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Goodbye
5th May 2010, 10:22 AM
After too long struggling between pays, spending more than I can afford and not getting ahead, I have decided to take my future seriously and start saving and budgeting and controlling my spending.

I'm with ANZ and they offer a few alternatives for this. Luckily I have a couple of different savings accounts with them (Access advantage, Online saver and Visa debit). Here's what I was planning:

- My fortnightly pay is deposited into my Access Advantage.
- I leave enough money in there for my automated payments (Internet, mobile etc etc), and transfer the rest to the Online Saver, where it earns a bit of interest.
- I transfer some of that ($100/fortnight?) to my Visa Debit for everyday spendings, and once it's gone, it's gone.

This way I hope I should be able to save a bit each time, and not just keep spending until I have nothing left. I'm also going to close my high-limit and pretty much maxxed out credit card and just keep one low limit card for emergencies.

What are your thoughts? Do you have any savings plans ideas that I should be looking at?

Thanks!

The_Hawk
5th May 2010, 11:34 AM
Stop spending money. It's the only way to save :P

What you have suggested is a reasonable approach, cover your outgoing, have an amount to yourself and set the rest aside.

If your maxxxxxxxed out on credit cards it's in your best interest to not put money aside but instead plow every cent into the credit card to try and reduce the interest payments. You might also want to consider moving/consolidating any credit cards to a single low rate card. If your really keen get a personal loan payout the cards and cut them up... it's not like they do you any good when they are at their limit and you can't spend anyway.

But all of this only works if your income actually exceeds your outgoings. I have a budget spreadsheet I use with each bill allocated an amount (usually the maximum historical bill). This then dictates what gets set aside for bills. It also gives you an idea what whats going where and can really open your eyes to how much is heading out and might make you think twice about some of those things.

Another idea (which I'm yet to try) is to actually catalog EVERY cent you spend for a month. Every pack of gum, every coffee, every 50c you throw to the homeless man on the corner. Then review to see where it all went. $2 here and there can really add up.

One thing I have seen and do agree with is that you need to set aside something for yourself. Spending no money is never going to happen, you'll slip up more often than you would think. Setting aside an amount to piss up the wall on luxuries on a regular basis will help to keep you in line. For example, knowing you have $100 to spend at the end of the month on whatever you want will hopefully stop you sneaking in a "cheap" new PS3 game every other weekend.

I'll have a look at my budget spread sheet and upload it for anyone who wants to have a play.

edit: File here: http://vwwatercooled.com/vwwc/Budget%20V1.0.xls

Mac Ram
5th May 2010, 11:41 AM
Start by working the other way round. Rather than saving what you don't spend, spend what you don't save.

Be realistic about a savings target, set that aside each fortnight. Not to be touched under any circumstances. Transfer the remaining and spend.

tryandbyte
5th May 2010, 12:22 PM
Treat saving like an automated payment, so if you have one of those ING/Ubank style accounts just make it deduct a reasonable amount each fortnight (like $50 - $100).

Also consider using a '1 month list' when it comes to buying big things. Basically you put something you want on the list and if you still want it in a month then get it. More often than not you don't. :)

forno
5th May 2010, 12:37 PM
Payday I pay all my bills, cc & mortgage, then put $400 per month into an ING account. If at the end of the pay month I am absolutley tapped and have an unforseen billor expense then I dip into that pool. other than that I go without

Silver-Arrowz
5th May 2010, 12:40 PM
Yeah it all starts with not spending. I use to have the same issue so for a few months I avoided walking into stores or online where I would go stupid with toy spending. It was all about discipline and not being in a place where I shouldn't be.

When managed to save a pool of money I right away drew up a budget for all my weekly expenses and the rest I moved into a whole bunch of investments or long term savings accounts. I no longer have credit cards and only a visa and mastercard debit which I make sure never see anything more than $200 a week in there.

forno
5th May 2010, 12:45 PM
Another interesting thing to do is to track what you spend every day for a month, write down every cent that leaves you hand/account. Will give you insight into whats luxury and whats not

RustySpanner
5th May 2010, 12:50 PM
All of the above sounds good. I did a similar evaluation of my spending habits, and found the biggest and easiest to eliminate was eating out. Packing lunch and cooking your own food can save hundreds of dollars per month. Just bringing a packed lunch to work four days per week saves me $200 per month against going to a cafe. Clearing out loans is very good idea, especially if they are incurring interest. You can also learn to give your car a basic service yourself if you're so inclined, taking it to a mechanic only every second service, which can save $150 or so against a typical service.
Drawing out your weekly allowance in cash rather than using a card lets you see exactly what you've got left as you go, and can reduce ATM transaction fees.

icant
5th May 2010, 01:15 PM
- My fortnightly pay is deposited into my Access Advantage.
- I leave enough money in there for my automated payments (Internet, mobile etc etc), and transfer the rest to the Online Saver, where it earns a bit of interest.
- I transfer some of that ($100/fortnight?) to my Visa Debit for everyday spendings, and once it's gone, it's gone.



