Sunday, May 29, 2011

ATO - 100 People

My brother works for the Australian Taxation Office. He does statistics and things. One of the great things he has done is 100 People. It uses flash player and is a really easy way to see more about tax in Australia and the statistics for the 2009 - 2009 financial year.

It is much easier to understand than reading through lots and lots of paperwork.

12.3 million people loged tax returns that year. 100 people is all the statistics conveyed as 100 people making it all much simpler to understand.

The results might surpise you.

Check it out here. You will need flashplayer.

Friday, May 27, 2011

Progress with my million dollar goal

I often get asked how on track I am with my goal of becoming a millionaire. Currently it is going well, but could be better. I know by the end of this year things will be a lot different to what they are now and I know that my life now is a lot different to what it would be like had I not set this goal.

Why will it be better by the end of the year?

1.) My book 365 Ways To Make Money will be on the shelves, in bookstores, online and I will begin to make some money from it

2.) I am selling my house. It is about $200 a week cheaper for us to rent in a suburb we actually like vs. own/pay off the house we have in an area we don’t like. We do plan on buying again later, but prices in our area have been going up and up and we would like to sell on an up!

3.) I will have sold off everything I can and paid off our car loan. So I will not have so much ‘stuff’ cluttering my life and no debt. I will own the car I love outright. Even with the interest on the loan we will have paid by the time our car is paid off we will still have paid less than what the car is currently worth by about $1,500 - $2,000.

4.) My $40,000 challenge will be complete, so all renovations, holidays for family and the above car loan will be done. No more renovations/house to suck out all our money, no more repayments and no more holidays for a little while. (Well, big ones anyway, probably do a few camping trips though.)

5.) I have another project I am working on I plan on launching in 2 months. I won’t say much now, but I am pretty excited.

The above things will not only increase our income but significantly reduce our expenses. The difference in the mortgage repayments compared to the rent, the car loan, house maintenance, land rates, house insurance etc... equals about $450 or so a fortnight. That’s right. I will be $450 a fortnight or $11,700 a year better off. That is a big difference!

I won’t own a house, but since to me (and most financial people I know and read) a house is NOT an asset, I am ok with this. I can grow my investment portfolio instead and create streams of income THEN look at buying a house.

We are also not 100% sure where we will live, so we would like to rent first to see if we like it. If we don’t it is much easier to move on when renting rather than trying to sell and buy again (which is ridiculously expensive.)

Since I have had some privacy concerns recently, I am not really comfortable disclosing my current net worth, but needless to say I am well on track.

Friday, May 20, 2011

Small changes = BIG results

Often when people think about money, be it making it or saving it, they get overwhelmed thinking about any changes they might need to make. They think you need to make big changes for it to have any sort of effect, but that is not completely true. Big changes show a bigger immediate effect, but small changes are just as important.

I recently heard this quote from Dave Ramsey and loved it.

"Because money is such a major player in our lives, changing your family financial direction is a big process. It's rather like watching an ocean liner turn. You sit there on the beach, and the ship is sailing along and all of a sudden you realise that it's no longer running parallel to the beach, it's pointed away from it- but the turn was SO SLOW you never saw when the turn actually began.

But if you're on an ocean liner and you turn right then turn left then turn right then turn left the ocean liner will NEVER really change direction - because to change the direction of an ocean liner requires CONSTANT, UNRELENTING, DETERMINED, NON STOP change. The rudder must be HELD in one direction for a LONG time to make a change.


You are never - EVER going to see real change in your life until you make yourself stay going in one direction and ONE direction only.

You and only you have got to grab hold of the wheel and hold that rudder firmly to starboard if you want to start turning in the RIGHT direction. Until you force consistency upon yourself, you will see no progress- and you will not be able to maintain enthusiasm."

It is so true. Consistency is key. Something that is small, if done unrelentingly can have a big difference. For example saving even $2 a week on your groceries is $104 a year! One small change at the grocery store, such as buying a cheaper brand or buying something in bulk can make a big difference.

