24 January 2008

Controlling your money

There's no doubt about it. Almost everyone has money problems at some time in their life. We all use the stuff, it is a requirement of modern living and for the most part, we don't get much of an education in how to handle it. Usually our lessons are by trial and error and many times we learn a lesson too late to avoid a financial disaster.

Hanno and I made the choice to live on a very meagre budget. We have no debt, an emergency fund, we have money invested and we have shares, but we choose to live frugally. Our total budget for the month is $1370, of which $765 is left in the bank to cover bills and $605 is withdrawn in cash to spend on our needs. The $765 covers car, house and private health insurance, phone, internet, electricity, house and land rates, car registration and maintenance etc.

This is the breakdown of the cash withdrawal - $605:
  • Groceries $290
  • Fuel $120
  • Health $50 (includes vitamins, doctor, pharmacy)
  • General $145 (includes garden supplies, dog and chook food, clothing, pocket money)

The only amounts that are always spent are fuel and pocket money, everything else we usually underspend on. We get $80 a month ($40 each) pocket money. That may be spent on anything we desire, or saved for a double whammy the next month.

The one thing that allows us to be so frugal, apart from our attitude to spending, is our stockpile. Stockpiling allows us to live well on food we usually buy on special and if we are running short on money, we can stop spending on food altogether and live off the stockpile. I was please to see others say they do this in the previous comments.

Let me say here loud and clear: being thrifty is not about being cheap, miserly or being poor. It's more about recognising our own needs and not exceeding them. Now for me, my needs might be that I require to eat healthy food, buy local fresh dairy products, a new car every few years, broadband internet and enough wool and cotton to knit. Your needs, on top of what you need to stay alive, might be organic food, pay TV, a motor bike and good clothes. Or maybe you're more into travel, so a trip overseas every three years, dance class for your daughter, soccer club for your son, 5 magazine subscriptions and 6 books a year. It could be anything within your means. The choice is yours, and you make that choice after you've done up your own budget to find out what money you have left over after you've paid EVERY bill you know you'll receive during the month.

Everyone makes their own choice because we all have difference circumstances, desires and needs. But when you make your choices, you stick with them and you don't add other choices on top. That is when you get yourself into hot water. Unless you're a millionaire, you have to recognise the fact that your money is limited. You have to live within your limits.

This is where personal responsibility comes in. You are aware of the choices you make and accept the consequences of them. I'm sure a lot of us would like to go through life like we did as teenagers - buying whatever we wanted, doing whatever pleased us. If something goes wrong, someone fixes it. There comes a point though that we make a transition to a more mature point, where we think carefully about what we are able to do and what we can't do. We examine our income, write up budget and make our decisions on what we can do within the means we have available to us.

I know there are some of you who will be saying: I deserve a treat every so often. Or, I want to enjoy my life! Maybe you do deserve a treat, but I think you also deserve to live a good and decent life, unburdened by debt. How much of life do you enjoy when you have too much debt? Doesn't the burden of paying off debt dampen a lot of life's joy?

A number of you have allowed me to take you by the hand with advice about other things. I wonder if I can do it with money and budgeting. Do you trust me enough to believe me when I tell you that a budget will help you organise your money? Will you follow my lead on how to manage money? I wonder. This is a tricky one.

I would like to pass on to you three things that will help you:

  • Stop spending.
  • Make a budget and stick to it.
  • Stockpile

But you have to supply the personal responsibility and you have to find the joy of life and not just the pleasure of spending. I know it's much easier for me to write these words than for anyone to act on them. I know it can be done though, because I have done it myself. I used to be a spender and now I'm not, my attitude to spending is completely different now.

I also know I'm at a different stage of life to a lot of you, but that is what I mean about making your own choices. YOU decide what your choices are and as long as those choices are within your means, and you stick to your choices and not keep adding others, then I'm sure you can manage your money well

Tough times are predicted in coming months so some good decisions now may change your life. Are you game enough for this? Can you organise your money instead of it organising you? I wonder who can do it. I'm happy to offer my help if you need help. If you get stuck on your plan or your budget, email me and we'll see what we can sort out together. Good luck everyone.

