So when you get paid, you take into consideration of bills and weekly expenses, but how much do you put across to a savings account?
Weekly/Fortnightly income + Bills + Expenses = remainder to spending and an even amount to savings.
How Do You Save Money?
Avacardooo Rayy Mee on 02/06/2016 - 10:46
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^ AHAHAH THIS! Story of my life too :)
Spend your money fast and furiously!
reminds me of the classic quote from soccer player george best: "I spent a lot of money on booze, birds and fast cars. The rest I just squandered."
Live fast, die old - David Brent
Money don't make my world go 'round
I'm reaching up for the higher ground-Des'ree
We put away what we think is reasonable every month first.
Then we spend the rest on bills and expenses.
"We put away what we think is reasonable every month first.Then we spend the rest on bills and expenses"
That's funny. I do the exact opposite:
Spend what I think is reasonable every month first.Then put away the rest.Same, spend as little as possible and never overcommit to anything. (IE mortgage loans etc)
That can't possibly work without knowing what your bills, expenses, home loan etc is upfront and budgeting for it. Unless you are suggesting that with a large enough income, you can choose what to save without considering outgoings as you can easily cover them.
Which I guess you are as you said you save 50% of your income, so really you just wanted to say you have a large income.This doesn't help the op or anyone wanting to know how to save money. They WILL have to budget for outgoings and see what's left. Prioritising essentials over luxuries and cutting costs to help save.
I don't know how you come to the conclusion of "you just wanted to say you have a large income" using a definite word like "large" based on a relative number of 50%. For all you know, my income could be $600 a week, my expenses could be $300 a week, therefore I put away $300 a week into saving. I still save 50% of my income but is $600 a week considered large income to you ?
Anyway, It might sound impossible but it works. All bills and expenses are predictable. Mortgage is monthly. Bills are quarterly and insurance policies are annually. It's not impossible to predict what the next big expense are going to be.
By putting away 50% of your income a month, you are restricted to survive on the remaining 50%. IF we are short for that pay cycle, we'll put it on credit card. Then we reduce eating out, buying stuff etc… and pay the credit card off when the next pay cycle comes.
I basically apply this principle. http://www.investopedia.com/ask/answers/12/pay-yourself.asp
While your argument is valid, let's also try to be reasonable with what you said. Our cities are expensive and with $300 a week, you wouldn't be able to manage anywhere. If you are among that small percentage of people in the society, you probably can, but otherwise it's very difficult for the vast majority of people to survive with that kind of low expenses. So, let's say your actual expense is $600 a week to still keep it conservative. And if you saving 50% of income, that means your income is $1200 a week, which is fairly decent if not "very large". So, going by the fact that you are able to survive on 50% income, it essentially means that your income is quite decent! Now, I know you can argue that a person can live on $200 a week too but let's not get into super special scenarios.
That can't possibly work without knowing what your bills, expenses, home loan etc is upfront and budgeting for it.
So it sounds like he, you know, budgets for it. With a sufficient sample size (i.e. enough months of bill-paying experience) you can pretty accurately gauge how much you'll spend in a given month.
I was using the free ANZ Money manager tool but it's about to be decommed by ANZ :( It could tell me net income for the month and was super useful for saving (or not).
I now just keep an eye on my bank balance and make sure it's trending upwards.
I've found that Pocketbook is a pretty good replacement for the money manager tool.
Pocketbook asks for your banking password…. aren't you a little concerned about giving away such information to a 3rd party app.
Same reason I didn't use pocket book, didn't feel it was safe.
Try a program called dsbudget, it's what I used when I started budgeting, now I'm just in a regular habit so I don't need to write it out very often. Sit's on your computer, you can budget for whatever timeframe you want, track your spending to see how much of each budget item you have left and has it in an easy graphical interface. The downside is its all manual entry so you have to remember the small items you buy, but this can be a positive as it makes you think of how much your spending
Some banks (BOQ for example) allow you to set up sub-users with limited access. I'm a little concerned, but not really, it's an Australian company.
@Skramit: There's a thread on Whirlpool for ANZMM alternatives. Personally I'm happy with Pocketbook, it's not 100% accurate and works on a cash basis, but it's enough for me.
