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Found 23 entries.

Basics: What does Personal Finance Mean to Me?

Welcome to my new series of posts on the basics of Personal Finance. I know many other bloggers have done their own series, but it’s such a personal thing (no pun intended) that it’s good to go over it every now and again.

On that Wikipedia page, they certainly go some way to trying to define it in monetary terms. For example:

“Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit.”

For me though I find that Personal Finance is as much about a way of life than it is just about money. I’ll try and define it in terms of the way we live, rather than the fact that it’s about money.

Over on Twitter, I come across a good quote every now and again and this one can help us define Personal Finance too. From inexpensively:

“Frugality is all about changing the way you spend money, not changing the way you live!”

I do agree with this to the extent that you shouldn’t go without but I don’t think it says everything. In fact, I do think it is a way of life and whilst it shouldn’t force change on your life, it does affect it.

A Way of Life

As I said earlier, it’s about a way of life. I think some of these points also sum it up very well, for me at least:

• being content with what you have, and not wanting more
• enjoying life, no matter what the weather
• not being excessive in the cars we drive, the houses we live in and the things we consume
• trying to be self-sufficient as much as possible
• making good decisions in everything we do

... but most importantly …

• getting to the stage where you are comfortable, happy and healthy (whether this is work, home or money related)

I know this has been a rather short intro on Personal Finance, but I hope it has been an interesting and slightly different perspective on the matter. Let me know in your comments what Personal Finance means to you.

Labels: living, planning

Inserted: 2010-01-01 09:03 (2 years, 1 month ago)

Paying off my Mortgage in the Current Economic Climate

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At the moment, the economy doesn't seem to be too great. Of course, many people are saying that they haven't felt any impact at all ... but these are the lucky ones who's jobs are relatively stable.

So far, I'd say that I was one of the lucky ones. To me all of four things has happened in the past year:

1. I got a pay-rise
2. I cut my spending
3. there has been tax cuts
4. there has been interest rate cuts

Therefore, with all these things going on, I am able to pay off more of my mortgage since I am currently on a floating rate.

The Plan

Since I have split my mortgage into a revolving and a repayment mortgage, I am able to pay a little more on both at the present moment. There will be no penalties since they are both on floating rates.

The overall plan is to eventually fix the larger of the two amounts (the repayment part) and keep paying a little extra on that. I shall also keep adding as much as I can afford to my revolving mortgage since that also acts as my emergency fund.

Attacking on Both Counts on Both Mortgages

By attacking both mortgages I am able to start bringing down the principal a lot faster than I ever have and because some of it is my revolving mortgage, I don't have to worry about having it disappear since that acts as my emergency fund.

I'm also attacking the larger of my mortgages on two counts too, since my interest has come down and I've upped my repayments.

All in all, I'm currently on track to repay my home loan in just less than 8 years. That would take me to a total of 11 years since the mortgage started.

Not a bad saving on all that extra interest I'd otherwise have to pay.

Labels: planning, repaying

Inserted: 2009-06-16 21:22 (2 years, 7 months ago)

Frugal or Cheap

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There seems to be some debate in the PF world at the moment about what the terms 'Frugal' and 'Cheap' mean. I think there are some interesting points but in all honesty I really think that it is in the eye of the beholder.

Personally I think I prefer the term Frugal rather than Cheap due to the same reason DebtDiva mentions ... that cheap has negative connotations, but mostly it doesn't matter to me.

I have known a number of people over the years who have said things to me like "I'm too cheap to buy [this] or [that]". They obviously don't care about any negative feelings towards being 'cheap'.

To Me, It Doesn't Matter

In reality, it all amounts to the same thing anyway, that these people who call themselves frugal or cheap look after their money a bit more than those who don't. Possibly by not spending as frivolously, saving well and looking at the long term needs rather than the short term wants.

The One Thing I Remember

There is however one phrase that I try to remember when I am purchasing something. Generally I don't go for the cheapest stuff but at the same time I don't go for the most expensive either. I've always been a middle-of-the-road guy when it comes to such things (of course, it is very dependent on what it is you're buying).

