Today I'm going to write about Electricity bills, how to understand them, and how to get the most out of them.
First of all, I'll try and explain the units. A Kilowatt is a unit of Power, and is a measure of how much energy a device uses, however, Power is Energy divided by Time (P=E/T). The energy usage of a device is often given as, say 6Kilowatts, but in order to see how much energy this will actually use, and therefore how much money it pulls out your wallet, you need to think about how long the device will run for.
It's like thinking about a car. You can't ask the question, "If a car travels at 60 miles per hour, how far does it travel?". You need more info than this, specifically, you need to know the time that the car travels for, at 60 miles per hour. If it's 2 hours, then it travels 120 miles, 3 hours it's 180 etc. This seems obvious, because it's stated in the units, miles per hour.
Watts and Kilowatts are the same, though it's not stated in the unit. A Watt is Energy (measured in Joules) divided by Time. So, when a device states that it's energy usage is 6 kilowatts, this means that it uses 6000 Joules per hour.
Multiplying the Kilowatt usage of a device by the time it's run for gives you a new unit, the Kilowatt Hour. This is a measure of how much energy a device has actually used while it's been running.
Your electricity bill is probably in Units, but these are actually the same as Kilowatts Hours. Therefore, it's easy to see how much each Kilowatt Hour is costing you, so you need to bear in mind when buying a new appliance, how long it will run for.
For instance a kettle might have a Power rating of 2kw. But you only use it 3 times a day, for 5 minutes each time. Therefore, it runs for 15 minutes per day, or quarter of an hour. So, to work out how much energy it uses, you need to multiply it's power rating by the time, so the kettle uses: 2Kw X 0.25 hours = 0.5 Kilowatt Hours each day.
A fridge, on the other hand, might have a rating of 1Kw, so you think it uses less energy than the kettle. You race out to buy an eco kettle, that saves loads of energy, and enjoy your cup of tea smug in the knowledge that you've saved the planet.
However, the fridge runs 24 hours a day, so 1Kw X 24 = 24Kilowatt Hours. The fridge uses up much more electricity each day than the kettle does. If you'd spent the money on a fridge that uses less power, then you can make a much more dramatic cut in your energy usage and your electricity bill.
More on making cuts, and saving money in the next blog.
Saturday 25 April 2009
Friday 24 October 2008
Ok, don't stop spending, invest in yourself, not stocks.
Lets look at the numbers on the cycling example in my last post. Say your bike costs £100. This is probably pretty reasonable for a commuting bike, and say it lasts 2 years. Over that 24 months, your bus pass would have cost you £40 a month, coming to a total of £960. You've therefore saved £860. If we look at the cost of a bike as an investment, you've turned £100 into £860, equivalent to a growth rate of more than 800% over 2 years. What investment opportunity can give you a return like that? And those figures assume that your bus pass stays the same price, over 2 years, which is pretty unlikely.
Even better, the government run a Bike-to-Work scheme, which many businesses support. This is where the company you work for buys a bike, and you pay them back for it out of your monthly pay. The key is that the take the deduction for the bike out of your wages before you pay tax and national insurance. This means that when they take £80 from you, the actual cash in your hand pay is only reduced by £50. Over the course of the year that you pay off the bike, this can mean that you get £1000 worth of bike for £500 or so. Bargain!!! If your business doesn't operate this scheme, it's dead easy to set up. Try these links for more info.
Wiggle
Cyclescheme
The key to adopting a happier, healthier lifestyle is to make small changes like this. As you save more and more money, you'll find that you need to work less and less, leaving you free to spend time with your family, or do whatever you please! Pretty soon you'll be healthier and wealthier.
Even better, the government run a Bike-to-Work scheme, which many businesses support. This is where the company you work for buys a bike, and you pay them back for it out of your monthly pay. The key is that the take the deduction for the bike out of your wages before you pay tax and national insurance. This means that when they take £80 from you, the actual cash in your hand pay is only reduced by £50. Over the course of the year that you pay off the bike, this can mean that you get £1000 worth of bike for £500 or so. Bargain!!! If your business doesn't operate this scheme, it's dead easy to set up. Try these links for more info.
Wiggle
Cyclescheme
The key to adopting a happier, healthier lifestyle is to make small changes like this. As you save more and more money, you'll find that you need to work less and less, leaving you free to spend time with your family, or do whatever you please! Pretty soon you'll be healthier and wealthier.
Stop Spending
In my last post I suggested that stopping buying things was pretty simple. I realise that it is actually far from simple. It does take effort, but you will reap the rewards.
