Reducing the cost of living 2

9 January 2013
We went to see the cardiologist yesterday.  He has booked Hanno in to the local hospital next Monday for an Angiogram. We have no more news until the doctor sees the results of the Angiogram.


If you need to be convinced about the merits of paying off your mortgage early, find a mortgage calculator and enter in the details of your loan, play around with it and see how much interest you will save by paying that money back sooner. I took the liberty of entering a $300,000 loan into the ING calculator. I used the interest rate of 7.5% which is about right for Australia now. Your country will be different. On that $300,000 loan, if you take the loan out for a term of 25 years, you'll end up paying back $365,091 in interest, or $665,091 dollars in total. If you can pay that loan off earlier - say 15 years instead of 25 years, you'll pay back $200,587 in interest, or $500,587 in total. That is a difference of $164,504 that you would save if you could do it. That is $164,504 in your pocket instead of in the bank's accounts. It's worth doing it if you can. Not everyone can, but those who can do it, should. Even if you pay it off five years early, you'll save $80,064.

Some of our commenters yesterday suggested paying fortnightly instead of monthly, increasing your payments $10 a week each January and making extra payments when you have spare cash. All that has the potential of working but you have to make sure you can do those things on YOUR loan. Each bank has different rules. Check your loan details and make a plan when you know what you can do. And if you're looking for a house now, don't ask for a media room, separate bedrooms for all the kids, a pool and large entertaining area. Look instead for enough cupboard space, a kitchen that is easy to work in, insulation, water tanks, room for a vegetable garden and chooks and maybe solar panels. Or the right house to suit you at your current stage of life.

Budgeting and working to lower the cost of living is as much a psychological exercise as it is a physical one. I'm taking my time talking about the whole concept of paying off debt both yesterday and today because it's important to have the right mindset. It will help a lot if you can change your idea of what success is. When I was spending like a drunken sailor my idea of success was to have the money to buy whatever I wanted. Now it is more simple and refined - to have my family safe, happy and close, to be healthy so I can remain independent and active, to work hard and to be content with what my work brings me. It takes a while to get your head around it and to convince yourself that whatever sacrifices you have to make, are worth it. So think about your own circumstances, work out a plan that will work long-term and then put that plan into action.

I have found that having a routine helps me do my house work and having a structured plan helps reduce our cost of living. You need structure. If you take a slapdash approach you be all over the place with no real path forward and you'll give up quickly. If you haven't already done a budget, do one now. A budget was one of the things I dreaded doing in the beginning because I saw it as a restriction. Instead, it turned out to be a wonderful map for me to use. I knew how much money we had, how much we had to pay in bills, how much I'd put aside for groceries and when we had money left over, I knew we could save it and that all the bills were paid. A budget will give you a clear picture of your financial situation. If you have to guess that, you're not in the best position.

So, make up your first budget, or upgrade your existing one to make sure it's still covering all bases.  Think about what you'll get out of this new commitment to lowering your cost of living and before you get any comments or criticism from family or friends, decide this is right for you and no matter what, you're sticking with it. You have to be confident that is the right thing for you. 

Look at what you have right now that you're paying for - your phone plans, your internet plan, insurance for house, contents, car and health and look to see if you can get a better deal on your current plans. Even $5 a month is a win. Go over everything. If you have two cars, work out if you can do without one. If you can, sell the car, if you can't, try to cut the costs on your car insurance and fuel as much as you can. Look after your car/s, check the tyre pressure, don't let it run out of fuel, have it serviced on time. Check around to see if you can get a better price on the servicing. We used to go to a dealership for our services and then found an excellent local mechanic who did a first rate job for much less. Do you have pay TV? Do you need it? If not, make the call to cancel it.

If you're earning a minimal wage, work out if it's worth it for you to be working. It might make better financial sense for you to be at home, shopping for grocery bargains, cooking from scratch, making your own cleaners, growing vegetables and keeping chickens. You'll also be able to do many of the things we'll talk about in the post tomorrow.

Lower your expectations. Yes, lower them. Don't expect to live in the best house in the best street. Buy what you can afford. This obsession with looks and being better than your friends is crazy. It wasn't like that in the past and it doesn't have to be like that now. Don't listen to the advertising hype or the real estate agent. Listen to your head, work out what you can afford and stick to that amount. Living in a home you can afford is much better for your mental and physical health than worrying about paying off a show piece.

