Paying for The Professionals

I generally try to avoid politics in this blog, but is it possible in Britain to talk about the NHS and private medicine without it being seen through a left or right wing prism? Years ago, in my twenties and at the start of my career, I caused a bit of a stir at work when I tried to find a way to opt out of BUPA when the company instituted it as part of our benefits package. Ah, the principles of youth! Suffice to say I didn’t follow it through, I stayed in the scheme, and had cause to thank my lucky stars I hadn’t opted out when I had to use the service a few years later. I still felt a bit guilty about it though, jumping queues because I was able to afford to.

I was lucky enough to have company funded private medicine for almost all of my working life, but it all stopped when I stopped working. I’ve seen and used the benefits of it, and it’s a pretty nice bonus when someone else is paying for the service for you and your family. Paying for it yourself though, that’s a different question, especially when there looks to be a free alternative that might be every bit as good.

Psychologically though, I wonder, because I did have to pay privately for dental root canal work last year, which cost the best part of a thousand quid. Previously I’d had this done on the NHS, but I still can’t shake the feeling – and it’s only a feeling, not a fact in any way shape or form – that the private dental treatment was, somehow, “better”. Perhaps this was to do with the peaceful ambience of the surgery compared to the busy chaos of my local dental practice. Perhaps it was because the dentist seemed nice and relaxed and took his time, ensuring I was always comfortable and informed about what he was doing. Perhaps it was because he used a lot nice shiny new equipment with laser beams and stuff. Perhaps, in other words, private dental treatment was a triumph of marketing over expertise?

Another instance where I think I paid over the odds for professional advice was when I retained an expensive lawyer over a potential dispute with a former employer. He charged me a small fortune and I didn’t learn much more than a good search of Google and forum advice wouldn’t have given me, but somehow I still think it was some of the best money I ever spent. Again though, the palatial offices, the lawyer’s fine suit, his good hair, his expensive watch, his Mont Blanc fountain pen, his erudite pontification on my situation (while the clock ran up the money), they all combined to give me the impression that this firm knew its stuff much better than anyone on the MSE forums. I followed his advice to the letter and felt it served me well.

Other financial bloggers have written about the glory that is Youtube videos which show you how to repair stuff. I’d admit they’re fantastic too and have saved me a pretty penny, but I look at the kitchen tap I fitted versus the ones properly fitted by professionals and I wonder when, not if, it’s going to start dripping? And is it on slightly squint? I just can’t say that my repairs give me the peace of mind that paying for a tradesman, with the experience and knowledge of his years, lends to his work.

I’ve never needed the services of a good accountant, but people tell me they can be worth their weight in gold. In fact, they tell me that even if I think I don’t need one it only shows how much I do, because I’m clearly ignorant of tax affairs. I must admit I’m kind of tempted by this advice because, no matter how much I Google, I can’t get my head around such simple tax subjects as ensuring you’re claiming back the right amount of higher rate tax relief on your pension. I have the gnawing doubt that a thousand pounds spent on a decent accountant might pay me back ten fold in years to come.

But, there’s one area where I think the fees will never justify the advice, and that’s when it comes to Fund Management. Give me low cost trackers every time. They can brand it all they want, elevate their star performers to the level of top footballers, write pages of high fallutin’ analysis in glossy reports and tell you “Here’s what you could have won”, if only you’d put your money with this financial genius. It’s all bollocks, and it’s one professional service that’s not going to get any of my hard earned cash, ever.

Who Moved My Cash?

When I was retired for a year, I was quite impressed by how little money I seemed to need to get by – enjoyably – on a week to week basis. My biggest expenditure seemed to be on coffees and cake, which I’d indulge in when I went to the gym, or when I met my DOH during her work break, or when I’d wandered into town to visit the library or on some sort of errand.

In many ways I now see my year out as “retired” was quite unusual and, I’m beginning to think, was certainly so when it came to money. I now think I was getting quite a kick out of actively avoiding unnecessary expenditure because, for me, it was quite a novel situation to be in. Why spend today what you can put off until tomorrow, or better still, put off indefinitely? I’d mentally scoff when many of my friends seemed to be continuing with their bad spending habits and congratulate myself that I had matured on from that childish “I want, I want” stage.  I mean, imagine spending sixty quid on a meal out for two! Imagine buying another set of new golf clubs when you’d bought one five years previously! Imagine buying a new winter coat when that one you’ve worn for the past two years is still in perfectly good nick! Imagine believing that you need to change your car every three years. And so on.

Before I found myself retired, I was never much of a spender and much more of a saver, but I enjoyed having the monthly salary dropping into the bank account giving me choice and relative flexibility when it came to money. Security too, as there wasn’t much I could imagine happening that I couldn’t take in my financial stride. Although I could still sometimes imagine money running through my hands like sand through an egg timer, I was topping up that top half of the egg timer every month with more sand. I didn’t take it for granted, but maybe I didn’t appreciate it as much as I might have either.

My year out, financially, didn’t do much to disillusion my notion that I didn’t need all that much to get by and that’s probably true, but ironically – or fortuitously – since I’ve returned to work I’ve begun to wonder if I was kidding myself? Because this year, so far, has turned out to be a bit of an “unplanned spend” nightmare. Last year, in retirement, I don’t remember spending too much on the house. So far this year alone I’ve needed a skylight window replaced; our garden furniture has literally fallen to bits; our central heating has broken down; our kitchen tap (a bloody expensive one, courtesy of the previous occupant) needs replaced; our shower leaked and needed a plumber to get to a leak behind the shower wall. This month our roof needs a major repair, our hoover has broken down and needs replaced (and no, Youtube couldn’t help for once).

Same can be said for cars – four tires so far this year, plus minor repairs.

Then there’s the social “special events” that, I reckon, have cost about a grand this year on presents, hotels, dinners and booze. Weddings, “21st’s”, fiftieths, Silver Weddings, Golden Weddings, this year has been the year for them.

And, coming to think of it, the year began with a round of dental treatment that I had to pay for because the NHS would have pulled the tooth instead of trying to save it. This cost the best part of a thousand pounds too which, as I write it, I can hardly believe. But the bank statements don’t lie.

The other day I had a go at calculating what I’ve spent over and above my monthly budget this year and took a sharp intake of breath when I realised that the figure was nearing ten grand! Unbelievable Jeff, but the devil is there in the detail on my financial spreadsheets. I began to wonder, however, if maybe this was a more normal situation than my retirement year when, it seemed, that I was able to stick pretty closely to my budget. Maybe I just had a lucky year out? Plus, prior to that point, I was fortunate enough to have a salary that took care of all eventualities without breaking sweat. Perhaps my “unplanned spend” in those days went by almost unnoticed?

When I was working, I was never much of a fan of having an “Emergency Fund” in cash that equated to about three month’s worth of salary, as many financial advisors would tell you that you should have. This year is teaching me that it’s not too bad an idea at all. Apart from anything else, it’s a psychological cushion because, in a way, you’ve planned to have that emergency cash available. My “Unplanned Spend” this year has had to come from my investments and I haven’t liked cashing them in to bridge the gap. It makes me feel like I’ve slipped up, miscalculated and got my sums wrong.

I’ve quite a few spreadsheets that try to calculate what income I’ll need when both my wife and I retire for good. None of them have previously included a line or amount for “Unplanned Spending”. They do now.