Budget Series Part 4-Saving!!

Budgeting Blog Part 4

 This is the final part in my budget blog series. It’s the savings part. Now that you know where all your money is going and how much you NEED to pay your bills, where can you start making cutbacks?

These are my best picks for where to cut back to save those hard earned dollars

 

·         HAVE FINANCIAL GOALS! We have goals. Each year we sit down and write what we would like to achieve over the next financial year. What we want to work towards. I like to print out our goals and hang them up somewhere so we can be reminded of what we are working towards. There is absolutely no point going through life with no goals. Goals give you motivation, determination and a destination to reach. Even if your goal is something as simple as “Limit how often I buy a coffee on the way to work” It’s still a goal, it’s still something you can work towards. Our financial goal for 2015/2016 financial year is to get our 4wd set up like a proper off road vehicle so that come July next year we can do the Gibb River Road in The Kimberly Region of Western Australia. This is a fairly heavy financial goal as we need a fair bit done to get the car ready for a big trip like that but I have my goals list printed out on our wall and I’ve got my notebook with all my price comparisons. If we work hard, it’s totally achievable.

·         Pay TV. I hate pay TV. There is absolutely no need for it. I’ve lived in plenty of country towns with less stations that the city and have still never been tempted. I know so many people who cry poor but they still keep their Foxtel subscriptions because it’s a “need” for them. Pfft! Cancel that and save yourself hundreds of dollars a year! Besides digital TV has like 12 hours’ worth of cartoons per day for all you people that say you NEED it for the kids’ channels. If your kid can’t survive with “only” 12 hours of cartoons a day maybe it’s time to get them outside and moving around (of course people and children with disabilities that can’t move around or leave the house are the exception)

·         Do you buy a coffee on your way to work every single morning? Say you spend $3.50 on a coffee 5 days a week. 52 weeks a year. That’s $910 a year your spending on something you can make for like $0.50 at home. Get up 5 minutes earlier. And if you desperately want a fancy coffee, try limit to 1 a week-that’s only $182 a year.

·         Insurance companies. I hate all these stupid insurances that are on offer these days-life insurance, car insurance, funeral insurance, income protection, home and contents insurance, pet insurance, health insurance etc. etc. the list is never ending. Some of them like car, contents and life insurance are definitely worth it. But if you have a pet that doesn’t end up at the vet too often is pet insurance really worth it?! Do you really need life insurance and income protection insurance? Our life insurance policy also includes permanent disability and serious illness as an option so we have it all under 1 policy which saves us a fair bit of money. Also most insurance companies give you a discount for having more than 1 policy with them. I do a big ring around probably once every 2 years, get some quotes and see if there is a better deal out there for us. At the moment I’ll admit I have all our insurances with different companies-however that is mainly due to where we live, certain companies will only insure us for certain things because we live in a remote town that is on the border of the “high risk cyclone area” and getting ambulance cover in an ‘isolated town’ can be harder with some insurers so our insurances are a bit messy at the moment :-/

·         Magazines and newspapers. Most of this gossip and info is readily available free of charge online these days save yourself another couple bucks a week by spending 20 minutes online, instead of flicking the pages of a magazine that’s only going to end up in the bin.

·         Shopping around is obviously a big one. I’m really into shopping around. At the moment hubby and I are getting lots of work done to our 4wd. I have a little notebook that I keep a list of what we need, what stores/online places stock it and how much it costs. This way I know what we want (because I’m not a very good car person) and I also know how much its worth, then if I see someone having a sale on I know what prices other companies charge to see how much of a saving we would get. City people get catalogues delivered so that’s one quick way to check out the competition and see what’s on offer.

·         Buy ONLINE!!! So many savings to be had. I can get things shipping over from America and including postage/freight it still works out cheaper than buying here. Don’t get me wrong I’m all for buying local and keeping money in our country etc. but sometimes the price difference is so extreme that I can’t see the point in paying more than double here. At the end of the day my family comes first, some things I just wouldn’t be able to afford to do if I didn’t do at least a little bit of shopping from overseas. Some Australian companies also have better deals online for some things if you really want to keep shopping local. Hubby has just recently done a massive tool shopping spree and all his tools came from QLD or NSW and including freight/shipping charges it worked out cheaper. See? Still supporting Australian business..