Pocketbook asks for your banking password
I just export my OFX file from CBA and import it into Pocketbook, that way I dont have to give out my banking password
ditto..ANZ money manager is such a nice tool..its a shame they are shutting it down..Banks want to do away with all the freebies I guess now that they are being cornered..
Are they shutting it down ? Where did they say that ? It's such a great tool.
when you login - they are displaying prominent banners that it will be taken off on 31/July.
@addicted: Any alternatives, I don't mind changing banks even. I need a tool that tracks my expenses and I wont give my banking password to third party apps.
maybe switch to commbank.. they got that tool and better.. u can also label your expenses and it tallies them by category too… much better imo
I monitor my expenditure closely by keeping on eye on any transaction on my credit cards, bank accounts and just spend as little as possible.
By having a detailed budget and trying to stick to it. Getting paid monthly kind of forces you to do this as you only get 12 paychecks a year. Need to put away yearly bills from each month's pay and set yourself monthly spending limits. Works well although credit cards can be a trap.
I would find monthly harder to save, how do you find it? as i am fortnightly
Was hard at first to transition to this. Especially because some months it is 5 weeks between pays rather then 4 :( I think overall it is easier to save than weekly or fortnightly as you only have 12 opportunities to do this, while regular income every week or 2 makes it easy to spend as you know you have money coming in within a few days. Discipline is the key though.
Oh yeah - and OzBargain really doesn't help with being able to save!
It's not easy to get a simple overview. That's why a budgeting/money manager tool is really useful for monthly pay.
Especially when you have credit card bills on auto direct debit ~20 days after the bill comes, things getting paid in arrears can be misleading!
I was used to weekly pay and moved to monthly with a new job. I decided to pay myself weekly. I setup a bank account which is a saving account (earns some interest) and each week I pay myself my weekly wage.
I can then operate financially just as I did before.
I don't understand why credit cards are a trap for people? I use mine for everything and just don't spent money that I don't have.
How Do You Save Money?
doing this with ozbargain.com.au
hasn't worked yet.
the day before "pay day" I put everything, except $100, from my everyday account on to my mortgage (it has drawback option).
I don't believe in "saving" money. with having a home loan then it is more a case off "reducing the amount of money that attracts interest".
i.e. "How do you cost less money"
^This. Have access to it in an emergency, but otherwise, keep interest down, and don't carelessly spend money on crap you don't need.
haha i tend to buy an sell as a side hobbie, its kind of like gambling but in this case you always walk away with something, at the age of 24 i can afford a house, yet i dont know if i want add a debt to my account, yet that is how the future will turnout.
This - and I put all my expenditure on credit and pull from savings (or mortgage) account to pay it back just before credit card interest kicks in (and keeps money in the bank longer)
I get all income deposited directly into the offset account and put all expenses on credit cards to make use of the interest free period and rewards points.
Also, make sure you're always getting the best deal on everything.
For instance, I just called up my electricity reseller and bumped my pay on time discount from 15% to 20%. Only took a simple phone call and about 10 minutes of my time.
Also switching mobile plans, insurance providers, etc. etc.
This is the way we do it too. Everything in the offset and live life. Evaluate big purchases before commiting to anything.
Evaluate big purchases before commiting to anything
Mind must be in the gutter today.. I read that as Ejac…..
How did you go about getting the pay on time discount increased? Just ask point blank?
They're offering new customers 20% so I just called up and asked point blank. If they didn't oblige I'd switch as other providers were offering similar discounts.
Which reseller was it? Click?
don't buy all the SSD, eneloop, SD card, fast food and toothbrush deals on OZbargain lol
Buy what you need, not what you want.
oh, and self dicipline.
I make myself fill out a really complicated form which makes me outline why I absolutely need something.
Normally I think about buying lyl's latest SSD bargain or whatever band 28 phone there is on Ozbargain.
Then I think of the 4 pages of self-imposed bureaucracy and I just can't be bothered to.
Can you share the form?
Yes - please share this form!
Don't pay full price for anything. Switching insurance providers annually. Only buying the half price items in woolies/coles or shop at aldi. Don't go out at all.
Sounds like a fun life.
I agree, except for the 'don't go out at all'. Minimise the necessary spend to facilitate discretionary spend/savings
Beyond certain tries, insurance companies can't beat the price though since you are at the lowest possible price already. I have faced this problem. How do you beat it?
