23 January 2011

Being impecunious-Part I: Living in Central London for <£850/month

Ever since I have moved out of residential housing, I've averaged about £830 in monthly expenditures. It amazes me that I can live in Central London for this little, and I don't necessarily recommend living the way I do, b/c I rarely go out. . . but that said, it's doable.

What's even crazier is that 3 of my busiest months as a student, I was able to live for under £500 a month--from April till June. Part of this is because of the weird way the residence hall charged our rent--so for the spring term (April, May, June), rent was £300/month. Those were the three months that I (well, our entire class) spent about 15 hours in the library, 7 days a week. It turns out that if you do nothing but spend time at the library, save the occasional food break, you can live on very little.

Sadly, life hasn't changed much since then. I still spend the bulk of my time at the library. . .. Perhaps this is why I can live on so little.

Another reason I can do this is my cheap rent. Rent is slightly over half of my monthly expenses--it is a steal for this area at the all-inclusive price of £450. In this area, rent normally costs £600-£800. The price I have to pay is zero freedom, which, to be honest, isn't worth the rent savings, but given that I'm not gainfully employed, I'm not in much of a position to be choosy. Well, it is letting me stretch out my last bit of savings, for which I am thankful.

Now, there are many things I don't buy or do in order to live for this little, but I certainly don't feel like I'm destitute (yet) or that I'm depriving myself too much. For example, today, I bought snob olive oil. What is snob olive oil, you ask? Uber-expensive olive oil that tastes so good, it is worth every penny. This bottle will keep me happy for at least a few months, so stuff like this is well-worth splurging for. So are the occasional £1.50-per unit Pierre Hermes macarons. I realize, there are many entire boxes of cookies that can be bought for £1.50 that are actually quite good. Ginger snaps, speculoos, chocolate-covered digestives, to name a few, but every once in a blue moon, it's really worth spending £1.50 to buy the Pierre Hermes macaron. All of you should do this before you die. Mind you, I've only done it once since I've arrived here. But they are seriously orgasmically good. However, to be able to buy that £1.50 macaron every once in a while, and still spend less than £850/month, I have a few self-imposed rules or budget restrictions.

1. Buying the FT at the school co-op-Some people have a discretionary coffee fund. I have a discretionary FT-at-school fund. At school, the FT costs a mere 25p. I don't buy it every day, but I buy it on average, 2-3 times per week. I mean, how can you not at this price point? At an 87.5 percent discount? Also, in my case, I need to be reading it regularly, for job interviews. So I spend an average of say, 65p/week on FT purchases.

2. Not paying service fees. There are several things that even as a working adult, I absolutely, positively hate paying. One of them is exorbitant (relative to the price of the ticket) service fees. The other is parking, when there is free street parking. If I am paying $40 for a ticket, I will grudgingly pay $2 or $2.50 as a service fee. That is reasonable. But anything above 10 percent is ridiculous. I flat-out refuse to pay it. So I never buy movie tickets online. There is no way it should cost $1.50 worth of services to issue a movie ticket. I know $1.50 is peanuts, but it raises the price of a ticket from "very high but worth it for some movies" (say, 9.50) to "No. Freaking. Way." ($11) Maybe some day, I will earn so much I won't care, but right now, I care. A lot. So for example, I went ice-skating. It was £10.50 for the ticket, and then another £1.30 to buy it online. It failed the under-10-percent rule, so I risked having the session sold out rather than pay the service fee. Again, I know that £1.30 is not much. But to someone who is unemployed, £10.50 (roughly $16!) is already a big chunk of my monthly "entertainment" fund.

3. Avoiding pubs. I actually don't care for beer, so I don't spend much at pubs. When I do go, I usually get sparkling water. Beer and most alcohol are ridiculously expensive here. At some places, it is £5. Again, since my savings are in dollars, I'm still thinking in dollars after a year and a half of being here--but that's $7.50--for a beer that I'm very lukewarm about. So, I very rarely drink in pubs. This probably saves me a lot of money.