·         No spend days. Ok, I’ll admit I’m spectacularly bad at this one. It seems every day I plan a no spend day I end up with a kid at the Dr or a husband that forgets and brings home dinner. We definitely need to work on this. But the basic idea is you pick a day of the week, it could be a different day each week depending on what suits you, and you literally just don’t spend money. It’s amazing how much money we spend every day, little things like taking coins from the cookie jar to grab a coffee or “window shopping” but coming home with $50 worth of things. Try have one day a week where there is NO money spent J

·         Most men (and women) will be shocked at me for even THINKING about this but oh well…ALCOHOL!! And cigarettes. If you smoke then that’s just gross, chuck that habit and save yourself potentially thousands of dollars, and your life-because you know there’s no point making a budget if you’re just going to die early anyway. (ok that was mean. But you get my drift…) Alcohol I’m fortunate that my husband isn’t the kind to sit back and drink 10 beers a night. But I know so many people who spend money on beer and wine BEFORE putting food on the table. And that’s just wrong on so many levels. Maybe instead of buying 2 cartons of beer and a couple bottles of wine per week you could buy a 6 pack and 1 bottle of wine on a Friday for the weekend. Still have your fun and drink but just limit it. Considering you can pay $50 for a carton of beer if you go from 2 cartons to 1 a week that’s $50 per week or $2600 per year. That’s a good chunk of money right there!

 There are so many ways to cut back your costs. At the end of your first financial year of keeping your budget go back through and have a look at where your money is going. If you seem to be spending a fortune on eating out and very little on groceries maybe it’s time to turn that around. Have an eating out night once a week, instead of 5 nights a week. Too many non-essentials-trips to the zoo, beer, DVD’s, books (but really, you can never have too many books he he), downloading from iTunes. Try think about some free outings like parks and picnics instead. All your spare money going on clothes? Have a think-did I really NEED to spend all that money on new clothes this year? Could you do a clothes swap with friends? Buy accessories to revamp your wardrobe instead of buying more expensive clothing items.

The first year will probably be quite a shock to see where all your money goes and how quickly it adds up.

We set ourselves a $300 per week grocery budget which includes all cleaning products, dog food, nappies, baby food, as well as all our food (if we have birthday parties or BBQ’s/outings we include that in our weekly food bill too). But just think $300 per week over 52 weeks that’s $15, 600 per year JUST on groceries!! We often come in under budget and that extra money just goes straight into our savings account or onto our car loan. But you can see how quickly it all adds up.

 

Time to SUMMARISE!!! Our entire family budget can be broken down to 3 steps

1.       Open a Direct Debits Account.

2.       Keep Track of ALL your spending

3.       Set saving goals and find places to make your cutbacks

Simple?! Absolutely!! Give it a go for a year and see where you end up…

I hope this has helped you out in some way with your finances. But like I said before. If you take nothing else from this Budgeting series the direct debit account will save you so much financial stress.

Budget Series Part 3-Direct Debits Account

Budgeting Blog Part 3

Our direct debits account. I can honestly say this is the single most important part of our family budget. It saves us so much financial stress. If you do nothing else to budget for your family I would say this alone will keep you on track and out of financial trouble.

 OK. Now our bills account. We have so much that just comes straight out of that account. To give you some ideas of what sorts of things you can include in this fortnightly sum I’ll list ours

·         Both life insurance policies

·         Private Health Insurance

·         Contents Insurance

·         Driver’s License renewal (we renew every 5 years so this doesn’t make a big difference to our fortnightly account balance)

·         Mobile phones and internet

·         Car Services (we estimate getting our 4wd serviced twice a year and came up with a rough dollar amount for each service)

·         Compassion (I have a sponsor child in Bangladesh that I send money to on a monthly basis)

·         Credit Card

·         Car Loan

·         School Fees (not such a big deal at a public school as there aren’t many fees, would work better if your kid is in a private school and you pay fees per term)

·         Car Insurance

·         ASG (this is a scholarship program we have for our 3 kids, we pay a little bit of money each month and then when they start high school we get payments each year for the duration of high school to help out with fees, books, uniforms etc.)

·         Cell Care (this one will be all finished with soon-when Isla was born we chose to store her cord blood and tissue, we couldn’t fork out the full amount straight away so we pay it off monthly)

·         Vet (using the last financial years vet bills I estimate what we could be likely to spend the next year)

·         Car and trailer registration

·         PO Box (while in the Pilbara we have a post office box in town as it’s the ONLY way to receive your mail up here)

·        Rent/Mortgage we don’t pay any rent where we live as we are in a company owned house but it is one of the biggest and sometimes hardest expenses to get money for each week/month

Obviously your needs will be very different to ours and you may choose to put more or less expenses in your account. Most of these things are just those little monthly direct debit payments that you hardly notice but it helps to keep them in a separate account so you know that what’s in your everyday account (attached to your Eftpos card) is money for spending. We don’t have an Eftpos card for our bills account as I Bpay all our bills.

