For this reason, audits take place after the end of the financial year. Transactions and events after the year end give information about conditions during the year. These are called post balance sheet events.

What I did afterwards

I needed a haircut two weeks ago. However, I avoided the immediate cost by waiting until after Lent and using a comb more often. I’ve just done a large online Tesco shop and replenished vital supplies of washing powder, cleaning products, peanut butter and pheasant. Adjusting for post balance sheet events, I should have a deficit of around £103.20+ (unaudited figure).

This week I most looked forward indulging my Starbucks coffee habit at will. I drunk many caffè lattes and re-identified myself with accounting trainee-literati. But I never used to buy coffee so regularly before Lent, so why should I change now?

I believe in corporate coffee. Photo by rudolf_schuba.

Final Thoughts

If I’m honest, the last six weeks have not been that challenging. The problem with Benefits in Lent was that it was always temporary. The fact that it was only 6 weeks made it easier because I could pre-buy and then defer purchases. If it was permanent, I would find it impossible.

I’ve learnt the importance of using what resources we have wisely, whether it is money, time or bandit-avoidance skills. Most of all I will remember Benefits in Lent for the awesome spreadsheets.

Credit

Most Britons have access to cheap credit. It’s useful for unexpected emergencies, such as car repairs or a broken economy. I used “notional credit” to cover my spending overruns but this was unrealistic because I wasn’t charged any interest.

In real life, the poor only have access to the most expensive forms of credit. For example, I found a website that offered a one-day £50 loan for a finance charge of £14.75 – giving an APR of 2222.46%. Crazy – but what alternative is there when things break and food runs out?

Savings

Low income means that there is no slack. Building wealth and safety buffers is not possible. In Britain, the top 10% of the population owns 53% of the wealth and the bottom 50% own 7%. The point is, nobody ever escaped poverty without saving.

Budgeting

The natural argument is that those on benefits should not live beyond their means. No-one disputes this, but that doesn’t explain why budgeting is often absent. I venture two reasons:

1) Poor financial education – Financial education in schools is currently not compulsory and its delivery is varying (source: FSA study). Financial habits are learnt at the home. However, what message do you learn when you see everything going on a credit card, or a quick loan company being used. Unfortunately, there’s evidence that the under-40s are less financially capable than their elders (source: FSA study). The bankers have highlighted the dangers of a lack of financial nous.

2) Societal expectations – Eating out used to be a rare treat. Now I’ve memorised the Pizza Express menu and eating out is one of my bigger expenses. Mobile phone are everywhere. Computers are considered essential. Everyone has a high definition TV (except me). It’s easy to say that the poor should do without these things. But we can’t live our expensive lifestyles and wonder why others don’t want the same.

Now we have a difference between income and expectations. Debt is the only way to fill the gap. Most of society is in debt – I’m in a negative wealth position if you count my student loan. However, the poor suffer more intensely from debt because of much higher interest rates.

Financial Services

Financial services, such as credit, have made our lives better by making it possible to withstand unexpected events. This is why I welcome the government’s decision to make bank accounts universal for all.

However, the poor are still disadvantaged. They live on the edge of a cliff with loan sharks waiting if they fail.

I have talked about how my existing possessions and working full-time makes living on benefits easier. However, I have not been able to substitute money for free time. I’m used to regularly eating out, convenience food, home delivery for groceries and a cleaner. None of that is possible without money.

Organising for Victory

Without money or time you have to organise beyond German efficiency levels to make things work. My life is run by my diary, to-do lists, revision plans, meal plans and New Year’s resolutions. However, being 100% efficient is not possible and leads to unhealthy psychological conditions. The need to buy time is one reason that I’m £7 over budget this week. I didn’t need to spend money on dishwasher tablets and a cleaner, but it saved me about 4 hours of time.

Everyone suffers time poverty and I don’t expect any sympathy. I have been questioning how I spend my resources. I can either:

• wring out every last useful second and use up every single pound to maximise enjoyment and achievement. Economists call this “utility-maximising behaviour”.
• leave gaps

Gaps such as the one where a pertinent conclusion to a blog post should go.

1. Cheating – by pre-buying lots of food. This was worth about £25 over three weeks.
2. Pre-existing assets – I already had a lot of food in my cupboard and freezer. However, I also already own a guitar, piano, books, TV and a laptop. I can enjoy my free time without needing to spend any more money.
3. Work – The benefits of work go beyond the monthly paycheque. Work saves money. That’s what I want to discuss in this blog post.

