Budget Brilliance

Imagine what things would change in your life if you could go back in time and have a conversation with your younger self? What would you both chat about? Family, friends, relationships, finances, health, dreams and goals?

Imagine having the ability to take advantage of every massive opportunity that came your way whilst also dodging some of the unnecessary hardships. Wouldn’t your life be monumentally better? Some might argue to the contrary that life is instead shaped by our mistakes rather than our successes. We would probably all admit that we wouldn’t be the people we are without the mistakes. Yet, we would also admit that we wish we could have at least avoided a few of them here and there.

As this website is devoted to helping people rocket ahead in their personal finance journey, I always like to give one or two constructive tips in each post that can be applied directly to your current financial situation. Rather than unproductively navel gazing, can we glean any life lessons from looking back to the past?

Looking back on our past gives us a profound insight into how we can create a brighter future for ourselves and our family. As we look back we can analyse the great opportunities that we pounced upon, as well as those that we missed. We can learn from those moments of fortune as we try to replicate more of those situations. We can also seek to avoid those misfortunate situations as we try to insulate ourselves from repeating those errors.

7 Examples of Looking Back to Look Forward

1. Calculate how much you’ve paid off on your mortgage in the past five years. This paints a picture of where your money has been going. Could you manage to pay an extra $100 per week off the principal? What would your home loan look like in 10 years time from making this decision today?
2. Comb through your wardrobe and look at the graveyard of ever changing fashion. Next time you’re out clothes shopping, maybe this memory might help you to gain some perspective when you see the latest clothing fad.
3. Look at the cars you’ve owned over the past decade. How much would you estimate car expenditure has cost your family? Ever buy new? Could you drive a more modest vehicle and use the saved money to put towards income producing investments?
4. Think of the missed investment opportunities. They’re the ‘If onlys’ you talk about with your mates. They’re the Apples, the Costcos, the Alibabas and the Facebook investments that you’ve missed out on. To learn from past events, keep an eye out for the future world-changing ideas that are right in front of you.
5. Work out how much you have saved for your retirement. Consider salary sacrificing an additional $20 a week to change the living standard you will experience in the future. Don’t forget that compound interest is a powerful friend!
6. Reminisce about the memorable take out/restaurant meals that you’ve had. What was it that made these experiences so great? Compare that to the weekly ‘eat outs’ that barely even induced a smile. Perhaps look towards reducing the amount of incidental eat outs and instead save them for special circumstances where you do something eat some unique and special with amazing people you care about.
7. How much have you spent on electronic contraptions over the years? I’m talking televisions, CDs, DVDs, set top boxes, laptops, mobile phones, tablets etcetera. They all need continual upgrading. Could your life be as equally pleasant with the absence of one or two devices? What would this save you per year?

We each have (if we’re lucky), an average of 82 years on this earth nowadays. Time ticks by incredibly quickly and I’m beginning to understand this more the older I get. We all make mistakes, but they really are only mistakes if we choose not to learn from them. Have a think about where all your big wins might come from in the next 10 years and position yourself to take full advantage of them in the years ahead.

Hi SA readers,

This is a post I put up on my blog with a few Aussiecentric pricings. Hope there's still some relevance for global readers.



Watching the Porsche 911 Carrera S thundering up the hill towards Mount Dandenong left me drooling. All that raw power, the chrome, the leather, the roar of the engine.

Over the years I have come to realise that my passion for cars and motorbikes fluctuate incessantly. In fact with each and every wind change my top 10 list of favourite cars and bikes seem to alter drastically.

I’ve been fortunate enough to have driven a few nice sports cars from Subaru WRXs, to Mitsubishi EVOs to Alfa Romeo Spiders. While the first 20 minutes of driving tends to get my heart racing, I’ve got to admit that things soon settle down and my mind wanders to thoughts about the next vehicle. There’s always another car, another motorbike, another shiny object to capture my attention… albeit temporarily. Coming to this realisation has saved me a fortune over the years.

This kind of self-awareness wasn’t always there however. Like Paul Kelly’s famous song “I’ve done all the dumb things.” I’ve owned new or newish cars, and recoiled in horror as they seemingly plummet in value with each hour that you drive them. Our lovely ‘automatic rain sensing windscreen’ sounded like a great idea until the stone chip required a $1200 piece of glass imbedded with rain sensing microchips. I’ve grimaced as kids fling open car doors with careless abandon and as shoppers underestimate the width of their shopping trolleys. I’ve also owned a few four wheelers and had a great time bouncing around the Australian bush. A fun frolic in a river, followed by a total engine rebuild taught me a lesson that fourbys can be costly!

Car expenses can add up to be a gargantuan expense from your yearly expenditure. As Aussies we love the feeling of driving around in something that makes us feel cool or gives us a bit off social currency. Whether we intuitively judge a person’s financial status or coolness by the car they drive, is up to us to personally answer. For me, I will admit that it subconsciously plays a part. However, visit Europe or Asia where touch parking can be a common practice, and the fascination with shiny vehicles can quickly lose its lustre.

But how much does a new car cost to run really? What if we were to choose something modest? Cars definitely have their purpose, but understand that they can leave a huge hole in your pocket. Did you realise is that driving a new humble Mazda 6 can cost you as much as $12,030.78 per year? Yikes!!

$12 grand to drive a car that doesn’t catapult you from 0-100 in any special time. $12 grand for a car that isn’t particularly regarded as head turner. $12 grand for a car that you may have thought was a actually a very rational economic choice. In some ways it is too. Were it a Toyota Landcruiser the annual costs are purportedly over $19k per year. Drive two new cars and you could expect this cost to potentially double. Is anyone else hearing alarm bells blasting in their minds? Fine if you are earning truckloads of cash but for the average Aussie earning $74,724 before tax this could make a massive dint in your pocket.

Vehicle expenses can hit you financially in both obvious and subtle ways. I’ve tried to list a few.
• Depreciation- What is a $30,000 car worth in 5 years? More than likely just a third of the cost. Then there’s the expense of losing the income opportunity that the money could have been deployed towards.
• Financing- A $30,000 loan fully financed at 12% means an additional $18,000 goes down the gurgler over a 5 year period.
• Registration- This would most likely between $500-$850 each year in Australia.
• Insurance- Depending on your rating and the level of cover, estimate $600+ per year.
• Servicing- The RACQ report would conservatively hint that the costs would be around $800+ if you drove 15,000 kilometres per year.
• Fuel- No way of avoiding this one unless you buy electric or have a Flintstones powered vehicle. Obviously the best way to lower your fuel bill would be to drive less, or to choose a more economical vehicle. At today’s prices, driving an average 15,000 kilometres per year, each litre per 100km of economy saved equates to roughly $180 back in your pocket.
• Tyres- Ones again, conservatively allow for $225 per year for when a replacement is due.
If you’re interested in reading the RACQ recently for yourself click here.

See: http://www.racq.com.au/cars-and-driving/cars/owning-and-maintaining-a-car/car-running-costs

This post is not to persuade every reader out of buying new vehicles or lavish cars. I would, however, advocate that each person ensure that car expenses only make up just a small proportion of your annual income. Earn $150k and want to buy a $30k car in cash? No problem. Earn an average of $50k and it could be much more financially harder for you.

To ensure you’re getting a good deal and moving onwards and upwards, add up how much your car costs you each year. Add up the registration, the repair bills, the interest, the insurance and the depreciation. Do a comparison on another more modest vehicle and weigh up the difference. If you could reduce your expenditure by $4-$7k each year, what could you potentially do with it?

Get rich quick schemes abound. They sound great don’t they?

I invested $10,000 in XYZ company and now they’re worth $2 million!!!

They trigger our greed glands and even better, we don’t have to work for it. Think about the latest billion dollar US Powerball Jackpot that saw record numbers of people shell out their hard earned money for a hope and a dream.

Unfortunately for the vast majority, the reality of making money can be a lot slower than we would like it to be. How many millionaires do you know who made their fortunes instantly? Maybe the odd one or two whose savvy investor parents left them with a substantial inheritance, but not many. Popularised in the media, we hear of a few great business people who ‘made it’ on a stroke of luck. We seldom hear of the years of study, research and work well into the wee hours that occurred behind the scenes.

Everyone needs to start somewhere. A house is built one brick at a time. A child learns to read by first learning the alphabet. A person seeking to lose weight does so kilo by kilo. Why would the road to wealth be any different?

That may be a downer for some to read, but an alternate view is that a house is a prized possession because it takes such a long time to build. Reading is celebrated because it is an incredible skill that takes a young child years to develop. A person who is overweight astounds everyone by shedding kilos and reaching their goal weight through hard effort and dedication. Working towards your wealth creation is no different and it is something to be celebrated every step of the way.

This post is about creating a habit that will dramatically reshape your financial future.
I would like to suggest one little, tiny change that you could make to your everyday circumstances that would have a huge long term effect on where you are in the future.

Allocate 5% of your income per week towards your retirement fund.

I can hear some already saying that there is no way they could possibly contribute 5%. Others might be saying that it is not enough.

In Australia, the average income for 2015 was $1,545.60 per week or $80,371.20 per annum.
Let’s take a look at what 5% would look like over the course of a working lifetime.

