Looking For Ways To Save
Since I really started thinking about where my money was going and what I was spending it on, I have been thinking about ways I can save more by spending less.
It’s a good habit to get into and it maybe time for you to have a serious think about where your money goes and what you spend it on. And this doesn’t need to apply just to big purchases either. The little amounts that you spend quickly add up.
There are two major changes I have made that have saved me quite a bit of money.
The first was not buying lunch every day. This is a relatively easy step anyone can make and will save you a lot of money every month. To illustrate this let’s look at some numbers. On the rare occasion I do buy my lunch I would spend on average about $8.00. If I did this every day of the week that’s $40 per week (5 x $8= $40) or $160 per month!
Just think about what else you could be doing with that money! Like saving it, or paying some more off your credit card, or even paying the gas or electricity bill on time.
The best way to stop buying lunch every day is to brown bag it. And a good source for lunches are left-overs. Cooking for one leaves me with plenty of left-overs from dinner the night before, and I regularly take this to work for lunch the next day. Or I make sure I leave enough time in the morning to throw together a cold meat and salad sandwich. It’s surprisingly easy!
The second way that I have saved a bit of money is through renting DVDs only once a week.
I learned that my local movie rental store has all its movies to rent for only $1 each on Tuesdays. I am a huge movie fan and I regularly rent and buy DVDs (my one real purchasing weakness). But I have reduced my renting to only Tuesday nights and this has saved me quite a bit of money. Normally they charge $6.00 for an overnight hire on a new release, but by renting it on Tuesday I save myself $5.00.
I am not entirely sure how they stay in business by doing this, but that’s not my concern (unless they go out of business, but I will cross that bridge if and when I come to it).
Over a month that’s a $20.00 saving. Not huge but enough to warrant the effort.
And it’s kind of cool to have a dedicated “movie night” that I look forward to each week. And if the movie I hire turns out to be a lemon I don’t care that much as I only paid $1.00. :)
What do you do to save money?
Image credit: ToastyKen
People Are Mortgaging Their Future, For Their Mortgage
It seems that a lot of homeowners are accessing their Superannuation to try and save their homes from repossession.
Over 55% of the applications received by APRA last year for early release of Superannuation funds were for mortgage assistance. This far exceeds the second highest reason, medical treatment, which was a mere 15% if applications.
This seems like one of the worst ideas I have heard of in many years. Taking money from your retirement fund, your future, to pay debts now. And it reminds me of a married couple who are friends of mine.
About 12 months ago I helped them landscape the backyard of their home. It was the most physical labour I had done in years but it was fun (except the blisters) and by the end it looked great.
A few months later they told me they were selling up. I was a little surprised but they told me that they couldn’t afford the mortgage on the place any more. They were a two-income family (they had a little girl as well) but the wife had lost her job after her company re-shuffled. And the mortgage on their 2-bedroom house (with a fabulously landscaped backyard) was too much for just one income.
So they had decided to sell it and buy a (much cheaper) unit.
I was really proud of them for making that decision. And it is a lesson that others, including these people who are raiding their super, should learn. If you are having difficulties financially you need to come up with various ways of dealing with it and make some hard decisions.
I am sure it wasn’t easy for my friends to move into a smaller place (especially from a house into a unit), but they had to make a hard choice. And dipping into their retirement wasn’t one they wanted to make.
The end of the article that I linked to has a chilling last line that was quoted from David Tennant, head of Care, a financial counselling service:
My experience . . . is that all it does is shift the date on which foreclosure takes place.
Do you anyone you know thinking about raiding their superannuation?
Image credit: itjournalist
Now Is A Good Time To Start Saving For Investments
Now is the best time to start saving as much as you can for investing in the coming months.
The economy is a strange beast, but one that is fairly predictable over the mid-to-long term. There is a well-known cycle to most economies that you can use to your advantage. It is known as the Economic Clock.
The cycle runs something like this:
Rising Interest Rates - Falling Share Price - Falling Commodity Prices - Falling Inflation - Static Property Values - Falling Interest Rates - Rising Share Prices - Rising Commodity Prices - Rising Inflation - Rising Property Values - (Back to Rising Interest Rate) - and so on…
At the moment, as you are probably aware, Australia has experienced rising interest rates for the last couple of years now and their has been falling share prices over the last few months. The next stage Australia should experience is, according to the cycle above, a fall in commodity prices and then a fall in inflation.
Given that our inflation is still quite high and their is fear of it rising even further, I would estimate that Australia is somewhere between falling share prices and falling commodity prices. Given that the cycle spans approximately 5-7 years, means that over the coming months and years we should see a drop in commodity prices, falling inflation, static property values and then (finally!) falling interest rates.
This is the time where you should be saving as much as you can. Why? Because the next stage after falling interest rates is rising stock prices. And you want to have as much money as you can to invest in the stock market before this rise in share prices takes effect.
