Slow down to save money

We live very fast paced lives and the 'convenience' costs us money. Even though it is normal in society to be constantly on the go, everyone working themselves to death and being busy, busy, busy, doesn't mean it's right.

Recently, I attended the July 4th celebrations at the US Embassy here in Canberra. I got to meet the chef they had flown in, Tory McPhail and it was interesting listening to him speak about how he cooks and cooking in New Orleans. Everything is slow and in his restaurants they make everything themselves including pickling plus all food comes from within a 100mile radius.

The past few months I have been insanely busy setting up a new company, participating in Human Brochure, court and other things and as a result, my finances have not been as robust as normal. Over the past few weeks I analysed my life as well as my finances to see where I could slow down and what flow on effect that would have.

1.) Cooking
I got very lazy with this in June, partially because I was out at events a lot and the tasty items I was given made me not want to cook. Since re-establishing routine, starting dinner earlier and focusing on slow food not only are we eating better again, but my grocery bill has dropped.

2.) Driving
My petrol bill went up as I raced to get everywhere and drove many places instead of walking. The simple act of driving my kids to and from school instead of walking because I was so busy the day before I slept in doubles my petrol bill.

By slowing down, making sure I get adequate sleep and we get ready in time to walk to school saves me on petrol, wear and tear on the car as well as my own sanity. I get very stressed if I am late.

3.) Enjoying life
When we are busy busy busy we don't get to enjoy the little things or appreciate the 'moment'. My kids are growing so fast, but when i am rushing around I don't get to see the little things they learn, I miss out on events at school and their milestones. This week I slowed down and saw my youngest get 2 awards at school, watched as my eldest daughter read to her sister and overheard a little whisper from one of them that has made mornings run smoother.

That little whisper was "Let's race mum and beat her." This was in reference to getting ready. Game ON! Every morning was a battle with my children dragging their feet, stressing me out and we'd end up late. Now, it's a race to get ready before me, which they love and we are getting ready in time to walk to school then walk home. On the walk home they tell me about their day. When I am living too fast paced, I miss out on these things.

4.) Decision making
We all make the wrong choices at times, but I have noticed when I am busy, worn out and trying to live too fast I make more wrong decisions. When slow down, keep my priorities in order and take time to make decisions I do much better. The wrong decision can cost you a lot of money.

So tell me, do you live too fast? Are you trying to slow down? What benefits have you seen from living a slower life?

Debt is Slavery

Being in debt feels horrific.  It's something that's always hanging over your head.  If you amass enough of it, you can end up owing entire paychecks to the lending institution.  Not that you pay them you're entire paycheck.  You can't, so your interest rates rack up and you end up even further under water.  In this way, debt has you in bondage. In this way, debt is slavery.

We are familiar with the definition of slavery being one person owning another down to every last hair on their head.  I do not mean to diminish the suffering these human beings go through.  (And they do, in fact, still go through it to this day.)

But Merriam-Webster has two other definitions for slavery, both of which may describe your situation if you find yourself in debt:

"1. Drudgery, Toil
 2. submission to a dominating influence"

When  you decide to borrow money, you are deciding to submit to a dominating influence.  That influence is consumerism.  That influence is the culture of immediate gratification that we live in.  That influence is the banks.

After you submit, you must go through that drudgery and toil to repay every penny and then some.  You have lost your freedom to spend or save your money however you would wish.  You have lost your freedom to vacation.  To send your children to good schools.  To be able to spend the money you work for on the things you truly value in life.  In some cases, you could even lose your home, your vehicle, or your business.

But there is good news.  You have the power to liberate yourself from debt. The easiest way is to avoid it in the first place.  Live within your means.  Practice provident living.  If you feel like you need to spend more, find ways to make more money before you do.  Don't allow yourself to become a victim to advertising schemes that entice you to borrow money.

If you find yourself already in over your head, you can still free yourself from this bondage.  First, don't take out anymore debt.  Then, make it a priority in your budget to erase the damage you already have incurred.  You may have to turn over parts of your budget to your goal, giving up things like entertainment, travel, and shopping for non-necessities for a while.  You may have to shop for food by buying what's on sale rather than what you want to eat.  The clothes in your closet may no longer be quite as trendy.  You may feel like you have no social life whatsoever.

But it's worth it.  Because on the other side, you can shake off your shackles and once again taste sweet freedom.

Things you might not know about Home and Contents Insurance

Buying a home is likely the largest purchase you're ever going to make, so you need to do everything possible to keep it safe and secure for the long haul.  That means buying the right kind of insurance to take care of it if something ever goes wrong!

