Frugality

Self-Sufficiency and Resilience – Plans upon Returning to Australia

 

Back in January of this year I wrote a post about Self Sufficiency, Independence and Lifestyle Planning . In it, I explained how I wanted to become less reliant on the current industrial system and to take more control of my own life. I’ve achieved a lot since then, but knowing that we were moving back to Australia in less than a year meant that I put off some changes. Now that we are only about 10 weeks away from returning home, I thought it would be worthwhile revisiting that post; to envisage what I want our new lifestyle to look like and to outline some goals for the next few years.

1. Getting off the Economic Grid

In 2010 I finally paid off the last of my mortgages. Now that I’m no longer paying any interest, my cashflow is healthy and I’m saving a large percentage of my after-tax income. Knowing that we have to buy a car and appliances when we get back, my priority now is to save for those big-ticket items. The last thing I want to do is go into debt to buy depreciating assets.

Upon return to Australia, my income drops but Brendan will be back at work so it should even out. We don’t relish the thought of both being back to full-time work, but at least in the short-term we see that it is necessary. We both have secure jobs for the moment, so we plan to use this opportunity to save like crazy. Comparative to the rest of the world, the Australian economy looks reasonably healthy at present. But in this globally connected world I can see that a number of potential crises could impact Australia quite heavily within the decade. I still think the biggest risks come from the Australian Housing Bubble and the reliance of the Australian economy on China. I anticipate that any crisis in the European and American economies (looking more and more likely) will result in rapidly rising interest rates in Australia. Australian homeowners are already struggling with their mortgages while the cash rate is 4.5%. How will they cope if it increases to 9%? 

Holding cash in an economic environment like this just makes so much sense to me. We are using the current ‘recovery’ to prepare for the hard times we predict will come as the global debt bubble unravels.

2. Reducing Energy Dependence

Cheap energy will not last forever and my family and friends in Australia are already seeing rising prices, especially on the electricity bill. There are a few lifestyle decisions we’ve made which should help us to reduce our energy dependence once we are back in Australia.

Firstly, we are renting a detached townhouse just a 15 minute walk to the city centre. It has any excellent walk score which was really important to me. My daily commute to work will be about 4km each way, so I’ll easily be able to do that by bicycle and Brendan will be able to do the same to his work. By carefully choosing where we wanted to live we can reduce our dependence on a car. We will still buy one car, but I anticipate that it will remain in the garage for much of the time. Removing the requirement to buy a second car also saves us a lot of money.

In selecting what car to buy, we have been referring to the Green Vehicle Guide. It’s an excellent website which rates Australian vehicles based on greenhouse and air pollution emissions. It also provides statistics on how much fuel each vehicle consumes. We are very keen to find a fuel efficient, second-hand car.

We’ll also be using the Government’s energy rating guide when shopping for energy-efficient appliances. Our new home is centrally heated with natural gas and we are hoping that the smaller size will reduce our heating expenses. Otherwise, we plan to rug up in order to avoid using too much energy to heat our living space.

3. Improving Food and Water Security

My first priority once we’ve settled into our new home it to begin stockpiling some food and water for emergencies. Knowing that we can sit out a short distruption to services is very comforting. I would never want to put myself in the position where I had to rush off to the shops in a time of emergency to stock up on food and water. It also makes good economic sense to stock up on more than you need. Food is increasing in cost faster than just about any investment right now and certainly faster than the rate of inflation. When things are on sale, we’ll simply stock up and we’ll buy in bulk every six months or so.

I’ve already identified a food co-op not too far from my house where we can buy bulk-goods without all the packaging you get in the supermarket. It also looks like they stock fresh fruit and vegetables.

We don’t have a lot of room for it, but we intend growing some of our own food. The courtyard we have is not very big, but we’ve been surprised how much we’ve been able to grow in our small courtyard in California. Of course, the climate in California is much more condusive to growing food all year round than Canberra, but I’m sure we’ll learn as we go along.

4. Building Community

It’s important to me to get involved in the community when we get home. We feel like we’ve been in limbo for the last three years, but once we are back in Australia I hope we feel a bit more settled. We already have a lot of friends in Canberra, but I’m very keen to meet more like-minded people as well.

I’m especially excited about checking out SEE-change, the local Canberra community for creating a sustainable future.

I finally feel like things are falling into place. I’m now at the point where I can visualise our new life back in Australia and I’m even starting to get a little excited about the move.

