A new era of frugality

For several years now, my family has been practising frugal living ever since we had our first child and began to rely on just my income to support our small family.

Internet income has helped to ease the tight spots, and specifically has enabled us to take the occasional holiday. It is not just holidays that have been sacrificed over the years, we don't eat out much or go to entertainment events like we used to when we had two incomes swelling the coffers.

I believe that what we have done is quite impressive, but maintaining the frugality is difficult as every so often, the frustration breaks out and money gets spent which is not easily covered by our reduced income. Maintaining living standards becomes increasingly difficult when wages are static, yet prices of household essentials are rising. Welcome relief arrived in the form of interest rates cuts which has meant significant spare income - however, I have taken the step of using this excess to overpay our mortgage. The reason I have done this is that eventually I know the interest rates will return to 'normal', and if we were to get used to spending this extra income, it would be painfully difficult, if not impossible to cut back when the rates begin to rise.

During the financial 'crisis', we have overpaid our mortgage to the tune of £3000 so far, this not only relieves the pressure of having an endowment mortgage, by reducing the principal rather than just paying the interest, the already low interest is falling even further.

The challenge for 2011 will be to maintain frugal living by minimising waste and maximising value whilst still trying to have as normal a family life as possible. Not everything we do is governed by tight purse strings, but lack of available funds certainly has an impact on much of our lives. Nevertheless, we believe that by living within our means now, we have a better future in store.