Benefits of Work

1) Time consuming – You spend money when you are bored. If you are at work for 10+ hours a day, you don’t spend much money at all. There is an exception if you internet shop or buy houses during your lunch break.

2) Free heat, light and shelter – Your office protects you from the threat of bandits.

3) Training – It’s in your employers interest to train you. However, you are the ultimate beneficiary of training. I’m currently training for the Chartered Accountancy qualification, the ACA. My employers pay for the training but I will enjoy the benefits for the rest of my career.

The training also extends to soft skills, such as teamwork and communication. Perhaps the most important one I have learnt is the art of small talk, especially how to feign interest in Desperate Housewives.

4) Future prospects – Work gives the idea that you have value. You have an incentive to invest in your C.V. There is the chance of doing different kinds of work throughout your lifetime that gives you satisfaction and income. I believe that is called a career.

5) Self esteem – Work gives you a sense of purpose and worth. But unemployment eats away at your self esteem and dignity. We can’t help but be defined by our work.

It’s easy for me to judge the long-term unemployed but I’ve never been in that situation. I heard a story about some long-term unemployed trying to get back into work but didn’t believe that they didn’t deserve a job.

I have been too religious about sticking to the £64.30 limit. It is a symptom of having an accountant’s mindset. It’s not just about the numbers, it’s about remembering the good things that I do have.

For the record, I am 2p under budget in week 3.

Essentially, I am still living a middle class lifestyle that is far beyond someone on benefits. A fair way to take account of it is the use of accruals accounting. In short, goods and services are accounted for as they are used instead of when they are paid for. For example, I bought three boxes of cereal before the challenge started. Under cash accounting, I can ignore this. Under accruals accounting, I have to account for the one box of cereal I ate during the week.

More information on accruals accounting can be found in paragraph 22 of the IFRS manual.

I’m going to adjust week 2’s budget under accruals accounting.

List of Adjustments

1. To account for the consumption of the existing food in my fridge and freezer. Including free food given by my parents
2. Benefits in Lents does not take account of Oyster card costs because they are assumed necessary for work, however, there’s no adjustment for non-work travel.
3. To account for use of existing household products, such as my bed, sofa and toothpaste.
4. Existing use of laptop and TV, assuming an estimated useful life of 3 years.
5. To account for free beer and sandwiches consumed at a work event.
6. To account for clothes worn, assuming a useful life of 2.5 years.
7. Existing use of guitar, piano and the reading of 3 chapters of book. Estimated useful life of 10 years. The book cost £2 and has a total of 14 chapters.

Notwithstanding the disturbing fact that this looks like a spreadsheet at work, I am now over budget by £22.77. This shows that I already have good wealth and income doesn’t matter so much. Those on benefits don’t have such wealth, and need to borrow at extortionate rates to fund a basic lifestyle.

No kimchi for me tonight.

Actually, someone on benefits should not be able to afford a £44 return train ticket. Yet, I’ve not spent a single penny on food. What is going on?

Pre-Paid Food

Yes, I cheated. I went on a large shopping trip on the Saturday before the start. I filled my freezer and bought three boxes of cereal:

Existing Food Stocks

I will take advantage of special offers. This means that I had built up a considerable stock of food – probably enough for a month. Benefits in Lent is a welcome opportunity for me to run down these stocks.

Work Lunch Allowance

I do get a lunch allowance from work. This does saves me spending money and time making sandwiches in the morning. At a conservative estimate, it gives me a £5 advantage.

The Spirit of Benefits in Lent

Benefits in Lent is not meant to be a perfect simulation. It does affect my behaviour enough to remember why I am doing this. My income is constrained and I can’t do whatever I want. Every time I pass Starbucks and want a coffee, I realise that I can’t afford it. It may seem petty that the only change in my daily life is not having coffee. But there will be harder choices to make. Because the three boxes of cereal won’t last forever.

The pastor at my church (crazy) Dan proposed something more radical – living on benefits for 6 weeks. In effect, giving up money. That means living on job seekers allowance, which for me is £63.40 a week. I’ll be starting on Sunday 21 February for 6 weeks, ending on Easter Sunday!

Why?

