Tuesday, 18 August 2015

We are going to be living on less.

Whether we sell the house soon or not so soon, we are going to have to find a way to live on less from October. There are several reasons - firstly because Col had to stop doing any heavy work for a couple of months our farmer friend had to find someone else to do the irrigation work. So no income from that this summer. For the same reason we didn't cut the third hay field and we've got 36 chickens instead of 130 and we didn't grow as much to sell. It's obvious there will be very little money going into savings for winter. The other reason is that we invested in Bonds at a good monthly interest rate with the inheritance when my Dad died and now those bonds are finishing, and interest rates are rock bottom.

 The plan was to sell this house, use the bond money to buy a small, cheap house that we would live in and prepare for renting out and meanwhile look for a small cottage somewhere cheaper. We would then have an income from the rental as well as the extra cash left over from the sale of this place to live on to see us through until Col gets his work pension and we both get our state pensions. It's looking very unlikely that we will sell the house before October so we will not be able to begin the plan.

Things are not as bad as they sound because I got the unexpected pension pot payout and clearing up here has given us extra money from selling scrap and the chicken sheds and we've done two car boot sales, plus the yard sale of course. However  living off savings instead of saving is going to need a whole different mindset.

I've been looking at how we have cut our budget to make the savings stretch and what else we can do in future.

This is the post about our budget I did in January this year before Cols new health problems and
before we knew we would definitely be putting the house up for sale.

 New updates and ideas in Blue What I wrote before is in black italics with old totals in red.

How we organise our budget 
 1. Council Tax. Because  we have lived here for 23 years our Council Tax is based on the tax bands when they were first set in  1991. I believe tax bands are re-calculated when houses are sold. We are also in a very rural area, so our Council Tax is a lot less than that paid in towns. We pay by direct debit over 10 months.  I'm not expecting the cost to go up very much as County, District and Parish councils have pledged to keep costs down.

2. Water Bill. We have a meter for the Campsite and farm buildings. The house is not metered. We have no mains sewer here, so septic tank drainage. The water bill for the house is direct debit over 10 months and is also based on the 1991 Council tax band. We pay the metered bill twice a year, this varies - the more campers we get the higher the bill. But the more campers the bigger the income anyway.The usage for farm/garden is low as we have huge rainfall collection tanks ( 8000 litres total!) on the farm buildings  and move the water around to water tanks in the garden.

3. Electric Bill. This varies a lot, again depending on how many campers come to the site. We pay quarterly for both.

4. TV Licence. I budget £15 a month, for 12 months. This allows for price increase and a bit left each year to add to anything with a shortage.
Total needed for those 4 things is approx £290 per month ( less for 2 months with no council tax)
 No change for these for the rest of the year.

The Campsite and smallholding businesses

1. Public Liability and Business insurance. We have to send a copy of this to The Camping and Caravanning Club. Without it we would be unable to run the site. We also need it because of selling eggs etc.  This seems to go up by a few pounds every year. Direct Debit £53 a month for 12 months at the moment. We paid this up front all at once in April which saved us about £25
2. Campsite electric inspection and test. Every year we have to have an electric test on the hook-ups and a certificate to say it's been done. A copy of this goes to the Camping and Caravanning Club. Without this we wouldn't be able to operate the campsite. It's around £75 each year. Nothing needed repair so it was just £60 this year.
3. Chicken feed. Range Layers pellets direct from the Mill. They changed from 25kg to 20 kg bags last year and  now  we collect 20 bags at a time. With the number of hens  we have at present this lasts a couple of months. When we drop down to 2 dozen hens for a while  one load will last us longer.We also need to buy grit and oyster shell. Even though they are free range they need these as our soil is heavy clay. We kept 36 old chickens, we  collect 10 bags of feed at a time which lasts us over 2 months.
4. Buying new point-of -lay  hens. To keep a steady egg supply for our customers, we replace the very old hens with new young hens each year. About 60 each year at £6.50 each. We plan to restock in summer so need to save for then. We are not going to restock with a large amount again. We plan to hang onto what we have, maybe replacing them with just half a dozen young hens if the house doesn't sell before winter.
5.Egg Boxes, Egg wash and cleaning cloths. We use plain grey boxes as they are the cheapest  and we buy them in big packs of 300 collecting 1500 once a year direct from a farm supplier. I use a sanitizing egg wash for cleaning muddy eggs and a clean cloth ( J cloth type) every day which then goes in the wash. We have enough to see us through.
6. Diesel for the tractor. We are allowed to use Red diesel for the tractor BUT nowhere locally sells it. We could have 1000 Litres delivered! except a tank costs a fortune and that amount would last us for ever. So we get a can full whenever possible from Morrisons in Ipswich as they are the only garage that we know of that sells it.
7.Petrol for the mower and chainsaw. Neither uses a huge amount. We need both, one for cutting the campsite and the other for cutting our free heating wood.
8.Campsite requisites. That's Loo rolls, paper towels, cleaning stuff. I usually buy these out of the housekeeping except for the paper towels which I stock up on when Viking mail order office supplies have a sale.
9. Multi purpose and seed compost plus seeds and plants for vegetables. I always check through several seed companies catalogues comparing prices. I have spent a lot less this year, cutting down in several places - £63 so far and seed potatoes still to buy. We sell probably 70 - 80% of what we grow so easily get our money back and earn a good income from June through to October. We are not sure what we will manage this year, it depends on how much Col can do.  
We cut down on some things because Col wasn't able to get all the beds ready at the right time. There are quite a lot of seeds in my seed tin and 3 bags of multi purpose compost left so if we are somewhere to grow things next year it won't cost very much.
10. Smallholding repairs and maintenance. There are always expenses when you own land and want to earn an income from it .Machinery repairs and replacements and maintenance and even small things like sticky labels for selling things at the gate, the list is endless. BUT as we will be doing less I shouldn't need to save so much each month.