I’m sticking with the average wage as a basis, but it would be fair to assume that it would be less when you commence your career and slightly more as you gain seniority in your profession. 5% equates to $4,018.56 per year or just $77.28 per week.
If you saved $4,018.56 per year from the age of 20 until the age of 65 you would have $180,835.20. This is a good start to have towards your retirement, but would you just keep that amount of money in an account bearing no interest? Unlikely. Most of us have some form of superannuation or a 401K retirement fund encouraged by our government and our work places. These tend to be invested in global markets, local markets and in cash.

In fact the Australian share market has returned 10.8% on average over the past 30 years. The beauty of this is that by leaving your money in that account, making regular contributions, receiving positive (and occasionally negative) returns that compound over time, this money drastically grows from your deposited amount.
I’ve written about this previously in a previous post but compound interest really is, as Albert Einstein said, the eighth wonder of the world. It is a way to grow wealth slowly and it should be in everyone’s plan for wealth generation. Those $77 you deposit, directly from your paycheck into your retirement fund, compound and compound and compound over time. Incredibly, at retirement age you are left with a whopping $4,125,880!

Use ASICs Money Calculator tool to try it out for yourself.


I’ve included a screenshot to show you what happens over time. Notice how your investment really begins to pick up momentum in the final years. Bear in mind, however, that the final figure does not take into account management fees, taxation or inflation.

$77 dollars per week may seem unattainable for some but consider getting all your insurance and utilities requoted, maybe only eat out once this month or perhaps give Aldi or Costco a go? A suggestion would be to not focus on that $77 as a punitive measure, but to focus on the cool $4.1 mill that is gained at the conclusion of your working career. Think of how much better you’ll sleep each night knowing that you are financially secure.

I know we all have a tendency to gravitate towards a get rich quick scheme but there is something truly beautiful about having worked and saved for your financial future. The marathon is the most well regarded of all endurance races for a reason. Start today and save towards your financial future.

Source: Australian Bureau of Statistics (2015). Average Weekly Earnings. Retrieved January 18, 2016 from http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0/
Source: Fidelity Worldwide Investment (2015). 30 Years in Australian and Global Shares. Retrieved September 18, 2015, from http://www.fidelity.com.au/fidelityP2/?LinkServID=B91D14A6-B125-E8DC-BB83AAD60C35BC5A
Australian Securities and Investment Commission (2015). Compound Interest Calculator. Retrieved September 18, 2015, from https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/compound-interest-calculator

I've always been fascinated by the concept of minimalism. Carrying everything you own in just one or two bags certainly has its appeal. The increase in mobility. To spend less time tending to things. The savings made from avoiding every latest marketing gimmick. To have bought only things of high use and that are necessary.
This appeal, which admittedly borders on an obsession at times for me, is exacerbated by the daily ritual of packing and unpacking the minivan with bottles, jumpers, shoes, toys, books for my fours kids.
Occasionally, I get hit by the decluttering virus and almost everything is up for grabs. My wife, Hayley, might argue that this occurs more regularly than I'd care to admit. Entire cupboards emptied onto the floor, a waste bin piled high, back and forth car trips to goodwill collections or strangers knocking at the door to collect various items are symptoms that I am hit from the decluttering bug.
From my perspective, the benefits of decluttering are as follows:
1. There is less to clean up, tend to, fix and maintain.
2. It gives you a perspective on the ever diminishing value of an object and prompts you to be a selective spender. Ever thought "Man, I paid $1,200 for this computer and now I'm lucky to get $50 for it"?
3. You have a more visibly appealing home.
4. The clutter can be sold to recoup some of your prior spending or to bless someone who might need it.
As Joshua Becker of 'Clutterfree With Kids' says "Owning less is better than organising more."
Post-Christmas I was again hit with the declutter bug and Hayley patiently supported me through the latest wave of house upending. I was able to piece together the substantial pile shown in the picture above.
It's actually not the largest of piles and some of you might be able to easily discard triple the amount without so much as a second thought. Bear in mind that this is something I tend to do quite regularly. About double the items in the photograph ended up being given to goodwill or thrown out entirely, and about 30% of the items have yet to be sold.
I use Gumtree as my sales vehicle of choice for two reasons:
1. No postage hassles. People come and inspect the item and pay on the spot.
2. No sales fees.
Reason Number 1 is my favourite. I often just tell the buyer my address, leave it by the door and ask them to put the money under the door. It keeps things simple for both of us and have never had a buyer betray my trust. Gumtree is great for its simplicity. Give a brief description, photograph on your phone and then your ad gets posted.
When I talk to people about on selling their old iPhone 4, their dusty gym equipment or their old set of rollerblades, people cite hassle as one of the greatest reasons. Gumtree is about as pain free as it gets. For example, I wanted to get rid of an unused swing set. Take a photo, post the ad and it's gone and picked up within an hour from an extremely grateful buyer.
You'd be incredibly surprised how the things that you think have no value are actually sought after by someone out there. The haul you see above netted $525 with a few remaining items still up for grabs. I was able to bless people like my new buddy Mamman (I guarantee I spelt this wrong), a student from Bangladesh, who needed the free electric frypan I posted. I chucked in one of my unused laptops too which felt substantially more fulfilling than the $525 I'd earned.
It would be an understatement to say that I'm a big fan of Gumtree and decluttering. My house is back to the stage where I am proud of it again. I met some great people. I blessed people and was in turn incredibly blessed. The $525 is really just an added bonus.
Some Takeaways:
• If you haven't tried Gumtree, consider giving it a go. It's really easy to set up and to use. If you don’t have the time to wait for buyers, just allocate a set time and say you'll leave it out by the front door.
• Items that you view as unusable items are completely usable to someone else. For example our older concrete tiles would have cost over $300 to dispose of at the tip. Instead someone came to collect them for use outside their onsite van.
• My decluttering advice is to consider getting rid of anything that hasn't been used in 12 months or more. Are you really going to wear that Hawaiian shirt again? Do you still need all your old CDs when you have a Spotify account? Will you use any one of the 5 old mobile phones that you have sitting in your drawers?

Further Reading:
If you'd like to read a little more about decluttering, Leo Babauta has some great tips you might find interesting.

http://zenhabits.net/15-great-decluttering-tips/

I don’t like getting old. For some reason I never really thought much about it. That was years away! It felt as though I would stick in some Pan-like state and leave the aging process for everyone else.

Youth seemed to pass by slowly and I remember wishing I was older. Remember those days sitting in the classroom watching the second hand tick by at a painstakingly slow pace? Life would surely be better when I turned 15, 18, 23, 25… then all of a sudden I started to want to hit the brakes. 30, 33, 36… holy guacamole, where did the time go? Life has passed so quickly and yet I still feel so youthful at heart.

The mirror now reveals the onset of grey hair. My forehead shows a series of creases that begins to resemble the rings on a tree.

Vanity is a funny thing. We always seem innately unhappy in our appearance. People with curly hair wish it was straight. Straight haired people wish it was curly. The only people really grinning are the corporations selling us the products to alleviate our discontent. They help us to look like the airbrushed, superimposed models you see in the magazines.

However, there is something admirable and strong-minded about a person who is content in who they are. Not a surface level confidence but a deep, deep down confidence. A person who remains unshaken by the whims of fashion and the siren calls of the media. I admire people who stand boldly and say “This is me, this is who I am and this is what I stand for.” I’d like to say that this is me and I have accomplished this high level of self-assurance. In truth, I haven’t, but each day I aspire to.

The photographs below were taken from the bathroom of a young woman who shall remain nameless. The sheer quantity of products, elixirs and modern day snake oil is astounding but not necessarily abnormal. In fact, many households might have a bathroom or two that resembles this.

I asked my wife how much the average item might cost. “$10?”

She laughed and said “Try $20 or $30!” There are even magical eternal youth creams that exceed $100, or so I’m told.

Doing a rough count of the products and a mid-range estimate of $20 per item, the cost of the items in the shower, bath, cupboard and on top of the vanity unit equated to $1,260!

$1,260 is an astronomical cost! The alarming thing is that I feel that this kind of spending is not particularly abnormal in today’s society. Because it is loosely health related, purchases in this category tend to feel in some ways justified. If you haven’t got your health, then you haven’t got anything, right?

How many creams and products are disposed of unused or half used before the next latest and greatest is added to the vanity cupboard?

Here are just a few suggestions that might help you save. It is not overly specific because I believe the real root cause of this type of spending needs to be addressed. Namely the understanding that we all age, that supermodels are not necessarily the epitome of health, and that marketers routinely pull out every deceit trick in the book to sell you their latest offering.

Nevertheless, here are some potential savers:
•Chemist Warehouse and My Chemist tend to have regular sales. Boxing Day sales are coming up with particular discounts in the area of fragrances.
•Have a good look at the active ingredients. These are the ingredients that supposedly are making the substantial difference. A quick Google search with the ingredient might give you other affordable alternatives.
•Before you buy, watch a review of the product on YouTube. How have other customers rated it highly?
•Sort your vanity cupboard. You may find that you have a collection of 20 or more skin creams. This realisation alone might stop you from buying another.
•If you are a compulsive spender of beauty products, nominate a friend to act as a financial judge, whereby your latest purchase must justified to them and approved directly by them.
•The easiest way to save is not to spend. To help you with this notion consider imposing a $300 cap (revise as you see fit) on the cost of any and all beauty products. This means you cannot buy another product if the products on your shelf exceed $300 in value. Once you have used up a certain product, then feel free to buy something else with a guilt free conscience.
•Buy a multitasker products that can do the job. This will save you both time and money.
•Consider making your own remedies and elixirs. Just Google the product and type ‘alternative’ at the end of the search term.

