I went on the internet yesterday and discovered that there was such a thing as 'Money week' and apparently it's now. And because my PPL finished and I'm having to be even better with money, and I'm a HUGE fan of budgeting anyway, I thought I'd share some of my basic tips for surviving on an 'austerity budget'*
Know What You Are Spending
If you don't do this already and you'd like to be better with money, track your spending. This means writing down every transaction you make, in or out, over a period of time and then going through and analysing it. I don't track my day to day spending often because I'm pretty good with money now - but I do track the big things like the power bill, so that I know what we spend and how much to budget for. Once you know what you're blowing your money on, you can better target your budget, and your spending habits. For instance, most people I know spend WAY more than necessary on lunch or snacks for work. $10 a day is $50 a week, and that can easily be curbed by making lunch at home. I make biscuits once a week and pop them into little containers for Murray's lunch, and make twice as much dinner as we need so we can have it for lunch the next day. This is a quick and easy, cost effective way to stop that work lunch spending. But we mightn't be doing it if we didn't know that's where our extra money was going...
Get Organised
I love my husband, but he is not the most organised person in the world. When we dropped to one income and I had to redo the budget I found out he didn't know how much our insurances cost... In previous budgets I'd estimated these, but with going to an 'austerity' budget, every dollar counts, so it was important to know exactly. He also didn't know how to find the amount....
If you don't know how much you spend on power/phone/insurance, whatever just go through your bank statement online - pretty simple. Once we found the insurance figures I found out I had previously over-budgeted, which meant I had slightly more money after paying the bills than I thought. That felt like getting free money! But it could easily have gone the other way. If you underestimate what you spend on regular direct debits you may go into overdraft and have to pay bank fees. Paying bank fees for this reason is as stupid as purposely flushing money down the toilet - and so easily avoidable.
And if you're organised you can actually make money. Because I have our power bill budgeted for, and know when it's due I save 10% on my bill by paying it within two weeks of receiving it. If you have a $200 power bill, that's like someone giving you a twenty dollar note. It's the same with your car registration or rates - you know you have to pay them, and if you can bulk pay them (like pay for a year instead of just six months) it works out cheaper. If you budget for these, it will not only stop you from freaking out when you get the letter in the mail saying you have to pay them - but it'll save you money.
You can save heaps on groceries by planning your meals and just shopping for what you actually need. We have just been doing this properly over the last month and it's so much better as we waste a lot less food then we used to, have lovely meals, and I'm not scratching my head about what to cook at 5pm. I choose one or two 'luxury' items, like feta cheese, and incorporate that into that weeks meals alongside cheaper ingredients - like tinned tomatoes. And don't forget that snacks are meals too - having small things you can take with you when popping out will save you spending unnecessarily on expensive dairy snacks.**
Be Realistic
It's all very well and good having ideals, but at the end of the day they could get you into trouble. When budgeting for your power bill, budget for your average bill - don't budget around your cheapest bill and plan on how you will use less power. Average out your last 12 power bills and budget based on that amount. And if you actually are managing to save on power, after three months work out your monthly average again. This will bring the average down marginally, and over time your power savings will be incorporated into your budget - once you've proven that it's actually achievable!
And if you know you cannot survive without something, like decent coffee - put it in your budget! Murray would be not worth dealing with if he couldn't have 'real' coffee on the weekends, so it's incorporated into our food budget - but we only buy it fortnightly. If he drinks it all in one weekend - there's no coffee left for the next weekend. But if having that coffee means you have no money for petrol to get to work - the reality is you're probably going to have to get used to instant.
Get Friendly With Your Bank
The reason I am good with money now is because I wasn't when I was younger. Even when I was earning fairly well I spent pretty much all of it - and on horrible things like expensive shiny pants. I did what many young people do and got into credit card debt. After that, I was slightly terrified of dealing with banks, but have since learned you can use them to your advantage.
