Woodpeckers Family and Financial Balance 2013

Winter time - time to do the budget!

Winter time – time to do the budget!

Cheers guys, and welcome once more in 2014!

I have been bloody busy at the job the last weeks, working every day until 5 or later, thus a bit of delay for the 2013 family balance.

This kind of several weeks hard office work is not really Woodpecker’s cup of tea (I’d prefer some weeks of hard frugal travelling instead), but then, better work hard in winter time and then have a good piece of time off in the summer on all the accumulated over-hours.

So…here is the family and financial balance 2013:

Work time was ok

2013 was a good year, though a bit less good than 2012, due to much too less time off (no 5 months of parental leave as last year, but only 56 days of ordinary holidays).

Time worked was up for Mrs. Woodpecker (40% job now, instead of 0% 2012) and up for Mr. Woodpecker (about 10 weeks off instead of 22 weeks in 2012).

This trend has to stop! And plans to do so are in the press aleady…keep you posted.

Work stress level was quite ok, around summer I made the mistake to think about promotion , which immediately brought the typical rat-race unrest into my mental state, but this fortunately slowed down when I managed to reduce work again to what it is:
Work. A means to bring in money. Quite often it can be fun too, but typically it is the more fun the less dependent you feel from it.

From a financial point of view, 2013 was excellent:

As you may have noticed, stock markets entered quite a run in 2013, obviously affecting Woodpeckers stock-biased portfolio in a healthy way.
In fact, the Woodpecker clan’s investment stash increased by almost 25%. Good!

Income from salaries obviously was up too, by about 20%. Income per week of work thus went down considerably – this is the problem with earning more in a progressive tax environment…

Savings rate from work income was a very satisfying 35%, again adding to the family stash. This figure now is more than high enough to walk the middle-way so we can well relax a bit on spending control and saving going forward.

Total family spending was a surprise

We upped our budget levels quite a bit beginning of last year, to compensate for more work with a few more meals out, an occasional baby-sitter, nice holidays (like the costly sailing trip in summer). And we took it very relaxed with budget control, thus checking the figures much less frequently than in 2012.

In total we expected spending to go up by around 5% in 2013.

Result: Family spending exactly flat in 2013! +0%, which is in fact a reduction of real spending given 2% inflation.

And this in a year that did feel much more spendy than the year before.

How can this be?

I think the reason is just adaption. Once you practised frugal living for a time, it becomes natural, and even if you relax on the accounting, you still spend much less than before without regarding this as difficult or painful. Saving and spending efficiently just become a habit! Gain without pain – very welcome!

Saving Drivers

The year before (2011) we implemented quite a list of efficiency measures to cut spending while maintaining quality of life, resulting in annual reduction of spending of 5097 EUR. Obviously all this measures continued, and we added a couple of things more. However, I think now this is it, I don’t see much areas where we can now improve our efficiency in spending further. New measures were:

  • Dropping car loss damage waiver. In fact you shall only insure against events that can wreck or seriously harm you financially. A damage to our car obviously can’t – and if it could we would drive a far to expensive model.
    Saving 250 EUR once per year.
  • Cancel some memberships that we never took advantage off.
    140 EUR p. year.
  • Switching utility provider
    220 EUR p.a.
  • Cutting unnecessary (and medical unimportant) parts on Mrs. Woodpeckers health insurance
    380 EUR p.a.
  • Skipping scheduled car service at contracted dealer. This is a rip-off and you don’t need it if you want to run down your car and not sell it soon. Better only change oil, check vital parts and be done with it.450 EUR.
  • Chance cell phone plan. Who needs the newest iPhone, when the old one is still working perfectly fine?!?!
    2oo EUR p.a.

That leaves us with additional savings in 2013 of 1.640 EUR on top of all the other measures worth 5.097 EUR continued from last year. And all with basically no drop in quality of life! This is the way I like it.

