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.

1) Blue, black, red and green pens – The most standard of audit tools, since the staple work involves marking up of schedules, invoices and other paper-based evidence. A red tick against a particular number says clearly that:

• it agrees to the same number somewhere else in the accounts
• it agrees to some other firm evidence
• all is well in the accounting world

Auditors can demonstrate their creative side by using different coloured pens for different tick marks. The height of the auditors art is a multi-ticked and multi-coloured A3 Excel spreadsheet. However, the art is dying with the introduction of paper-less audit.

Before then, the debate rages between owners of single four-coloured pens and owners of four pens of different colour. The four-coloured pen is more useful, but it is more expensive and the auditor becomes impotent if it’s lost.

2) Second screen – Immensely useful. Second screens can be used to compare two documents, transfer information, or display different windows – like having email on one side and the internet on the other.

Unfortunately, carrying around a second screen on your back, in the tube on the way to a client is not practical. However, a second screen has other fringe benefits. Colleagues will wonder how you can use both eyes to focus on two separate screens (like a fighter pilot). It will make you appear 10% more intelligent and advanced.

3) Numpad – On average, an auditor will type out 1,456 numbers a day. Using the numbers at the top of the keyboard takes 0.4 seconds longer than using a numpad. That’s a potential saving of 9.7 minutes a day.

Auditors probably shouldn’t make up facts and numbers.

4) iPod – Music helps you audit, especially Taylor Swift.

5) Jedi powers – Fancy equipment makes not an auditor. It is his experience and knowledge that add the value. Good auditors work out where the adding error occurred without use of a calculator. They manipulate Excel spreadsheets by the keyboard alone. They instantly recall the most obscure of numbers from one page out of a thousand in a five year old audit file. They bring calm to the audit room. They are the Audit Jedi Masters.

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.

Check in was smooth; Both flights arrived on time; The cabin was clean; I had decent enough legroom; And the plane didn’t suffer any loss of structural components. Rumours about a £1 charge to use the toilet were not true. Although there are plans to have passengers bring their own jet fuel.

Punctuality makes for good holidays but boring blog posts. Publishing bad news is preferable to good. But is it not better to celebrate the good rather than pull things down?

Complaints about Denmark

Amusingly, the Little Mermaid Statue in Copenhagen had been moved to Shanghai for the World Exhibition. However, I was convinced to go against the propaganda that it was worth seeing. I did not miss it.

In the end, the biggest disappointment was the terrible exchange rate, enough to turn Wagamamas from a cheap meal to a premium experience. Yes, I did travel hundreds of miles to a foreign culture to eat the same food. At least I refrained from my default choice of Chicken Katsu Curry. However, every other aspect was the same: the wooden benches, the menu, the chopsticks. The head waitress even sounded British. I might as well have been in London, except I was surrounded by a few Danes rather than hundreds of Canary Wharf yuppies. 

Ryanair, and Wagamamas, are actually quite good.

Picture the scene: You are at a party and meet someone new. You ask for their name, which is pointless because you forget it instantly. You move onto the next question: “Where do you work?”. Fortunately for you, the person is not unemployed but does say that they are an auditor.

Suddenly, you have no intelligent follow up questions, and are struggling not to make a joke about calculators. You force yourself a polite smile and comment that it is a “nice” job. However, you actually end up communicating that you think the other person is as interesting as beige. Talking stops and you both separate and get on with the rest of your lives.

This is where you need “insider questions”. Every profession has its own vocabulary, key concepts and idiosyncrasies. Learning a few key questions will make you sound intelligent and have great conversation. However, use insider questions sparingly before you are discovered to be a fraud. Do move the conversation on to mutually interesting topics, such as the weather.

The insider questions for auditors

1) Busy season – Auditors will do a great deal of their work from January to April, often without holiday. This is because audits are conducted after the end of the financial year. This is 31 December for most companies. Mentioning these two words to an auditor will either get them talking enthusiastically or crying endlessly – be prepared.

2) Exams – This is a classic question. Every auditor has gone / is going through exam trauma. Myriad questions can be asked: Which institute?; How many exams they have passed so far?; How many exams left?; How many attempts before getting fired?; Which calculator they use in an exam?

Be sure to mention that you couldn’t work and study full time and that they are making the noblest of sacrifices.

3) Longest hours worked – Every auditor will have their personal story of the nightmare client with the 100 hour week in a tiny conference room that smelled a bit. These are the scars of audit and are worn as badges of honour. Do ask an auditor about their worst job.

4) Funny audit room moments – Cramped conference rooms, long hours, stress and green pens have a strange effect on the auditor’s brain.

5) Cool clients – Not all clients are widget manufacturers. There are interesting audit clients. Just think, for every chocolate factory and theme park there is an auditor having fun.

Pens – the key to audit. Photo taken by atomicShed

Questions to be avoided

Certain questions will annoy the auditor. Use these with care:

1) Jokes about counting beans – This instantly shows your ignorance of what auditors actually do. Bean counters are actually “mere” bookkeepers. Audit is more interesting than that. We check that the annual bean report is correct in terms of number, size, type and weight. And only the larger beans are checked, the small beans are ignored.