Here are some important things you need to know about home and contents insurance:

Home and contents insurance usually go together, but they cover very different things

If you simply go out and buy home insurance, the structure of your home itself will be covered if it burns down, gets damaged from an earthquake, or gets vandalised.  However, in order to insure all of the belongings you have inside your home -- like your furniture, your clothing, and your electronics -- you have to get contents insurance. 

Luckily, most Australian insurance companies offer home and contents insurance together.  That way, you can get all of the coverage you need in one place.

Policies differ wildly when it comes to limits

In most cases, contents insurance comes with per-item limits -- meaning that each particular item in your home is only insured for a certain amount.  Let's say that limit is $5,000.  As a result, if you have a piece of jewelry stolen that's worth $10,000, you'll only get $5,000 from your insurance company for it.

That's why it's so important to read the fine print and check out the limits before you sign on the dotted line!  If you don't, you could actually wind up losing money if something ever goes wrong.

Flood coverage can get tricky

Once you've got your home and contents insurance policy all picked out, you might be inclined to think that everything is taken care of, and your work is done. Unfortunately, though, that may not be the case!
As a general rule, home and contents insurance policies don't only differ from state to state, they tend to be restrictive when it comes to flood coverage as well. Just because your policy comes with flood coverage doesn't necessarily mean the coverage is enough. Learn exactly how your policy works when it comes to floods. You may need to go out and buy separate flood insurance if you live in an area that's prone to flooding.

You may need to bring business into the mix

If you work from home -- and you have a particular room or area in your home that's a designated work space -- you'll need to get a separate business insurance policy.  Home offices are excluded in virtually all home and contents insurance policies, meaning that if you don't have a business policy, you'll be stuck paying for damages to your home office out of your own pocket!

Termites can really "bug" you -- literally!

Most Australian home insurance policies won't pay for damage that's caused by termites.  That's because they consider termites to be something that you can prevent during routine upkeep of your home.  Because they're considered preventable, anything that termites do to your home won't be covered, so be sure to make pest control part of your routine!

What are your thoughts on home and contents insurance?

2 Ways to Drastically Curb Your Spending Habits

 

It doesn't really matter what your financial goals are.  The number one thing that will help you reach them is making sure your spending habits are in check.  If you're trying to pay down debt, tightening your purse strings will help you allocate more of your income towards that scary number and away from the impulse purchases that may have gotten you there in the first place.  If you're out of debt, but trying to build your net worth, saving money rather than spending it is essential.  Building your income is a worthy goal, but all the money in the world won't be enough to make you financially free if you can't keep it in your bank account. 

But quitting a spending habit is easier said than done.  In order to really accomplish your goals, you have to change the way you think about spending.

1. Think of Your Money in Terms of How Many Hours it Took You to Earn It

Let's say you're out shopping and you see the most adorable top that's ever been created.  You think, "I have to have this."

You flip the price tag over and reveal the number.  $75.

When you see that $75, I want you to think of it in terms of how much you make an hour.  This is easy if you get paid hourly.  If you're salaried, take your yearly salary, divide it by forty-eight (which is 12 months a year, four weeks a month,) and then divide that by how many hours you work each week.  Use that number as your hourly salary.  You can get more exact if you know how many days a year your work, including days off.

Let's say you make $30 and hour.  You would have to work for two and a half hours just to afford that singular top.  Think about two and a half hours in your work day.  What does that entail?  Odds are, even if you love your job, those two and a half hours of your time are worth far more than another top to add to your closet, which most likely has ample clothing options already in it.

2.  Think of Your Money as Units of Power

Maybe you think that two and a half hours is totally  worth that super cute top.  If that's the case, take your spending psychology a step further.

In our world, money is power.  We may not like that fact, but it is the truth.  We can lack power by being in debt, or we can empower ourselves by using our money to do positive things.  Each dollar is a unit of power, and if we accumulate enough of it, we enable ourselves to do things like go on vacation, retire early, or have enough "power" in our savings account to just walk out on a job if we feel we're being mistreated or under appreciated.

So when you see that $75 price tag, ask yourself, "Am I willing to give up 75 units of my power for another shirt?  Or are there other areas in my life where I would like to enable myself?  If I use 75 units of power here at the mall, in what other area of my life am I sacrificing my power and therefore my freedom?"  


Have you ever had a spending problem?  What are your tips and tricks to get over it?