I've been an Aldi convert for years. This wasn't always the case though.

My first trip into Aldi turned me right off the place for years:

Walk in, grab a trolley... oh wait, I can’t. I don't have a dollar. Walk to the nearest Coles. Pinch a trolley and proceed to backtrack 300 metres to Aldi doing the Aldi ‘Walk of shame’.
Wander up and down 4 aisles. Is this what it’s like in communist Cuba? There is only one kind of toothpaste!
No music playing.
Store staff rushing around like crazy.
Why on earth do they have mountain bikes and welding equipment for sale in the middle of the store?
A trolley load of groceries. Do I have bags? Do I want to buy bags?
The cashier scans through items with blurring speed.
Looking dumbfounded. Everyone starring. Whoops. I’m meant to load the groceries myself.
Where are the bags?
Sigh.

I left feeling a bit lighter. It might have been the reduced ego or it could have been light headedness caused by the dizzying pace at which the cashier whipped through my groceries. Either way I made a decision never to return to that horrid place.

Aussie’s spend 17% of their income on groceries. I’ve spoken to a few people who say it continues to be their greatest expense with bills averaging $300-$400 per family. I can categorically, unequivocally, indisputably guarantee, or at least almost guarantee, that you will save a minimum of $100 off your average shopping bill. When visiting my local IGA I can carry home $100 in groceries! Don’t snub the savings. $100 a week can turn into nearly $2 million over a period of years invested!

Anyway, long story short, years passed and I accumulated more and more kids (or giant tape worms in human disguise) who proceed to eat me out of house and home. My wallet was suffering a monstrous hit. I sucked up my pride, returned to Aldi with a dollar in my pocket and a determined look that was prepared to take on Aldi’s scanner of the year!

My family of 6 spends has a budget of $160 per week. The only way to hit budget on this modest amount is to buy copious amounts of food from Costco and eat corndogs for the entire week, turn our backyard into a giant veggie patch, or shop at Aldi.

I’ve included a photo from a recent shop that amounted to just $135. You get a lot of bang for your buck at Aldi.

If you’re an Aldi hater, here’s a few tips:
• Bring a dollar.
• Bring your headphones and race up and down the music-free aisles listening to all your favourites.
• Learn to appreciate the minimal aisles. Understand that while you may not get that special coffee brand you are accustomed to, you can quite easily complete your shop in 20 minutes!
• If you have a typical grocery list that you tend to follow, photograph your local Aldi’s layout so you can create your meal plan shopping list aisle by aisle. Most Aldi’s have the same layout so they are easy to follow.
• Beat the cashier by placing everything immediately back in the trolley, cart it back to the car, and then transport it from car to the bench in a box.

Aldi has some fantastic products. You may find that they don’t stock your favourite brand but don’t assume that a lower price always is indicative of a lower quality product. The savings can be huge over a year and I find the time saving in doing a 20 minute grocery shop while listening to my choice of music can make me easily shrug the mainstream supermarkets.

My added two cents: If you shop at Aldi to save, don’t buy the middle aisle stuff unless you absolutely need it. There is some really cool stuff but it is only of value if you need it immediately, not 3 months, 3 years or 3 decades in the future.

A Quick Life Update:
Some of you may have read that in the past month I have resigned from the job I held at Empower Christian Church. My gorgeous daughter, Eve, was also born just 6 days ago. We still have 20% owing on our home loan, an investment property to make payments on and $140k (100% leveraged) in a managed fund where we have elected to reinvest the dividends as a forced savings measure. I will be working 3 days a week as a part-time teacher where I need to budget hack my way to meet the bills, save for the future and put aside $4k for an interstate holiday. This is the time where, more than any other time in my life, my budgeting mettle is being put to the test.

I decided to write about the 11 savings measures I have undertaken in the past month. Hopefully there’s 1 or 2 ideas that might help you to save the odd $20, $50 or $100 dollars.

1. Car Insurance ($232 saved)
I have flogged this horse so many times in the past few years that I have absolutely no idea which insurer I am currently with without referring to documentation. Even so I decided one more call shouldn’t hurt. 40 minutes later and I had cancelled my old policies and signed up with Youi Insurance. I could only carve up an additional $77 in savings across two vehicle policies but was able to receive free roadside cover (which saved an additional $155 per annum). On top of that the excess was lowered from $1200 to $700 and they threw in windscreen cover. Youi don’t do online quotes so you can wheel and deal a little with the sales representative. I paid upfront to avoid the 10% they charge for month by month.

2. Free LEDs ($459 estimated savings)
This week I got a flyer for free LED installation. Normally I don’t put in the time to investigate whether the offers are real or bogus and the flyer rapidly finds its way to the recycling bin. This time, however, I’m glad I made the call. 29 LEDs were installed yesterday without a single cost passed on. The company Aussie GreenMarks then sell the carbon credit created to companies wanting to ‘look green’. All our lighting is made up of 50 watt halogen downlights which were replaced. 12-17% of an average electricity bill is made up of lighting expenses. I’d estimate we saved around $459 per annum by making that one phone call.

3. Tax Return
I would rather have a filling each day for a week than spend hours completing a tax return. We have a wonderful accountant that we use but the process is still painful. I spend a long time each year documenting each and every receipt with clear reasons justifying each claim. This year I envisage around $8-9k returned including unpaid Family Assistance. Some might argue that I should have stated my correct income to Family Assistance in the first place. However, the lump sum I receive now goes straight off the mortgage rather than receiving a fortnightly trickle that could be inadvertently spent.

4. YNAB Budgeting Software
I am a big time Excel spreadsheet budgeter! I have used spreadsheets for years. I purchased the You Need A Budget software for $54 US (about $582 on current Aussie exchange market ) and found the transition a challenge initially. There was so many things I didn’t understand the rationale behind on a programming level. A few tutorials later and I’m in business! The app does make it fun to budget and the interface was exceedingly user friendly. One thing I did love was how it uses geolocation to record your purchases. It is a fabulous way to recognise little spending habits you might not realise you have and how to ‘roll with the punches’ when you have a blowout in a particular category.
There’s a lot of free apps but I really am glad I bought YNAB for $54 outright.

5. Car Servicing ($428+ estimated savings)
I really like my local mechanic. Great guy! Knows my car back to front. There’s one thing I can’t stand about him though… his billing! $100 per hour is the going rate. As a part-time teacher who is renumerated at $35 an hour, this is big bickies! An average service is in the realm of $500-$1,000. I spent $72 buying synthetic oil, an oil filter, drain pan and funnel. A YouTube video later and the job was done! (Truth be told it took me about 2 hours to work out how to loosen the oil filter because I didn’t have the necessary tools.)

6. Council Rates
As Benjamin Franklin stated ‘In this life nothing can be said to be certain except death and taxes.’ I would also add council rates to that quote. A few months ago I purchased an investment property. The valuation rate on the notice was $40,000 above my purchase price so I rang the council valuer. He was amazed that I was able to purchase the property for the price I paid and said it was ‘unheard of’ in today’s market. I patted myself on the back for a good purchase and now can anticipate a revised rates notice in the mail.

7. The Lights Off, Shorter Showers, Jumper On Rule
I still suffer heart palpitations from last quarter’s electricity bill. I am actually too embarrassed to share it publically on a savings/budgeting blog. Needless to say the electricity drill sergeant was in full force this month demanding lights to be turned off upon exiting an uninhabited room, 4 minute showers and jumpers had to be on before any heaters were switched on. I’ll tell you next quarter how I go.

8. The Power Company Hop ($252.22 in projected quarterly savings)
This relates to the above point. I did previously post about making the change to AGL who had a 12 month special with 38% off electricity. I checked their rates against Simply Energy and found their pre-discounted rates to be cheaper still. If I was with AGL on the last bill I would have saved $252.22 (not that a bill of that magnitude will ever occur again… ever!)

9. Decluttering, Questioning Spending Habits and Reducing Waste
I decided to bundle these 3 topics together.
One of the things that Hayley and I have been progressively doing is decluttering our home. We live in a 17 square home. Most people we know questioned us remaining here with 3 kids, let alone 4. We like it here and don’t want to move just because we need a larger place that can house all our stuff. I’m reading Leo Babauta’s Clutterfree at the moment and I am loving his inspirational thoughts about the innumerable trinkets that we accumulate throughout our lives. Once you declutter it is amazing how readily you view most of the assets you have as future hard rubbish! The tablet that was once the fastest thing in its heyday is now obsolete and can’t download the updated app. All the DVDs I collected haven’t been watched in years and now there’s this thing called Netflix. That jacket that looked great on the 6’ 6” mannequin doesn’t fit quite so well on me.
A declutter works wonders for your spending. You realise you are now disposing of items that once cost you hundreds or even thousands of your hard earned money. This month I was in the market for a new phone for my Hayley and myself as the battery didn’t last a full day. After reading Leo’s book it made me question why it was necessary. My old one works just fine. Maybe I need to stop checking each tweet, post, email and text that comes my way?
Being on a budget has also helped me to reduce my wastage. I have tried to plan meals around the perishable items in the fridge that have a day or two left. I have stopped buying unhealthy packaged goods (most of them anyway). I am also going to implement a rule whereby I forcibly wait 2 weeks before buying a personal item. In the declutter I realised that so many purchases I made served no purpose and were impulse buys. This is a habit I intend to eliminate.