When you've taken the time to fully understand your situation and make a genuine commitment to pay down your debt, then you can start working on all the small steps you can take to save money. It will be small steps that add up, rarely do you find big savings along the way. So realise early that it will be frequent small amounts that you save and commit to doing that now and in the future. Soon it will become second nature to you.

Tomorrow we'll focus on the savings to be made in the kitchen and laundry. Let's do as much as we can to get to a good standard of living while spending as little as possible. As usual, please share your thoughts with us in the comments.  See you tomorrow.  :- )


  1. I agree with every word Rhonda. I reduced my working hours to three days a week last year and even though we were worried about the reduction in our total household income, just by reducing wastage in our spending, we not only managed on my reduced income, we managed to save it all!

  2. Hi Rhonda

    Good luck with Hanno's Angiogram next Monday.

    Another great post. Thank you. I love starting my day this way, a load of washing put on the night before, (we are on the Smart Meter Electricity system so try to put washing machine on during the night), put out on the line to dry, kitchen tidy, sit here and have my coffee (having boiled the kettle, once boiled I switch off the electricity at the wall and pour the remaining boiled water into a Thermos flask and this is used for my tea and coffee during the day - always looking to save electricity) whilst reading your blog. There is no better way to start my day.

    After my comment yesterday and your lovely reply, I contacted the bank and within a couple of hours our mortgage repayments were changed from monthly to fortnightly. Done. Wish I had done it years ago but there were just too many other things going on to even sit and think about this. Again the 'life hours' that I have now gained not being in full-time work is allowing me to do these things and save our family money.

    The washing I mentioned earlier is being cleaned beautifully by the Laundry Powder recipe from your book. I have stopped using fabric conditioner but would like to put something in to replace the conditioner - thinking maybe Eucalyptus or Tea Tree oil?!

    1. I use 1/2 cup of white vinegar instead of fabric softener. I put some water soluble eucalyptus oil in it when I wash sheets and towels and water soluble lavender oil when I wash clothes. You certainly don't need to add the oil but some people like to have the scent....

    2. Meegy thank you very much for your tips, I am going to try each of them - I am partial to a scent!!

  3. Thank you so much for this, it is very helpful. And as I commented yesterday, I'm taking notes :)

    I hope all goes well with Hanno.

  4. a timely post for my little family - thanks Rhonda!

    I've read here for some time, but don't know that I've ever commented - I live in Baltimore, MD with my husband and our 6-month old, Caroline.

    I feel like we've cut our expenses as far as we can. My husband quit his job to care for C, so we sold my car. We dropped cable tv, and have the cheapest internet we can find. We put all credit cards into a debt consolidation plan and live only on my salary as we pay them off. As a veteran he gets his healthcare through the VA, so we only pay for me and C. I have a cell phone for work so we only pay for my husband's - no landline.

    I still breastfeed, and pump at work. We discussed cloth diapering, but my husband didn't feel he could tackle that so disposables it is, but he does all the housework and washing up.

    I guess this year I'll be focusing even more on the grocery budget - expant my raised bed garde, learn more about preserving and canning, put the breadmaker to better use.

    Thanks for all of your posts - they help me think outside the box of consumerism!

    1. Kirsten, I've found over the years that the grocery budget is where I make continuous savings. You have to be flexible and know your prices. It helps to plan your menus too, and use all your leftovers. I hope we can find a few savings for you in tomorrow's post.

  5. Such great advice as usual. I've been working on our budget and our goal is to get the mortgage halved in 3 years. By doing this we will be in a position to trade in my husbands high paying job that sees him away from home a lot, for something different - I'm seeing it as creating choices for ourselves. I've been learning from you for a few years now and and am so grateful for what you do. You have inspired me to do so many new things, including starting my own blog, so thank you for making such a positive diffetence in my family's life.