Approx £240 a month needed  for the above This can be cut to about £200 a month perhaps more and of course these will all disappear when we sell.

 The ( B*****) Jeep!  The (B*****) Hyundai Tucson!
We changed the gas guzzling jeep,( but not to something smaller because Col wanted to make sure we could still tow a big trailer) to the Tucson in February. It has saved us a lot of money on diesel, the insurance is much the same, road tax a bit less. A recent repair cost £290.

1. Diesel for the Tucson. We try not to waste journeys and  do lots of  errands  when we are out. Luckily for most of our daily requirements we only need a 5 mile round trip. I cycle whenever I can. Our nearest petrol station is the local one in Leiston, who have now started giving Tesco Club Card points. They are often no more expensive than the supermarket filling stations and the nearest one of those is  over 20 miles away. We plan to change to something MUCH more economical later in the year as we won't need to haul large trailers about anymore
 The Plan changed so we could still tow a caravan/trailer
2.  Insurance. This is the almost the cheapest bit of running our car. As we are over 50 we get it via Saga and they will match any quote we can find elsewhere. Col checked out insurance for something smaller and it would be about £30 -£40 less each year.
3. MOT. Col is able to do most of the servicing so checks the car out before taking it to the garage.
4. Road Tax = Too Much but unavoidable! £285 this year. This will be much less when we swap to something smaller. It was a bit less but not a lot less
5.Bits for servicing, tires, oil  etc

Approx £200 a month in total at the moment but hopefully half that later in the year
.Less, but NOT 50% less.

The things we need for everyday life

1.All  Food and drink ( including Christmas)
2. Clothes and shoes ( Urgently need to save for something for our daughters wedding.)These were bought mainly off Ebay without spending a fortune. I have also bought 3 new bras this year but no other new clothes needed.
3 Personal Hygiene (  Loo rolls,Toothpaste, soap, shampoo etc etc)
4.Cleaning and Laundry stuff
5.Pre-payment prescription cards, opticians and dentist. ( I get free prescriptions after April)Prescriptions now free for me and optician check up
6. Phone and computer.When we move we will start again with a new provider as Talk Talk have put up prices, but it's not worth trying to change now.
7.Bottled gas for the hob  and coal to keep the Rayburn alight overnight when it's very cold We have enough to last us through the winter.   
8. Birthday and Christmas gifts for family and friends ( I MUST cut this for 2015) I plan to spend a lot less this year for Christmas gifts
9. House and contents insurance We swapped and saved
10. Smaller Things for the house Nothing needed
11. Postage I spent £20 to stock up on stamps before the price went up in April and haven't had to buy any more yet.

Approx £475 per month for all above but a bit less after April
 Have cut this to about £400 at the moment hopefully by more later.

We have money in savings for replacing household appliances, the expected expenses like pumping out the septic tank and the unexpected. These need to be added to if possible as there are always unexpected expenses!
We will be using savings rather than adding to them!

Then we want to have some money for the things that make life interesting
Christmas treats
Days out We've had NO days out this summer, instead we bought a caravan and plan to have an Autumn holiday if the house doesn't sell by then.
Craft materials Must NOT buy anything else! Unless.................
Feeding the birds This is an area we will have to cut, especially if we don't have chickens and therefore don't go to the feed mill where bird food is cheaper.

 Can we earn more than £1205 now £1065 a month averaged out over the year?
 No, I don't think we can .

Hopefully we can but I'm not as sure as I was last year because our income comes from several sources and the list below is shorter than it was in 2014. And even shorter now!

  • The campsite between April and October.....Praying for good weather! All OK, we are up on last year.
  • Egg sales every day ( a lot less than last year and less again when we drop down to enable us to get on holiday). Income is now only about £20 a week, still enough to cover feed and to have free eggs for us.We don't plan to restock on a large scale here
  • Sale of hay after haymaking and throughout year ( only our 2 acres here will be cut for hay in 2015) The man who owns one of the fields we rented asked Col to organise getting it cut and baled and didn't want any rent. We have sold the hay but are still waiting to be paid. We owe for getting the field cut and baled.
  • Sale of fruit, vegetables and a few flowers mainly from June until November. As usual we are able to sell everything we grow. Lost the sale of flowers due to the road being closed.
  • Income from Cs odd jobs. ( We don't know what he will be able to manage). He has been replaced in one and a half of the jobs he was doing regularly!
  • Occasional income - Election duty, I opted out last year but will probably do it this year             (approx £100) I didn't do this as we were not sure how well Col would be.
  • Car boot sale? - I swore last year not to do another for a few years but we have some STUFF! We found enough from the house and workshop to do 2 so far with an income of £300. Maybe doing another later.
  •  Income from investments. This will decrease mid-year when our 5 year Bonds come to an end. Interest rates have dropped dramatically since we invested the money left to us by my Dad in 2010. The bonds finish in September/ October. We can't invest long term because we need money available for the  future plans.
  • Repayments from money we loaned to someone in the family last year to help them out of bother.A third has been repaid so far.
 So that's our budget for 2015. If things go as planned we will be OK, if not we will have to use some of the savings. I will hate to see savings used  for everyday so will try to avoid if possible.

   The above is how I finished when this was written in January  and now we know things didn't go as planned, another health issue cropped up and we decided it was time to move.
 Now I just need to get my head around having to use savings to live on - after all, that's what they were there for but if we can't sell they are going to be eaten into much more than we wanted.
So S-t-r-e-t-c-h the savings will be the theme for the rest of the year.

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