Well your already winning so what's the problem? I sometimes try and ask for an extra discount - most times it does work.. even if it is only a few dollars.
At what point do you start living?
Actually started off living first.. then realised all the unnecessary money I spent. I partly blame ozbargain for my lifestyle these days.
I wonder what people consider going out. Like does cycling to the beach to have a barbecue with your ALDI steaks count? Or do you have to pay a restaurant (maybe with a beach view) for a clean seat and to cook your steak for you?
I've "eaten out" a lot and I'm never wowed by food. Whether it be $10 or $80. Most people keep to themselves or their groups at restaurants so they stay within their bubbles. I'd like to sit in random places across the city (and the world) but generally indoor seats and shelter are only provided by paid establishments. I have much more pleasure walking between places than being stuck within a place but sadly most people use the outdoors as a route for getting to and from work, shopping and paid entertainment.
The real issue is that people that can't have fun without drinking are just boring people.
Now I know why you're called plain biscuit. I'm more a Tim Tams kinda guy!
lol ~ my hubby is going to kill me for using his account.
How Do You Save Money?
Delegate the task to the Bo$$ aka wifey
If I delegated finances to the wife I'd be broke
yeah, that sounds dangerous.. your a braver man than I am
That is why I haven't let her get her own credit card
R u sure she is ur wife and not GF?
There was a wedding so she should be my wife
…….and when she says we are 'downsizing' ensure she is not thinking about getting rid of you, lol
nah she gets rid of you when she's upsizing ;)
True. I spend more when going shopping compared to my other half.
I work out my essentials and work out the cheapest I can pay for the appropriate quality. Like with power and gas etc, there is no discernible difference so I go with the cheapest. With groceries etc I have the brands and stuff I like, so I shop on specials. I never lower my sense of quality for the stuff I want quality in, and just pay up for it. But given low desires, there isn't much in that category.
Then I move on to stuff I consider good value, which I would impulsively buy, but try to hold off on, of at all possible. Examples is mostly stuff with hundreds of votes on ozbargain, haha. Stuff I don't really need but I buy it anyway coz its "good value". My latest purchase, the dyson v6 on eBay. I could have gotten a cheaper vacuum , but the force was strong.
Everything else I save, which tends to be my biggest bucket.
For me it all starts with planning via a budget.
There are many ways to do this including new phone and online apps these days, I started with a spreadsheet (provided by AMP).
https://www.amp.com.au/data/calculators/budget-planner-sprea…
List out your inflows and outflows by the month so you can see how lumpy your spending is (ie Shire Rates or Yearly insurance premiums).
Once completed, you will have clarity on what you can expect in terms of surplus or deficit.
Then determine what your financial goals are, eg want to have the car paid off by 20Nn or save $Nnnn by a date.
Now you have your goal, you have visibility on what is possible (or not), adjust your circumstances accordingly.
Budgets don't work if you are not honest to yourself or spend in indiscriminantly.
When I need to save money, I block the Ozbargain site on my computer to stop tempting myself with bargains for things I don't need.
Don't visit OZBARGAIN! Full stop! To avoid unnecessary expenses =) peace Scotty =P
"Don't visit OZBARGAIN! Full stop! To avoid unnecessary expenses"
Rather have a list of things you NEED (or I suppose WANT if your budget allows it-you only live once ;-) or that you will need/want in the near future and wait for them to come up on Ozbargain much cheaper.that flies in the face of the Ozbargain way. Buy Now, Regret Later
1st Ozbargain Commandment:
Thou shalt ALWAYS regret it when you spend money!
2nd Ozbargain Commandment:
Thou shalt regret it a bit less if you know you got a BARGAIN!
Gees I could write a book on this (and maybe one day I will).
Guess one of my most fundamental philosophies is to get the best deal possible on absolutely everything. Although this is more a "save by spending" approach and i also couple this with "save to spend" approach.
I think it's important to look at both your compulsory and discretionary expenses and so whether you can get a better deal.
e.g. I recently changed offices and no longer drive to work. That means I now barely drive my car. Insurance renewal was up again and I couldn't stomach paying $1100 for a car I barely drive. I did my research and switched to a budget company that provided the cover I needed. Now I pay $600.
