman and her daughter. The lady was pretty clean and tidy and wanted me to promise that I wouldn’t use the kitchen. I negotiated the rent down from the £450 asking price after she bought a microwave + convection oven combo and a fridge, to limit my trips downstairs to using the washing machine. In principle, this was a good idea. In practice, I ate almost every meal outside and ordered takeaways with alarming regularity. The only pounds I gained from this plan were in weight – 2 stone approximately.

I saved some money on transport to work but I spent more money anyway

I made this plan based on my ideal self. The one who is content with being at home every weeknight and out with friends exclusively on weekends. I planned to spend those weekend jaunts hanging at my girlfriend’s and thus not commuting back to my suburban home regularly. In reality, I was in London at least 4 nights a week – my side-hustle is in Central London, all my friends live here and I have massive FOMO. My girlfriend also moved to Germany. It became even more expensive because every time I had to go back home after a bar shift or a late night out, I had to shell out £20 for a taxi home because there were no night buses (the horror!).

I also bought a cheap bike (£50) for my commute to work. The plan was to use that in the cold months and when I was time-poor then walk when it was nicer / I had lots of time. I hated that bike! In 2 years of owning it, I rode it once – home from the office where I’d bought it off a colleague. When I moved back to London, I even had to pay £50 to bring it back in an Uber. I’ve never been so glad to have something stolen before.

I didn’t do anything dedicated with the money I saved

I was saving £300 on my housing costs but I didn’t have a purpose for any of this money. I didn’t pay myself first, because I didn’t even know that was a thing. I didn’t pay off my debts first. I waited till the end of the month and if I had some money leftover then I would pay off someone or something. I was consequently spending the “extra” money that I had on foolish things – like takeaway, travel, gadgets and clothes.

What did I learn from this?

  1. Make a plan that’s actually tailored to you. I live in a house that costs me more money than I’ve spent on housing since 2012 yet I’m saving more money than I ever did in my cheap house out in the sticks.
  2. Making spending decisions that aren’t aligned to your goals is counterproductive. I love food and love to enjoy it. A plan predicated on an inability to cook cheap and/or nourishing meals, that I liked, at home was never going to be successful.
  3. Being realistic in creating your budget is essential. While it is good to aim for the ideal, the plan must work for current you while you exercise your frugal muscles.
  4. Money isn’t saved if you don’t bank it or pay off debt with it. Sure I saved some money on housing, but I just spent it all in other ways.
  5. Spending money is sometimes the best way to save money. My current bike will cost me £759 when I’m done paying for it (on the ‘cycle to work’ scheme) and costs £70 a year to maintain yet I ride it several times a week and it features in my plans for cheap travel to nearby towns/cities. I have a strong suspicion that it will save me a lot more money than the cheap one I bought, over time.
* The whole place cost £1600 but my parents and/or siblings subsidised it based on how frequently they were around.
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