    1. I agree there i love starting the day this way I'm sitting outside in my little garden with a cup of tea before I head off to work which I have also changed to 3 days a week!!!! Last work day today then 4 days off!! It my new years resolution heh I'm happier at home more having more time to cook and be available for my daughter who is studying I feel at
      Home at this blog :) I didn't make any comments last couple of days thoughts were with you Rhonda but I was reading xo

    2. You're welcome, Julie. Good luck with your goal; it's a fine one. Your blog is looking really good. I hope you enjoy writing it.

  6. I love your comments about what to look for in a home and I would be so excited if first home buyers actually listened and heeded your advice. I remember when I moved into this home more than 22yrs ago. I thought it was very daggy and never going to be "good enough" in the eyes of my friends but it would be a good stepping stone to another "better" property. Over the years I have updated some tired old things and re-positioned a couple of doorways, totally changed the garden a few times and before I know it...I find I have a home rather than a house. It is so comfortable and where the kids, though grown, come to feel safe. Our 3 bedroom low set is morphing into the ideal retirement home too which is important. Not only does the home have to expand but also contract. One of the bedrooms is now a craft room/office but I still do all my sewing on the dining room table! When I finally got around to replacing the worn out 50's carpet I put down a very long lasting commercial wool carpet (read expensive) because I knew here was where I wanted to stay, in my home for another 40 yrs. I now realise friends don't judge but they will recognise "home" when they see it and feel it.

  7. When we built our house back in 2009, we set a limit for the house (we were using our own money from selling our previous house). We could have built bigger and fancier, but we knew that we wanted to have money left over which we did. A fairly good amount which we have put into a term deposit and left there for the last 3 years (it's still tucked away until December 24 this year). The money that we have earnt could almost update our car but we want to try and leave it there for another year so that when I give up work at the end of 2014 (all being well) we will have money to live on until hubs receives the pension (we do both have supers but not huge ones - my super will be used for travel, updating the car, and we'll use his to top up the pension) - we'll never be rich, although by our standards we are, as we have each other, a beautiful place to live, and the opportunity to enjoy our lives instead of slaving away to buy more and more things that will not enrich our lives! Thanks for your great advice as always :)
    Judy xx

  8. Hi Rhonda,
    first of all, sending love and prayers to you and Hanno.

    Something I love doing, which may inspire others on their way, is I make a budget including absolutely everything we spend on, no matter how small. Then, I take a colored pencil and put an asterix against everything that is a want,rather than a need. This really highlights how lucky we are and how many choices we have. And it is really comforting to know that should times get tough we actually could manage by cutting out all of the extras.

    Yes,we love to have money to spend on fun as a family. Yes,I love to support my son's talent for tennis and celebrate birthdays. Yes, we prefer to eat organic - but if times got tough,we could make different choices and still manage.

    Although we have a very modest income and standard of living compared to many, I frequently tell my kids we are rich. Because compared to the majority of people on the planet, we really are. And highlighting on the budget everything beyond necessities really bring home to me how lucky we are, and makes it easier to make frugal choices.

    Have a wonderful day, Madeleine.X

    1. Hi Madeleine

      My Dad used to say the same thing: we are rich! He really believed it because he lived through the war (II) as a teenager in Holland and suffered through restriction and hunger (among other things!)
      I used to love it and feel very grateful for what we had (even as a child) when he said that!

  9. Yes I love the mortgage calculator! I entire our data whenever I need a lift, it reminds me what I am striving to do for our family, and of course how far we've come. It's also great to illustrate to your other half just how powerful all these small changes are! I know it's what really got my DH onboard.

    At the end of the day it's a mindset change. I look for a good deal whether I'm buying tomatoes, a dress, or my electricity. I shop consciously. I know my limits. I focus on the important things. I understand and respect my values.

    Good luck for Hanno's Angiogram. I hope it doesn't weigh too heavily on your mind between now and then xx

  10. Well written Rhonda, im looking forward to tomorrows post. :)

  11. Hi Rhonda

    I have been following your blog for quite some time and have also read your book. I love reading your blog at the start of my day and miss it in the weekend so I usually read a blog from the archive so I can get my fix. Your insights are valuable to a wide variety of people and nudge us toward changing our thinking and to not go with the majority but to forge our own path without doing what the jones's are doing.