Photo by : jef safi

Advertisements

The End of Retirement

A while back, I wrote about the coming en masse Boomer (1943-1960) retirement and how it is likely to affect the economy. Today, after reading the post and comments about The Grey Tsunami over at Down To Earth, I’d like to take that thought process one step further.

I’ve previously discussed how populations in industrialised nations are ageing. As an example, the number of people aged 65 or older in Australia will increase from 2.9 million to an estimated 7.4 million by 2049. The percentages are similar for most of the wealthy nations.

Additionally, mounting government debt poses a painful choice for developed countries; either a deep reordering of public expectations about everything from the retirement age to tax rates, or slower growth. In all likelyhood, it will be both.

Raising retirement age

The growth in the proportion of older people has major implications for the aged pension and for Federal and State budgets if taxation revenues were to shrink. If we were to ensure the proportion of five people of working age for every one retired was maintained, retirement ages would have to be lifted dramatically in the decades to come. There is no question that difficult decisions will be required.

To keep the economy moving in the face of a greying population, the Business Council of Australia (BCA) has recently called for the retirement age to be raised to 73 by 2049. I’ll be 72 in 2049, so this will very much affect the younger Gen X (1961-1981) and Millennials (1982-??).

The best way to deal with this issue ( from the government’s perspective),  is to raise the retirement age so you can’t begin drawing your old age pension till later …….preferably not before you die. This keeps you paying into the system longer without drawing any benefits.

Superannuation (401K) will not save us

It turns out Australians face a collective $695 billion “shortfall” between what they’ll have to retire and what they need. A professor at the National Centre for Social and Economic Modeling pointed out the following in an Age article:

  • The average super account balance for males aged 60 to 64 is $135,000.
  • For females it is $62,000.

But, apparently, the average isn’t terribly descriptive, because of a minority with very large Super balances. So, let’s check out the medians instead.

  • The median balance for men is $33,000
  • The median balance for women is a big fat 0.

So, half of women have no super. Please let that sink in. Here is the link to the article again. It’s still 0 when you read it a second time. Of course, this is misleading, as it includes those women well before retirement.

  • the median account for men aged 50-59 is $44,000
  • the median account for women aged 50-59 is $10,000

Retiring on $10,000 in the next few years isn’t an attractive proposition. But wait, there’s more. The professor reckons that “the old assumption that people would retire debt-free will not hold true for the next generation of retirees.” They have debt too. That means interest as well.

This is the reason that Governments of wealthy nations are worried. We can see this in Australia, where the Government is encouraging mass immigration and encouraging a new baby boom through the ‘baby bonus’.

The Solution?

So what happens if the government raises the retirement age to the point where it’s likely that you’ll die before you can retire? What happens if the purchasing power of your Superannuation (401K) is steadily eaten away by a sluggish economy and rising prices? Assuming you can keep a job, do you just keep working until you die?

Personally, I am not expecting to ever see a cent from the government for my retirement. I’m not even expecting to see any money from my Superannuation. After all, it relies on the economy growing steadily for the next 40 years and I have my doubts about that.

For me, the answer is to become as resilient and self-sufficient as possible. Realigning expectations to this reality, getting out of debt, reducing expenses, finding work that I love and will enjoy doing into my old age. These are all maxims of voluntary simplicity and I hope they will all serve well to deliver a dignified ‘semi-retirement’. The notion that we can all play lawns bowls and jetset around the world during our final years will not last much longer.

To end, I wanted to include some of the comments from the post, The Grey Tsunami over at Down To Earth as I think they amplify my thoughts on this topic.

What are your thoughts?

This is an important message. My husband and I are in our early 30’s, and we understand that here in the US, there will be no social security for us, and that the age of retirement for those who do receive a pension might well be 70. Simple living, with an emphasis on health in terms of meals and lifestyle are going to be the only comfort for us and others like us. ~ The Simple Poppy

This is one big reason why I am so glad I stepped forward into this life while I am young. This issue actually makes my DH angry, because he has believed for a long time that we will not get this money back. And here in Canada, it’s a lot of money. My goal is to have an entirely self-sufficient home, where we can live without electricity, gas, even plumbing if need be, and that it be modern and beautiful at the same time. My DH is making me a solar oven and a cob oven so that we will have two alternatives from the modern oven. Things in my home are getting slowly replaced- the essentials, so that if we don’t have money for them, we aren’t in the bind. We aren’t counting on a pension, we never were. We are preparing. I’m glad you raised this issue though- we need to all know we cannot rely on the government to take care of us, and take steps now. ~ The Girl in the Pink Dress