I have seven bank accounts. This might sound like a lot, but every one serves a purpose. You probably won't need seven bank accounts but these are mine and what they do:
1) A regular personal chequing account with eftpos card
2) An internet only 'rainy day' account (also for car maintenance)
3) A debit card which doubles as a personal savings account
4) An account for Etta (to pay for things like swimming lessons)
5) A double signatory savings account for our 'real' savings
6) A 'fun' account (this pays for movies/takeaways etc)
7) The 'bills' account (for power/phone/water rates/mortgage etc)
Bank fees through the roof you say? I only pay bank fees on one of my accounts (my debit card) and also have unlimited transaction fees on all but one account (savings account). Talk to your bank and see what they can do for you. Multiple accounts makes it easier to organise your finances and allocate money for specific purposes. Three of these accounts are both mine and Murray's and three are for me. Even though we're a couple, it's important to both of us to maintain some financial independence - Murray doesn't want me nitpicking his personal spending, and he doesn't need to see what stupid things I blow money on either.
Probably the most important account I have there is our double signatory savings. I used to be unable to save money. And then one day my boyfriend-at-the-time's sister decided that she and the family were going to Fiji for her 30th - we both had to save up to go. So we set up a double signatory joint account so we could stop each other from taking money out whenever we wanted a new pair of shiny pants. And it worked. And we went to Fiji with the family! Seeing a savings plan come to fruition is a great way to make you want to keep saving, we actually kept it for quite a while after we broke up (cos we were still friends) and I used it to save for other things. This is how Murray and I managed to save for our Civil Union, and our house deposit. If you suck at saving, I highly recommend it. And you don't need to be in a relationship to do it - ask your Mum or Dad, brother, sister or friend - as long as it's someone who won't buckle every time you want new shiny pants it will work, and you will save money.
Compare Prices
This is especially important when looking to buy important things (like fridges), but also a great way to stop you impulse buying using online specials - which can sometimes be a little less 'special' than you'd think... There are apparently apps you can get for your smart phones which do this for you - but my phone is not that smart so I just use websites like PriceSpy or PriceMe whenever we need to buy big ticket items. These are great cos they can also let you know about demo models available at certain stores - totally worth doing on most everything but TV's, and you'll save a bunch of money.
Although Pak n Save is usually the cheapest supermarket it's definitely worth checking out the other supermarket's specials. I get the Countdown specials email every week, and if something I regularly buy is on special and I happen to be passing by Countdown during the week I'll pick it up from there instead - it's sometimes not worth the time or petrol to make an extra supermarket trip, so definitely not something I go out of my way to do - if it costs more in petrol than in savings than you aren't saving anything at all!
And if you're an impulse shopper who is signed up to deals newsletters like Grabone, and you just can't bear to 'unsubscribe', when an offer comes up that looks enticing just do this. Google that product and see how much it costs. Is it much more than the cost of the 'special' plus postage? And do you really need it? Even just taking the time to stop and look at something else for a few seconds can make you realise that you don't really need those pet brushing gloves after all.
Don't underestimate other revenue streams
This probably sounds dumb but I'm one of those suckers who does online surveys for money. I figure I'm at home, I have no job and I like pissing about on the internet so hey, why not. Because I'm the nerd that I am, I have started tracking my earnings from the various survey sites. Currently I earn about $12 a week in vouchers or Paypal money. That doesn't sound like much, but it's over $600 a year. It's enough to sponsor a child, or buy three coffees (in West Auckland), or if you're me, to put aside for Christmas shopping. Not too shabby really.
And garage sales are not to be sniffed at. We had some pretty massive ones at our old flat to help fundraise for our Civil Union and honeymoon - we made over $700 at one of them! And it's a great way to de-clutter your house.
Incorporate treats
Being on a budget is not a bad thing - it's a way to work toward getting the things you want in life - like a holiday, or to maintain the things you've worked hard to get, like a house. But it can be hard to see it that way when it means you've had to change your lifestyle to stick to it. Because of that, it's important to set a small amount of money aside for treats. It doesn't have to be a lot. I put $3 aside each week to spend on Instant Kiwis, cos they are my 'little happy'. Yours might be chocolate or coffee, Sunday fish 'n' chips or a bottle of wine. Whatever it is, it's important to make sure there is still room for a little sunshine in your budget. Even if it's just 50 cents worth of sunshine.
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So those are my tips for Money Week - sorry I don't have any for Fashion Week. Being a stay at home Mum I pretty much live in pyjamas these days... Combo tip: $5 PJ bottoms from The Warehouse's online store - you probably shouldn't wear them to any Fashion Week runway shows though...
* We're not proper poor - but we would be if we didn't budget and watch our spending pretty closely.
** I have HEAPS of money saving tips for grocery shopping/eating - will write a blog just about that some time soon.