  12. Hi Rhonda.
    Firstly me condolences on your families tragic loss with baby Patrick and Hannos ill health.I hope 2013 is more restful and full of happiness and health. I hope Hannos angiogram goes well next week and you both can have some peace of mind.
    I love your blog and dont often comment, but wanted to just add an interesting reference to all your wonderful words of wisdom.
    There is a wonderful book called 'Affulenza' written by a couple of men at the Austalian Institute (Australias largest think tank). The book was written in 2005, but upon re-reading it this week, was amazed how it is still (or even more so) relevant today. It talks and references all that you discuss here, but shows how we are being maniputlated into buy buy buy and the changes made to our psyche over the last few decades to have the biggest/best/most expensive. The psychological term for it is called 'Affluenza'. It is a tad academic but a fascinating read if you have not already read it, and so relevant to your gentle words. It is based upon Australia, but also relevant for other countries and the general western culture.
    I look foward to the rest of your insightful posts.
    PS. i was wondering if I had missed the link to your cheese book publication somehow? I understand you may not have got around to it yet with your very busy Christmas and New year period and tragic family loss, but wanted to clarify.

  13. Hope all goes well with Hanno's angiogram. Our health is one thing that we certainly can't take for granted.

    I really think a lot of people are going to get some great inspiration and positive ideas from this series of posts.

    And although everyone's circumstances and stories are different, hearing them is a great. Sometimes just one new idea is enough to start the ball rolling.

  14. I remember reading somewhere that for every thing that you buy you then have to take care of that---a big house, a car, a boat, a big riding lawn mower etc. So looking at it that way you create a load for yourself each time you buy something even when it is something that you think that you want. There is a corresponding responsibility to do the upkeep on it or have totally wasted the money paid to buy it in the first place. So many times that is overlooked when in the throes of wanting the thing itself.

    1. Right on! With world view, many without food/housing.., it's embarassing as an Australian to see all the 'Declutter' books / websites as we got caught in the buy, buy, buy and eventually instead of owning possessions we need & use they came to own us-- taking our money (purchase price & interest if bought on loan, storage boxes / larger houses to store them), time, filling our lives with clutter overload visually and mentally.
      Disclaimer, I am all for these declutter sites such as FLYLADY as they have helped me question what I am buying and holding onto "just in case" - mostly other family items I didn't want to see wasted but did waste as I don't use them and they could be used to 'bless others' with.

  15. My continued positive thoughts for Hanno.

    With regard to today's post, my husband and I were once told by a relative to "buy the most house [we] could afford." We knew even at a young age that this was not good advice. When we bought our current home we opted for the smallest floor plan, and lowest price, in a nice neighborhood. Not an opulent neighborhood, just a nice, safe one. It works well for us. We don't have a big payment and we never feel pressure to "keep up" with our neighbors.

  16. I read the book you mentioned in the comment above and it is great. One comment in their that so related to my ex husband was about your kid is never going to remember you drove a Francy BMW your kid is going to remember you playing with him and giving him time. This was very true because that BMW was his pride and joy yet he had a son who he was not putting any time or effort into. I did say ex but the book is excellent. I do shop online mostly books from the uk book depository amazing service and prices and I buy digital scrapbook words etc for my photography passion and they are only a couple of dollars each. Everyone I know gets daily emails from cudos and living social and talk about the bargains. Talk about marketing and helping you spend your money. Just about all of them buy a deal each week because they have 50 percent off or similar. I have no desire to receive any of those emails so if you are on their mailing lists unsubscribe now. My comment was while you may have bought a bargain that you can use and save money on was it something that you would have been in the market for or purchased last week if the email hadn't arrived. I tell my kids (9 and 6) that we don't have to buy everything that the Kmart or big w catalogue has. It's the job of the advertising to get you to give them your money. The social websites are the worst. If you are looking for a tv do your research Nd buy the best one for you family. Half they things purchased because they look like a goof deal and not necessarily anything you would have bought that week. All the best for the health test next week.