Niki at rural writings is also writing about money at the moment. Check out her post here.



  1. Rhonda Jean --
    I gave you a "You Make My Day" Award today on my blog: http://crafty-angels.blogspot.com/2008/01/thank-you-angels.html

    Thank you for brightening, and enlightening, my world!

  2. RJ, I'm not sure whether the sales on sheets are still around, however I too still have that on my list for Jan sales together with a good long lasting pot/pan set. May go out today and so will let you know...I think some shops have the "sales continue till sold out" approach or until the end of Jan. Although for me it is easier not to go to the shops. I find it exhausting and inane trying to discern the marketing tactics and lingo from goood value!! Thanks for your great posts, as usual!!
    (this response is to my comment yesterday)

  3. Hi Rhonda Jean,
    Another great post!
    I want ramble on today.lol Thanks for allowing me to do so. :o)
    Thanks again for taking so much time for helping others!
    Have agreat day!
    Blessins', Lib

  4. It's interesting seeing the way other people prioritise their money, and the sorts of tactics for savings that work in different environments.

    For example, you've paid off your house so you spend much less on housing than I do (I'm renting) but you spend heaps more on transport than we do (we can walk nearly everywhere). You live in a larger house than we do, so stockpiling makes sense (the larger space is working for you) but a large stockpile doesn't work for us. We'd have to increase our housing costs quite a bit to fit one in!

    It's hard to learn about money, so few people talk honestly about their income or expenses, so thanks for your contribution. There are lots of budget calculators online for people who are having trouble coming up with one, Choice magazine have a good one, but you might need to be a subscriber for that.

  5. Your thoughts are coming at an appropriate time. My husband's pay has been recently cut once more. I am positive but feeling a bit challenged.

    We've been paying down debt (with a slower stride now) as quickly as we can. Even with the challenges, we hope to be out of debt this year. We've crunched everything, but our elec./heating bill is still high. We have cut it to the lowest point tolerable. The other challenge is we have little reserve to fall back upon. Each time we seem to get a reserve, the car breaks down or similar. I know we are not the only ones this happens to I'm sure. :) Due to health I am not able to work.

    Might you or your readers have any practicals for going through a pinch? Or even how to acquire more of a reserve? What do you do when you have to buckle down? I am quite frugal already, but there's always more to learn I'm sure.

  6. Rhonda,
    I wanted to add that it sometimes seems really hard to control your money when life's (basic) expenses are trying to control you - hope that makes sense.

  7. Rhonda Jean,

    So very true that being thrifty isn't about being cheap, miserly or poor. Granted circumstances may lead for some of us to be thrifty, unemployment for instance, but I think that many of your readers are thrifty by choice, or wanting to go the route of thrifty.

    I'm curious to know do you put things like deodorant and shampoo under Groceries or General? I'm still debating if my 'grocery' budget for the month should include those items or if I should have a seperate column for non-food items.

    I do have a question for your readers: how do you handle work colleagues who are really big into eating out or ordering in food? We have a lunch outing in a few weeks time; I insisted it be AFTER payday so I would at least have some pocket money, but I'm a bit concerned that eating out might be a common thing. Obviously I don't want to ostracize myself but at the same time I don't really have the budget for weekly work lunches. Especially since they're sit down meals and not fast food.


  8. Maggie,
    Might I suggest you just be honest with them when asked, saying, "I'd love to go, but it's not in my budget right now". It might be humbling, but I think they will understand. You could always suggest a pot luck at work once in a while - everyone could bring a dish to share. Don't feel badly, you can only do what you can, and I think being honest is the best way to go. They will know that it's not because of them that you cannot attend.

  9. Hi Rhonda, As always your posts are timely and hit the nail on the head! Thank you. There is a uk based website that your readers may find useful, with budget sheets etc (makes sure you don't leave anything out!) and also has a weekly email for any particular deals etc (great for stockpiling, or when your insurance is up for renewal). It's www.moneysavingexpert.com
    Blessings, Diana
    Ps Rhonda, hope you got my email re Choosing Eden, I've had some go very astray in the last week!