 I calculate what these bills cost me per year (I use old receipts or scroll through my bank statements to find out exactly how much the direct debit amount is) and divide by how often we get paid. For example say you have $40,000 worth of bills/mortgage payments per year and you get paid fortnightly. 40,000 divide 26 is 1,538.46. So you would put $1,538.46 (or round up to $1,540) into your direct debit account each fortnight.

Easy right?? Sometimes it sounds like a big chunk of money to take out of your pay every single fortnight, but imagine getting a bill like car registration or home and contents insurance. That can easily be $700-$1500 for one bill. Instead of having to come up with a big chunk of money like that in a couple weeks, you’ve been slowly putting away $20 per week all year so when the bill pops up it can be paid AND you won’t even have to scrimp on your groceries for that week.

It’s also a good way to make sure your bills are never paid late. Instead of getting a bill and waiting until your next pay cheque to pay it and risking it being paid late, the money is already there and it gets paid straight away. Best way to get a good credit score with the banks J And if you can manage to keep a bank happy then that’s basically nothing short of a miracle!!!

 I hope that helps you understand our direct debit account.

 

I have just one more part of this Budget Blogging series. Part 4=Saving!! Where can you save more money…

Budget Series Part 2-Setting Up Your Budget Planner

Budget Blog Part 2

If you’re like me and want to go a bit deeper into a family budget or want to get real serious about where your money is going and where you can make cutbacks, then keep reading for how I set up our family budget.

My Budget. I’m just beginning my 4^th year of having a proper family budget. Before then I just had rough estimates in my head of where I wanted our money to go. Since that first financial year 4 years ago my budget has gone from a simple, admittedly not very good budget, to a more complex one that is easy to see where our money goes and I can make quick comparisons to the same time frame of the year before.

4 years ago I got bored, seriously, that’s how this all started. I was bored, I was (and still am) a stay at home mum, and I really wanted to start kicking ass financially. So I decided to sit down and see where all our money seemed to be vanishing too.

Before you keep reading and realise how OCD I am, don’t get freaked out. It may seem like a lot of work but I actually haven’t changed much in my day to day life. The biggest change I’ve made is saying ‘yes’ when asked if I would like a receipt at the checkout.

So here goes, step by step how our family budget is set up.

1.       I have 3 bank accounts. Savings, Every day and Direct Debits

2.       I have a budget book (you could use a computer program like Excel but I’m old school and I like writing it all down) I’m currently using the Wildon Family Budget Planner from Office Works which costs $5.85

3.       Now you need to set up your budget book. It takes about 5 minutes I promise! The headings I use are

·         Groceries

·         Non Essential (Junk) Groceries

·         Essentials

·         Non Essentials

·         Vet

·         Petrol

·         Eating Out

·         Medical

·         Clothes and Accessories

·         Tools

·         Direct Debits account fortnightly amount

·         Kids Accounts/Savings.

Obviously if your husband isn’t a mechanic that constantly buys tools you won’t need that. If you don’t have pets there’s no need for the vet heading. Try and categorise everything you spend money on into just a few headings. Non Essential Groceries is things like chips, juice, and biscuits etc.-basically junk food that you don’t NEED. Essentials are day to day things that you need like if you need a new frying pan or a new piece of furniture, back to school essentials etc. Non Essentials for us is things like going out to the movies, buying new books or DVD's, beer, toys, money spent at a fair etc. Medical for us includes medications, Dr visits, when we have a flu outbreak and stock up on things like Vicks etc. The rest are pretty self-explanatory.

 

4.       I also have a weekly subtotal and year to date running total column

5.       Once you have your budget book set up with your headings it’s time to fill it all in. I have a new page for each new pay cheque and throughout the fortnight I collect receipts for EVERYTHING. Even that $5 morning coffee. Hubby does too-it took a while for him to catch on but now he’s better at me than remembering to get receipts. At the end of each day spend 5 minutes (or less depending on how much you spent that day) jotting down the amounts for each receipt in your budget book.

6.       At the end of each pay fortnight add up the fortnightly totals and update the year to date totals for each category. This takes me no more than 10 minutes at night time when the kids are in bed.