  17. Hi Rhonda,
    One of the most money saving areas for us was to stay put. Once we had bought (had it built) our home (very practical for our family, but definitely not luxurious), we worked and saved over time to add the finishing touches (carpets, floor tiles, concrete driveways/paths, gardens etc). We finally added a pool which kept the kids (and their friends) home so we knew where they were. We watched others with more lucrative incomes in our age group updating every few years with ongoing extended mortgages. Our home was paid off early, we lived in it for 25 years before leaving the area when we retired. So what could have been mortgage payments in a newer home, ended up as savings, Super, having spare cash for those awful 'unforseens' that happen to us all. We loved our home, it was ours. A family home full of comfort and love - if not luxury - but every one of our needs were met - and our wants too, but strangely we found that when you're happy with what you have, you already have what you want. (Hope that makes sense.) When we sold and moved up here we were able to buy outright and as the values had improved over the years, make a good profit. I realise not everyone can do this for many reasons, but when you can it really does make a difference.

    Hope all's well with Hanno's angiogram on Monday, Rhonda.

    Howzat - 2 comments in 2 days - I'm really getting good at this :-)


  18. "....friends don't judge but they will recognise "home" when they see it and feel it." Lovely & very true Tanya.
    Mortgages- Shop around, you may find that the savings made on interest & fees covers any exit fees you may have in very short time and then you have ongoing saving benefits. An 'offset' account allows your savings / daily account to offset your loan balance or you can even, as I do also, have your salary paid into the loan. With my free loan withdrawal I only take out monthly to pay bills (aka credit card mostly).
    Credit card- risk of spending more if not spending 'real' money but if used carefully can save money. I pay everything I can with credit card, I don't have any annual fees attached (loan deal), use for my bills, some groceries (when not available at Aldi or local green grocer/butcher), big ticket items e.g. microwave, fridge, washing machine (AMEX extend warranty for free and this saved me hundreds when my washing machine broke down out of normal warranty-- AMEX have other free stuff e.g. free travel insurance...BUT only good if you use those things). I keep track easily of all my expenses, earn bonus points which I convert to department store/supermarket gift cards (converted some last year & still have $500 worth I am redeeming now). I pay in full when due which means my salary sits in the housing loan saving interest for up to 45 days before the credit bill is due. If registered online with Medicare they deposit cash into your account immediately even when paid by CC.
    I know this will go against what many readers do, but using for bills / expenses within my budget that can be paid in full when due works for me. If using for anything else do the 'Do I need it?" and walk away / come back another day to stop impulse buying - I'm still working on that, especially New Year sales so have my list & try to stick to that only e.g. dads quilt cover, calendar, funnels & cheese cloth--for straining yoghurt for 'cheese' & making oat milk - new skills this week thanks to you Rhonda). Sorry so long, saving money/living more simply is not only what I am passionate about but neccessary for my health and retirement planning and I want to share what I have found to help others in the same boat if it works for them. Cheers from Vic.

  19. I'm sorry for the heartbreak and worry you have had of late.

    I have been lucky to stay at home with our children. I have been reading your blog for a while. Reading your blog gave me the courage to quit buying bread and bake my own. I make 2 loaves of buttermilk bread at a time a couple of times a week. My boys all tell me they like it better than store bought.
    Thank you Rhonda.


  20. this is really good. i must try shopping around on our utility bills, i don't know why i haven't already when i haggle over everything else (i think its the fear of the hassles you hear about when swapping providers). it has to be easier than trying to lower my food bill anymore, we've hit a wall with that. someone here mentioned writing down everything they bought. we have written a budget for a long time which has been super helpful, but this has been the first month i wrote EVERTHING down and kept a tally, and though we still have a few days of our pay month to go it looks like being the first month where we have
    not snuck over budget. i shall be keeping that up for sure!
    thanks for everyones ideas, and good luck on monday hanno x

  21. Judy
    We have made a big reduction in our food expenses for our family of five by changing to a wholefoods plant based diet. This was originally done for health reasons (my husbands family history of heart disease) and with a lot of research to make sure we were providing a complete and balanced diet for our teenagers. The side effect was a much cheaper grocery well as much improved blood pressure and cholesterol readings, and feeling healthier than ever. It has also occurred to me that the "simple" life is a lot simpler when you just eat plants. I so often read of simple life bloggers (wonderful people) having problems with expensive fences, escaped and sick animals, vet bills and so on. Also, things like cheesemaking are fun and rewarding, but too time consuming for a working family like us. We also now don't need the bigger fridge we were planning...dried beans, nuts and wholegrains are easy to stockpile and don't need refrigeration even in a hot Australian climate. Our original inspiration was a documentary called "Forks Over Knives" if you are interested...Good luck with your doctors visits, and many thanks for your inspirational words.