I finally got rid of vodafone and changed to Vaya for $19 a month w/ 2gig. I considered taking advantage of Optus $30 pm with 10gig but decided against it because I rarely hit 2 gig anyway. That's $130 saving for something I didn't need. Even if I go over a few months, I'm still ahead.
I adore "catalogue" day and make the most of WW, Coles and Aldi to get the best deals. When something I consider to be a necessity is on a super special (even if that necessity is actually a want, not a need), I bulk buy. I save a lot like this and now understand my grandma's spare bedroom being a mini supermarket. haha
I make sure that anytime I buy almost anything that it's the best deal possible, whether it's a gadget, hotel, accommodation etc Yes it takes effort but I definitely reap the rewards. I don't deny myself the things that I want. I just get amazing deals on them.
I try to spend as little as possible at work Monday - Friday. I bring my snacks/lunch from home or go to Coles/WW from work, I have a pod machine at work, I have a proper espresso machine at home. I'll go out for lunch if it's a social event (i.e. friends, work mates) but I won't buy lunch just to feed myself (I also dislike eating take away/out too often). I barely spend anything during work and ÍMO that's the way it should be.
I maximise the amaaaazingness Big W 10% off gift card sales and use them to buy Myer/ticketmaster/opal/groceries.
I only ever pay with Paywave w/ Cashback or Credit Card. Balance is paid off in full. All my money sits in my offset.
Before my mortgage my savings moved frequently to whichever had the best interest rate.
I do little things on the side like cashrewards, pricepal, ing cashback, citibank cashback, CC FF deals, amex offers, market research sessions etc that all add up.
I would add moving your mortgage to a low cost provider to this if you have one. Currently looking at Reduce Home Loans 3.67% or 3.57% depending on which criteria you fit into. Just be warned there are joining fees (but no ongoing fees).
Definitely. This is a biggy!
Make sure you're getting the best deal on your mortgage. It's the biggest expense and will save you 10s of thousands or more.
To those not convinced, to put it in perspective, if you're paying those stupid "package fees" of $395 per year for your "discounted interest rate" and "free CC", even if switching to a mortgage with the same interest rate(which you wouldn't you'd always get better) but no fees, you'll save $10,000 over a 25 year loan. That's crazy for a BS fee to begin with!
Online lenders aren't for everyone, and if you can't bring yourself to do it, push your current lender to its absolute limit. When i was with St George only with little bargaining power i still pushed them to a 1.05% "discount". This was a few years back they may be more competitive now with more competition. Point is to push, push, push!
May I ask how do I do the 'push'? Call up and ask for it? Also, what kind of bargaining chips do I use when calling them up?
Well this is tough to answer because i only know from my experience. But the best advice i can give is that knowledge is power. Put the effort in to learn the knowledge and you'll be infinitely better off.
This is only my opinion but while we need the bank for the loan, they need us too. Their competition is our biggest weapon. Putting the effort in to go to different banks to get offers on interest rates then pitting those offers against each other. Big banks won't compete against online lenders but they'll compete against eachother. So long as you're on variable you can always leave or change your terms. Go and speak to a few banks and see what they offer. You'll pick up what the baseline offer is and when you take an offer to another bank or two and they refuse to beat it, that's your winner basically.
Also if you go in to a bank and talk like you know what you're talking about i can almost guarantee you'll get better offers than someone who is clueless. If it's not your strength, do you have a friend/someone you trust that knows their stuff to bring with you.
What's your current loan to value ratio? It may have been 90% when you bought, but are you at 80% or 70% now? That puts you in a better bargaining position.
Are you paying off a main residence that will be your home for sure? If so, do you really need an offset account or can you get a more basic account that doesn't gave an offset (but allows redraw) but saves on the interest rate? What if you fixed half and kept half variable with an offset attached to the variable part? (Although probably shouldn't be fixing atm)
The point is is to assess your situation, learn about the different products and how they can best work for you. Know the banks competition and use your knowledge to show the bank that you mean business.
This is our biggest expense in life. It's worth spending a decent amount of time on it. How much time do we all spend on getting cheap flights and accommodation or lining up for half hour for free doughnut (guilty).
Not sure if that helps but for me it always comes down to knowledge and effort…and being relentless lol
Great advice. Put me down for a pre-sale for your book!
Haha will do
Can we get Opal recharged in Big W Or at Woolies using Big W card??
Big W doesn't sell Opal, only Woolworths does.