Why do you go to work? Do you love it? If you won the lottery would you continue to work? I've asked a few of my friends this question, and the answer is always no. No-one would work if they didn't have to. So why do you have to? Money. We all work because we get paid to do it. What do we need money for? To buy stuff that makes our lives better. Or so we've always been told. the truth is though, that happiness does not correspond to increased wealth or belongings. Several studies have highlighted this, have a read of this article to see what I mean.
So, you work for money to pay for stuff. What if you didn't need stuff? Then you wouldn't have to work right? Pretty much. If your outgoings are small, then you don't need much money coming in to fund yourself. Obviously your outgoings will never be zero. You will always have to buy food, and clothes, I'd say it was impossible, or at least extremely difficult, to be entirely self sufficient. That would involve going back to living in caves, and as I've said before, that's not what this blog is about.
Consider your outgoings. Gym membership? When was the last time you went? What did you do? Run on the treadmill? There's miles and miles of empty pavement out there for running on, and it won't cost you a penny. Like to read books? Don't buy them, join the local library. You'll have access to every book you could ever want, at a cost of zero pounds. Like clothes shopping? Try going to charity shops, you'll be amazed at what you can buy for £3. Travel pass? Get a bike. You'll get there quicker, your fitness levels will soar, and once you've bought the bike, it won't cost you anything ever again.
Cycling is a perfect example of the aim of this blog. Lean and Green lifestyle change isn't about never spending any money, it's about spending money in a way that means you have to spend less money in the future. Buy a bike today for £100, and stop paying for your bus pass at £50 a month. Within 2 months you've saved money, and then you have free transport for ever more (well the next couple of years anyway, until parts start to wear down!). And lo and behold, whilst saving money and your health, you've actually become more environmentally friendly!
I'll be posting more in the future about how you can incorporate this idea into every aspect of your life.
Why do you go to work? Do you love it? If you won the lottery would you continue to work? I've asked a few of my friends this question, and the answer is always no. No-one would work if they didn't have to. So why do you have to? Money. We all work because we get paid to do it. What do we need money for? To buy stuff that makes our lives better. Or so we've always been told. the truth is though, that happiness does not correspond to increased wealth or belongings. Several studies have highlighted this, have a read of this article to see what I mean.
So, you work for money to pay for stuff. What if you didn't need stuff? Then you wouldn't have to work right? Pretty much. If your outgoings are small, then you don't need much money coming in to fund yourself. Obviously your outgoings will never be zero. You will always have to buy food, and clothes, I'd say it was impossible, or at least extremely difficult, to be entirely self sufficient. That would involve going back to living in caves, and as I've said before, that's not what this blog is about.
Consider your outgoings. Gym membership? When was the last time you went? What did you do? Run on the treadmill? There's miles and miles of empty pavement out there for running on, and it won't cost you a penny. Like to read books? Don't buy them, join the local library. You'll have access to every book you could ever want, at a cost of zero pounds. Like clothes shopping? Try going to charity shops, you'll be amazed at what you can buy for £3. Travel pass? Get a bike. You'll get there quicker, your fitness levels will soar, and once you've bought the bike, it won't cost you anything ever again.
Cycling is a perfect example of the aim of this blog. Lean and Green lifestyle change isn't about never spending any money, it's about spending money in a way that means you have to spend less money in the future. Buy a bike today for £100, and stop paying for your bus pass at £50 a month. Within 2 months you've saved money, and then you have free transport for ever more (well the next couple of years anyway, until parts start to wear down!). And lo and behold, whilst saving money and your health, you've actually become more environmentally friendly!
I'll be posting more in the future about how you can incorporate this idea into every aspect of your life.
Beat the Credit Crunch
This is probably the most important part of adopting a new lifestyle, and may prove to be the toughest for most people. Consider the economy, which we are told is in ruins, and the end of civilisation is nigh. What is the economy, and what does it actually mean to us? I'm no economist, and this is way out of my field really, but I'm trying to make sense of it all. As far as I can see, economic growth is fuelled by consumer spending. As people spend more money, more shops can open up to sell them stuff, and therfore more people have jobs, and then more people have money to spend etc. I think this is the basis of economic growth, which we are told is vital to our everyday living.
There are clearly problems with economic growth though. Money cannot appear out of thin air, regardless of what the mathemagicians in The City tell us. Take oil for exapmle. The cost of oil has steadily risen over the last few years. This is not because it's running out, nor is it because of a surge in demand from developing countries. Oil prices have risen because stock traders are buying up, say, 10,000 barrels at a low price, and then holding onto them. This oil can't then be used, so there is less oil available, and the price rises. Then when the price gets higher, the traders sell their oil, and make a profit. Money from thin air! No, actually. The rise in price means that your energy bills are higher, and the price you pay at the pump is higher. Bankers haven't made money from thin air, they've made money by taking it out of your pocket. Now everyone is selling stocks, and low and behold the price of oil is dropping. This isn't because India has stopped using electricity, it's because the market is now flooded with oil that was being held in the hope that the price would rise.