I’m 43, and hubby is 46. I was told by my financial planner not to count on any social security or state pension being available when it came time to retire. It was all up to me. So, we have a house with no mortgage, have no debts, and are saving, saving, saving and becoming self sufficient as much as possible. The government coffers are bare, and it is up to us to fill them ourselves if we don’t want to be working until we drop. ~ AM of the bread

The objectives of the welfare state were undoubtedly noble and humanitarian, but the results have been disastrous. As harsh as it may sound, I think it would have been better if entitlements like the aged pension had never been enacted in the first place. And I didn’t need the benefit of hindsight to help me arrive at this conclusion. Instead of incentivising self-reliance, hard work and financial responsibility, what we have now is a system which actively encourages dependency and tells us that becoming a ward of the state is something to which we should all aspire. Anyone listening to talk-radio in the lead-up to the recent federal election (in Australia) would have heard what this does to a person’s moral compass. Instead of expressing concern for the country as a whole and acknowledging that profligate spending is unsustainable and destabilising (see Greece), most callers were only interested in what was in it for them personally…and to hell with where this leaves their grandchildren and all future generations. Obviously the current system cannot be abolished overnight and the transition from welfare dependency to self-reliance needs to be fair and just, but the fabric of our society will be made all the stronger once the aged pension is all but eliminated (some kind of safety net will no doubt still be available). ~ Simone

Finding Freedom in Simple Living

I came across this interesting Peak Moment interview with an early 30-something couple. I found their story to be really interesting because their lives parallel ours in many ways. While the host of this show gets on my nerves somewhat this video is worth watching for some inspiration on how others are choosing to find their freedom in living simply.

A Young Couple Find Freedom in Simple Living

Rather than follow the customary American dream, Tammy and Logan sold their home and car, and moved to a bikeable/walkable neighborhood in Sacramento, California. After reading Derrick Jensen’s writings, this couple used Your Money or Your Life as a means to get out of debt and, they feel, regain their lives and their future. While they recount the psychological challenges of facing a future of declining resources, the catalyst that continues to move them forward is a dream of living in an affordable tiny house within a supportive community.

Links – Week 9, 2010

Photo by: Papalars

Blogs

This week I thought I’d feature a couple of blogs which are actually cooperatives. i.e. they are written by a community of different writers. Each writer brings their own point of view to the conversation and I’ve found some great new blogs in the process.

The Simple, Green, Frugal Co-op

A writers cooperative: Simple Living, Self Reliance, Organic Gardening, Sustainability and so much more.

The Green Phone Booth

Where ordinary women become eco-heroes

Economy

This article by Richard Heinberg is well worth reading. In fact, everything Richard writes is worth reading but this article is a turning point in his discourse. No longer is he just about warning the world of the Limits to Growth and the likely outcomes of Peak Oil. He now says we’ve already turned the corner and society as we know it is collapsing. It’s now time to focus on how we transition.

Life After Growth

In 2008 the U.S. economy tripped down a steep, rocky slope. Employment levels plummeted; so did purchases of autos and other consumer goods. Property values crashed; foreclosure and bankruptcy rates bled. For states, counties, cities, and towns; for manufacturers, retailers, and middle- and low-income families, the consequences were—and continue to be—catastrophic. Other nations were soon caught up in the undertow.The world has entered a new era. The project of awakening and warning policy makers and the general public was worthy of the investment of all the effort we could muster. In fact, it would have been negligent of the Limits to Growth authors, Colin Campbell, Jean Laherrère, and thousands of climate and environmental scientists and activists (myself included) not to give it our best shot. But it is now too late to avert a collapse of the existing system. The collapse has begun.

It is time for a different strategy.

By saying this, I am not suggesting that we should all simply give up and accept an inevitable, awful fate. Even though the collapse of the world’s financial and industrial systems has started, effort now at minimizing further dire consequences is essential. Collapse does not mean extinction. A new way of life will almost certainly emerge from the wreckage of the fossil-fueled growth era. It is up to those of us who have some understanding of what is happening, and why, to help design that new way of life so that it will be sustainable, equitable, and fulfilling for all concerned. We all need practical strategies and tools to weather the collapse and to build the foundation of whatever is to come after.