What are some small changes you could make?
  • Round down your account to the nearest dollar. Whenever you check your account if there is say $37.85 in there, transfer that 85cents to a debt or savings. You could go one step further and round down to the nearest $5 or $0 so $35 or $30 instead resulting in an extra $2.85 or $7.85 off your debt.
  • Switch off things when they are not being used. Instead of leaving your phone or laptop charger plugged in all the time, turn it off. Many thing left on stand by are still using 10 – 15% electricity. You can reduce your bill by a few small changes.
  • Have a weekly no spend day. Aim to spend nothing all day.
  • Have a weekly meatless day. Instead of meat make one of the thousands of yummy vegetarian dishes available.
  • Make take away at home. By this I mean instead of paying $20 for fish and chips at the take away if you keep a box of frozen fish and a packet of frozen chips in the freezer you can cook a quick meal for half the price of take away.
  • Have a DVD night instead of going out to the movies. You can borrow DVD’s from the library or even from friends. Pop some popcorn and have a night in.
  • Walk somewhere instead of driving. Saving on petrol here and there adds up.

These are just a few simple ideas you can do to change little habits and save money long term. What are you doing?

Monday, May 16, 2011

I saved $200 on groceries this week!

J.Money from Budgets are sexy threw down a challenge this week, Make or Save $50! I had already set myself a challenge to not buy any food, which judging by our recent grocery habits would save $150 - $200 already, so now I was even more determined to do this!

This was not easy, especially since we had already been eating pretty much just out of the cupboards the week before so they were really starting to get bare.

We managed to do it though and I am proud to say we did not immediately then go out and splurge all our money buying food or go buy up everything we had eaten.

This week took a lot of planning as we had ran out of what I consider pretty much basics such as milk, cheese and eggs as we did not have much of them to begin with. Oh, I also did not have my oven connected so had to use a frying pan, slow cooker or the microwave which made things a little more interesting.

Whilst not easy, we ate a lot of food that had been sitting there waiting patiently to finally get used up or else go off.

What did we eat exactly?

Day 1 – cornflakes, Scrambled eggs, sweet and sour pork, banana cake

Day 2 – Fruit salad (tinned), cereal, curry with beef, lentils, black beans and potato, cake,

Day 3 – Spinach ricotta fritters, tortilla’s, roast chicken with garlic beans and rice

Day 4 –fruit and cereal, fried rice, left over chicken pasta

Day 5 – Cereal with milk!! Rice with sugar and milk, lamb ribs

Day 6 – yoghurt, chickpea curry, satay beef

Day 7 – Toast/yoghurt and fruit, sandwiches, beefy stew

I actually worked out a menu plan to take us over the week and we will continue it as I would really like to use up all the food we keep meaning to and start from scratch again.

During this time we had a few bonuses such as the milk my husband got and chocolates when my parents visited which made it easier. I transferred our grocery money straight out so there was not even the opportunity to spend. My mantra the whole week was we can do this!

Most of what we ate this past week is not going to be replaced such as the lentils, chickpeas, spinach, ricotta, lots of the meat (it was a bulk buy and it turns out we don’t really like all the cuts available) so we did save money. Without this challenge, that food would have been thrown out and we would have spent more money on food.

I did a few other things this week besides the groceries such as sold some books, wardrobes and a few other bits and pieces, since I had already decided on this challenge when I joined J.Money.

Friday, May 13, 2011

Planning With Kids - Book Review

I recently finished reading Planning with Kids by Nicole Avery, who blogs at Planning With Kids. I loved the book, which is no surprise since I also love her blog.

Nicole is super organised and has excellent advice for being organised with children, which until you have them you don’t realise just how much they can throw a spanner in the works.

Planning With Kids covers everything from routines right through to budgets and Christmas. There’s a whole section on menu planning, which I love as it just helps so much with the budget and stops the questions of what’s for dinner.

Whilst I have always liked to think I am pretty organised, after reading this I am not! Mind you my children are only 2 and 3, so the organisation factor has not been hugely necessary yet as we don’t do much.

We have had a bedtime routine for some time, but never really implemented any other routines. It is easy to think of routines as restrictive, but what they actually do is give you more time, as there is a time for everything, things get done quicker and jobs don’t pile up. By implementing a few simple changes and creating a few simple routines life in my house runs much smoother. It also helps stop some arguments as everyone knows what is expected and when. (Notice I said some, not all arguments!!)

Planning With Kids covers everything you need to know and do to have an organised family. It covers each stage from babies right through to you as parents. And since Nicole is a mum of 5 who manages to run her household, blog and has written this book! I think if anyone has good planning advice through experience it’s her.