As to exactly when all this will take place is still anyone’s guess but the cycle is quite reliable on a macro level. Of course micro-economic factors play their part and the cycle doesn’t always run smoothly, but it is a fairly good predictor of what is to come.
I plan on using this time before the next share market boom to save as much as I can to invest so I can take maximum advantage of this economic cycle. Also, it would be a good time to educate yourself a little more on how the share market works and the best way to invest your money.
Have you had any thoughts on investing lately?
Image credit: PPDIGITAL
Shopping at Amazon.com Saves You Money
I love shopping at Amazon.com
Amazon.com and eBay.com.au are my two favourite places to shop online.
Despite this I don’t know very many people who shop at Amazon and I have no idea why. As it has the potential to save you hundreds, even thousands, of dollars a year.
Maybe it has something to do with it being located overseas in America and they think the shipping costs will be prohibitive. I am not sure. But I couldn’t be without it.
Not only does it save me money, it gives me access to items that I cannot get in Australia or that haven’t been released here yet.
Given my obvious love for it and seeing as how I mention Amazon.com a lot in my posts I thought I would give you a run down on why I think it is so good and what to expect.
For those of you who don’t know what Amazon.com is it is the biggest online department store in the world. It started its life way back in the 1990s as a book seller and has gone from strength to strength from there.
The real trick with Amazon (and maybe this is why a lot of Australian don’t order from them) is you need to buy a few items at a time to bring down the delivery costs per item.
There are several separate pricing structures for delivery to Australia, depending on how quickly you want your items and what the items are. The delivery times are: 18-32 business days, 8-16 business days and 3-5 business days. As you would expect, the faster you want your items the more it will cost you. You can find all the information about these rates here at Amazon’s Australian shipping cost structure page.
I always choose the 8-16 business days delivery as I have learned that most of the time you receive your items in less than a week, despite what they say. It also depends on what you are ordering. I usually only order books or DVDs, but you can find out more about the cost of shipping other items here.
The cost of shipping books or DVDs for the 8-16 business days time frame is a base rate of US$13.99, plus US$5.99 per book or US$3.99 per DVD. This may sound rather steep but with the discounts Amazon.com give you on each item and if you stick to ordering 3 or more items you will come out in front every time. A great example of this is in my post on comparison shopping.
But I would really like to illustrate this point further, so I have selected three DVDs at random to see how much they would cost us if we ordered them from Amazon and also see what they would cost us if ordered from an Australian online retailer, say EzyDVD.
NOTE: When you order DVDs from the USA they will be Region 1 formatted so you will need to have a DVD player that will play them. Most DVD players do these days, but this is something to be aware of.
To make this comparison fair I have chosen three DVDs pretty much randomly but I have chosen one older movie (Charlie’s Angels), one new release movie (Alien vs Predator 2) and one TV show (Lost, Season 3).
You can see the prices of each of the DVDs from the respective sites below and I have taken time to convert the US prices on Amazon to Australia Dollars (using an independent third site: XE’s Universal Currency Converter).
| DVD | Amazon (AU$) | EzyDVD (AU$) |
| Charlie’s Angels Movie | $15.95 | $19.83 |
| Alien vs Predator 2 | $18.07 | $29.83 |
| Lost - Season 3 | $34.55 | $89.93 |
| SUB-TOTAL | $68.57 | $139.59 |
| Shipping | $27.60 | FREE |
| GRAND TOTAL | AU$96.17 | AU$139.59 |
This table speaks volumes. Even with EzyDVD’s free shipping, Amazon beats their total price by AU$43.42. Do you really need any more proof to showcase how Amazon.com can save you money?
Sure you may have to wait a couple of extra days for the items to arrive but isn’t that worth an extra $43 to you? I know it is to me.
The trick to shopping at Amazon is to be patient, and create a wish list of items you want to buy. Then, when you are ready to purchase some items then you can choose a handful of the ones in your wish list and save yourself some money!
Have you ever shopped at Amazon.com
Image credit: Command-Tab
Losing My Urge To Spend Money
I just finished reading an article on making a move from spender to saver over at Get Rich Slowly and I have to agree with J.D completely.
Ever since starting to take control of my money and budgeting, I have lost most of my desire to spend. Sure, I still put aside some money each pay (10% actually) to buy whatever I wish, guilt-free, but most of the time I hang on to it.
I always think and re-think any purchases I make these days. Which isn’t to say that I live an unhappy and boring life, making myself go without. It’s that I want to go without. I enjoy having that money and watching it grow into a nice nest egg, much more than spending it on stuff that I probably will get bored with after a couple of weeks.
There are still many things that I still need and want to buy, but right now I have few urges to buy them.
I am starting to wonder if this loss of the spending urge goes hand-in-hand with someone’s decision to start to budget and desire to save. It seems once you are finally ready to make that decision to save and take control of your money, the urge to spend diminishes.
What do you think? Have you felt the same way?
Image credit: Noii