In late 2009 and early 2010, the economy showed some signs of renewed vigor. Understandably, everyone wants it to get “back to normal.” But here’s a disturbing thought: What if that is not possible? What if the goalposts have been moved, the rules rewritten, the game changed? What if the decades-long era of economic growth based on ever-increasing rates of resource extraction, manufacturing, and consumption is over, finished, and done? What if the economic conditions that all of us grew up expecting to continue practically forever were merely a blip on history’s timeline?

It’s an uncomfortable idea, but one that cannot be ignored: The “normal” late-20th century economy of seemingly endless growth actually emerged from an aberrant set of conditions that cannot be perpetuated.

That “normal” is gone. One way or another, a “new normal” will emerge to replace it. Can we build a different, more sustainable economy to replace the one now in tatters?-

Getting Out of Debt – And the Debt System

Indebtedness pushes us into a form of servitude, and in extreme cases, can leave us imprisoned. Consider, for example, current rates of interest, usurious compared to what savers earn on their savings in the same banks that charge that interest.

How do we convince people they definitely cannot afford to take out loans to buy things? More impact will be realized by targeting luxuries such as houses, cars, and appliances than small “goods.” The Obama administration recognizes this, and has therefore rewarded people for purchasing houses, cars, and — most recently – appliances, by giving them huge financial incentives (i.e., taxes on other Americans who might not even be tempted to play the “consumer” game).  All of this has operated to keep us indebted – and to serve the stock market at the expense of the people.

Loans are required for most people to purchase these “durable goods” (which are often no longer durable or good). Loans traditionally are seen as safety nets, but it has become clear as our incomes decline  and as we can no longer count on the myth of endless economic growth, that they really represent traps.  Never mind the psychological or ecological implications of consumerism — there exists no evidence suggests anybody has minded them so far — the focus here is on the trap into which each potential consumer falls by taking out a loan that require us to pay many times the value of what we receive. Most loans are a bad deal for the borrower, although credit cards represent the largest trap (even with the new rules).

The system needs you to keep borrowing. If you stop borrowing, then who knows what could happen.  What can you do to get out of debt, and to help others get out?

Environment

You CAN Shop For Happiness…But The Purchases Aren’t “Stuff”

You can’t buy happiness. Or can you? One new study shows that you actually can – but it doesn’t come in the form of things. It comes in the form of buying experiences. It’s not necessarily news – we already know that happier societies than the US exist, and they’re societies that put far less emphasis on owning stuff. The latest study by Thomas Gilovich, Cornell University professor of psychology and Travis J. Carter, Cornell Ph.D.  points a shining light on how dematerialization can, and does, make us happier people. We just need to shift where we spend our money (if we need to spend it at all…).

What Every Environmentalist Needs to Know About Capitalism

For those concerned with the fate of the earth, the time has come to face facts: not simply the dire reality of climate change but also the pressing need for social-system change. The failure to arrive at a world climate agreement in Copenhagen in December 2009 was not simply an abdication of world leadership, as is often suggested, but had deeper roots in the inability of the capitalist system to address the accelerating threat to life on the planet. Knowledge of the nature and limits of capitalism, and the means of transcending it, has therefore become a matter of survival. In the words of Fidel Castro in December 2009: “Until very recently, the discussion [on the future of world society] revolved around the kind of society we would have. Today, the discussion centers on whether human society will survive.”

Creating a New Future Worth Living

Yesterday at lunch I was talking to a friend who reads this blog. We were talking about hope and how he thinks I have none because of the gloomy things I write about. I told him that wasn’t true in the slightest. In fact, apart from the occasional slip into doom-mode I am usually a very happy person. Yes, I can see the predicament we are in and I choose not to stick my head in the sand, but that doesn’t mean I’m pessimistic and hold no hope for my future.

I’ll admit that when I first started learning about the confluence of the triple threats of Economic collapse, Energy depletion and Environmental devastation I was a little panicked. OK…I was a lot panicked. Most people who discover these issues will probably have a similar experience and more than likely will continue to cycle back to these feelings on occasion. However, everyone who confronts these issues has to work out for themselves how to stay motivated, while not panicking or agonising over the future.

We’ve all had expectations about what the future would hold for us, and have made plans based on what we thought we knew about the world. When we discover that we will likely be living a very different future it can be disconcerting to say the least. 

I’ve found the best way to deal with this is to transform my relationship to the future; to use this time as an opportunity to reassess my values and determine how I really want to be living my life.  While I have very little control over what the world will become in the next decade, I have a lot of control over the role I will play in it.  For this reason it’s important for me to create a new future worth living.