  10. Hi Rhonda,
    this is the first time in 30 years that I have started a new year with NO debt. Last year we paid off both cars and our house and we never carry credit card debt. It is a wonderful feeling.
    We have not increased our budget even though we have more 'disposable income' but we are treating ourselves to a trip to NZ to celebrate our 30th anniversary in September.
    This year I am trying to stretch our budget even further by working on a calendar month rather than a 4week cycle. January has been difficult and I have over spent by $20 on fuel but am hoping to get to the end of the month without anymore blowouts.
    BTW, Pillow Talk and Spotlight both still have sheets on sale.
    Cheers, Michelle.

  11. What amazing and informative posts! I was always terrible with money and carried credit card debt and was sometimes afraid to even answer the phone. (What single parent has had at least a short spell like that!) Then I met DH. He is really good with money and I have gladly handed over all the finances to him. He takes care of paying all the bills, tracks our money, and does the investing. He's very good at that (he's an accountant and reads financial and investing books for pleasure) and he just did our balance sheet for the end of 2007 and I'm amazed at how well we are doing in such a short time! By the way, if I every wanted to see what our financial position was he has it all on the computer for me to see if I want to. I just chose not to. All those years of of worry and stress struggling with money, I just don't want to deal with it anymore. Not necessarily a good way to be, but it's the way I am anyway.

    So the only money I have to manage is my own personal spending. We have agreed to each getting a certain amount (I get probably twice what he gets, he's very frugal, plus he doesn't need as many things as I do, things like make-up, hair cut and colour, and pantyhose!!). Anyway, I've learned an awful lot from him over the years. I use my credit card for a lot of things since I have a bank account that has lower fees for only a few free transactions. Paying off the credit card each month is only one bank transaction! I've also managed to get myself a nice nest egg started out of my own monthly money. DH knows about it, I'm not saving for something behind his back, but I'm really pleased that I now have over $1,000 of my own money in a mutual fund!

    Thank you so much for all the information you share with your readers, and for all the time and effort you put into this blog. You are amazing! And by the way, I think you have the trust of a lot of your readers.


  12. looking forward to learning more, as always...

  13. Our budget was totally out the window in 2007, as we began building our house, and have had LOTS of unexpected expenses with that. I'm really hoping to get it back on track again this year, but am struggling with just getting started.

    I'm struggling with keeping track of spending, as most of itis done on debit card (we have an offset account, so it makes more sense to keep money in the account until it is used).

    I know I need to get on top of this, but I guess I'm a little scared to even get started.


  14. Hi Chris, thank you for the award. You're very kind.

    Thanks Bella, I'll look into it.

    Hi Lib!

    Kate, I take your point on the differences. I actually wish I could write about the many different ways of saving and organising money, but I'm no expert and it's such a big topic. I really like it when other view come into play because it helps everyone know that my way isn't the only way and that each person deals with money things in their own way. Thank you.

    Lyn, I know you're living a frugal life now. I think we mayn be able to teach us something. You could try to save on utilities by monitoring your meter readings and only having one cheap phone. Are you buying generic brand groceries and making your own cleansers? Just a few reminders which I'm pretty sure you already do.

    Maggie, whatever I buy at the supermarket, I put under groceries. I don't buy shampoo anymore - I use either bicarb or the soap I make, but deodorant is under groceries. And I agree with Lyn's comment below about the work dinners.

    Diana, thanks for that reminder. Moneysavingexpert.com is a great website and I do recommend readers check it out. I'll email later today. I did receive your emails but have been a bit busy.

    Michelle, are you the michelle from ALS. If so I remember when you first started to turn yourselves around. The fact that you've done so well is a real credit to you. Congratulations. Thanks for the info on the sales. : )

    Thanks Jackie. My Hanno is great with money too. We're a lucky pair of gals, aren't we. Congratulations on your $1000, that's a real achievement.

    Hi Kelly! : )

    Hello Tamara. There is no time like the present to start something. I know it can be scary, but so can the consequences of not dealing with it. Just do one thing at a time, and convince yourself it's important enough to stay with all the way through. When you've conquered that, start on something else. We all had to start somewhere, love. This is your time now, take a deep breath and take responsibility for your money and I promise you won't regret it.

