10 Tips For Cycling in a Recession

thehungrycyclist

Howdey Folks

Well it all seems a bit gloomy out there. Every morning I turn on the radio and yet more bad news. Its going to be tough no doubt and there sems to be advice everywhere on how to cut back. This has led to a boom in cycling as people save on petrol, but how as cyclist can we all save a few quid.

Last night I sat down with my flat mate Anna and we tried to get together the top ten ways that cyclist can save money in these lean times.

here is a link to the list on my blog

http://www.thehungrycyclist.com/blog/20 ... ssion.html

reading it through today im sure there are more tips out there, and would love any input.

Ride Safe

Tom

downfader

IMO there is absolutely nothing wrong with being a tighta**e. My grandparents and parents have/had always been very careful with money and it makes me laugh a little when I hear or read of people buying a new X Box, or spending a fortune on things they will barely use (gym membership anyone).

Clever Pun

but surely saving in the current climate doesn't offer value for money?

cee

huzzah credit crunch....good time for buying the stuff that everyone is flogging cheap.

rjeffroy

Link is broken

Clever Pun

cee wrote:

huzzah credit crunch....good time for buying the stuff that everyone is flogging cheap.

exactly... ching ching ching all the way

downfader

rjeffroy wrote:

Link is broken

Was working fine for me. :?

thehungrycyclist

rjeffroy wrote:

Link is broken

seems fine to me?

DonDaddyD

Clever Pun wrote:

but surely saving in the current climate doesn't offer value for money?

As I understand it.

The rule is when interests rates are high people save. When interests rates are low people spend (cost of borrowing is cheaper).

Wasn't the most recent economic boom the exception to that rule? I recall over the past few years interests rates started to rise as the Goverment (Gordon Brown) was desperately trying to curb borrowing/spending and get people saving for fears that this would happen? People however continued to spend because the pound was so damn strong everything was cheap.

Clever Pun wrote:

exactly... ching ching ching all the way

I remember getting into an argument with a teacher about this. He would argue that social/common trend would suggest that right now people will save like crazy. If you however saved like crazy when the banks were lending and giving loans (during the boom). Now is a great time to purchase.

Soon however - as seen with 09 bikes, which are more expensive for lower spec compared to their 2008 counterparts - inflation and the weakness of the pound will make most goods more expensive than ever.

Correct me if I'm wrong, i'm still learning.

richk

downfader wrote:

... (gym membership anyone).

I reckon gym's are like Colemans Mustard. They make their real money from what's bought but not used

Rich158

DonDaddyD wrote:

Soon however - as seen with 09 bikes, which are more expensive for lower spec compared to their 2008 counterparts - inflation and the weakness of the pound will make most goods more expensive than ever.

That's too true unfortunately, talking to my LBS yesterday they said Trek has had three price hikes in the last 6 months :shock: Taking what was a very reasonable hardtail MTB at £750 in the summer to over £1k next year. Fortunately they're buying as much in bulk as they can this year and puttng it into storage so they can pass on any savings to their customers

The moral of this is it's never been a more important time to support your LBS, after all where are you going to get that small obscure part yuo need in a hurry when they go bust?

Eau Rouge

DonDaddyD wrote:

Wasn't the most recent economic boom the exception to that rule? I recall over the past few years interests rates started to rise as the Goverment (Gordon Brown) was desperately trying to curb borrowing/spending and get people saving for fears that this would happen?

That's not quite how I see it. For starters, the Government doesn't set interest rates, the independent Bank of England does, exactly to stop the Government using it as a political tool.
When people talk about curbing borrowing these days they mean Government borrowing, not individuals. While this Government did feel people weren't saving enough over the past 10 years, and tried to use various things to encourage that, it wasn't at all out of a fear of the economy collapsing, it was just that people in Britain saved less than most other countries.

The last boom confirmed the rule rather than being an exception. Interest rates have been low, and credit was easy to obtain, perhaps slightly too easy. As per the rule, people borrowed and spent. The exception was how this boom didn't lead to higher inflation.

But that's just how I see it, and I really don't see it very clearly at all, so that could be all rubbish.

DonDaddyD

Rich158 wrote:

The moral of this is it's never been a more important time to support your LBS, after all where are you going to get that small obscure part yuo need in a hurry when they go bust?

True, too true.

Other recommendation. If you can find it buy a 2008 bike, not only are most makes/models being sold cheap because they're now mostly discontinued. At full price most had a higher spec at the same price points than their 2009 counterparts making them arguably better bikes and othering more value for money..

Example:

Focus Cayo 2008 with Dura-ace shifters, rear mech and Ultegra front mech. £999.

Focus Cayo 105 (2009) with 105 shifters, rear and front mech. £999.

(The 2009 version is at least 2 levels lower in spec for the same price).

Incidentally, Wilier seems to be the only company I've found that is selling its bikes (same models) cheaper in 2009 than 2008.

DonDaddyD

Eau Rouge wrote:

DonDaddyD wrote:

Wasn't the most recent economic boom the exception to that rule? I recall over the past few years interests rates started to rise as the Goverment (Gordon Brown) was desperately trying to curb borrowing/spending and get people saving for fears that this would happen?