2) Asking for confidential information – This is illegal. However, if the auditor acquiesces to you “well-intentioned” joke then immediately phone the Metropolitan Police on 0300 123 1212. Make sure you take a photograph and then run to the nearest safe house until the danger has passed.  

3) Mentioning the tax year – There is merit in knowing that the personal tax year runs until 05 April. However, this date is irrelevant to auditors because they are only concerned with companies. If you try to work this date into a conversation the auditor will start a long and uninteresting ramble on the meaninglessness of 05 April.

4) Posing maths questions – Friends have yelled a series of numbers at me and expected rapid mental arithmetic/calculus. This is a no-win situation for the auditor. Either we’ll get it correct and it is nothing special or get it wrong and look incompetent. Reality is that these days, auditors rely calculators and Excel spreadsheets, even mental calculations are double-checked using a calculator. 

5) Why audit? – Auditing is not a traditional childhood aspiration. This question might expose a graduate’s lack of imagination in choosing a career or a personal desire for a stable income. However, numbers are the great desire for some, but would that be admitted in public?

Do insider questions work?

Insider questions are useful. Last week, I tested out some over dinner with 11 junior doctors and a dentist. I asked questions about the hours and interesting/dangerous patients. After a while, I did try to move the conversation beyond work by asking about non-work activities.

This is important to avoid being exposed as a fraud. But more importantly, no-one really wants to talk so much about work. It’s a Western cultural quirk that the second question we ask is: “where do you work?”. We define ourselves by our work but it is not where our passions lie.

Sadly, the reply to the question was: “I don’t have any spare time”.

The insider questions idea is taken from “How to Talk to Anyone” by Leil Lowndes.

Lack of underground trains – The only part of the network which reaches the South East is the DLR. One solitary line is poor in comparison to North London. Although it is balanced out by the overland trains operated by South Eastern. However the second grievance is:

The inability to use pay-as-you-go Oyster Cards on said trains – The Oyster card is a great boon for Londoners. It allows for cheap and convenient travel on all forms of transport – except for trains in the South East. You either have to queue for a ticket or get a Travelcard (for unlimited use during the day / week / month). This is fine if you made a lot of journeys, but annoying for one-off trips.

The situation is more confusing for visitors and tourists. There are already enough lines, ticket types and zones without the added confusion of not being able to use your Oyster card on certain parts of the network. It an unnecessary hindrance and disincentive to those wanting to visit.

Oyster Redemption

However, on 04 January 2009 the Oyster Card situation was remedied. Pay-as-you-go is now available on South Eastern trains! The people would have rejoiced in the streets – except most had to return to work after Christmas and they would have slipped on the ice anyway.

A New Dilemma

There is a dilemma for those travellers who don’t commute every day. It is the choice between a using a pay-as-you-go Oyster or a Travelcard (£25.70 a week). If you want to save money by not buying a Travelcard, you have to spend less than £3.67 a day. However, there are situations where this may not be the case:

• Unplanned and unexpected journeys – making a few unplanned journeys in a week will wipe out the savings from using pay-as-you-go.
• Forgetting to touch out the Oyster Card – will cost you £4 straight away. You could phone up TfL to get a refund, but they are unsympathetic and assume that you were out to cheat the system.

All Londoners face the dilemma of capping their transport costs but forgoing a potential (but risky) gain. Interestingly, the very same kind of choice has been studied extensively in Economics, look up “risk premium” and “certainty equivalence”. In short, most people are risk adverse and will pay a premium to get rid of risk. In this case, that means getting a Travelcard.

Unintended Consequences

The station I use most for getting into central London is New Cross. It takes just 15 minutes and there are many trains per hour. An entirely un-noteworthy station, but to me it means that I’m not too far from home.

If you arrive late in the evening, you will see one of two men who stand outside the station who offer £1 to buy back your day Travelcard. The trade benefits all parties, except for TfL. However, the introduction of Oyster pay-as-you-go has removed any incentive to buy a one-day Travelcard.

Two men have been deprived of their livelihood. Is there not a moral duty for TfL / the government / society to compensate these men?

Photo of New Cross Station taken by chrisphin

Gone are the greens and pinks of the old site. They were from a different era. The new colour scheme of grey-on-grey reflects the recessionary days that we live in. A lot of the content has been updated:

• Articles – The longer writings
• Photos – I have a new camera, so expect some better photos in the future
• Activities – What I do with my time
• About – Who I am and where my background

What will I write about? I want to tap the under-represented market of London accountants.

Old sleeping habits – Means staying up way past midnight; sleeping for more than 8 hours; sleeping in and afternoon naps. Bliss. However, I remember a journal a health economics journal which said that over-sleep was worse than sleep-deprivation for life expectancy.

Revision for an accountancy exam in two weeks. Actually, most of the course is self-study, so technically revision has not started yet. The recommended study guide is spread over three days, but assumes that you work for 10 hours a day.

Wii Mario Kart – This is the 4th iteration of Mario Kart that I have played (SNES, Gameboy Advance, Gamecube and Wii). A motion-sensing steering wheel is now the method of control. It takes time to learn how to use it after years of using a standard controller. Funnily enough when I first played Mario Kart on the SNES, I tried to tilt the controller in order to control the kart. (I wasn’t a smart 9 year old). Now technology has caught up with my childish intuition.