Sure, many of the roles I play in my current life will disappear. I’ll probably not be an aerospace engineer or frequent world traveller in the decades to come. However there are new roles which I will step into. I think about these often and while I have no concrete idea of what my life will look like in ten years time I can imagine some of the things I’ll be spending my time on. Perhaps I’ll be a mother, most likely I’ll be supporting aging parents, I hope I’m helping my community to prepare for energy descent.  I imagine I am living a simple, frugal life filled with nature, relationships and rich experiences.

I encourage you to start thinking about what future you think will be worth living.  Yes, you’ll have to let go of the future you thought was ahead of you, but designing a new future for you and your family can be an exciting exercise. Designing your own future rather than just letting it happen to you can be very empowering. I urge everyone to make the most of this opportunity.

Photo by: alicepopkorn

On getting out of Debt (I bought back my Freedom)

Two years ago I was in a lot of debt. I mean A LOT! We are talking seven figures here. I was ok with it because I considered it ‘good debt’ (i.e. it was all investment related). I earned a good wage, worked in a secure job, could comfortably make the repayments and my assets were consistently growing in value. I was also clueless about what debt really means.

I learned the hard way that debt is equivalent to slavery or at the very least forces you into indentured servitude. The minute that any of my lenders wanted the money back, I had to be prepared to give it. This happened to me a number of times in late 2008 as margin loans were called in because of falling stock prices. My lowest point was the day I received a margin call while on Christmas vacation in Mexico. Rushing around to arrange fund transfers internationally with limited communications was not the way I wanted to be spending the holidays. After a few months of sleepless nights I resolved to sell all my stocks, and I exchanged financial loss for some peace of mind. It was an expensive lesson, but at that point I had my eyes opened to the real world lurking beneath the veneer of modern life.

While shackled to my debt repayments I had no choice but to keep working, even if I hated my job. I had no freedom. I exchanged my time for money, and in the process I felt like my precious time was slipping away. I dearly wanted to work less and undertake some personal projects I was passionate about but instead I felt I needed to stick with a high paying job for the ‘security’ it afforded in making those loan repayments. In some ways I sold my soul for a salary.

Once I had my eyes opened to the true nature of money and debt, I made the decision to get out of debt entirely and do it as quickly as possible. I made some tough decisions about my assets and was fortunate enough to sell some Australian properties quickly for a reasonable price. I’m not sure how much bigger the Australian property bubble can inflate, so I felt quite comfortable with this decision. I’ve always been a saver, so tightening the budget wasn’t too difficult for me. Brendan and I stopped going out for coffee as often and we found lots of free things to do around town. In the process of simplifying our life, frugality was a natural outcome. Growing a vegetable garden, cooking at home and consuming less were not only good for our finances, they were also great steps to take towards a more sustainable and self-sufficient life. As my debt began reducing, the snowball effect started to kick in. With less debt came smaller interest payments and the whole process sped up.

As of today, I’m pleased to announce that I’m now debt free!

In less than 18 months, I’ve paid off seven figures worth of debt. I think I may have single-handedly killed the economy, but I’m OK with that.

It’s still hard for me to come to terms with it. This was a huge goal for me and proves once again that if you set your mind to something you can find ways to achieve that goal. I have bought back my freedom!

Now that I’m no longer shackled to loan repayments I can CHOOSE how I want to live. I can CHOOSE to leave my job and study basket weaving if I so desire. I can CHOOSE to work part-time. I can CHOOSE to move to the country and raise goats and chickens. I can CHOOSE to stay in my current job for as long as it remains fun. Whatever my dream, I am now FREE to pursue it.

I’d like to take this opportunity to thank all those personal finance and frugality bloggers out there who inspired me in the initial part of this journey. I’d also like to thank my husband and best friend, Brendan for all his support. We make a good team.

So what next? Well I guess I want to encourage people to make this one of their goals. There are so many good reasons to break away from debt slavery and I intend to dedicate some future posts to this issue as well as some personal finance related topics based on issues we might encounter in an uncertain future .

Read more from me:

Voluntary Simplicity, Frugality and why all this economic stuff is relevant

photo by: Strevo

Self sufficiency, independence and lifestyle planning

Today I wanted to talk a bit more about some topics I haven’t really touched on before but which I find myself thinking a lot about.