An alternative is to deposit pay into the [high interest saving account] and then transfer $ out to the [everyday account] as you need it.

[high interest saving account]
ANZ: 4.5% interest. You have a higher rate with Ubank online. UBank also has BPay, so you could pay bills that way to reduce the amount you need in the everyday account. (Not automated direct debit).

[everyday account]
Hopefully you’re not paying $5 monthly.

Consider ING savings, or (my preferred) HSBC Internet Banking.

If your credit card is maxxed out, you have bigger problems than just finessing your bank accounts (e.g. why would you have balances in both a high interest savings account and on a credit card? (shrug) I’m sure you have a reason.). But changing (to the correct) bank is a one time thing that continually saves (/earns interest) over time.

Instead of giving possible ways, here are true examples of how I’ve saved $ in the last 12 months.
Learned the wonders of vinegar and sodium bicarbonate around the house.
Drink water only. Bought a steel water bottle (klean kanteen with sports top). Only drink coffee made at home, never buy on the go drinks of any kind.
Eat fruits for snacks. e.g. cut pears into slices.
Take care of my things. This includes putting the iPhone in a case, and putting iPhone earphones in a tupperware when I’m not using it. And not losing my water bottle.
Bicycle
Joined and use library
Worked out the correct iPhone plan for myself. Changed from low mobile plan to lower mobile plan, and stopped making calls on it.
Currently: prepaid virgin long expiry. $5–10 monthly for the 100–300MB data plan. Works out to $100–120 annually. Use whatsapp for “SMSes”.
Consider alternative free software or learn programming to get stuff done. I use Applescript to avoid buying 3rd party stuff.
Buying a 13” MacBook Pro instead of a 15”, as I already have an external monitor, and Applecare is cheaper. (Actually, the difference is small on eBay, so I may reconsider). Not getting an iPad.

Think about what’s important to you. I love movies, so spend $20 monthly on Quickflix. But I don’t have a DVD library, and I don’t go to the cinema.

Lutze
5th May 2010, 02:05 PM
One way to limit spending a bit is to not take cards with you.

Withdraw your weekly "spending" cash and that's your limit for the week.

Don't revisit the hole in the wall unless something bad happens.

It saves you a fortune in silly spending.

Rust
5th May 2010, 02:49 PM
All of the above sounds good. I did a similar evaluation of my spending habits, and found the biggest and easiest to eliminate was eating out.

SO true...i think thats the worst culprit for me. I enjoy eating out with my wife alot and that's where we spend the most. Dare i say more than my gadgets/music equipment :)

mattmac
5th May 2010, 03:29 PM
I pretty much live off my excel spreadsheet with my budget! My girlfriend calls me a tightarse because of it but really it's just because I like to think I manage my finances well and know whats coming and going out through my bank!

I'd recommend setting up a spreadsheet as suggested by others here with all your expenses, work out how much you have left over after subtracting those expenses and what you'll do with the left over cash. My main expenses for example are rent, petrol, phone, car loan, house bills, groceries. Add them all up in excel with a formula then see whats left at the end of it. Transfer that amount into a "bills" account is what I have and then when it comes time to pay its there and ready to transfer.

Have goals! This is so important and will help you so much in reaching your goal. Mine at the moment is to buy at least 50-100 acres somewhere and then eventually build a house. This keeps me motivated to save save save :)

Here is a quick summary of what i do:

I have near $700 a week left over after my putting aside my funds for expenses.
I then put aside $400 into a Savings account.
The rest is near $300 left over for general spending. This will go into my everyday/General spending account. General spending for me is going out, buying something or saving up for anything i want or need. I try and ALWAYS transfer the savings amount of $400 into my saving account unless I really have something to pay without choice urgently.