10. Alcohol Free
For years I have enjoyed a wine or two at the end of an evening. Call it working with kids all day or maybe just call it a habit. Either way it results in about 3-4 bottles a week in wine. I made a conscious decision to eliminate all alcohol purchases until I reached a particular savings goal. Each week I would estimate that this decision saves me $25-$40. I have also noticed a feeling of having more energy throughout the day as a consequence.

11. Mobile Phone Plans
I scoured the internet once again fishing for the best mobile phone deal. I can recall those golden Kogan days where $25 a month bought you 5gb of unlimited talk and text on the 3G Telstra network. Now the cheapest I can find is Vaya with $18 a month and 1.5gb. I tried them and wouldn’t touch them with a barge pole! I am currently using Amaysim which offers unlimited talk and text with 2gb a month for $29.90. Lebara, Boost and Optus offer similar plans for a similar cost. I decided to remain loyal to Amaysim at this stage as I have been happy with their customer service and coverage.


In life there are a lot of ideas that we have which we think everyone else already knows. This is a collection of the things I have done to consciously save money over the past month. They are not necessarily mind blowing or unique but if you think any of these tips could help someone else, please share the post. If you have any other ideas that could benefit another, please add them in the comments section.

My home was built around 10 years ago before many energy efficient measures were introduced. My family’s electricity hovers between $2500-$3500 despite my frequent attempts to reduce usage wherever possible.

Draughty gaps between the doors, thin window panes, and relying solely on reverse cycle units to heat and cool the house means my bills are always cringe worthy. I have looked into options such as installing solar power but shelling out $4000 for units that return a mere 16 cents per KWh didn’t work out to be financially viable when I crunched the numbers. Retrofitting insulation, double glazing or installing heat retaining blinds were other overly expensive options.

Yesterday we received a flyer in the mail offering a free LED light exchange. An electrician arrives to swap every halogen downlight in the house cost free.

‘What’s the catch?’ I asked the service representative.

‘No catch. It’s just an incentive we are offering at the moment’ she replied.

‘You’re not doing it for free. How do you make money?’

She explained that the company earns carbon credits which are then on sold to companies for purchase. There is no cost to the consumer and the value of the carbon credits is presumably more valuable than the cost of paying an electrician to install the 34 LED lights in my home.

10-15% of the average electricity bill is attributed to lighting expenses. The LEDs I am having installed match the lumen rating (440 lumens compared to 465 is near enough). They use only 6 watts rather than 35 watts, and a rough calculation saw around $400 additional dollars in my pocket each year.

Well worth the change and I feel much better about reducing my carbon footprint. They have also offered to install door seals as my house can be like a wind tunnel at times.

I can’t endorse the company in the photo as of yet as the lights won’t be installed until next week. I also need to note that I have no affiliation with the company. I’m just a guy who 5 years ago would have thrown the flyer immediately in the bin rather than seize a potential opportunity. If you’re an Australian I believe there are many other companies that offer a similar service. If you’re not an Aussie, shop around because I’m sure there are many energy saving incentives available as the planet turns greener each year.

Tweet or share this post if you know of someone who might benefit from this service.

It is rare these days to have a bank that gives you anything other than an interest paid statement in the mail.
Yesterday I received a letter from the NAB to say that they needed to raise the interest on our investment property loan by 0.29% because the ‘market conditions have changed’. Yet the Reserve Bank have kept interest rates on hold. As such I can only look on such a move with skepticism.
ING Direct, on the other hand, have done nothing but surprise me with their level of service and financial credits. First, my dad referred me to them and we both received a $50 credit when I joined. Nice! Next I had 6 months as an introductory gift where I received 5% back for any PayWave purchases under $100. Now that the 6 months have come and gone we still receive a little kick back in the form of a 2% rebate on PayWave purchases under $100.
2% doesn’t sound like much but it is nice to see all these cumulative credits appearing in your account rather than constant debits. It also amounted to $283.67 in the last financial year alone.
While that might not seem like anything to write home about, let alone blog about, it does bring to question how much the average person actually gets back from their credit card rewards.
I looked into a few credit cards last week, crunched some numbers and found that most did not offer a cash reward but rather a store credit system and charged for the privilege of having their rewards card.
I also rang a few lenders to query the cash rewards that they offered and found that most could only really offer 0.6% back on each dollar spent using their card. This would mean I would need to have spent $47,278.33 to recoup the same gains made though ING.
There are a few catches with the ING Direct card however:
• You need to have $1000 deposited monthly into the account.
• The account carries no interest that I know of.
• The card is only a debit card and offers no credit function (Read: This will keep you out of trouble!)
The ‘no interest’ component means that you need to actively make your money work for you. What I mean by this is that you need to scoot your deposits elsewhere to lower the interest payments on some of your debts or to be deposited into savings to earn interest. It would be a bad move to leave $10,000 sitting there earning no interest and would probably erode any potential gains.
Let me know if you know of any other banks offering such services in the comments box below.
Note- I am not affiliated in any way with ING Direct but I do like the cut of their jib! At the time of writing I also discovered that while they no longer offer the 5% rebate on PayWave, the 2% rebate still applies however, and they are offering $75 to new sign ups. Hope that helps.

Hi SavingAdvice community,

For years I have used a home job Excel spreadsheet that I custom made myself. It has done a great job of tracking my expenses and I refer to it with great frequency. It has been one of the primary reasons for my savings over the years.

Excel, has one issue however- it is challenging to update your payments on the hop. I have mitigated this issue by having a Google Keep record of transactions which both my wife and I can add to.

I am, however, interested in Dollar Tree Pro's ability to detect via geolocation the shops you have visited and being able to sync your transactions automatically. $99 USD per year, however is expensive for a highly budget conscious person such as myself.

YNAB is only $60 and I like the look of the interface. The only downer for me is that I want to be involved in a forum that I like. I have a few sour grapes in that I opened a journal on their site and posted thoughts and learnings only to get 13 Spam points within 3 days because I used links to verify my findings and people, as a pack, assumed it was dodgy. As I said, sour grapes but I'm happy to move on if it is really worth it.

Mint is free which is a huge plus!

I am familiar with Excel and I like the ability to incorporate all the expenditure of my investments. I also like being able to calculate with near precision the amount of tax I need to pay or the return I am expected to receive.

Dollar Tree and YNAB offer trials but I don't particularly want to upload a month of data onto a subscription that I won't use.

I have also looked at YouTube reviews but they are often given by people with affiliate codes. Not an issue but I sometimes question the objectivity of the information.

Any advice would be appreciated SA community.

Hope you've all had a spectacular weekend.

I’ve always been a huge fan of pirate stories. The idea of vast fortunes left buried, somewhere, for people to find. Did you know that there is an estimated $4.5 billion dollars worth of treasure still to be found?
Unfortunately, this post is not about helping you to uncover it. It is, however, about helping you discover treasure of another kind. Remember the excitement you felt as a child about going on an adventure to somewhere mysterious and new? This post will hopefully rekindle that sense of fun and exploration.
About 2 years ago I found out about this new treasure hunting craze called Geocaching. For about a month I was a Geonut convert telling everyone and anyone about it. It was quite contagious too. Friends told friends and soon enough we were all racing around everywhere geocaching.
I did say this was about what to do with bored kids though. It can be very hard to discover new things to do with your children that is both fun and free. Take them to the movies and you’ve soon burnt through a $50 note no problems. But geocaching is free, free, free!
The concept of geocaching is simple- someone has hidden a note, a toy or a token. They give you clues and coordinates. You use an app and go find it.
There are a numerous apps out there to help you find one of over 2 million treasures, or caches. They vary in difficulty but they often take you to new and exciting places you’ve probably never seen before. Once you’ve found the cache, sign the log book and return it carefully. Make sure a ‘Muggle’ or non-geocacher doesn’t spot you either!
Most neighbourhoods have around 4-10 hidden in locations you’d never think to look. And why would you? You’re a Muggle after all. Or should I say… ex-Muggle.
Let me know how you go.
More information can be found at www.geocaching.com

I recently posted about cutting down my working hours to 3 days as a teacher. The rubber has really hit the road now and we need to make some tough calls in relation to our budgets.
One massive cost that appears on the budget is presents. I worked out that just in my family alone there are 39 birthdays, mother’s day, father’s day and Christmas presents to be bought. Our family figured out that roughly $40-$50 per gift seemed about right.
Add to this friend’s birthdays, engagements, weddings, christenings, sympathy gifts, thank you gifts and $2,500 to $3,000 seems like a reasonable annual estimate. This is no longer sustainable for us as a family nor is it an effective use of our money.
Does this conversation ever happen to you?
You: “Hey. I realise your birthday is coming up and I’d like to get you something. What would you like?”
Them: “Umm… I’m not sure.”
You: “A shirt, DVD, book, CD, shorts?”
Them: “Hmmm. How about cash or a gift card at XYZ store?”
You: “Okay.” [Sigh]
Cash and gift cards, while useful just seem incredibly impersonal and our finances cannot sustain that amount per present anymore. It also doesn’t allow to use wisdom and research in your gift giving. I love buying an expensive gift on sale and wowing the person with something that might actually be useful to them.
First step I’m thinking will be to lower the amount spent per gift. I’m happy to eat humble pie and say “We have allocated most of our income towards investments. We have cut down our hours to spend more time with our family and we love you, but, we may need to be more creative with our gift giving.”
I think we will next think about giving gifts that build the relationship and affirm the person. The amount of times I’ve scratched something meaningless on a card and whacked $50 in the envelope is innumerable.
Perhaps a better gift and a more affordable one would be something that we have invested time into creating. Pinterest here I come! Another potential idea will be to invite the person to dinner, or take them out somewhere special. Quality time instead of dollars.
If you have any ideas for what you do, I’d love to hear them.