Has economic growth benefitted you then? If it means everything is more expensive than it used to be? As the price of commodities rises, inevitably there will come an equilibrium point where people stop spending money. We have now reached that point, and the news today shows an economic decline, rather than growth. It seems, then, there is no escaping a boom and bust economy, for every boom there must be a bust. It is folly to suggest other wise.
A further example of the folly of economic growth is pretty obvious if you stop and think about it. Growth involves increased usage of resources. Yet we live on a ball surrounded by vacuum. There are a finite number of resources on the ball. It is glaringly obvious that we cannot continue to use more and more resources indefinitely, if the resources are not replenished. Currently there are no plans to harvest asteroids, or the moon, so we're stuck here. We must therefore limit the amount we consume, and recycle as much as possible. This has nothing to do with whether you believe in global warming or not, it is a simple fact that we have a finite amount of resources available, so it is not possible to have infinite growth.
How do you escape it then, as a person on the street? Pretty easy really, but it takes will power and determination. Just stop buying things. Let others worry about economic growth, it's for chumps anyway.
There are clearly problems with economic growth though. Money cannot appear out of thin air, regardless of what the mathemagicians in The City tell us. Take oil for exapmle. The cost of oil has steadily risen over the last few years. This is not because it's running out, nor is it because of a surge in demand from developing countries. Oil prices have risen because stock traders are buying up, say, 10,000 barrels at a low price, and then holding onto them. This oil can't then be used, so there is less oil available, and the price rises. Then when the price gets higher, the traders sell their oil, and make a profit. Money from thin air! No, actually. The rise in price means that your energy bills are higher, and the price you pay at the pump is higher. Bankers haven't made money from thin air, they've made money by taking it out of your pocket. Now everyone is selling stocks, and low and behold the price of oil is dropping. This isn't because India has stopped using electricity, it's because the market is now flooded with oil that was being held in the hope that the price would rise.
Has economic growth benefitted you then? If it means everything is more expensive than it used to be? As the price of commodities rises, inevitably there will come an equilibrium point where people stop spending money. We have now reached that point, and the news today shows an economic decline, rather than growth. It seems, then, there is no escaping a boom and bust economy, for every boom there must be a bust. It is folly to suggest other wise.
A further example of the folly of economic growth is pretty obvious if you stop and think about it. Growth involves increased usage of resources. Yet we live on a ball surrounded by vacuum. There are a finite number of resources on the ball. It is glaringly obvious that we cannot continue to use more and more resources indefinitely, if the resources are not replenished. Currently there are no plans to harvest asteroids, or the moon, so we're stuck here. We must therefore limit the amount we consume, and recycle as much as possible. This has nothing to do with whether you believe in global warming or not, it is a simple fact that we have a finite amount of resources available, so it is not possible to have infinite growth.
How do you escape it then, as a person on the street? Pretty easy really, but it takes will power and determination. Just stop buying things. Let others worry about economic growth, it's for chumps anyway.
Opening gambit
This blog is about achieving sustainable living, whilst driving down your costs, and beating the credit crunch. It's also about how to achieve a higher quality of life, one where work features minimally, and leisure time is the goal.
I should say at the start that this blog is not about becoming rich. My objectives, in the way I run my day to day life are to have as much leisure time as possible (ie, spend as little time at work as possible!). Now, conventional thinking would imply that you need to have lots of money in order to increase your leisure time, and therefore you need a well paid, high pressure job. My aim here is to show that is not the case at all. Coincidentally, making the changes that lead you to this life will actually make you much greener, rubishing the idea that being green means reverting back to living in caves.
Equally, I am not aiming to cut work out of my life alltogether, just to make it a sideline that's an occasional hinderance to doing whatever I want the rest of the time.
I should say at the start that this blog is not about becoming rich. My objectives, in the way I run my day to day life are to have as much leisure time as possible (ie, spend as little time at work as possible!). Now, conventional thinking would imply that you need to have lots of money in order to increase your leisure time, and therefore you need a well paid, high pressure job. My aim here is to show that is not the case at all. Coincidentally, making the changes that lead you to this life will actually make you much greener, rubishing the idea that being green means reverting back to living in caves.
Equally, I am not aiming to cut work out of my life alltogether, just to make it a sideline that's an occasional hinderance to doing whatever I want the rest of the time.
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