  22. When I built my house, several people told me to build it with resale in mind. Instead, I built it for me... small by American standards (1000 sq ft), only 1 BR and bath, but with a large kitchen and pantry. I still went into debt, which was not in the plan, as my ex left when it was only roughed in, but I will pay it off early.
    I'll be sending good thoughts for Hanno and you. I don't remember if this will be a first angiogram for Hanno, but as a cardiac nurse, I was told more than once that they would rather have an angiogram than go to the dentist, meaning it was not a bad experience. I hope for that for Hanno.

  23. Hi Rhonda sorry to here Hanno is not at his best my dad had the same thing he went in and they put stents in made such a huge difference he was back to his old self full of life I hope it goes as well for Hanno my thought will be with you
    Linda xx oh and thanks for your help Rhonda I downloaded the journal Linda Ann

  24. I have found with my own experiences of living a simpler life that I have actually become happier. Here is an example, instead of taking the children to the shopping mall to buy their mum a christmas gift, I helped them make her jam. If you include the travel time, both are comparable in the amount of time required. But which one was more fun? Making jam, hands down. The children just loved it, mashing the strawberries and licking the sugar. And they both felt a level of pride when giving her the gift, that no bought gift could have given.

  25. Really looking forward to tomorrow's post ... we've cut everywhere we can so laundry and kitchen (and gas in the vehicle) are my only variables these days. Frugal is great and open to more tips. Love your blog!

  26. I am sad to hear of your recent loss of baby Patrick and Hanno's ill health. We lost our 6 month old granddaughter in June and some days I still feel a wave of grief come over me.

    My hubby is planning on retiring at the end of 2013; this was a five year job with a small pension AFTER retiring from his 25 year career. We've got everything paid for and emergency funds set aside. As we work our way month by month, it is our goal to only spend what his pension incomes will be and bank the extra so when he does retire, we will have had plenty of practice.

    You always have such good strategies laid out for your readers .. to use as springboards .. I keep coming back to learn more.

    1. Mrs Mac, I'm so sorry to hear about your granddaughter. {{hugs}}

  27. I think a lot of us have our obstacles of stubborness. I think it can be a bit of a process for some, if they are too attached to things or foxtel, or whatever. If I and my partner could quit smoking, I would feel as though we were 'there', if you know what I mean. It'd mean there'd be no obstacle financially we couldn't beat.

    1. I know what you mean, Sharon. You just have to do what you can and be okay with that.

  28. We are really striving to lead simpler lives and to lessen our expenses as much as possible. We are on one wage, I'm a stay at home mum with two kids, one of which has additional needs. I have done a budget and have cut expenses down as much as possible but we are still in the negative almost $100 a week! I just don't know what to do besides going to work which isn't an option at the moment. We don't go out, don't lead extravagant lives but just can't make the figures work. Any advice for us? Thanks in advance.

    1. Liz, it's very difficult to give specific advice without knowing what you're spending you money on. Why not go over to the forum and start a thread with a few more details. I know you'll get good advice there from people who are trying to live in the same way.

    2. Thanks Rhonda, will do.x

  29. Great post! I think it's so, So, SO important to take a good hard look at your "fixed" expenses when trying to live more frugally - and really question how "fixed" they have to be. I think one of the tricks that companies use to keep us hooked on spending is to get us to sign up for things that have a "low monthly fee." So often we fail to realize how much we're really spending on services that might not be that important to us, because once it becomes a monthly bill we tend to file it mentally in the "fixed expense" column.

  30. This year, I have made a budget that I think we can stick to. My husband and I have planned to save his wage and live off mine, (his wage is double mine). This way we can save for our kitchen renovations and then our bathroom as well as getting solar panels and water tanks as we are now debt free. The best advice we received when we got our first mortgage was to put our wage directly onto our housing loan and then draw down from the loan. It help us to pay off our loan within 12 years. It is funny as we now have more disposable income we are more wary on what we spend our money on. We are making our own laundry liquid, soap and have a great vegetable patch. It is hard work but worth it.