3a. Not buying beverages in general. My only exception to this is sparkling water. Over the past year, I've really taken a liking to this stuff. It probably started out as wanting something less pedestrian than plain old water at a pub. Anyway, this is the one drink that I will actually order--again, never at a restaurant, b/c the markup price is ridiculous--but the student center only charges 70p for a one-litre bottle, so I occasionally get that, or at a pub as per above. However, in general, I find that at restaurants and pubs, the price of drinks, relative to food is really high. I don't like beer or even wine enough to pay an extra 5 quid. Marginal utility never equals marginal cost. I'd much rather spend that 5 pounds on food or several PH macarons. If I forego that glass of wine twice, that is the cost of a meal. I also rarely buy teas or coffees. I rarely did this when I lived in the U.S., but now, given the relatively higher price of beverages, I buy them even less-frequently. There are actually times that I've wanted a Starbucks drink--and walk in there with the intention of buying a latte or whatever--and then walk out after deciding that rather than spend the equivalent of $4 on a chai latte, I'll forego this feeling twice, and buy myself dinner instead. So I guess I'm not a beverage-buying kind of person. Water from a tap is completely free.

4. Don't use the tube--ever. Ok, I use it for interviews, if the interview is far enough, or to get to Heathrow, since that is like in zone 6, but since I live in zone 1, one way to immediately cut costs is to never use the tube. I have used it a few times to go see friends, but most of my friends live near LSE or we always meet close to LSE, and the few out-of-town people I meet up with, I usually ask them to meet me half way somewhere that is walk- or bus-able. I used to live in zone 3 and 4, where I had no choice but to use the tube to get to school. A weekly tube/transport pass costs about £27, so in a given month, you are spending a little over £100 on transport costs. I now walk or take the bus everywhere, when I can.

5. Better yet, walk everywhere. Now that it has gotten considerably warmer, I have been making a conscious effort to walk more. London is a wonderful walking city, and is relatively safe to walk around at night, so this definitely helps. Also, since I'm paying the zone 1 premium, the price for this should be to walk more. I also enjoy walking a lot, so I don't find this particularly hard to do.

6. Don't call people; text them instead. And don't pay for a monthly plan. I use my phone for 4 things. 1. Text people, 2. Make only domestic calls that are job-related. 3. Call internationally. 4. Receive calls. Compared to the US, my monthly cellphone expenditures are much much lower here. One reason is that I don't have a monthly plan. In the US, I paid $40/month for a plan I barely used. I had something like 400 minutes and free weekends--and I rarely used my cellphone. Reception was crappy. I don't like committing to 2yr plans, so I never upgraded my phone, so technology was shit. Here, I pay an average of £7/month for 2 phones/plans. Why do I have 2 phones? I got one as a bequest, and I've now optimized my calling system. Plan A charges me a flat rate of 10p to send a text or talk for 1 minute. So I use this one to make outgoing calls. Plan B gives me 600 free texts if I top up every 3 months--but calls cost 26p/min for domestic, but only 3p/min to call the U.S. It doesn't make any economic sense to pay 26p for calls, when I only have to pay 3p to call abroad, so the result of this is that I make a lot of international calls, and text everyone who lives locally.

Actually, people in general don't seem to talk on the phone much the way we do in the US. We "miss call" each other a lot, for example, if we are meeting up, but other than the people who have plans that give them unlimited minutes, others are usually very mindful of other people's top-up minutes/limits. If I need to talk at length to someone, we either use alternative media, or the person with the unlimited plan usually calls everyone else back. I never texted back in the US, but here, they are a lifesaver.

7. Hang out with students or like-minded people. I really like hanging out with other poor students who are also living on a tight budget, b/c they are on the same page about things like this. They never scoff at you if you take a dinner break at the library, and you bring your own lunch and dinner from home. And today, when I texted one of my friends to see if they want to take a food break, he texted back and told me that actually, he was going to eat from home to save money. I religiously try to bring packed lunches (and dinners) as much as I can--probably more so than most of my other classmates. But whenever we went somewhere to take a food break, people always accommodated those of us who brought food from home. Either we ate at places where they allowed outside food in, or they would buy the food and bring it back. It's definitely possible to eat cheaply at school, but even then, the people who bought every meal spent an average of £11/day. I don't know how much I spent per day, but I know I spent considerably less.