And that’s pretty much it. Less than 5 minutes per day and then at the end of the pay period another 10 minutes to do a few calculations. Easy!!

At the end of the financial year I then print out a list of all our expenses with the year to date totals. It is amazing to see how much money you can spend each year!! And this way I can quickly look back at the year before totals and compare if we actually are making the savings we want.

 

That’s our budget book, this is what I do week to week to keep track of our money.

The next part in this series of Budgeting posts is all about our direct debit account. What exactly we set money aside for and how it works for us-also a great way to keep the banks happy J

I Got That Scary Phone Call Today...

It took 4 months but finally today I got that phone call. The scary one. 

The number for the kids school flashed on my phone just as I had sat down with the last 4 squares of chocolate. It was an hour before pickup and I really wanted to relax. 

"Bradley's had quite a fall at school, he hit his head quite hard on the ground and he's pale, sweaty and shaking" 

Immediately I panicked. And I started praying that Bradley's heart could take it. Stupid dodgy heart! 
I rushed down to the school where I found him lying flat on his back as I've been instructed to do whenever his body experiences trauma. The teacher walked over and they had already taken his heart rate, he was laid down straight away after the fall and he was ready to go to the hospital. The school did AMAZING, followed his care plan exactly! 

So I grabbed him and went down to the hospital. They monitored him some more there but his heart rate was ok, it hadn't dropped to the dangerously low levels it did after his accident with the drawers. He seems to have just a mild concussion. 

Last time the "episode" didn't happen until 12 hours after the trauma and resulted in him being flown by Royal Flying Doctors to the city. We can't tell if it's going to happen again this time but he's been put on 'rest and stay quiet' for 24 hours because it was quite a big hit to the head. 

Ever since that incident in February I've been dreading this phone call. Being quite a rough and tumble little boy I always knew it was only a matter of time until he gave himself another good knock to the system. To be honest I'm surprised he's lasted this long!! 

Another day, another hospital visit. . . 

Budget Series Part 1-The Basics

Budget Series Part 1

So I’ve decided to do my budget blog as a series of posts. Because if I did one post it would be like 25 pages long. Well not really but it would be long and you would probably get bored by the end of it. 

This will be my first 4 posts. And this first part is for total beginners. If budgeting seems like a really hard thing to do that is going to totally confuse you, if you just want to start out simple for the first year or if you’re spectacularly bad at budgeting then this will be where you start off. 

When my husband and I first got together over 8 years ago he owned (well, technically the bank owned) a rather expensive car and as an apprentice he struggled some weeks with the repayments, fuel, bills etc. So me, being the slight (ok more than slight) control freak that I am, offered him a few tips to help him stay on top of it. From then on until he eventually sold the car (when I got pregnant) he never again missed a payment and always had money for fuel, bills, groceries and date nights with his very beautiful, very intelligent girlfriend. 

So what were those few handy tips I gave him all those years ago??

1.       Open a new bank account called your direct debits account.

2.       Grab together all your bills, loan repayments, rent, phone/internet, insurances and calculate how much they cost you yearly. 

3.       Divide by how often you get paid (we get paid fortnightly so divide by 26 fortnights per year)

4.       Each pay cheque BEFORE anything else put that amount of money into your bills account. 

5.       Whatever is left over in your “everyday account” is what you have left for food, medical expenses, savings etc…

6.       Next you need to SAVE. Before you go off spending any of that left over money put a few dollars into your savings account. If you save before spending you will quickly learn to live without that money and won’t even notice its gone each fortnight.

7.       Roughly divide up what’s left in the “everyday account” between food and other expenses. 

This way whenever a bill comes in the money is already sitting in your direct debit account. Make sure you have changed your bank account details with banks that take the money directly from your account. Phone bill? No worries, I can pay that within 5 minutes of opening it because I know I’ve been putting aside a few dollars a week all month for this!! 

And that is how I helped my 21 year old boyfriend keep his car and never default on a loan repayment again.

I was only 18 when I gave him those budget tips and now at 25 and living in a single income household with 3 kids and a dog to feed and keep alive I feel like I’ve definitely improved my budgeting skills. This is a very basic way to budget but it’s one way to ease you into having a budget. From here you could learn what suits you and continue to build a better budget.

If this is a little too simple for you then hang around. My next post is how I budget now. It includes a much more in-depth look at your finances and how to set yourself up to keep the banks happy.