That's not quite how I see it. For starters, the Government doesn't set interest rates, the independent Bank of England does, exactly to stop the Government using it as a political tool.
When people talk about curbing borrowing these days they mean Government borrowing, not individuals. While this Government did feel people weren't saving enough over the past 10 years, and tried to use various things to encourage that, it wasn't at all out of a fear of the economy collapsing, it was just that people in Britain saved less than most other countries.

The last boom confirmed the rule rather than being an exception. Interest rates have been low, and credit was easy to obtain, perhaps slightly too easy. As per the rule, people borrowed and spent. The exception was how this boom didn't lead to higher inflation.

But that's just how I see it, and I really don't see it very clearly at all, so that could be all rubbish.

I think you're right.

Apart from the Gorverment and Bank of England thing, which I was wrong about. I think I'm mostly right as well.

I think its a combination of a lot of things that has led to the situation we are in right now.

lost_in_thought

DonDaddyD wrote:

As I understand it.

The rule is when interests rates are high people save. When interests rates are low people spend (cost of borrowing is cheaper).

I remember getting into an argument with a teacher about this. He would argue that social/common trend would suggest that right now people will save like crazy. If you however saved like crazy when the banks were lending and giving loans (during the boom). Now is a great time to purchase.

Soon however - as seen with 09 bikes, which are more expensive for lower spec compared to their 2008 counterparts - inflation and the weakness of the pound will make most goods more expensive than ever.

Correct me if I'm wrong, i'm still learning.

Now then...

This market crash, according to my research folk, is quite strongly sentiment-driven. In fact at a recent research seminar, the speaker argued that it was entirely sentiment-driven.

Apparently, the recent massive take-up of consumer credit at low interest rates was fuelled in part by sentiment, led by word of mouth, advertising and sheep mentality.

This lead in part to the subprime crash - people who couldn't afford to pay back loans could get them anyway, those loans were securitised to unprecedented levels, which caused the beginning of the crash, and continues to have impact now.

The scaremongering in the media at the minute, although not totally unfair, has a massive effect on sentiment, causing people to squirrel money away despite the fact that saving is not really worth your while as far as interest rates go, and the pound is losing value on a daily basis. Your teacher friend is right.

This all leads to lower spending, which leads to lower production, which leads to a weaker economy and GDP dropping.

Clearly the bike market hasn't admitted this yet, but the retail market who has ordered the bikes will have, and you'll get writedowns on the 09 range, I should think.

Here endeth the lesson.

Oh abnd BTW, I don't personally know a lot about this, but the people who advise me do!

DonDaddyD

lost_in_thought wrote:

DonDaddyD wrote:

As I understand it.

The rule is when interests rates are high people save. When interests rates are low people spend (cost of borrowing is cheaper).

I remember getting into an argument with a teacher about this. He would argue that social/common trend would suggest that right now people will save like crazy. If you however saved like crazy when the banks were lending and giving loans (during the boom). Now is a great time to purchase.

Soon however - as seen with 09 bikes, which are more expensive for lower spec compared to their 2008 counterparts - inflation and the weakness of the pound will make most goods more expensive than ever.

Correct me if I'm wrong, i'm still learning.

Now then...

This market crash, according to my research folk, is quite strongly sentiment-driven. In fact at a recent research seminar, the speaker argued that it was entirely sentiment-driven.

Apparently, the recent massive take-up of consumer credit at low interest rates was fuelled in part by sentiment, led by word of mouth, advertising and sheep mentality.

This lead in part to the subprime crash - people who couldn't afford to pay back loans could get them anyway, those loans were securitised to unprecedented levels, which caused the beginning of the crash, and continues to have impact now.

The scaremongering in the media at the minute, although not totally unfair, has a massive effect on sentiment, causing people to squirrel money away despite the fact that saving is not really worth your while as far as interest rates go, and the pound is losing value on a daily basis. Your teacher friend is right.

This all leads to lower spending, which leads to lower production, which leads to a weaker economy and GDP dropping.

Clearly the bike market hasn't admitted this yet, but the retail market who has ordered the bikes will have, and you'll get writedowns on the 09 range, I should think.

Here endeth the lesson.

Oh abnd BTW, I don't personally know a lot about this, but the people who advise me do!

And a good lesson t'was!

+1

greg66_tri_v2.0

Eau Rouge wrote:

That's not quite how I see it. For starters, the Government doesn't set interest rates, the independent Bank of England does, exactly to stop the Government using it as a political tool.

Yes, literally, but...

The BoE operates within other parameters set by HMG - eg the inflation target is 2-4%, and if the economy falls outside that range, Merv has to write a "Dear Alastair, I'm so so so sorry" letter. Were HMG to remove all economic targets, what would the BoE do? I'd guess it would peg interest rates at the highest competitive level it could - after all, banks make money from lending money.