  15. Rhonda,
    Thank you for replying back. I am cutting off all things electrical that I can inside & trying to hang laundry more, which is physically challenging so I do it as I can without guilt.

    Thank you for the other reminders too. I use some coupons, but do a combination too of sales, mark down items, buying needs, stocking up my pantry, using generics, etc. As for cleaning products, mostly all are natural now. I have gardened a small bit in the past few years but I am doubtful I can do it this upcoming season, but that is okay.

    I'll keep at it though. It's nice to see what you and others do that help make a difference, frugally & simply.

  16. Great post Rhonda. I agree that being thrifty isn't about being miserly. Sometimes it is more frugal to spend a little more on a quality item, than less on a cheap version which will break or wear out after a short time.

    As for us, we are challenging ourselves this year to save more than ever before. That savings will go towards the mortgage and a small, frugal, train holiday later in the year.

    Last year saw us in the black with our only debt being our house (quite small now) but last year we spent a bit on things like new gardens for veges, fruit trees, water tanks, etc. This spending should help us save money this year. Already we are eating most of the fresh veges we consume from the garden (exceptions are spuds and onions which I have had trouble with this last year). We buy fruit still and other food staples but many things we previously viewed as staples are no longer found in our home - paper towel, shampoo, toothpaste, etc. We have found alternatives to these which don't cost nearly as much.

    Our budget has been drawn up and a plan has been made. We'd like to sock away double what we did last year. You tips and tricks have been so valuable. Thank you.

  17. Hi Rhonda.
    The budgeting one scares me a bit - mostly because its seems like we have a millions little expences like life insurance, income protection insurance, insurance of houses, stuff, etc.

    But I think I have gotten realy good at not buying STUFF. And as a result, we are saving lots more money than we used to, and paying extra off our morgage - which feels fabulous. Simple things like taking leftovers for lunch, and bringing your own water rather than buying it make such a difference.

    These days, if I feel like I need a treat - I organise a massage or something nice like that, rather than buying more stuff, and this has been such a liberating change.

    Its intersting that the things that are good for our bodies, souls, and pockets are also good for the environment hey!

    I love your blog Rhonda - thanks so much

  18. Rhonda,

    This is a wonderful post! I am with you on stop spending. I hope others listen to you:)

    The one thing I need help with is stockpiling. What extra's do you buy? I usually buy just what we need and not much extra.

    Can you give me some advice in this area?

    Thank you for being so honest with your budget. I am hoping in the next few monthes that my husband and I can have pocket money:) I would love to buy some new yarn:)

    Love to you,


  19. Rhonda Jean - a very timely post. I'm looking forward to learning more! :)

  20. Hi Rhonda Jean, What a good post. I am a new widow, in good financial shape, and had been managing things for several years as my husband died of Alzheimer's, but I will be redoing the budget as of February 1st. We always felt that a good life was achieved when one had enough to cover ones needs and a few luxuries (not wild extravagence, but some disposable income). It's bad not to have enough for ones needs and equally bad to be able to have everything one can think of....I am just considering stockpiling, which I probably have always done in a haphazard way. It's coming at the same time that I learn to cook mostly for one. My youngest, a son of 25 years, lives at home while going to graduate school, but does his own cooking for the most part.
    Just got a small freezer this year and some people may not be aware that it is cheaper (more fuel efficient) to freeze solids than air, so if you haven't much in it, it's good to freeze water in whatever leftover plastic jugs you can come up with. But you probably knew that already.
    My luxuries are books and plants, mostly and I'm trying to buy books from library sales and use the public library!

  21. I'd add - don't take a loan for something you want, save up for it first. That way you don't pay over the odds in all that interest money you end up paying to the lender. I've had that philosophy all of my life and it's allowed me to retire early so that I can enjoy life to the full :)

  22. fantabulous! But um, where do you live that you can cover your mortgage, car, insurance, phone, etc.?

    Because um, seriously? I'll move there! :)

    We live in NYC, and the big trade off is amazing public transportation, so we don't have a car, but our "House" expenses are just under 2k a month, but we pay MUCH MUCH less than most renters, AND we own. AND we have a vegatable garden in the back. But still 765 to cover ALL that is SEXY!