  31. The main psychological move we made was to realise that you need to base your standard of living on what you have today not some promise of promotion, second income etc. Then the plan to pay off chucks of a mortgage keep in line with the committment.It is hard for people to realise that a woman at home is costly to replace. Eventually what maytter is the difference between what you make and how much you spend.`Time = money

  32. I am a young woman (in my early 30's) looking to purchase a home in the next 6 months to 1 year with my husband. I am in charge of the finances as it is something I am good at. These are some of the things I have found extremely helpful:

    1. Make a budget. This cannot be said enough! I know to the 1 cent where all my money is allocated. I have set out a spreadsheet with all the costs I can think of; if I do not know the exact amount of an expense (for example, pet expenses or car repairs) I will allocate a best guess (but fairly generous) amount on an annual basis and then divide it by 26 (as I get paid fortnightly). Some of these expenses will be weekly/fortnightly/annual costs, but for the most part, anything I will not be paying immediately on pay day gets transferred into a special interest bearing "expense" account that I take money out of whenever an expense comes up. This way I always have money already waiting to pay bills when they arise and I don't get any surprises or have to take money out of my savings account.

    2. I have recently just started menu planning. I can already see this is going to save me SO MUCH. Every Monday I sit down and plan our menu for the week and then I go out and by all the ingredients for the menu. There is no waste and I don't impulse buy/minimise impulse buying.

    3. As another reader mentioned, I actually use my credit card whenever I can because I can earn reward points from it. I don't use my credit card in the typical way that most people do (even though it is a real credit card): it is more like a debit card to me. I have the lowest credit limit on it that the bank will allow for me ($500) and I load money on it each pay day and use it for normal expenses.I actually earn money from the bank this way (which gives me much joy I must add!). It's not a huge amount - perhaps $50 or $60 per year but it is better than nothing!

    4. I have kept records of all my budgeting in the form of spreadsheets and I think this will help us eventually when we approach the bank for a home loan because it will show my money management skills.

    5. Choose what advice you will listen to. I recently had an unpleasant run in this Christmas with family. A family member announced that a typical family cannot sustain a mortgage on one income these days. I was mortified. I earn a good income (close to the average total household income -- by myself). My husband is a student at the moment and works part time, which really just pays for his own education and not much else. One reason why I was so worried by this announcement is that this family member is a property valuer. However, a quick search of property prices in a sensible area shows there are quite a few properties available in the price range we are looking in. SURE I can't afford an average home in a swanky suburb near town, BUT I can afford a run-of-the-mill house several suburbs over.

    6. Before you take out a mortgage RESEARCH.
    Recently I have been researching property rates/taxes, water costs etc which I do not currently pay as a renter. Like Rhonda has mentioned in her post, I have been inputting figures like crazy into various mortgage calculators. I have experimented with the length of the loan, splitting the loan into percentages of fixed and floating rates and also creating a mock budget for when I actually have a mortgage to see what life would be like financially when I actually have to pay the mortgage and not just rent. I don't want to pay the bank a cent more than I have to. I don't claim to know everything about this as I have never had a mortgage before but I do feel I am better prepared than the average person.

    Hopefully this will help someone or at least provide some food for thought!

  33. This year is the year we are saving EVERY spare penny to go into our house purchase fund, we are on the point of buying our first home together, which will also be our foever home. After renting since we met and married and trialing out our simple country life we are finally about to take the plunge and really go for it.

    I have a food budget challenge of £480 for the whole year and I am going to make it last as long as I possibly can, growing our own (as I have been for the last 4 years) and getting eggs from our chooks, I am new to the make your own washing detergent thing, but have been making my own soaps for the past couple of years.

    Life is a challenge but it's a good challenge and our main aim after paying a deposit of half the value of the house and land, is to pay our mortgage off in as short a timescale as possible, so it will be a few tough years, but then it will be ours all ours.

    We're no spring chickens ourselves by the way I'm 52 and Hubby is 54!!

    I hope it all goes well on Monday for Hanno, I'll be thinking of you.

    Sue xx

  34. Dear Rhonda and Hanno, I hope that the appointment goes well when you go for the angiogram. Fingers and toes that you will soon be back to 100% Hanno,

    Cheers Kathy



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