Big W e-gift cards bought via online sites like Groupon, Cash Rewards etc can only be used at Big W. They cannot at WW (therefore no Opal).
Big W Physical gift cards bought from the physical Big W stores when they have their promo 10% off gift card deal can be used at all WW Group stores. These can be used at WW to buy Opal.
It's the only way I top up now.
These can be used at WW to buy Opal.
Thanks. You meant buy and also top up Opal. Correct? If that's the case, it's better to go for 10% off Big W cards than 5% off Woolies cards since you can use Big W cards (physical) in Woolies anyway. Right?
Yes, buy, top up, do everything you can do with cash or card.
and Yes, 10% Big W is obviously better than 5% WW. When BigW have their GC sale I stock up on maybe $2000 because that's what I know I can safely use. I don't want too buy too much because the GC sale is likely to happen every 3-6mths. When they run out I begrudgingly start using 5% off from WW until the next BigW/Other deal comes along.
I don't deny myself the things that I want. I just get amazing deals on them.
And this is the best philosophy for saving; also the reason I first came to this site.
I buy stuff that is on sale. So if there is a pair of shoes I like that is normally $300 and I pay $200, I just saved $100.
Well that is my wife's logic anyway
I made a spreadsheet years ago. Took an hour or so. Listed out my weekly, monthly, yearly expenses and estimated the cost. Convert them all to per week/per fortnight/per pay cycle. That told me how much I needed to put away for expenses every time my pay packet came through. I slapped on some 'pocket money' for myself for when I do my chores.
Then I just have two bank accounts: high interest saver and my savings account. Once pay comes in, the "expenses" amount stays in the savings account and the rest goes to high interest saver.
If I want to save more I look at expenses and see where I can cut back. Pretty straight forward, means I never have to worry about a surprise bill. Every so often I'll review the expenses to make sure I'm not spending more than I expected to on stuff.
Also means I save money on health and car insurance as I basically just self insure when it's sensible to do so.
I use "loot" on my phone to keep track of my pocket money so I can save up for toys and chocolate. Keeps me from overspending and means I save more.
PM and I'll send through the spreadsheet if you're interested.
I do something very similar.
Total annual bills (phone, insurance, doctor etc) divide by 26 into 1 card each fortnight. Total car costs divide by 26 into another card each fortnight.
Get a bill, pay it with my "bills card". Petrol, rego, service, parking etc I pay with my "car card".
For the car expenses I use my Virgin Velocity Card that doubles as a Debit Card. Buy petrol at BP and earn frequent flyer points on petrol and on $$ spend amount. I have a Virgin mobile as well that contributes point to Velocity.
Why not use ING card which gets you cash back and also higher interest.
I spent a lot of money on booze, birds, and fast cars. The rest I just squandered.”
― George Best
YNAB works really for us and we've tracked every transaction with it since July 2011.
The hard part for us is using it as a budgeting tool and not a transaction tracking tool, so we're still learning to be disciplined. YNAB lets you 'roll with the punches' though so you don't feel trapped by using it.
YNAB or similar tool is needed for training period if you aren't used to saving more in life. Once you get used to it, that becomes your way of living and you may not need the tool any more.
I think we'll need the tool for the rest of our lives. :)
BUDGET!
Seriously set yourself up a budget and make sure it's realistic and budget a slush fund for fun stuff and impulse buys.
Head over to reddit and r/personalfinance as there a few decent stickied threads with infographics, excel templates and other useful links
I personally use "You Need A Budget" as well as some excel sheets. I'm using an older version of the software which works a treat. Their current online version is $5 p/month or $50 p/annum. Steam Summer sales will be coming up soon though and you should be able to pick up a one time payment cost of the previous versions for <$10. Bit easier to manage if your not a complete excel wiz and puts you into the right mindset to be one month ahead of your current financial standings and to consider costs over the life cycle of things e.g. If your car insurance/rego is $1500 a year, put into your monthly budget $125 a month for it.
I use an app called "Wally". I enter everything I spend there. It catagorises my spending gives me a month/week/year total. Very simple. The purpose is to let me monitor exactly what I do with money. If it see its too high, i control my spending. If i've done well saving that week, I treat myself. Everything else in terms of income/budget I can work out in my head.
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No savings. Live fast, die young.