My Background

First, a little background. At the age of about 22 I decided that I did not want to be working for someone else for the rest of my life. I came to the realisation very early on that I hated being trapped in a routine that required me to go to a job every day of the week, and I certainly couldn’t imagine doing it for the next 43 years until I was old enough to officially ‘retire’. It felt like a slow death and I was determined to get out of that ‘rat race’ as soon as I could. It was about that time that I set my goal to retire at 40.

So at the tender age of 22 I started looking for ways to achieve financial independence within the next 18 years. At that time, the only way I knew how to get to that goal was to invest, and to take some risks in doing so. I had always been a saver and had no debt. At 23 I purchased my first home just before the property boom hit my town. I scrimped and saved, built enough equity in that property for the down payment on the next. I then renovated that second property, set it up as housing for students at the nearby university, built my equity and bought a third house. I repeated this process until at the age of 25, my partner and I had five houses, four of which we had cleaned up and rented to students. It was practically a second job to manage all this work, but the cash flow was good, enough that we could make all the mortgage payments easily; and because we had bought in an area just beginning to gentrify, the property prices doubled in short order.

At that time I had many people call me crazy. At my age I was supposed to be out partying and living life to the fullest, not being so sensible. I was laughed at when I told people I was going to be retired at 40. They either didn’t think it was possible, didn’t think the sacrifice was worth it or couldn’t imagine living life any other way than the prescribed path of running the rat-race until retirement.

Flash forward a few years; I was 30 and on my way to being financially independent. I had leveraged the houses and was heavily invested in the stock market. Everything was going to plan….until it wasn’t. After the crash of  ’08 a large portion of my stock holdings were wiped out. Suddenly my old plan wasn’t going to work anymore and I had to rethink everything.

The last 18 months has been a time of learning for me. I see the world in an entirely different way. My goal of independence is still as strong as ever, but the way I’m planning to achieve it has changed dramatically.

A New Plan for Self-Sufficiency and Independence

One of my biggest realisations over the last year is how reliant on the system we’ve all become. This clearly works during the good times, but when things go wrong we have no control over our own lives. This is how I felt after the crash. I was in a lot of debt, I had to find cash at short notice to cover margin calls, I was extremely stressed and couldn’t sleep. I never wanted to feel that out of control again. This is when I started looking into new ways to be more self-reliant, making improvements to my level of self-sufficiency and decreasing my dependence on the system.

I’m going to talk more about this in upcoming posts, but here are some of the important changes I’m making:

  1. I’ve started making sure I’m more prepared for emergencies, natural disasters and economic turmoil. I want to ensure that if I’m ever affected by one of these situations that I have made preparations as much as possible. There are plenty of easy things I’ve done to make myself more prepared while improving my life even if nothing adverse ever happens.
  2. I’m reducing debt as quickly as possible. Two years ago my debt to earnings ratio was about 10:1. I was holding huge amounts of debt which in good times allowed me to leverage larger returns on my investments. When things turned bad, my debt became financial cancer! Now I have a plan in place to be debt free within the year.
  3. I’m stockpiling more food than I need. Food is increasing in cost faster than just about any investment right now and certainly faster than the rate of inflation. When things are on sale, we simply stock up and we buy in bulk every six months or so. An additional benefit is that we never feel like we have to rush to the shop when we run out of food. There is always something on hand. I can’t see how you can lose by storing additional food that you use on a regular basis.
  4. I’m growing some of my own food. Growing food is for everyone, not just people who want organic fruit and vegetables. Our food system is not at all robust. The ‘Just in Time’ method of delivering food to the stores is extremely efficient, but also prone to disruptions if something occurs along the supply chain. Stores only hold about three days worth of food on their shelves, so you can imagine how quickly they would be stripped bare if there were a local emergency. Producing our own food (even as little as 10%)  reduces our dependence on the system. Gardening is also good for emotional and physical health and makes you popular when you bring fresh goodies to your friends.
  5. I’m undertaking some planning for disasters in the following order of priority – Personal-Local-Regional-State-National-Global. Despite the real possibility of a true economic melt down or catastrophic terrorist attack or some other major global disaster the most probable “disaster” for any individual is personal such as a loss of a job, loss of a family member, a fire or local weather event. I’m planning for those first.
  6. I’m reducing my dependence on energy.  Cheap Energy will not last forever and we are already seeing prices rise on the electricity bill and at the gas pump. Reducing our dependence on these systems is reasonably easy to do by being more efficient in our use of household electricity and minimising our use of the car. This year we are working towards producing more of our own energy, mostly related to Solar.
  7. I’m working on a plan to own some productive land. Being able to provide for ourselves in terms of our most basic needs is the true definition of wealth. Owning productive land and removing ourselves from the systems of dependence as much as possible is a dream we are working towards.
  8. We hedge against “disaster”. Pragmatic things like cash emergency funds, good insurance and secondary income streams are good ideas for everyone. These types of protection can make life a lot less miserable when something goes wrong.
  9. What I now understand is that I am in control of my life and that what I do matters. Our culture tells us that to be successful we have to be rich and beautiful. Somehow, most of us buy into this from a young age and until we challenge the concept and decide on our own path we will never be truly happy.