Some of the things covered in Planning with kids are:

- Routines, particularly for mornings, evenings, cleaning and scheduling ‘me time’

- Chores different age groups can do

- Plan a months worth of meals in less than 1 hour

- Navigating life with a new baby (a must read for all parents to be)

One of the things I have changed around my house after reading this book is chores. I always looked at my kids as being too young to do much. My 3 year old used to help with different things when she was a bit younger, but when we moved and had no kitchen, no real organisation it stopped.

Now, I ask if my ‘big helper’ wants to put her clothes away, put the dishes away (I dry them, she puts the Tupperware in it’s drawer, breakables are done by me in higher cupboards), she puts her dirty dishes on the sink and picks up after herself a little more.

It’s not perfect and my Tupperware drawer is a mess, but she is learning to do things and help which will make my life easier long term.

So, all in all, I LOVE this book and think everyone who is or is about to become a parent should read it. Applying what you learn will improve your family life like you won’t believe.

You can buy it here or at book stores.

You might also like:
How to prioritise your life
The Duggars 20 and Counting
Ways to save time
Finding more time

Wednesday, May 11, 2011

My Million Dollar Plan

Million Dollar Club

This week I stumbled across The Million Dollar Club over at Budgets are Sexy. There are a group of bloggers who have committed to becoming millionaires. How did I miss this? The group was started in 2008, but you can join any time.

Since your chances of success increase dramatically when you surround yourself with like minded people I decided to join. I mean, my blog is about my goal to be a millionaire by 2015 so it fits! This is for $1,000,000 in CASH though. I had cash and assets as my original goal. But as I have said before you have to Think BIG!

So here is my ‘Millionaire Plan’

1.) Live below my means. There is no point living within, as you with end up living right up to the amount you make. My aim is to save ¼ of our income to start with, but any income increases will go straight to this goal.

2.) Get rid of our debt. We were down to our mortgage when our car died and we borrowed to get a reliable car we have wanted for a long time. Whilst it means we now have debt I do not for a second regret the decision. We got it for $3,000 less than the current market rate (yes, it is used) and could sell it for more than we paid if needed now.

3.) I will increase my streams of income, particularly passive income. Although, having read this post I will now be terming my passive income as low effort income. My low effort income (LEI) includes my book 365 Ways to Make Money (when it comes out July 1, 2011), shares, property, interest on investments and a few online ventures I am looking into.

I will be investing any income derived from these sources to set myself up financially instead of spending whatever I earn.

4.) Finish my studies so if I necessary I can work. It is self paced and I have been taking my sweet time focusing on everything else. It really is the last thing on my mind, but I do need to step it up if I ever hope to finish!

5.) Live life. Whilst I want to be a millionaire and I focus on making money I still want to enjoy life, do things with my family, travel etc... It is just a matter of finding a balance.

So there you have it. That is my basic plan which so far has been going well. Do you have one?

You might also like:
5 Things you need to become a millionaire
Think like a millionaire
Differences between Australia and America

Friday, May 6, 2011

$40,000 - 1st Month Recap

Another week has passed, making it a month since I started this challenge. And how have I done? Not bad, but not as good as I could have.

I didn’t go into a lot of detail about what the $40,000 was to include other than a trip to Tasmania, another to Hawaii for a wedding, some debt, (mainly our car loan), as well as the usual large expense like car registration and a few other things.

So far this month I managed to reduce our grocery bill and save a bit there by menu planning and only buying what we needed. We were fortunate enough to get some fruit for free from my mother in law (she got given 2 large boxes for free) and we also had a few family functions which I only needed to take a dessert to, which saved me needing to make meals a few nights.

Where I live we have to arrange a few things for our car registration, which when I looked into it all (insurance, registration, mechanical inspection) it was going to cost $2,500 total. I shopped around and managed to get the insurance significantly cheaper elsewhere and our car service/inspection was cheaper as well so I saved $400 there.

We reduced our debt a little by $1,500 which was nice. We had a week where my husband didn’t have a lot of work, but it has picked up now, so we plan on reducing this even further.

I have reduced the amount we need from $40,000 to $35,500 so whilst we have done , we need to step it up a notch.

We still haven’t sold the second car. We needed it for a little bit, but now we can get rid of it. I only listed and sold a few of the things I intended to, so I need to get that done.