As it turns out, this particular phrase has stood me in good stead over the years and I somehow manage to make my purchases last years longer than what some other people would. By not buying the cheapest thing, my possessions usually last as long or longer than I need or want them to. Adhere to this phrase and you'll probably be able to do the same too:

Only the rich can afford to buy cheap!

It's one of those phrases I heard once and never forgot. The friend who told that was well on the way to retirement at an early age (probably mid-forties and he could stop work - not that he will) and I've thought about it all the time since.

How do you see the words 'frugal' and 'cheap'? How about 'thrifty'? Does it really matter?

Labels: planning, budgeting, shopping

Inserted: 2009-02-22 15:56 (2 years, 11 months ago)

How is your Work/Life Balance?

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Recently I and a few of my work colleagues have been having an interesting time of it. Our project is pretty busy at the moment and it does make you think of the work/life balance.

As you all know, I have been trying to do a four day week recently but haven't been having any luck. I was four days for September and October but back to five days for November and December at the request of my employer. Again when I wanted to be back to four days in January, I was asked if I could do five.

Of course, I said '\i{yes}' because it's hard to refuse when your colleagues are also your friends.

The Problem

But since early January the project has been even busier and there is currently no let up in the amount of work we have to do. For the first 21 days of January, I was in work for at least a few hours (if not usually a full or even longer day) for 17 of them. If I were on a five day week I'd have normally done 13 days and on a four day week I really should have done just 10 days.

I also just cut short a holiday I had pre-planned from five days to just three.

And this is my problem. When someone asks me if I can do something, I invariably say yes. It's silly, I know and it's completely my fault but as I said earlier, I guess I find it hard to say no, especially to people I like.

Work/Life Balance

Unfortunately this does nothing for my work/life balance. My original four day work week dream is not only not happening but pretty much completely shattered. Again, as in November and December I have noticed that I have less time to do the things I enjoy. I have:

• hardly been on my bike in January at all (maybe three times)
• not really cooked a good meal at home
• not kept up with simplifying my life
• hardly spoken to my family in the UK
• missed a neice's birthday for which I will be eternally sorry

I even managed to somehow lose a DVD which I had sold on an internet auction site. I have no idea where it is and I shall be reimbursing the purchasers' price and postage. Not only have I lost out on a few extra dollars, I'm sure I won't get a good rating from the other trader.

So as you can see, my life has both gone out of whack and been pretty much non-existant. I have still seen a few friends here and there but not as many as I would usually. I usually go for coffee with a particular set of friends at least one weekend in each month and since the New Year, I have had to delay it every single weekend and now, there's not even a full weekend left to do it in (this Saturday will also be taken up working).

Extra Work and Who It Affects

We sometimes say to ourselves that "it'll be okay", "it'll calm down soon" or "we'll be able to relax afterwards" but none of these statements are ever true. Firstly, it's not okay when the extra work time starts affecting your family. Secondly it never calms down since commercial projects are incessantly going forward always with something to do. And finally, you don't get time to relax since once the project is done, all the things that need to be fixed up come back and haunt you for weeks if not months afterwards.

Out of those points though, the first is the most interesting in this conversation. Many times we buffer those around us from the realities of having to work overtime. We manage to shield our loved ones from the harsher realities such as nightmares (about work), arguments within work or even just plain old tiredness (whether physical or mental).

But sometimes our buffers become thin or cracks start to show. When working 14 consecutive days, it's hard to shield it anymore from those around us. We start complaining about the smallest things, we're grumpy and we're tired.

And as soon as you start to show it, your family sees it too.

Suddenly your homelife isn't as good as it was, your relationships don't sit as well and your family and friends start complaining that they never see you anymore. I know this because some friends of mine have been complaining for almost two weeks now. My response however is "There's nothing I can do".