Hayley and I have one month till the birth of our beautiful baby girl and I have recently resigned from one of my work places, thereby kissing farewell to 2 days salary. The craziness continues.
In the past 6 months we have purchased an investment property of around $400,000 and placed an additional $140,000 in a managed investment. We have almost paid off our home but used the equity in our home to finance the loans.
The rental property we purchased came with a delightful tenant (since evicted) who enjoyed avoiding rent payments, boxing holes in doors and taking various illegal substances. In the past month and budgeting ahead into next month, the property has required around $11,000 in repairs and upkeep to make it tenable again.
It gets better, the 3 days of employment that I do have is as a teacher, which is not renowned as being one of the highest earning jobs.
Why in God’s great earth did we decide as a family to drop down to 3 days a week? I’ll give you a few reasons:
1. To spend more family time together. I’d rather live frugally and have time with my kids during these formative years.
2. It gives me a chance to put my money where my mouth is and see if I can save and invest successfully enough to subsist, or better yet, thrive!
3. We have saved and saved for years and know we can do it! Years of budgets proves it even if the knees are a little wobbly.
I realise this might seem silly to some. As I said, we have saved for years though and would have a debt to equity ratio of approximately 1.5.
I have elected to reinvest the returns from the managed fund which is nearly $11,000 in net profits since the beginning of the year.
My wife also earn $8,000 as an editor and we have no personal loans, credit card debt or car loans.
In addition to this we are paying principal and interest off of our remaining home loan and envisage paying off an additional $10,000. We’ll see in a year’s time if this is achievable.
I do have a fall back, I can get contract work as an emergency teacher if the situation becomes dire.
Please if you are going to comment I’d appreciate keeping it positive and I’d love hear any well wishes. I’ll certainly be reading SavingAdvice.com a lot more carefully.

Albert Einstein wrote that “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it!”
This post is all about a reference to a book written by Tony Robbins entitled Money: Master The Game. Now I’m going to start this post with an admission- I have not read this book!
I am an avid reader (or should it be listener) ever since I discovered the Audible collection of audiobooks. Previously, I would average 4 or 5 books a year. Now it is 3-4 books per month.
I am passionate about savings and investments, and generally read specifically around these topics. One book that came across my radar recently was this one by Tony Robbins. It sounded quite different from his other material and right in my field of interest. Unfortunately, there is no audio version yet on Audible. Being money conscious I am reluctant to ever pay more than $15 per book. Unfortunately it tipped the scales at $25 US dollars, which I hesitate to calculate in Aussie dollars at the moment.
Long story short, I found the PDF book supplement free on Audible oddly enough considering I can’t even find the book there.
The link is http://download.audible.com/product_related_docs/BK_SANS_006899.pdf if you would like to read the supplement.
Let me cut to the chase. There is a lot of fascinating diagrams and tables about funds, 401K contribution limits, average household expenditure and other stuff which didn’t make sense as I didn’t have the book.
Of the greatest interest to me, and possibly to you is the power of continuous saving and the effects of compounding mentioned on page 15.
The very top row stated that if you saved $5 per day, over 50 years and earned 10% per annum compound interest, you would have saved… [drumroll please]… $2,598,659 dollars!
I find that amazing! What a great lesson to teach our children.
As a personal reflection, this has made me value each day’s savings and to keep saving consistently. While I don’t want to forsake every enjoyment today for when I’m 80, I can forgo the daily latté to be financially free.
I’m really looking forward to reading/hearing the book. Hurry up Audible!

What Is Your Net Worth?


Money in, money out, a transfer here, automatic debit there. Sometimes we almost need a full time accountant just to keep track on all the comings and the goings of our hard earned dollars. The more accounts and investments you have, the easier it can be for money to float around in the ether. You know you work hard, you haven’t bought a Harley in the past month so you must be getting further ahead right?

Sometimes we can all feel lost in a crowd when it comes to our finances. It is no good guessing that you are on track. One thing I can wholeheartedly encourage everyone to do, if you haven’t already done so is to KNOW YOUR NET WORTH. It is imperative to your financial growth!

It is very hard to aim at something without having measured increments to gauge your progress. Imagine asking your basketball coach about who won the game and getting a response like “You got some in. They got some in. I think you won?”

There is a fabulous saying: What gets measured, gets managed. You know those charity telethons with those humongous goals to raise $10 million for the hospital upgrade? There is always a scale that denotes the amount donated. Why? Because psychologically we are instantly excited and motivated when we see dollar figures ticking over and momentum being gained.

Your savings journey is no different. Know as accurately as possible your net worth. Write it down, monitor it and manage your financial growth. If you drop behind in a month, note down why and take steps to mitigate any future losses.

The calculation of net worth is super simple:
Assets minus Liabilities (Money owing and taxes) = Net Worth

Calculate the values of your assets as a best estimate. Personally, I don’t tend to calculate motor vehicles as they sink like a stone in value over the years (unless it is a historical vehicle).
The way to work out the value of your home and investments is to spend 30 minutes scanning sold properties on the internet. Compare apples with apples. Stocks are easily by checking on the internet too.

You may even find it helpful to calculate 3 prices:
- An ‘I wish’ price
- A ‘Sounds About Right’ price, and a
- ‘No Way’ price.

From that point I would always choose the middle price. The process above might look unnecessary as you could just start with a ‘Sounds Right’ price. The challenge is that we aren’t always quite so objective when it comes to the appraisal of our beloved family home.

Now that you have a plausible valuation, take away any loans and debts. To be even more accurate I like to calculate the tax owing on any potential profits made.

The next step is to write your net worth down on a piece of paper that you won’t lose, a document or a spreadsheet. I use a spreadsheet because I calculate my debts again at end of each month with a fine tooth comb.

Watch your net worth carefully and celebrate each saving milestone that you make. Maybe you can plan a little celebration with your family each time you save an additional thousand. Associate pleasure with saving and you will be guaranteed to form good habits for your financial future.

I have now owned multiple two and even three wheeled forms of transportation. In a budgetary sense they have been brought about a huge saving for me when I rode them exclusively for three consecutive years. 3-4 litres per 100 kilometres travelled. Around $382 for registration (still expensive). And with self-servicing, around $4 in oil to complete a home-job oil change. What’s not to love? When I sold them, I would also estimate that I lost no more than 10% for a year of use. What fabulously slow depreciation!

My latest set of wheels is a Yamaha BeeWee YW100 that I bought with 5,000 kays on the clock for $725. I’ve got to get it fixed, resprayed and registered. All up I envisage around $950 to get it on the road and looking nice.

In the same week I received the registration for my old faithful Rav 4 with over 320,000 kilometres. I would estimate it would now be worth around $500 yet the registration is a ridiculously high $718! I am again pondering returning to a two wheeled commuter as the costs of servicing for a car, the registration and the insurance can be outrageous for such an old, but faithful clunker.

My passion for scooters came about after a trip to Japan and Europe. Those things are everywhere with people easily zipping around.

The location I currently live in is highly conducive to scooter commutes. A gentle 19 kilometre ride through the Yarra Valley has never once brought about anything close to a near miss. Would I ride in the suburbs or city? Probably not. The odds are not really in my favour.
Just comparing the two in a rough tally:

Scooter Car
Value $950 $500
Annual Servicing $4 $345
Registration $382 $718
Insurance $295(Comp.) $266(3rd Party)
Petrol (5k km) $210 approx. $700 approx.
Total Expenses $1841 $2529

$688 is an okay saving to having a scooter. But as you can see there is a large an advantage to having a cheap vehicle with such low annual outgoings and zero depreciation (it’s at an all time low). This year, however, I do have a few upkeeps on the horizon to keep the Rav 4 roadworthy such as tyres, a new headlight and the windscreen. These would easily add another $950 to the cost of the car.

There are advantages to having a car but I tend to travel to work alone, and out and about in the family car. I do love commuting by scooter. At the moment, the minus 3 degree morning requires quality motorcycle apparel to stop from freezing up.

The savings are minimal but still worth it given the table above. Where a scooter really comes into its own is when you have a high value vehicle that is rapidly depreciating.

Owning a newish vehicle haemorrhages money each year. Read the Drive article below for more information.

http://www.drive.com.au/motor-news/biggest-losers-20110506-1ean8.html

Have you ever heard about the amazing Chinese bamboo tree? If not, keep reading. There’s a lot we can learn from this plant in relation to budgeting and investing.

The Chinese bamboo tree is impressive! Over 90 feet of towering greenery above you. But do you know what it takes to make it grow?

