Before you, buy a car, book a holiday, or hit the shops for retail therapy, check your budget to see how much money to have to spend.

It sounds simple, yet not many of us actually do this.

Think about this, if you dont know how much money you have, then how do you know how much you have to spend? Sure you could swipe the credit card and pay it back later, or get a loan and pay it off, but, is this really making it affordable or just adding debt to your existing commitments?

LEARN TO BUDGET NOT TO BORROW!

When was the last time someone showed you how to budget? It is not complicated, nor time consuming, it just takes a little bit of thought.

My experience:

No one showed me how to budget. My entire family is hopeless with money. I have been blessed with an inherit ability to use money wisely. Ha.

I have been saving money since I was in primary school. I would not buy books from book club, or sweets from tuckshop, rather I would put my money in my CBA dolomite account every Tuesday when the lady visited our small country school. I did this every week for 12yrs. When I finished my school days, I took my mother and myself to USA for 10days and paid cash for my first car.

I view most (90%) of my purchases as value for money purchases ie. Kids want a cinnamon donut from Donut king while shopping at a cost of $1 each= $2 for two kids. ??Is that worth the money?? OR Am I better of stopping at Woolworths first and buying a cartoon of 12 donuts for $2. Take left overs home freeze and add to school lunches for the next 10 days.

Household BASIC items ? cleaning supplies, butter, flour, sugar, honey, eggs.? I buy the cheapest brand.? These items have the same ingredient whether you pay top $$ or lowest $$……? I do not buy pre-package cakes, pancakes, instant meals, etc. I make everything from scratch ? flour, milk and eggs.? (Mainly because Alex is preservative free)

When I buy everyday items ? toilet paper, tissues, body wash, soap,? I buy the cheapest per unit price (within reason). Personal preference I do not buy cheap and nasty toilet paper, tissues, paper towels. ?Some toilet paper is 26c per sheet while others is 50c per sheet. Every house uses it and goes through heaps, it makes sense to buy it at the lowest price. Ie. If buying a pack of 12 rolls, this method can save you $5 per pack, or over $130 per year.

If bills offer a discount to pay in full rather than instalments, I pay in full.

I do not buy lunch. I eat from home at EVERY opportunity. We eat leftovers the following day or evening. If we go out (often we do) and I have left over steak or pasta, etc I ask if I can bring it home. It makes a great lunch the next day or dinner for the kids. At $15 p/day ?saved by NOT buying lunch & drink, that is saving $75 ea week. Or $3900 per year.

Around the house.

We do what we can ourselves. Ie mowing, gardening, fixing things, cleaning cars (do not pay car wash), clean leaves from our gutters, saving hundreds/ thousands in trades ea year.

We buy things on special ? check catalogues, check websites, read the papers. At every chance I shop when things are on sale. Napisan half price can save $7

I Shop where the items are cheapest. ? ALDI, Costco, WOOLIES, COLES.

Aldi ? is fantastic for basic everyday products ? cleaning, canned tomatoes, butter, flour, cereal, kids lunch box snacks, sauces, washing detergent, toiletries, Buying here would save us approx. $80ea week

Costco ? GREAT for bulk buys. Meat, frozen foods, party snacks,

WOOLIES / COLES ? good for weekly specials.

I bulk buy meat, fruit where possible. Premium mince per ? kg pack is $6-7 at shops or if purchased bulk ie 3kg or more from Cosco, ?can be as low as $7 for 1kg. Saving me $21 for a 3kg packet

We do not spend much money on pamper items. Eg

I cut the kids hair, I do my own nails, we do not splurge on massages, facials, night clubbing, or expensive wines, imported beers, pre-mix drinks, etc. We do these OCCASSIONALLY.

Buying big ticket items ? Do people really need the top of the range car? Seriously. We look at price V value.? Is it worth an extra $12k to upgrade to lather seats and a louder car stereo?? Will you use Car stereo to host your next Birthday bash or home social gathering? Will you buy seat covers to protect the leather? What is the point is paying extra for these items.? What will be car be used for? How long will you keep the car? What will it be worth in about 4-6yrs when you want a new car? Will it depreciate moderately or enormously?? How much you likely get for re-sale to put towards your next vehicle purchase in a few years?? All things we consider when buying a vehicle.

Buying a house ? So much to consider here. Why are you buying it? How long will you live in it? Is it located in an area that will have high capital growth? Will it rent well in future? Will you have to spend money on it to renovate or upgrade?? What stamp duty will you have to pay?

DO we go without while watching our pennies? ? YES

We do NOT buy expensive NZ wines ? rather we buy bulk buys or cast wine.

I do NOT buy brand names just because they are brand names. Higher price tag Doesnt mean they are any better.

I do NOT buy my kids every single thing they ask for. I buy what they need and small gifts from time to time. (I grew up on farm, with no flushing toilet, no bedroom to myself, no fancy battery operated toys, playstations, ipads, mobile phones, big screen TVs, pool, etc.? We had dam, tractors, mud, push bikes. And land. Lots of land. So we had to create our own fun. And we did.

Dont get me wrong, our kids are spoilt but with limits.

We do NOT shop in myer, or designer shops. We do NOT buy the most expensive cheese, free range eggs, butter, ham etc. we buy what is good quality at a good price. ALWAYS thinking price V value

We do NOT own motorbikes. We do NOT visit expensive restaurants, or clubs, or pay $9 ea for a corona beer at a club/pub. We do buy nice cars, beers, clothes, holidays when the price is fair.

Bills / credit cards.

We ALWAYS pay on time to received discounts and NEVER, NEVER not pay the credit card in full each month. I cannot bring myself to pay interest to the bank.

We pay more than our min repayment to our mortgage and we pay this weekly, saving us interest and reducing our loan faster. In the past 2yrs 4mths, we have reduced our mortgage by approx. $55,000 and plan to be debt free within another 5yrs.

Around the house

We turn lights off when not in the rooms, turn water off when brushing teeth (old farm habit growing up with tank water) use ceiling fans rather than air con where possible. Do NOT use the clothes dryer unless I have too. We have switched all light bulbs with energy efficient LED bulbs.

Quick showers, shallow baths for the kids, dont drive if I dont have too. (saves fuel obviously) When I do go out, I do everything I one trip so I dont have to go back and forth.

We do not subscribe to anything. Ie magazines, gym memberships, personal training, no private health (although I would like to have this), we only have min required phone plans.

Insurance,

Every year I do the painful task of ringing around to get the best price on car insurance/ home insurance.? This pays big rewards. Last year I reduced our car insurance premiums by $270 in just one phone call to our existing provider.

Our Luxury items include

  • Both kids in private school & private kindy
  • Brand new cars every 5-8 yrs
  • Overseas holiday annually
  • Dave has hair cut every 4weeks
  • We eat out 1-2 nights a week ? take kids to restaurant or get takeaway
  • We go out every weekend (preferably somewhere free) ? markets, beach, park, friends, waterslide, etc
  • Buy new clothes when we are going somewhere new. Ie Christmas function, wedding, big party. On sale of course.
  • Short stays in resorts 1-2 times each year.
  • Camping 2-3 times yearly.
  • We do buy top shelf drinks, cheese, nibbles, brand clothes on special occasions just NOT all the time.