Saying What we Don't Believe

Of course, there is something we can do about it and that is to push back on unrealistic work schedules. Having to work extra days, overtime and lunchtimes because of something that is out of your control is pretty demoralising. I have been on projects in the past which had crazy schedules but this particular one is fast becoming one of the hardest I've ever had to work on. Let me also qualify that by saying that on one of my previous projects I had to support a scientific space telescope for the European Space Agency for months beforehand, months after and 12 hours per day for well over a week around launch. So I know about high profile and expensive projects.

Today then, I decided that I shall give my all until project launch which will take us to around the end of January. After that however, I expect I'll not only be back on the four day work weeks but also back to normal hours too. It'll still be busy after launch I know but realities are kicking in now and I know that working these long hours is not good for either myself or those around me.

Instead of believing then that "there is nothing I can do", I shall be instead believing that my dream of a four day work week will soon become reality again - and this time, actually make it happen. Any future projects will just have to schedule me for four instead of five days per week.

Why?

Because I want the 'life' part of my 'work/life' balance back!

How do you put a control on the work part of your work/life balance?

Labels: planning, living, working

Inserted: 2009-01-26 01:11 (3 years ago)

Are you a spender or a Saver? Can you Change?

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Jonathan at Master your Card wrote a guest entry over at Four Pillars. It was titled How to Change Your Financial Personality. I found it an intriguing article and got me thinking.

Here's part of the comment I left over there:

I used to be a spender (with a few savings) but now I’m a saver (with a few spendings). I think you’re right, we do flit and flirt between them but I now know I’m on the right track and probably won’t ever become a 'spender' again.

As I've mentioned before, since September last year many things about my life has changed and pretty much all of those have been for the better. I really don't spend as much as I used to which has afforded me the freedom to work a four day week and spend more time doing the things I enjoy.

My Changes

Therefore change for me was actually surprisingly easy. Of course, my change was enforced since I wouldn't have been able to sustain my previous spender lifestyle and be able to only work four days.

I bumped into an ex-boss the other day and we got chatting how things were. I told him that I was working a four day week and he immediately asked: "And you can afford that?"

I replied: "Well, you make yourself afford it." I'm not sure whether he actually liked the answer since I'm sure there are many people who would say that they couldn't but the truth of the matter is, many people can, if they only curb their lifestyle slightly.

I'm not going to make this a long blog entry since Johnathan wrote a great article. Also because there are a few other things I want to touch on before I go. However, one thing that stuck in my head about all this is whether each of us has the ability to change.

What do you think? Can you change? Let me know whether you have, you can or you will.

Changes in the 'Andy @ Retire at 40' World

As you can see, I have a brand new blog with my own domain now. It is all very exciting and I even managed to migrate all my old entries and comments over to the new one.

I know this is a lot to ask but if you have a link to Retire at 40 in your blogroll, can you please update the link so that any of your readers coming here won't have to go through BlogSpot to be redirected. Many, many thanks to each of you, I owe you one big time.

Hopefully, you good people who have already subscribed to the blog will automatically come here from now on since my feed now points to the right place. You're also in luck since there are quite a few interesting features planned for this site over the next few months so if you're not already subscribed, do so now so you don't miss out (that big orange RSS icon in the corner is what you're after).

By the way, thank you to everyone who has subscribed to 'Retire at 40' recently. I thought getting to 100 subscribers by month 3 was pretty exciting but I seem to have gained about another 50 in the past month (pending what happens with the blog move). Welcome to all of you.

Also, be sure to contact me to say hi, talk about PF, point me to an article, ask me a question or just to chat about anything at all. It's great hearing from you guys.

Finally, I hope you all had a great Christmas and New Year and keep enjoying the blog now that I am back.

Labels: planning, saving, spending

Inserted: 2009-01-07 23:18 (3 years, 1 month ago)

Why You Should Do New Year's Resolutions All Year Round (but don't call them that!)

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Are you one of those people who write down huge lists of things you're going to change about your life come 1st January? Maybe you just have a small list of things but the real question is, are you going to keep them?