  23. WOW.... I WISH $765 would cover all that here. If we had to pay for private health insurance (rather than have it provided through my job), that ALONE for our family (of 7) would run more than $765 a month. Now, granted, that's US dollars, and I have no clue what the exchange rate is. Our rent for a 950 sf apartment is more than that a month, too. (and yes, we have 6, and every other weekend 7, people living in that small space... it's a little cluttered at the moment - we need to purge again)

  24. No problem Rhonda. A few inner city savings, for anyone who's interested:

    1. shop at the markets and compare stalls rather than supermarkets. If you can see 'juicing' carrots or apples (the ones that have gone a bit soft, or have blotchy skin) snap them up - if you don't make your own juice, you can use them for cakes/muffins. There're fine to eat, and you don't need the prettiest fruit and veg if you're going to grate or stew it.

    2. markets are also good for bulk goods sometimes. They wont necessarily have everything you want, but if you're prepared to have a look around, or cook more experimentally, you can eat very cheaply.

    3. ditch your car. We're lucky here to have a 'flexicar' locally as well as public transport. You can pay flexicar monthly and save up hours of credit (fuel and all other car costs are included) so that when you do drive you've already paid for it. You can cancel your membership any time if you hit hard times, much simpler than selling a car! If you're not chicken like me, motorbikes are a lot cheaper than cars if you have a longer commute, or one that doesn't work with public transport.

    4. Buy the smallest, most energy efficient appliances you can. Inefficient appliances lock you in to regular high bills. A large fridge also encourages you to get slack about clearing it out regularly and makes it harder to see what you've got.

    5. Almost everyone has room to grow herbs, even if it's on a window sill. I used to grow pots of herbs rather than buy flowers when I lived in a flat (which are always a temptation when you live in a tiny place, with no backyard, and they're so cheap at the market!). Now I have a little backyard, so I grow my herbs outside. My cacti collection is still on the kitchen windowsill.

    6. De-clutter. Get rid of anything you don't need, differentiate between things you want to keep for display (vases and ornaments for example) and things of sentimental value that you don't need to keep on hand (your kid's school reports) and put any of the latter in a storage facility along with your old tax records and that thing of your Mum's that you don't like but can't throw out. It's cheaper to have a storage facility than to get a bigger house with another room.

    7. If you're renting, check the appliances and the fuel they run on, and have a think about natural light and heat/cool breezes. Where I live that means aiming for a place that has gas cooking and heating, rather than electric. Even if the rent is a little higher, it may be a cheaper house/apartment to live in if you don't have to turn lights on during the day, or run an electric hot water system.

    Hope all that's of interest!

  25. Rhonda-mending is so easy and so many people put it off or toss the clothes like you said. I have also cut apart t-shirts that are too far gone to mend and have been for years. I have a huge basket of my girls t-shirts from many years ago cut into squares and waiting for me to make two quilts out of-one for each girl. My next door neighbor says I am a cheapo- and I guess I am and darn proud of it too!!

  26. Hi everyone! Thank you so much for sharing your ideas and suggestions.

    Renee, there is some stockpiling info here: http://down---to---earth.blogspot.com/2007/12/stockpiling-groceries-101.html and here: http://down---to---earth.blogspot.com/2007/12/stockpiling-groceries-101-part-2.html

    shelli, I live in a small semi-rural town in Queensland Australia. We'd be happy to have new yorker here. : ) We have no debt, we paid our house off years ago and have been able to cut back on many things we once thought of as necessities.

    Judy, private health is our biggest expense. From memory, we pay around $2500 a year, and pay each 6 months. That gives us top cover for hospital and medical with a few odds and ends throuwn in, like optical, dental etc.

    Thanks again, Kate. Great tips.

  27. Another resource full of information, freely available resource from the US Government, is the My Money Tool Kit. It is a free package of helpful publications on saving, investing, protecting and getting the most for your money. Check out more info at:

  28. Thanks voor this great post, Rhonda Jean. It's over a year ago when you wrote it, but it is an eye-opener for me.
    Money is controlling me at this moment and i want to turn that around.

    You give me great inspiration to do so. Thank you so much.

    Ingrid (holland)


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