The German view last week was music to my ears. The current problems seem (to me) to have been driven by an alignment of greed - basic human trait which we all suffer from to a greater or lesser extent - and the easy availability of credit (due to low interest rates and arguably imprudent lending). From this, Banks lend to individuals who want, want, want, but can't repay, repay, repay. Banks package the loans and sell them to each other, buying and selling them like a giant game of pass the parcel. 'Cept at some point, the music stops (ie borrowers default) and whichever Bank is holding the defaulting loan says "ooops".

But Gordo's strategy to get out of this seems to be to get Banks lending again, get borrowers borrowing, and get the public spending. Errrr, isn't that how we got here?

Plus, you can already see the signs of deflation - the housing market leads the way. People wait to buy, because it will be cheaper in a few months. Cars are going to have to follow suit soon (esp anything that Gordo's already hitting on a "green" - ha ha - basis) and then the dominoes will start toppling. Why is deflation bad? Because your income goes down (in contrast to inflation), but your debts stay at the same level. Ouch. And as your income goes down, you wait for lower prices that you can afford, fuelling the deflationary spiral.

BTW, we can all look for to 10 to 15 years of high taxation ahead. That's not going to help a deflationary trend. I'm amazed that the upper band is still at 40%. I suspect it's there for purely political reasons, and the cost of keeping it there this side of an election is simply accumulating for the next Govt to deal with. And I bet when VAT is readjusted, it goes to a level > 17.5%.

tailwindhome

This market crash, according to my research folk, is quite strongly sentiment-driven. In fact at a recent research seminar, the speaker argued that it was entirely sentiment-driven

It all boils down to Greed and Fear (each multiplied by stupidity)

But Gordo's strategy to get out of this seems to be to get Banks lending again, get borrowers borrowing, and get the public spending. Errrr, isn't that how we got here?

Correct!

I seems to me that if you have dug yourself into a hole the best thing to do is throw away the spade. Not borrow money from the tax payer to buy a bigger spade in order to dig faster.

Cars are going to have to follow suit soon

Already happening - due to an expanding family (twin boys born on tuesday, now 4 kids) we bought (from savings) a Renault Scenic. I was offered £2700 as a trade in for a 4 year old Clio. I declined opting to sell privately and advertise in well publication . I have reduced the sale price from 3495 to 2750, 8 weeks later still no phonecalls.

spen666

WheezyMcChubby wrote:

...

Cars are going to have to follow suit soon

Already happening - due to an expanding family (twin boys born on tuesday, now 4 kids) we bought (from savings) a Renault Scenic. I was offered £2700 as a trade in for a 4 year old Clio. I declined opting to sell privately and advertise in well publication . I have reduced the sale price from 3495 to 2750, 8 weeks later still no phonecalls.

You may have more luck selling the kids

tailwindhome

spen666 wrote:

WheezyMcChubby wrote:

...

Cars are going to have to follow suit soon

Already happening - due to an expanding family (twin boys born on tuesday, now 4 kids) we bought (from savings) a Renault Scenic. I was offered £2700 as a trade in for a 4 year old Clio. I declined opting to sell privately and advertise in well publication . I have reduced the sale price from 3495 to 2750, 8 weeks later still no phonecalls.

You may have more luck selling the kids

thought about it

however my wife seems strangely attached to them

anyway no one would take on 4, and it would be a shame to split the set

DonDaddyD

I'm scared now. I'm paying off everything ASAP!!!! And then I borrow nothing (except Cycle to work) but how long is that going to last?

downfader

RichK wrote:

downfader wrote:

... (gym membership anyone).

I reckon gym's are like Colemans Mustard. They make their real money from what's bought but not used

Great analogy!

lost_in_thought

downfader wrote:

RichK wrote:

downfader wrote:

... (gym membership anyone).

I reckon gym's are like Colemans Mustard. They make their real money from what's bought but not used

Great analogy!

I like it! However, I get through about 2 jars of colman's a month - I love it! And I use the gym about 3x a week... or did... must suspend that...

downfader

lost_in_thought wrote:

downfader wrote:

RichK wrote:

downfader wrote:

... (gym membership anyone).

I reckon gym's are like Colemans Mustard. They make their real money from what's bought but not used

Great analogy!

I like it! However, I get through about 2 jars of colman's a month - I love it! And I use the gym about 3x a week... or did... must suspend that...

Hmm I thought he was talking about the powdered tubs? Do they still do those? You never use all of one of them ime.

laughingboy

Greg66 wrote:

The current problems seem (to me) to have been driven by an alignment of greed - basic human trait which we all suffer from to a greater or lesser extent - and the easy availability of credit (due to low interest rates and arguably imprudent lending). From this, Banks lend to individuals who want, want, want, but can't repay, repay, repay. Banks package the loans and sell them to each other, buying and selling them like a giant game of pass the parcel. 'Cept at some point, the music stops (ie borrowers default) and whichever Bank is holding the defaulting loan says "ooops".

It is like pass-the-parcel, except the parcel is a lump of doo-doo. :shock:

The best explanation of how the banks do their shabby thing is this 47-minute animated video:
Money As Debt. I really really recommend it.

Scarily, it explains that the current economic model depends on exponential growth. OOOOPS.