In your first year of growing a Chinese bamboo tree you plant it, lovingly water it, fertilise it, carefully remove the weeds surrounding it, and… nothing happens. Year two the same process and… again, not so much as a tiny bit of green bursting through the ground. Year three and four is frustratingly more of the same. At this point, most would think something had gone wrong and would probably be tempted to plant something else in its place.

But in year five something incredible happens. Green life begins to burst through the soil. Not gradually either, but at an astonishing rate, 90 feet in just five weeks! Isn’t that amazing? You could practically pull out a deck chair and witness a transformation before your eyes.

5 financial lessons from the Chinese bamboo tree:

#1- Plant a Chinese bamboo tree. This is sometimes easier said than done but you need to ‘plant a tree’ (or invest) in something that will produce great growth. It might be a savings goal, prospective business, property or other form of investment. Write a plan about what your 90 foot tree will look like, plan what it needs to help it grow and what daily contributions you need to make to ensure its success.

#2- Consistency is the key. Set a goal and pursue it relentlessly. Keep ‘watering’ by saving and investing with that goal at the forefront of your mind. Before you go to bed each night plan one step that you will take to get you closer to achieving that goal.

#3- Have faith that your ‘tree’ will grow. You might be saving, saving, saving while your friends are borrowing and buying, living the high life. Don’t get frustrated! Bad debt is just that. Save and invest towards good assets that will earn income for you. The goal is not to pull the seed out of the ground now, but rather to allow it to grow. If you are doubtful that your investment/savings ‘tree’ will grow, seek the counsel of financial advisor of some sort. You should feel confident in the seed you’ve planted.

#4- Plant other trees. One tree is great but you could help others more in the world by having other trees planted. Once you know how to plant one, plant another or teach someone else.

#5- Enjoy the planting process. Savings and investment is not meant to be like sucking on a lemon most of your life so you can eat cake in your final years. What kind of a life is that? Enjoy the process along the way. When you save more than you spend, you feel liberated. When you invest in something that grows while you sleep, you feel empowered. And when you can help others along the way, you feel purposeful, proud and free!

We live in a digital age. Numbers are constantly changing in our accounts. Up, down. Fifty-three cents credit, ten dollars out, a thousand dollars gone in the blink of an eye.

Think back to when you were younger. Remember that collection of coins you used to have in your piggy bank? How did you spend your money? What kind of considerations did you have to go through to manage your money? Were you a saver or did you blow your money straight away? Either way, those coins and notes meant a lot to you and you knew they were in a finite supply.

It is so incredibly easy to simply tap your card, swipe it in a machine, or use your phones or computers to move large sums of money around in an instant. The problem with this is that we become disassociated with the value of money. Think about buying a $1200 laptop. Which is easier- handing over a card or handing over cash?

Here’s 3 money saving tips that will make your dollars go further!

#1 Pay in cash.

Yes, I realise that cards allow you to get points, interest free terms for 30 days, maybe special shopping credits. Don’t be deluded into thinking that these are a gratuity. Banks know you spend more when you use your card and the massive interest rates on credit cards outweigh any benefits.

#2 Put aside an allocated weekly amount at the start of each week.

Having the weekly budget in cash ensures that you don’t put on hold your savings goals. Put it in a safe place away from kleptomaniacs.

#3 Keep an weekly ledger.

A weekly ledger is a recording of all the ins and outs of your financial transactions. Write down each and everything you spend. Some might be big items like vehicle registrations, insurance items etcetera that should be factored into your annual budget. The weekly spends like a $5 coffee, take away pizza, groceries and so on should be recorded on your budget. If you do need to pay for a bill or move money online, make sure you record it on your budget and take the money out of your weekly cash.

Remember- the reason you are saving money is for the purposes of investing in your financial future. A dollar invested can have a massive compounding effect.

Today I was reflecting on the famous Bob Dylan song ‘The times they are a changin’ when I was asked to make numerous changes to a new rental property that we have acquired. The building was built in the 1970s and hasn’t been renovated since.

Old tiling that has stood the test of time, solid double brick walls, plasterboard that was more than 10 millimetres thick. Things seem to be made to last, until now that is, where I am requested to modernise the appearance and update the fittings.

One of the alterations that the property manager has advised I change is the hot water unit. It is a 50 litre unit which the plumber estimates will only disperse enough hot water to last a person five minutes. Oddly enough this is an apartment that has been built to house 3 and possibly 4 people. My question is how have the occupants spent the past 45 years showering in the past?

The hot water unit at my house contains around 300 litres. I have worked out that it costs around about $12 a week the heat. We often run out of water as the kids like a morning shower and sometimes an evening bath. When we travelled around the world for 4 months we rented out our house for a year. In our absence the tenants requested a high-flow showerhead to replace the frugal water saving feature. Now the unit gushes out water to whoever can twist a tap.

I remember as a child having a 30 cm television with 4 channels. Now my own children watch a 60 inch unit and have access to 20 or more. I fondly recall our once a year family outing to an All-You-Can-Eat restaurant where each family member felt nauseous because we consumed so much. Maybe you can remember waiting for almost a year or more for a movie to arrive from on video tape?

It amazes me that most family units only 3 or 4 decades ago were content to live in 10 square homes. Nowadays people in Australia and other Western nations aspire to have homes of 25 squares or more. There is no way we would put up with a 50 litre hot water unit in such an establishment. We can no longer stand freeze-dried coffee anymore and need expensive machines to disperse water through freshly roasted beans.

Where am I going with this post you might ask? The title was ‘The times they are a changin’. The above reflections might not be representative of you whatsoever, so please don’t take offence. I think, however, you would agree that you know plenty of people in society where this post paints an accurate portrayal. Possibly it shows the root cause for the bad debt that many have incurred? When I moved into a new home with Hayley as a couple of young twenties, we turned down numerous offers of furniture and white goods as it wouldn’t look modern enough for our tastes. Out came the credit card and in came the lesson it taught us about debt.

Indeed that little hot water unit inspired a lot of thought about how much has changed. We seem to have so much compared to previous generations yet still desire more. We seem to have an insatiable appetite for the latest and the greatest. While we definitely have a higher comparative standard of living, I believe we need to celebrate what we have. There is nothing wrong with investments or acquiring assets, but we all need to remember to show gratitude for the blessings that each of us have.

This post is not rocket science and it is not revolutionary in the slightest. It is something we all know we should do, but don't. It has the potential to save us thousands throughout our lifetime but we often cannot be bothered.
It is the power of getting 3 quotes.

By getting 3 quotes for insurance, phone, internet, utilities and services you know you are paying the best amount. You have the ability to save yourselves hundreds and possibly thousands each year.

I would encourage everyone to do this annually as I regularly find that bills tend to go up each year because of inflation, higher overheads [insert other improbable excuse].

Recently I reevaluated my electricity provider against other companies. I did this only a year ago. I was able to save $272 just by checking the rates against an old bill.

$272 is not chump change either and it has a cumulative effect when you get fresh quotes for your health, car and home insurance. You should also check your gas and phone bills.

Keep a record of what you were paying prior and then record how much you've saved. I believe even the most stringent saver could save at least an additional half a grand just by putting in an hour worth of effort each year.

Let us know how much you were able to save in the comments section or if you have other great ways to easily recheck an old quote.

One of the biggest expenses that most people tend to complain about is the fluctuation of fuel prices. There is a perception that petrol prices have a larger impact on us than they do. Yes, it costs money to keep the car running. Yes, transportation of food and resources cost more.

According to the government Money Smart resource, the average adult single spends $20 on fuel and utilities yet $24 a week on alcohol.

Having said that, you can really carve up the weekly expenses by getting rid of the car and riding a scooter. Registration is substantially cheaper as is insurance. I was a scooter commuter for around 3 years. I began my riding career on a cruiser, then a GSXR 750 (not for the faint hearted!) before progressing to a scooter. It began with a trip to Japan and Europe. Scooters are everywhere. Fast, zippy, cheap and easy to park and repair.

When I came back I became enamored by them. I bought an SYM 150VS with only 200 k's on the clock for $2200. I found it safe, fun and... humbling. No bikers would give me the head nod anymore but I was always laughing when it came to the pump. $6 a fill up with an average of around $3 per 100 kilometres. It was an easy service too. Around $4 in oil and a 15 minute job. I had to change the tyre once which was a whopping $60. Dead cheap!

It wasn't long before I sold the sports bike and the car, saved a truckload of cash and began my scooter commutes. It was something I looked forward to each day and a boring commute was suddenly made exciting.

The downside is that you must have safety gear! This is an added cost of around $200 or more. Riders are also up to 35 times more likely to have an accident. It also is not much fun riding along on a minus 2 degree morning or when there is torrential rain. I also need to state that I live in a semi rural town where my commute was along dual carriageway roads. If I were to have an accident, it would have been most likely my fault.

Thankfully, over the 3 years I rode, I did not have a single near miss. I've had friends who were not so lucky however. Ride conservatively is my advice and weigh up the risks.

Another great aspect of purchasing a scooter is that there is next to no depreciation if you buy well. I've only ever lost 10% at the most after owning them for years.

Source: https://www.moneysmart.gov.au/managing-your-money/budgeting/spending/australian-spending-habits

Do you need a credit card?

No. No you don't. Cut the thing up now!

I am an ex-owner of multiple credit cards. To be honest, I don't really remember actively seeking them out. They found me!