This last 18 months have been a wake up call for me and in redesigning my life I find myself more in control, more content, happy and stress-free. I’m designing the life I’ve always wanted, but it’s coming about in a way I never expected. Life’s funny like that.

Photo by: alicepopkorn

My first Crochet Project ~ Newborn Teeny Beanie

Crochet Newborn Baby Cap

I’m excited! This week I managed to learn a new skill and then actually produced something that resembles what it was supposed to look like.

Last Sunday I spent an hour with a friend who showed me the basics of crochet and then during the week I watched a bunch of instructional videos. I love how crochet seems to produce such a neat result (when compared to my knitting) and that when I drop a stitch it’s easy to pick it back up. I’m hooked (pardon the pun).

My first project used this Teeny Beanie Crochet Pattern and some yarn I collected from a friend and the thrift store. It’s going to be a gift for one of my friends who is due in a couple of months. I hope she’s not reading, because that will spoil the surprise!

Voluntary Simplicity, Frugality and why all this economic stuff is relevant

2945608377_1dc89ee3b5

Photo by: Stuck in Customs

Over the last couple of months I’ve written some lengthy posts on various economic issues such as how money is created, housing bubbles, the credit crisis and debt. I know some people yawn and switch off to talk of economics, so today I wanted to talk about why I find these economic issues fascinating and why they are so relevant to living a frugal and simple life.

For me, downshifting (or voluntary simplicity) means working towards living a simpler and more meaningful life by making conscious choices to leave materialism behind and move to more sustainable living. It does not mean simply cutting back and trying to live the same life with less money. Downshifting requires re-prioritisation, an adjustment in values and a totally different mindset.

While saving and frugality have always come easy to me, the impetus to really downshift came only in the last 18 months or so.  There were a couple of factors which triggered this shift in me, the first being a move from Australia to the USA. There is nothing quite like living in a foreign country to get you out of your comfort zone and really make you challenge the views you hold about the world.

The second prompt was to experience the downside of the global financial crises.  I had invested in the stock market since the age of 16, and at the time of the collapse I was very heavily invested. As with many people in a similar position, I watched my holdings evaporate before my eyes. I would lie awake at night and worry about when the next margin call might come and whether I would have the cash to pay for it. It was not a fun time. Eventually I sold everything and got out of the market completely. I sleep much better now.

What followed was a whole lot of soul-searching. I had grown up in a generation where the future seemed huge, where we had unlimited opportunities and where we believed that all we needed to do was put our money into investments and then wait a couple of decades for them to make us financially secure. The crash of ’08 was a shock to my generation. We had never been through a recession before and although we’d heard our parents talk of such things, to us it was not a real concept until it happened to us.

Even though the financial pain was very real to me, I’m not the type of person to live in regret or lament about my losses for too long. I wanted to understand how and why this had happened. So I started reading and the more I read the more I started to understand that the way we view the world (and money in particular), is fundamentally flawed. The reason I’ve been writing my World-Changing Wednesday articles is so that I can communicate some of these issues to others.

I now understand that money is not real wealth. Money, as we know it, is so easily controlled by a few powerful people. Once this is understood, it seems crazy to spend so much of our life energy in the pursuit of it. Due to the nature of our economic system, growth must be maintained at all costs. In a world of finite resources and delicate ecosystems, this perpetual growth is destroying lives, both human and animal. Understanding the economy is the first step to understanding where the system needs to change if we are to start living lives that are truly prosperous.

Fresh air, clean water, abundant and nutritious food…..that is real wealth. Having family and friends you can rely on in times of need…. is real wealth. Working at something you love, which enriches your life and is useful to the world in which we live…. is real wealth.

Personally I’m very grateful for the wakeup call.