Going forward we will allow budget to move up 1-2% in 2014.

I’d have no problem to increase it further, but Mrs.Woodpecker and me really did not find a lot where we’d want to spend more than we do already.

As most Westerns we already life a live of luxury and abundance. Car, Shower, Food, Friends, Savety, Travel, Warmth and Shelter, all is already in place!

Working time and thus salaries will be down 10% or so, but I’ll tell you about that later…




Winter Time is Saving Energy Time

A nice fire in the oven. A good add on to your home heating system.

A nice fire in the oven. A good add on to your home heating system.

After housing, car and food, utilities are quite likely to be one of the biggest budget positions in an average household.

Actually, it is amazing how much some people spend on heating, electricity and water, and how they even think this is normal and inevitable. From my surrounding I know people who spend as much as 130 EUR on electricity and 105 EUR for gas per month for ONE person. And in Money Mustaches Blog, there was once a guy that spent more than 300 USD (=200 EUR) per month on electricity for a family of three, which corresponds to even higher figures in Germany, where the price of electricity is at least twice as high as in the US.

So what do these people to with all that electrical and heating power? Are they trying to add to global warming by heating with the windows open, because they perceive their area of living as too cold? Are they running 3 mega-huge flat-screen TVs 24/7? Is there an extended demand of ice cubes to produce christmas ice sculptures? Are they running a secret laundry service in their basements?

Or, god forbid, are they just wasting energy, because they never put a single thought into efficient energy usage?

Let’s start with understand efficient heating first.

(Electricity use will follow in a separate post.)

To do this it is helpful to learn a bit about the physics of heating to understand saving potentials:

Warmth actually can transmit in three ways:

  • Conduction
    Warmth is transferred by direct contact of two objects. E.g. if you touch a hot plate or if air in your room is cooled by touching the cold glass of the window
  • Convection
    Warmth is carried away by a fluid element. E.g. wind is carrying away the protecting warm air around your body. Or the cool air next to the window sinks to the floor as it is heavier than the warm air inside the room.
  • Radiation
    Warmth is transmitted from a hot object via radiation. E.g. the sun feels warm in the face even in winter, or the fire in a hot stove warms you if you stand in front of it.

Another important thing to know is the energy storage capacity of different materials:

  • Air has a low storage capacity (it is not dense nor heavy). This is why you can easily stand 90 degree Celsius hot air, e.g. in a Sauna.
  • Water has a much higher storage capacity (ca. 800 times air, given same volume). This is why you cannot stand 90 degree hot water.
  • Brick, Metal etc. has an even higher storage capacity.

Knowing this, it’s easy to understand how heat is carried away from where it should be, e.g. in your house.
Now you can think about reducing the loss of energy by curbing or improving each of the energy transmission effect as necessary.

Some ideas are:

  • Conduction has to be minimized.
  • This can be done by insulating your house (very important!), by closing the blinds in the night, by wearing an extra pullover, by having a carpet under your feet, using a blanket.
  • Convection has to be minimized if it concerns cold air.
  • If there is a lot of convection in the room, cold air will spread and there will be an uncomfortable draft.
  • A draft will require 3-4 degrees C higher temperature to still feel comfortable! And if some air stays where it is, it is acting as insulation (this is why styofoam works).
  • Stopping convection is thus important and can be done by putting a barrier between cold and warm parts of a fluid (mostly the air), e.g. by having a curtain in front of the window.
  • Closing doors in the house is important!. And of course insulating any gaps in windows, under doors etc.
  • Even growing plants like ivy on your outer walls will help stopping convection of cold air towards your outer wall. This can save up to 10% of energy. Or you use a rough outer surface of the house as it is done in modern homes. The little creeks there will keep air from convection on a microscopic level.
  • Convection of warm air is desired.
  • Thus your radiators should be free, no furniture in front of the etc. The warmth shall circulate into the room, otherwise it will just vanish into the wall behind the radiator and to the outside. Same holds for an oven.
  • An open fireplace is very inefficient. Convection will blow hot air right through the chimney. A metal wood burner (“Schwedenofen”) or a “Kachelofen” is much better, the hot air is slowed down there and will pass its energy to the metal and thus to your room, before leaving to the chimney.
  • Radiation is often underestimated or not understood. Radiation in a room means that apart from warm air around you, you will pick up energy coming directly from radiating warm objects (like an oven, the sun, or even from a wall). If an object is cold it will radiate less and people perceive this as cold radiation (whereas it actually is only a lack in radiation, as there is no such thing as cold radiation). An extreme case is e.g. after sun settles on a crisp winter evening in the mountains – drop in radiation from the surrounding can give you an extreme feeling of coldness there. However, for heating purpose, radiation is very important:
  • If radiation is high, you will feel quite warm even at lower air temperatures. High radiation can be reached by:
    • Sun falling in through a window. The radiation from the sun (not only the light but all of its spectrum) will be reflected around the room and will make you feel comfortable. Thus choosing a house with big (and well insulated) windows towards south-west is VERY helpful to curb heating costs. The sun will heat your home PLUS make you feel more comfortable by the radiation it provides.
    • A metal wood burner or a “Kachelofen”. The very high temperature of this type of oven provides radiation (infra-red radiation in that case) that is reflected throughout the room. Apart from the direct heating effect, this radiation will increase you level of comfort even at low air temperatures. Thus an oven is a good investment. Another plus is that you can make it comfortable in short time, thus you don’t have to heat this room when you are not there.
    • Floor heating. Floor heating provides a lot of positive radiation , but I am no expert here.
  • Low radiation (“cold” radiation) is not desired. Unfortunately it will come from any badly insulated and thus cold object, like a single-glas window (replace this immediately!) or from a badly insulated outer wall. The effect there is opposite to sun or oven: The bad insulation not only wastes energy to the outside, but it also makes you feel more uncomfortable, even at high air temperatures.
  • High energy storage capacity of walls means: If you are ventilating fresh air into your home, do it by opening all windows and doors of your home at once for 5-10 minutes once a day or so (turn heater off). This way, all the air inside will be replaced. But as 95% of the energy in your house is stored in the wall, not much energy will be lost. It will feel quite cold for another 10 minutes inside the room, but then the air gets warmed up by the walls. This way you get a lot of fresh air in by loosing little energy.
  • Venting by tilting the windows is much worse, as it constantly drains energy from the room without a full exchange of used air. And you virtually heat energy out of the window.
  • In the night lower heating by using a heating computer.
  • Use modern burners in your house. As insulation of walls, roof and new windows, this is in most cases an excellent investment that will give you easily 5-10% return p.a. Consequently don’t look on this as one off costs, but as an investment.
  • If you rent, you should negotiate with your landlord and offer him to pay a slightly higher rent if he does the investment. This is a clear win-win situation, especially if energy-saving investments are tax-deductible as in Germany.
  • Definitly change to a cheap supplier of gas. This can easily safe 200-400 EUR p.a. in Germany. But be care-full not to pre-pay nor bind into too long contracts.
  • Ask around at your neighbors to get some wood from their garden works for your burner if you have one.
  • Arrange with local forest owners for pick up of dead wood allowance.

Following this basic steps, most households will have significant saving potential to their heating costs.
You can easily save a couple of hundred bucks each year here and save the environment as a plus!

At Woodpeckers, our current heating energy consumption is as follows:

  • 10.500 kWh of gas per year (last five years avarage) plus around two cubic meter of wood for the metal wood burner. This is for a 150 sqm home, built early 90s, 4 persons, heating done with gas, two days homeoffice of Mr. Woodpecker as well as Mrs. Woodpecker.
  • Gas provided by Maingau Energy. Switch to them saved around 200 EUR p.a. in Woodpeckers case.