As a young twenty something who had gone through a few rough financial patches the idea of a piece of plastic that could 'bail me out' if an unexpected event occurred seemed like a sensible idea. The paperwork was practically non-existent. All I had to do was sign on the dotted line and I had 3 credit cards within the week.

I had envisaged using the card only in situations like I needed an emergency spleen transplant. Plus they had all these amazing points that would save me money. What's not to love? In 3 years if I spent lots on the cards I could have enough points to fly to Sydney.

They also waived the $110 fee x 2 (for my wife and I) and the $88 fee on the other card for the first year.

It got better. They even gave me 55 days interest free. If I was super clever and paid off the credit card at the 54th day, I would be one clever cookie.

The problem was that I did use it. Not a lot at first, but little by little. I also forgot to pay it back by the 54th day. It was hard to remember what product you purchased when too. We were also building and there was a lot of other costs associated. Putting it on the card earned us points. Subtle, subtle poor money management began to creep in.

At the end of two years we had nearly $25,000 on our credit cards at 18% per annum.

We eventually sold the house and moved somewhere more affordable. We cut up the cards and realised the hidden curse in a credit card.

So what do we use now you ask? Debit cards.

Debit cards have the exact same features as credit cards and you can use them exactly the same. There are no points though, but no fees either. No interest expense, but a small interest amount is earned.

The only catch, if you can call it a catch, is that you can only spend what you have earned.

This is budgeting 101. Only spend what you earn. This is the key to improving your savings potential.

I understand that some people could potentially use them to their advantage and capitalise on the incentives, BUT... the banks are banking on you losing out.

The average American owes $15,706 on their credit cards!

Source: https://www.nerdwallet.com/blog/credit-card-data/average-credit-card-debt-household/

Cut them up!

How do you spend your lunch hour?

Lining up in a cafeteria queue? Combing the streets for food?

Or are you the type of person who brings your own lunch that you prepared the night before?

In a budgetary sense, the obvious choice should be to take your own lunch to work. In some ways you miss out on the mystery of having a different meal prepared for you each day, but the savings are huge.

I would imagine, for simplicities sake that most people would spend on average around $10 on lunch. If you buy a $2 salad or some other bargain like that then keep going, you are on to something good! Most people, however, would say that $10 might even be a little on the conservative end.

The maths looks like this:

$10 per day x 5 working days in a week x 48 working weeks = $2,400 per year.

Want to hear something crazy? Doing this over a 45 year working life equates to $108,000 of after-tax, hard earned income!

This one simple change could potentially pay off your home loan.

A few important considerations however is that you should still occasionally go out with your peers on occasion. Don’t be a Neville Nofriends (apologies if your name is Neville).

The other factor is to consider though, is that if you were to do this every day, it would lose that special feeling. Things done repetitively can quickly lose their sense of excitement.

One way to physically see the change is to put the money you save each week in a jar. After a month, count it out and bank it. The financial momentum you gain will make the change you made seem worth it.

You have one opportunity as a parent to raise your children well and to give them a childhood that they love and cherish. Ask a person what they’ve been up to and they will usually identify the work they have been doing, any noteworthy events such as marriages or births and then talk about the places they have travelled to.

Travelling can be an incredibly expensive cost on the family budget.

I know people who save and save and save their entire lives and never travelled. It was a luxury they could not afford. Instead their house was filled with spare coin jars, adorned in 70’s furniture and they wore each t-shirt till each thread finally evaporated. When they retired I observed the wallets suddenly loosen. Their dreams could now finally be realised! Two weeks on a spectacular cruise down the Rhine River and a hefty $20,000 for the privilege. If that was their notion of travel, I can completely understand why it took so long for them to save.

Travel does not need to be like that. You do not need to forsake travel because you have children.

My parents raised me well on a diet of travel. By the time I was 20 I had been to nearly 50 countries. I, in turn, have always been determined to give my kids the same experience. Don’t let budgeting spoil an opportunity to go on a holiday with your kids. Who wants to miss out on those amazing years because of money?

But what kind of travel is reasonable?

When I was a young traveller I used to live on the smell of an oily rag. Eating a can of cold stew, sleeping on benches and walking EVERYWHERE! It gave me a great perspective of how others lived and eroded the fear I had of not having enough. Would I suggest this standard of living for a group of family travellers? No way!

How do you then travel on a budget?

Here are 5 tips that might make your dreams a reality:

#1 Consider a road trip instead of a plane flight

Recently we decided on a road trip instead of a flight. It was an 18 hour drive there and back, but would have cost over $1200 as we booked late. We worked out that it would have been a 1 hour trip to the airport, 3 hours early check in, 2 ½ hour flight, 30 minute check out, 30 minutes to car rental, 1 hour later at hotel. We figured that the cost of the flights, parking, plus the car rental for the sake of 9 ½ hours was not a price we were willing to pay. Instead we drove and had a lot more family time as we stopped along the way.

#2 Focus on the experience

Dollars spent to not necessarily equate to a better experience. Spending $500 on a fancy hotel that you check into at 2pm, then depart from to explore around, sleep in and then vacate at 10am is a sure way to blow your money fast. My wife and I travelled around with our 2 year old daughter for 4 months and had a budget of no more than $100 Aussie dollar per night. Believe me, this was more than enough.

#3 Avoid overpriced attractions

I’ve always found that some of the real big tourist attractions where big money was spent, often left me feeling disappointed. Paying a huge amount as an entrance fee for each member of the family can sometimes be better spent. You won’t be able to brag about saying “Oh yeah, I saw that!” as it pops up on a travel show. Instead you will be able to talk about the experience you had with the people you met and the natural beauty you saw along the way.

#4 Eat where the locals eat

When you visit a hotel, ask the person at the front desk where they would recommend to eat. They will often suggest various fancy restaurants because that is what they think you would want to hear. Ask again and say that you want places where they would eat. This should take you to places that you otherwise might not have found. Places filled with locals, great food and fabulous prices. Much better than some starchy tourist restaurant!

#5 Plan and book early

The earlier you book, the cheaper the prices usually are. Plan your trip well in advance and book things early.

Never skimp on the things that matter most. Family holidays are a something you and your children will treasure forever. They don’t need to break the bank. Spend your travelling money wisely and you will have memories that will last forever.

$8,000! That was what one tradesperson estimated to retile the bathrooms in our extremely modest home. Just to give you an idea of the size that he was working with, it was less than 15 square metres. Understandably he did not receive my business.

My next port of call was to visit a tiling store to explain that I knew what constituted a reasonable price and wanted a tradesperson they would highly recommend who would give a fair quote. They gave me the name of Chris.

Chris was the epitome of professionalism. He was well mannered, clean, tidy, well organised and quoted me less than half of the previous quoted price.

First lesson- Get two quotes as a minimum and go by recommendations.

The second story involves having a repair person from Bosch visit our house for a call out. The water was not being drained. I carefully examined the washing machine and could hear water going in but it was failing to go out. I googled the model number and examined the faults that others had experienced. I ascertained that it was most likely a defect with the outlet house. Later that day my wife rang the service technician. He laughed at my diagnosis and said it wouldn’t be a hose. Upon inspecting the machine for a while he concluded that it was in fact the outlet hose and only charged the $150 call out fee, the hose was gratis!

Second lesson- Do your own research using that marvellous contraption called the internet!

The third story is back from when we built our home out in the country. We had a few outrageous quotes for getting over 150 metres of cabling laid, even up to $15,000. I picked up on a bit of the lingo along the way. By the fourth quote I could say with certainty the exact type of cabling needed and detail the specific measurements required. I mentioned the contacts I had formed with the power company, had an excavator arranged to dig the hole to the exact depth, laid all the necessary conduit in preparation and sealed it accordingly.

Consequently I paid a fraction of the price due to the time that I had saved the electrician in managing the third party tradespeople.

Third lesson- To save money it helps to be proactive. Do your part and get a discount.

The fourth example is not so much a story, but more my experience in negotiating a reasonable rate with tradespeople. I have found you can get a much better overall price when you clarify their hourly rate from the outset. Most people are poor estimators of time. Ask 10 people how many hours it would take to paint a given room. Estimations will vary widely.

When you negotiate an hourly rate you show that you expect accountability from the tradesperson. Most would generally estimate more as a safety buffer when they quote you, so an hourly rate is not only fair for everyone, but usually works in your favour.

Fourth lesson- Negotiate an hourly rate to get a cheaper outcome.

Ever walked past a shop, seen a bargain in a catalogue, found the deal of a lifetime on eBay and thought ‘I have to buy it!’? The fact of the matter is that there are so many purchases we make that are not premeditated in the slightest.

Marketers know this only too well and exploit it as much as possible. Think about your typical trip to the store where you have just 3 items on the list. You are made of steel if you can make it past the half price chocolate and the buy one get one free soft drinks.

With smaller items it perhaps doesn’t matter too much and won’t exactly break the bank. Larger items however, can have a devastating effect on your budget and long term financial goals. Sometimes we get eBay alerts or an email from an online store and are tempted by the option of purchasing a bargain just in case it disappears forever.
Let’s face it, we get a rush of endorphin when we buy. It makes us feel good. But how do we control ourselves?

I have a solution. Introduce a ‘Buyer’s Lag’ into each sizeable purchase.

A Buyer’s Lag is a time that you decide upon before you make a purchase that involves a prescribed amount of money.