It is coming along nicely though and we are really happy with our results so far. This month I am aiming for $7,000 to be able to stay on target!

You might also like
How to stop spending
The real cost of stuff
Tips on selling a car

Tuesday, May 3, 2011

Debt Reduction Tips

Yesterday I had a guest post about debt reduction for single mothers so today I thought I would share with you my debt reduction techniques. Having been a single mother I found that the stereotype is far from the norm.

When I was single there was more available in terms of government assistance, but depending on your family income there is government assistance available to many (here in Australia at least). You can find out all sorts of information on the Centrelink website. You can do estimates and check rates of pay to see if you are entitled to any assistance.

Now, on to the debt tips.

1.) List all your debts. Some people live in denial about how much they owe. Most people I know are well aware of their financial situation. Nevertheless, the first step is to list every single debt you have, all credit cards, loans both through banks/financial institutions and from friends or family. List where the money is owed, how much is owed, the interest rate and payments.

2.) Work out your budget. List all your income vs your expenses. If your expenses exceed your income, you will need to cut back on expenses somewhere, or increase your income. (It is great if you can do both!)

3.) Negotiate. If your repayments are just too high, try calling the people you owe money too. You might be able to negotiate a smaller payment over a longer term or a reduced interest rate. If you are lucky you may get a reduction on the total debt if it can be paid in full by a certain date. I saved my mother in law $2,500 by renegotiating her loan. I also saved myself $2,000 by checking paperwork and knowing my rights. A company tried to charge me interest on an interest free product. I got the interest removed. Later I offered full payment of the remainder and received a $600 discount.

4.) Work out your debt reduction plan. If you are disciplined the best way to pay down debt is to pay the debt with the highest interest first as this will save you the most amount of money. Mentally, this is not always the easiest which is why Dave Ramsey recommends you pay the smallest debt first. (Check out his baby steps for debt here.) Clearing that smaller debt creates a sense of achievement and will help you stay on track. Once you have cleared a debt, whether it be the highest interest or the smallest total debt, do the debt snowball. That is put the money you were paying on that loan onto the next loan. Once that loan is paid out, put both the payments from debt 1 and the payments from debt 2 onto debt 3. You will pay your debts down much faster.

5.) Set up an emergency fund. Most people end up putting money on their credit card for emergencies because they do not have $1,000 or more saved to cover these expenses. Dave recommends doing this before paying down your debt.

6.) As your debt decreases, decrease the limit. This is very easy with credit cards. Whilst most companies will try to talk you out of it, reducing the limit really is the best way to ensure you do not spend on that card again. You can reduce it every $100 or $500, whatever you like. Just pay it off and get rid of it.

7.) Put all excess money onto your debt. If you can earn a little more money, get a pay rise, tax return or do some over time, put this money on the debt. It is not money you initially had or were relying on, so put it on your debt.

8.) Live frugally. Cutting back is not always possible, but some simple changes you might not already do can make a big difference such as switching things off at the wall, wearing warm clothing at home and blankets instead of having the heating on high will save on electricity. Introducing an easy soup night or adding some lentils, potatoes or other vegetables to a stew will make it and your grocery budget stretch. Menu plan and buy what is on special. Look online or ask friend for frugal tips. There are lots out there. Click here to see some of my money saving posts.

9.) Check your interest. Find out what your daily interest is on your loans. Since interest is usually calculated daily, but charged monthly you could be shocked at how much interest you are paying. Even on a smaller loan $35 interest a day is not uncommon. What could you do with that money?

10.) Search for a better deal. If you can, switch to an interest free credit card or lower interest rate loan. Anything to reduce the interest and payments. Once you switch cancel the other card or loan. Too often people end up keeping both and get in worse debt than they were before. There are heaps of sites you can use to compare everything from your mortgage to your savings account.

11.) Once you have paid off your debt, continue to save to avoid being in debt again. It is a great feeling to be debt free and have money in the bank. It means you are on the way to financial freedom.

For more advice on debt reduction check out Dave Ramsey or finance blogs like Punch Debt in the Face (paid of $28,000 of debt in 2 years) The Simple Dollar, Penniless Parenting or you can join sites like Simple Savings who have a forum with members more than happy to help.

Yes simple savings is an affiliate link, but I am a current member, so not pushing something I don't think is good!