More time has been spent on Mario Kart than revision.

Snow isn’t fun anymore – Returning to Liverpool means I don’t have to use public transport and get to drive everywhere. However, it has been ridiculously cold and the roads have been frozen. Not being able to stop while going at 5mph is terrifying. Driving through snow for 20 miles is horrible. You trudge at 20mph without and sudden movements. You’re not sure if you or the car behind you can stop.

Snow isn’t fun anymore, but snowmen still are:

• Not leaving enough time to go to the post office and then finding a queue of ten people with only three staff working. This gives a ratio of 3.3. My personal rule is, if the ratio is more than 2 then it is not worth waiting. This rule does not apply at theme parks.
• I got to New Cross station and found late and cancelled trains. I really should have checked the National Rail website before I set off, but I had got used to the trains being very reliable. However, the combination of a new timetable and icy conditions meant that New Cross station had been like this all week. Ironically, the new timetable increased the frequency of trains.
• And I should have got a taxi back home. The train was slow and the walk home was covered in ice. Not easy with a suitcase.

Actually, writing about the journey home is an excuse for me to publish a photo which I took today:

While admiring the view, I asked the question: who got my work Secret Santa gift?

A bet for Liverpool to win the FA Cup AND for England to win the World Cup. I should be £125 richer at the end of July. As a clue, the accompanying card reads: “Miracles do happen at Christmas”.

Originally, I thought that there would not be enough room in the flat. I was right, there is just a foot of room between my bed and the piano. There’s not even enough room for a music stand, I have to tape the sheet music to the wall. There’s also no room for a stool. I have to sit on the speaker, boasted by a copy of Shakespeare’s complete works, so that I can sit at the correct height.

Space isn’t the biggest issue, what I lack most is time. I’ve talked about the London time-vortex before. It is clichéd but I have met many grade 8 musicians who don’t have the time/inclination/space to play anymore. It’s a shame. Were all the hours of practice wasted? Why do it in the first place? Pushy parents? A better personal statement for university entry?

I’m not being critical of the pushy parents because I’m (secretly) jealous. I’d rather be a retired grade 8 pianist than a struggling grade 2 adult learner.

The real answer is to enjoy the learning experience and not to worry about the end result. Or I could concentrate on an instrument that I can already play – the guitar.

Liverpool One Wheel

Liverpool was the end of a frantic week’s holiday. It started with a weekend trip to the South coast of England. I saw the channel for the first time. The calm white rolling waves can’t be found in the city.

The South Coast

Several friends commented that they would like to live in such a place. But not me, I’d be bored after a day. As annoying as London can be – the frantic pace and impersonal nature, it is addictively exciting. I do want to stay for a few more years at least. Friends have complained that London has caused them to feel abandoned in the North West. It’s a shame that the UK is so capital-centric, but the fact that it is London is compensation enough.

Let’s hope I don’t get burnt out soon.

This is not a photo of me at the ball. I still don’t own a (useable) camera. This was taken six years ago during a first year university ball. The photo is relevant because I still own the same bow tie.

Ball highlights

• Friends complaining about being 25. As a 24 year old I wasn’t among those complaining – but a six year old photo does makes you think.
• Random bidding on rounds of golf from someone who doesn’t own a set of clubs, play and lives 100 miles away from the course.
• Shouting “lower” on a charity auction is in bad taste (sorry).
• 1am is past my bedtime.
• Realising that we have no keys on the way home.
• Desperately ringing 118 118 for an emergency locksmith.
• And I quote “I’m sorry, but I’m going to try breaking into out own house before calling you back”
• Being hoisted into the kitchen extension roof by a guy with a broken wrist in a cast
• Climbing through the window, disabling the alarm, opening the front door, saving £70. Not priceless, but a welcome prevention of a depletion in net worth.

Stories like this can’t be bought.

Both Liverpool and Deptford have had a history of deprivation and poverty. Both are trying to shed their bad reputation. Honestly, you won’t get your tyres stolen in Liverpool. Times have changed. Now, your identity, credit cards and wife will be stolen while you are admiring your shinny new tyres. The money will be used to buy Mozart tickets. Capital of Culture 2008.

The news coming out of Deptford is dire (look up “Deptford stabbings”) but I do believe that things can change. The area has been recommended by the New York Times. The East London line extension will be complete soon in June 2010. The most tangible sign of improvement is the opening of a Tesco Metro on Deptford High Street:

Tesco will save us! More importantly, it will save me a 20 minute trek into Lewisham.

I passed. If you don’t believe me, you can search for my name on the ICAEW website.

I celebrated by performing a petty cash count with my flatmate on his box of change. I initially offered him £10 for the box, which he rejected.

The total came to £86.68 – including 454 hand-counted pennies. I’ve included some bottles of beer in the photo to dispel rumours that accountants were unexciting.

For me, relief trumps happiness. It’s a hard road to become a chartered accountant. The next step for me is to ensure the controls around cashing the money at the bank are working correctly.