An example of this might be to write down that that you would not make a purchase greater than $50 without writing in a diary and waiting a fortnight. Yes, you might lose the deal. Yes, a fortnight is also a long time, but by being disciplined you will save money and only make purchases that you really need.

You may even like to introduce an accountability partner that you have to call to discuss your prospective purchases with. Hayley and I are quite serious about budgeting and know to run our purchases by each other. The Buyer’s Lag adds in another layer of protection and gives you time to think carefully about whether you truly need the item that you desire.

Okay, the last post I made was all about decluttering. At this point I will confess that I am at heart a minimalist. I love my toys, but would be equally happy bumming around in my one pair of jeans and a couple of t-shirts.

When I was a child, at two points in my life, I sold off or gave away all but 3 possessions. I am fascinated by the concept of minimalism and think we would enjoy life a lot more if we had less and spent less.

Confession over. My belief is that less gives you the opportunity to experience more. I am a huge fan of Kirsten Dirksen and her alternate living YouTube channel. If minimalism and being happy with less appeals to you, I encourage you to check out her channel if you haven’t already.

Here are a few short decluttering tips as promised.
* Shed- Dispose of chemicals, old paint, old tiles/bricks, equipment etcetera that you will never use again. There is often a lot of junk in a typical shed that are stored for ‘maybe’ moments. Chuck it. Chances are that you’ll forget it was even there when the time comes to use it.
* Kitchen- How many spare plates and bowls do you own? Got 30 forks? How many salad servers? Cull your excess platters, utensils and appliances. You will have so much additional space in your cupboards as a consequence. But don’t stop there! Go through your pantry. Throw out that 10 year old spice which has needs a chisel to loosen.
* Vanity units- If it’s hard and crusty, dump it. As you throw it out work out the approximate value of the disposed goods. This is meant to be a shameful task and will stop you spending $20 on that latest fad skin care cream that is extracted from rare, high altitude Himalayan mud.
Kid’s Rooms- Why hang on to boxes upon boxes of baby clothes? Sort them into genders and sizes. eBay them as bulk lots or sell them separately if you have the time and patience. Alternately, just donate them. The amount of toys that most kids have nowadays is insane. Based on my own family, I know for a fact that 50% can easily be given away or on sold. The best way, but the slowest, is to remove everything from their rooms and only put back what will be used again in the future.
* Garage- Do you have old bikes you’d never use, car parts, tools that have been replaced with superior items? Photograph your unwanted goods and post on Gumtree, Craig’s List or eBay.
Study- Scan important paperwork and begin to develop a digital file system. Burn or shred banking records older than the government taxation requirement. Dispose or give away the 3 staplers and 30 pens you might have. Don’t keep that old 486 computer with a VGA monitor that sits in the corner.
* Book Shelf- This is up to you. Some people would prefer to lose an eye than dispose of a single book. I am an avid reader and felt this burden when I had to shift countless books as we moved homes. Consider reader PDF files, eBooks or even listen to the text on Audible (my personal favourite). I have now read (listened to) over 45 books in the past 4 months thanks to the brilliance of the Audible program.

I know I said I am a minimalist at heart at the beginning of this post. I will also confess that there is an element of me that loves to learn a new hobby and skill. Currently I am enamoured by kayak fishing and longboarding and am keen to someday learn how to paraglide. These items take up space and cost a reasonable sum of money.

You can’t do it all, but you are also risk becoming quite a boring person if you do nothing of interest. My advice is to limit your passions and try to do things that include others. The more family members or friends you can incorporate into your hobby, the more chance you will do it with greater frequency and share the enjoyment.

By decluttering and keeping your treasures to a minimum, you value what you have and think carefully about your purchases.

How would you feel if you were told you had to move house next week?

Aside from the potential nerves you might experience about moving somewhere new, how would you feel about packing and moving all of your belongings?

For most of us living in developed nations, we would feel utterly overwhelmed and fearful by such a situation.

Over the last century, manufacturing has become comparatively cheaper. We can buy a lot more things with a lot less money (relative to the inflationary factor). Think about the toys you had as a kid and compare them with that of a child of today. Contrast this with what your grandparents used to have when they were children.

The average house size has more than doubled since the 1950’s while the average family size has progressively decreased. The business of extensions, sheds, storage facilities is a huge and booming business. We have so much stuff nowadays and we need a place to store it.

When you declutter, you gain a new perspective over each and every item that you purchase. You spend less time looking after your ‘stuff’, more time enjoying what you have, and you don’t spend time wishing you had more things.

Here are 3 tips to help you declutter:

#1 Wardrobe- Sift through your wardrobe and take out all the clothes you would never wear again. Next do another sift with the filter ‘Would you wear it today?’ I understand that there are seasons and we can change sizes at times, but… with all that taken into account, would you wear it again? Some items might be considered high value jackets. eBay or Gumtree might give you a few extra dollars for those if you wanted. Otherwise take those items to the nearest thrift store to donate.

#2 High Value Items- What do you really use and what is just sitting there collecting dust? Some items we have sitting around have cost us a huge amount of money yet we cling to them while they devalue and decay. Caravans, motorbikes, unused furniture, boats, musical instruments, appliances, kayaks, televisions, computers, even an unnecessary car. You may not want to part with them, but think of the dollars you will retrieve and the space that will be cleared.

#3 Paperwork, cards, souvenirs, memories- Don’t clear out what is really precious but consider doing a cull on what mementos are excessive. When Hayley and I were first married I had instantly inherited boxes of trinkets and souvenirs. Just to give you a taste of the items she had collected, boxes of roller skating trophies, stuffed toys and even a container of cat fur from her deceased childhood pet. Gross! Most things you can just get rid of, some you should keep and others you should photograph and then say goodbye to. It might not save you money, but it will save you space. With saved space, who knows? Maybe you could live in a smaller dwelling?

If you apply some of these tips, hopefully you’ll have a few extra dollars in your pocket, you’ll save money with your new formed spending habits, you’ll feel liberated of possessions and your home will be neater.

Many, many more tips to come so stay tuned!

We live in an age of unprecedented levels of fitness. I would argue that the developed world’s health levels are quite polarised- The uber fit and those who are sacrificing years of their life for the consequences of their lifestyle habits.

The fitness industry is gigantic with gyms and personal trainers residing on almost every street corner. Nowadays we look for ways to correct anything short of a six pack. With all this pressure, it is no wonder we turn to gyms to give us a helping hand.

But some of these expenses have a tendency of adding up. Gym fees of $800 per annum are considered cheap, personal training sessions of $30 for 30 minutes and expensive supplements to keep your nutrition up to scratch. It gets even more expensive if you decide to do it with your spouse.

Just to clarify, I think faith, fitness and relationships supersede any quest for financial wealth. Agree or disagree with that statement. If a gym membership will add years to your life then who could possibly put a price on that?

I would like to offer an alternative however. Could you exercise at home? Think of the travel time saved, the expense and the flexibility.

I have been a home trainer now for years. I was a gym guy but moved way out into a country town an hour from my gym. I purchased around $6,000 in fabulous gym equipment which was well used. Once we moved to a smaller home and had a few kids, we found we needed to reacquire space. I sold off most of the gym equipment except the bare essentials.

What were those essentials?

Power Tower
24kg kettlebell (thanks to Tim Ferriss’s ‘The 4 Hour Body’)
And that’s it!

There are so many body weight exercises that you can do to give you a well-rounded physique. Body weight exercises work on so many stabilising muscles rather than isolated muscles. I would highly recommend reading ‘You Are Your Own Gym’ by Mark Lauren.

The time you could save and money is nothing to be snuffed at. You do need to have incredible discipline though. If you feel you need people motivating you, the pressure of eyes staring, a workout schedule that is combed over by a trainer, then perhaps stick with your gym.

We have private health insurance and have had it for the past few years. It costs us approximately $3500 after the government rebate. We barely ever make use of it aside from when my wife has another amazing child. Even when we do have another child, we still need to outlay nearly $3000 for the obstetrician so it is not exactly cheap.

Australia has an incredibly public health system. There is obviously huge improvements that could be made, but by global standards, we rank pretty high.

Now you know by now that I love to save, so why on earth would I choose to pay for private health insurance? The answer- If my wife is having a baby, she gets to choose where she has it and who her obstetrician is.

To be honest I’m not entirely sure we will keep the health insurance once our family size has met its quota. It is a sizeable cost each month. We did use the hospital cover once when my wife had severe pneumonia. She had spent an agonising week going back and forth between doctors who prescribed her various medicines and told her to come back again in a few days. This went on until she could endure no more and we paid the $300 to be seen by the hospital. In this situation, private health was invaluable.

A few pros for private health insurance:

You can sometimes select your doctors.
You usually receive a private room.
It could be argued that you receive a higher standard of care with doctors and nurses checking on your welfare more regularly.
You get the care you need when you need it.
A few cons for private health insurance:

It is expensive.
You still need to pay for extras.
The difference between public and private might not be worthwhile.
Either way, the choice is yours. I have witnessed a few friends needing surgery who had to wait a long, long time as they kept receiving phone calls notifying them that they had been bumped down the list.

One alternative to most forms of insurance is to pool the money you would have paid into an interest earning account. When you need the money, you just redraw it from the pool. For example 3 years of my health insurance would equate to $10,500 of available funds.

See which method works best for you and the ones you love, which method helps you sleep the most soundly and which bears the least mental cost.