On my spreadsheet I've set it up so I can predict how much I'll have saved by each week of the year up until the end of 2011. So if i change anyone of my expenses or want to buy something i know how it will effect the end result of my savings or at any point and so on.

I'll send it to you if you like I'd just prefer to remove all my personal data first.

Azabu
5th May 2010, 03:42 PM
I'd suggest you do what icant suggested and deposit the bulk of your salary into a high interest account and what you need to cover your expenses into a transaction account. Depending on your employer, some can do this for you if you set an amount for each.

Byrd
5th May 2010, 04:42 PM
Do you have a mortgage? Best thing I've found is to set up an offset account (which I appreciate not all home loans have provision for), where everything you make goes into the offset account. Take out a lump sum once a month for bills/fun/etc (once you budget your expenses); but ultimately you can see the benefit immediately on less loan repayments. I find it easy to then manage my expenses with a smaller amount in my day-to-day account. Works for me - paying half of what my monthly mortgage payments are, simple and effective.

JB

cosmichobo
5th May 2010, 05:04 PM
Recently got a low rate c/card with BankWest, transferred 2 other c/card balances over. Cut up 1 of those cards, and (um, will soon) lowered the limit on the other.

The BankWest card is in my name only. And it resides in my wife's purse. So, she can't use it, and I don't have it to use it. We then lowered the repayments on our mortgage (to the minimum) and are putting the extra $$ onto the c/card. Lastly, we are dropping the limit on the BankWest card as we go, so there's no temptation to use it.

icant
5th May 2010, 05:09 PM
Do you have a mortgage?

Hopefully not. It makes even less sense to have a high-limit maxxed out credit card, a “high interest” savings account, *and* a mortgage. Unless it’s an investment property, which I suspect it won’t be.

IMO free redraw trumps offset account, but that’s just me.

DeKa
5th May 2010, 09:24 PM
Payday I pay all my bills, cc & mortgage, then put $400 per month into an ING account. If at the end of the pay month I am absolutley tapped and have an unforseen billor expense then I dip into that pool. other than that I go without

Not relevant for the OP, but just a suggestion. Why do you put $400 into an ING account earning interest? You pay tax on the interest you earn...

If you have a variable interest mortgage, and you can redraw, consider putting the additional $400 into the mortgage where it will save you paying interest, and save you from paying the tax you would have paid on the money you would earn in the ING account. Think of it as earn 5% and pay tax on it, or save 6.5%.

If you need the money for something, you redraw it.

toholio
6th May 2010, 01:25 PM
Start by working the other way round. Rather than saving what you don't spend, spend what you don't save.

This is very good advice. It's often called other things such as "Paying yourself first.".

bushbabe
6th May 2010, 01:31 PM
A late entry on this topic

When you are tempted to make a purchase of some non essential item, work out how long you would have to work to earn the money to pay for it - and then think is it worth it ?? do I really need / want this?

Phorte
6th May 2010, 04:19 PM
This is very good advice. It's often called other things such as "Paying yourself first.".

good advise here (and the quote that was quoted in that reply)

apart from changing lifestyle and spending habits like people have mentioned so far, i think one way that really helped me get out of my rut a few years ago was to actually have a written budget sheet that i updated daily. this gave me a visual understanding of where things are needed (bills) vs spending and also expected amount saved. i found that just having something visual to see where things are going REALLY helped.

i was paid monthly which made things easier as bills were charged monthly too, so my excel sheet was setup like this:


headers from left to right are the months in the year
next row down is my monthly income followed by total income and a line inbetween incase i make an extra bit here or there for that month
next is monthly debits. these are the necessary monthly fees that i always have (eg. mortgage, visa repayment, car loans, insurance, internet) and tend to be the same amount each month7
next is other monthly expenses that happen every month, but the amount may not be static. this included fluctuating mobile bill and an allocation for grocery
then i had another 10 rows labelled "other" for other spending where each time i spent something i put it in including a comment (eg. $200 for new jumper. receipt #).
at the end is total summary again, showing monthly income (same as income at start), followed by monthly expenses (all expenses totalled) then difference between the two, hence showing the amount saved
the last column on the sheet totals all of these rows so i can also see totals for not just whats savad, but totals for all the monthly debits/expenses incase i needed to see


i dont use this spreadsheet anymore because my wife controls my finances incredibly well but before that, it helped me out a lot. i still have a copy at home and can send it through if you think it will help.

i hope this has made some sense!