Easy ways to save money while living more sustainably

 2231651472_61f4115606

Photo by: Orcoo

Shifting to a more sustainable lifestyle is a process. It’s not like you wake up one morning and can make a massive reduction in your impact on this planet. We’d like to think we can, but in reality it takes time to change our habits. Trying to change everything at once can also feel like a shock, it’s not much fun and often we’ll revert to our previous way of living pretty quickly. 

Living sustainably needn’t be a drag. There are some really simple things we can all do which will also save you money, something we can all appreciate in these tough economic times. Today I’ve decided to provide a list of some of the first things we started implementing on our road to a simpler, more sustainable life. All of these changes have been really easy to implement and although they are great for the planet, they are also nice on the hip pocket.

  1. We replaced our light bulbs with compact fluorescent light (CFL) bulbs. They might cost more to purchase but they last for years and save money on your electricity bill. To be honest, they weren’t even that expensive to buy. We got a bulk pack from Costco and replaced the high-use bulbs in our house first. As the rest of our regular bulbs need replacing, we swapped in more CFLs.
  2. We walk to the grocery store and carry home our shopping in reusable canvas bags. It’s great for the environment and even better for our biceps. It takes a little strategic packing, but we have the clerks at the grocery store well trained now. We make a point of refusing all plastic bags and it’s been interesting to watch people’s reactions to our explanations. I must say, recently we’ve been getting less strange looks. Perhaps it’s catching on. 
  3. We buy less stuff. I have a real problem with buying more new things which just adds to to the amount of waste produced. We try to buy everything second-hand, but in many cases we just don’t buy anything. We’ve got a fantastic thrift shop nearby, but you could also try craigslist.org and freecycle.org. 
  4. I use the local library. I love to read. I inhale books and of course I have the bookshelves to prove it. These days I can find most of the books I want in the local library. I also use Paperbackswap to trade books I’ve finished with. So far I’ve found new, loving homes for about ten books I no longer needed and I have credits I can use for any other books I might want.
  5. We repair. Actually, Brendan repairs and I congratulate him on what an amazing job he’s done. He’s extremely resourceful and has saved many an item from the scrap heap. Most recently he’s given a second life to a beloved pair of shoes I’ve had for about 10 years. Not only has this saved us quite a substantial amount of money, but I get to keep using items I love and we save them from becoming landfill.
  6. We minimise our heating. On cold nights we put more clothes on and/or use a throw rug. We open all the blinds that allow sunlight in during the day and then closed everything up mid afternoon as the sun drops low. 
  7. We regularly give the car a checkup. Actually Brendan maintains the car and I congratulate him for having so many useful skills. Having dirty oil or a dirty air filter actually costs you more to run the car. A quick tune-up will see your car run more efficiently and it will emit less pollution. 
  8. We turn off the tap (faucet). It’s such an easy one. We don’t need to keep water running while cleaning our teeth or peeling potatoes. We water our very minimal lawn as little as possible and we wash the car at a car wash that recycles their water. When we lived in Australia we would always be on water restrictions. It was a normal part of life in a dry country. Now we live in California, another very dry place and we are horrified at the amount of water that is wasted. 
  9. Switch to low flow shower heads and low-flow aerators to further cut down on water use. We actually got them for free from the center for sustainable energy here in San Diego. Check with your local water company to see if they offer something similar.
  10. We utilise reusable water bottles and mugs. There is no need for a new plastic water bottle every time I want a drink. I just refill my BPA-free bottle with filtered tap water. I also carry my travel mug with me on trips to the coffee cart. My barista appreciates that I bring my own and do my bit to reduce the horrendous amounts of paper and plastic cups making their way into landfill. 
  11. We buy local and seasonal food. We eat all the fruit off our orange and apple trees. We frequent our local farmers market and do our best to identify local produce in our grocery store. Earlier this year we started a small vegetable garden in our courtyard.
  12. We eat less meat. Meat production has very large environmental impacts. Simply by replacing some of our weekly meals with meat-free dishes we reduce our impact and save a bundle at the grocery store. Lentils and beans are very inexpensive and you’d be amazed at the tasty recipes we’ve discovered on the internet.
  13. We watch less TV. When we moved to the USA from Australia we saw no point in getting cable. Personally I think cable is a lot of money to fork out every month and if I had it I’d probably feel like I needed to sit in front of it all the time to justify the expense. If there is something we really want to see, we can usually find it for free on the internet or we can get it on Netflix.

There are plenty of other simple, cost-effective things we could all be doing. What are you doing to save money while living more sustainably??