• Money for the poor in Greenwich – the money saved from living on benefits will go towards a poor council estate in Greenwich.
• Reflect on how fortunate we are – we are in the top 1% income bracket of the the world. We should feel like we have enough
• Deep religious reasons  – which I don’t know about – yet.

Ground rules

• Rent and council tax are excluded - because that would be paid for if you are on benefits. It would also wipe out my budget many times over.
• Travelcards for work is excluded – because you wouldn’t have need for a travelcard if you weren’t working.
• All other expenses are fair game – water, electricity, television, food, beer and widgets. All of them have to be covered by £63.40 a week.

Are we being annoying goody two-shoe Christians?

Absolutely not. However, I realise that there are criticisms and issues which I be discussing in future blog posts.

Track my progress

As an accountant, I’ll be maintaining an online spreadsheet of my budget and actual spending. Benefits in Lent Link.

I’ve estimated that I have to slash my weekly spend in half. I’ll be blogging about my experience. It’s going to be a struggle. But I will enjoy producing the spreadsheet, doing variance analysis and fancy pie charts.

One working knee
Is all I have. I’ve been told to lay off the training for six weeks. I tried to cycle with one leg and found out it doesn’t really work at all. Struggled.

One year on
From living in London, from stating my job and from joining the church. I see the same faces and get to build relationships. Stable.

Playing guitar in church
I’ve been playing the guitar for about 10 years. I got to play at church last Sunday despite not learning any more chords in the past 5 years. Actually, I have learnt the strange John Mayer chords that require huge hands and ridiculous dexterity to play. However, they are obscure enough to be nameless. Anyway, all you need for church is D. Simple.

It went well. I lost feeling (or blood circulation) to my right hand but carried on playing. 80% of the chords were hit on time, and the ones I missed are inaudible to the human ear anyway.

What could disrupt this current peace and stability? Exam results on Friday. Sadness?

Race day performance depends on two things:

• Not getting injured – unfortunately, my ankle got buggered playing netball. It was actually football, but I refuse to blame her.
• A good night’s sleep – I only managed 4 hours

Actually, the vital factor is the training that you must do beforehand. 12 hours sleep does not substitute hard miles run. I felt like I hadn’t done enough, but my version of preparation would be five dry runs of the actual route a year before the race.

So I set off to the o2 Arena for the start of the race with Johnnie (my running partner). I had a weak ankle and the feeling of workday tiredness. It was a gloriously sunny day. Perfect for a picnic but not ideal for a run. The race was well organised. It was a relief to find that there was somewhere to put my stuff and that I wouldn’t have to carry around my wallet, oyster, keys and phone. It also started on time.

I did a steady 9.5 minute per mile pace for the first few miles. My ankle hurt a bit but Johnnie and I soon hit a rhythm. It was hot and stopping for water was tricky. You had to virtually stop and wait to grab a cup off the table because the stewards were so busy. At the halfway stage, we were looking good and on track for a 2 hour (plus a bit) finish.

There were some killer hills at the 7/8 mile stage. Fortunately, training on "death hill" in Greenwich Park meant that we coped well. We soon hit the familiar training spot of Blackheath and Greenwich park. Alas, Johnnie got tired and graciously told me to go on ahead. Then I developed a horrible pain in my right knee. For the last three miles I pathetically hobbled towards the finish line. My theory that the pain would go away after 20 seconds was completely wrong.

I waddled over the finish line at 2 hours and 13 minutes. I finished 5,627th out of 9,065. The pain was worthwhile and I hope it has done a lot of good for Steven. Now, I’m determined to go back and beat the two hour mark.

I’m now on a post-run recovery regime of beer, pain killers, glucosamine, ice packs and rest.

In short, Steven is a Rwandan pastor who is helping out the victims of the genocide and AIDs. He has adopted 20 orphans and has created employment for 250 widows through his tailoring project. He does need your help and money. Email me on admin(at)jameshuang.co.ukif you wish to donate.

I’m also running to achieve one of those “life goal” things that my life coach keeps going on about. Raising money for Steven is part of my drive for efficiency through multi-tasking. The first 9 miles should be fine. The remaining four miles is unknown territory. I would have trained more, but that was curtailed after a netball/rounders injury at the work’s sports day. I’m walking around the house with an improvised ice-pack strapped to my ankle made from ice cubes and a towel.

The most worrying part is that my running shoes have 12 miles life left in them before their warranty expires. After which Nike is not responsible for loss of limbs.