Also, since we are all living with tight finances, when we do go out, people are good about picking reasonably priced restaurants. And if you tell people, "Nah, I'll pass today, b/c I've already eaten out this week", people understand. They don't give you a hard time about it.

7a. And not just any students, but mostly school-of-despotic-regime-studies students. I have nothing against hanging out with other students, but let me point out the differences between SDRS students and students from Rich-MBA-School. First, the topic of buying a plane for 6.7 million dollars--and mentioned in the first person, as in I bought said plane for blah-million-dollars--never ever comes up among SDRS students. We talk about how we worked 3 jobs to save up for our program. I can talk for hours with these people.

Second, I had the chance to go ice-skating with RMBAS students, and they have quite a different budget, in terms of an evening of entertainment. Now, with SDRS students, we were all on a budget, so we typically did one activity per evening whenever we got together. Except graduation and end-of-term, when we felt justified in splurging a bit. But even then--even then, someone printed out a 30% off voucher. Not that I am a student anymore, but I am also still not working and living on the last scraps of savings, so if I go ice-skating, I can't also go to dinner. SDRS students understand that, without my having to explain this. But when I went with RMBAS students and tried to make an excuse for not joining them for dinner, the slightly-pressure-wielding guy was like, "come on--you can study tomorrow." I know that he was just trying to be friendly, but with SDRS students, there is never this sort of annoying pressure that irks me b/c they understand. This guy is getting paid a salary to attend RMBAS, so he doesn't understand such things and ends up being slightly inconsiderate. I suppose I could've said something about my financial situation, but I don't really want to have to spell this out to people every time, you know? Especially, since we spent the past half-hour talking about my wanting to find a job and earn income. This is where I feel like Asian so-called "passive aggressiveness" (I call it being tuned in to people's needs without having everything SPELLED OUT, but many "let's be explicit and spell out every feeling we have" white people probably think anything that is not direct is just passive aggressive. . . in their culturally intolerant way. But you know what? Passive aggressiveness is sometimes really useful for reading between the lines, so we don't have to spell everything out for you.) Anyway, I did want to hang out with them a bit more, so I did end up going to a pub with them and joining them for a little bit. But again, RMBAS students: ice-skating+pre-prandial drinks at pub+dinner. SDRS students: ice skating OR dinner.

8. One fun per week. This one is not a strict rule, but like I said above, I generally allow myself one source of paid fun per week. Most of the times, that is dinner with friends. And to be honest, most of the people who have enough time to meet regularly are also students or not earning much, so we are all on similar money-saving mode, so it actually ends up being even less frequent. There are some months, like graduation month, I've spent over £100, but these days, I've been keeping extraneous expenses (eating out, getting that occasional tea, ice-skating) to £40-£50/month. It turns out there are lots of fun things one can do in London for free.

There are the other standard things, like packing lunches and snacks to bring with you. I also don't currently have as much access to a kitchen as I'd like (one of the prices I pay for this cheap rent), so it also means I'm living on stuff like hummus and pita and cereal and yogurt and the occasional vegetable thrown in. Actually, I have salad and fruit daily. But I also never buy processed food. I'd like to, sometimes, but not for £5-£6. For that price, I can make my own moussaka or whatever.

So, I'm not in dire straits, and I'm getting by and still getting to eat my fancy chocolate bars (none of that Hersheys or Cadbury shit), but an income soon would be nice. Not just nice, but I really. Need. To. Earn. Money. Soon.


infertility and us said...

its amazing you are very cool... hats off for accepting the situation as it is

Anirban Daripa said...

Hi, I felt very happy after reading your post. Actually, me and some of my friends are in a kind of same situation - financial crisis, though we are not student, we are software professional!! We also always think to save money anyway.
Nice post. Keep it up. All the Best Anzu... :-)

anzu said...

Thanks. I am actually not a student, either--just in between working and being a student. . ..

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Sator Arepo said...


What happened to you? Are you alive?

anzu said...

Long time no talk. Apologies--I'm studying (again) so haven't had time to respond to your comment.
I've had too much going on so haven't really blogged lately, but I'm alive--thanks for asking! Hope you're well?