Here, I'm going to tell you why you should do New Year's Resolutions all year round but instead of giving them a big official title like that, just tell yourself that you're going to change something about your life. Besides, most people don't last out January with their resolutions anyway, so what's the point?

Change a Little Something

Whenever I have changed aspects of my life on 1st January - admittedly something very rare in my life - I have usually failed at keeping up with it. But many times, I have just decided, right there and then, that I was going to change a little something. And this has been my most successful method when wanting to change direction in my life. Just start.

That's what you should do too.

Just do it spontaneously, don't think about it too hard, just do it. Yes, you might have been pondering it for a while but then suddenly you just know it is the right time to change.

Whether you are quitting doing something, doing more of something else or changing an aspect of yourself or your life, the best way to do it is to just say "To heck with it, I'm changing as of right now!"

No lead in time. No setting dates. No pre-planning and no further thinking about it.

Deciding that you will quit something on a particular day in the future just doesn't work. Then you realise that that day is going to be the last day you can ever have that particular thing means you hype it up too much. It becomes bigger than what the actual change is and maybe you even over-compensate prior to that date by having even more of the thing you're actually going to quit!

Surely this isn't the right way of doing it?

Wake Up One Morning and Just Decide

A number of major decisions in my life have happened when I've been in bed in the morning, trying to wake up and pull myself out of bed between snoozes and thinking to myself that I just don't want to get up today. When that happens, I usually know what it's about and on occasion I have decided right there and then what I was going to change.

One time, I couldn't get out of bed because I didn't want to go to work. Right then, I decided to quit my job and look for another one. After that it was easy to get up and I immediately stepped into the new wonderful world of looking for a new challenge rather than the old miserable grey world of the current job.

As a counter-example to this, I knew of a schoolteacher who said that she would quit smoking, not on the 1st January, but on the first day back at school. It seems to me that quitting smoking on what could be one of the most stressful days of the school year (teaching being quite a stressful job anyway) didn't seem to me to be the best plan. Instead, I told her to just wake up one day and to have just stopped. No date for when to quit, not ritual buying of the last packet and no 'last' cigarette. Instead, wake up and just say "As of now, I have quit smoking" and that's it!

Not just smoking but anything.

Changing My Whole Life

Back in September, I pretty much changed my entire life on the 4th of the month. It was a Thursday. I remember it well since I'd had the previous day off as my first Wednesday off of my first four day week. Prior to that Wednesday I had no idea that I would change my life so completely as I did the following day. I mean, things had been rolling around in my head prior to that day - a stewing period is always an advantage - but suddenly I woke up a new person.

I stopped buying takeaway coffee, I cut down expenses, I changed a whole myriad of aspects of my life - why, because I knew when I got paid in 12 days time it would be for a lot less than I got paid the previous month. I just had to do something about it to make sure I wouldn't end up going back to 5 days a week.

Use Any Kind of Stimulus to Make You Decide

It's not just about waking up in the morning though. You can make these decisions at any time you like but I find that the best time to make decisions is when that final straw broke the camel's back. Here are three quick examples of some aspects of my life I have changed in the last few years:

• About three years ago, I'd had a terrible week in work and went to McD's for food that evening. Instead of the usual chicken burger, I bought a large beef burger (I forget the name of it). It was disgusting, dripping fat, mixed with mayonnaise, it just didn't taste good. It put me off for life and I've never been back to McD's since.
• One day, I added up how much money I spent each year on takeaway coffees. It added up to almost $1,000 which was in my opinion, far too high a percentage of my salary - my net salary too! In fact, it wasn't this that made me stop but add it to the fact that I'd just received my 4th coffee that week which was caffeinated instead of decaf and that finally broke me. Paying extra on top of the already exorbitant prices for decaf which I never received anyway finally stopped me from going. Now I get the odd hot chocolate but usually as a treat and with friends.
• The decision to sell my car was the culmination of having to pay out $70 one Wednesday on petrol, $170 the next day and the final straw of $630 on the Friday. I was not happy. I decided it was time to get rid. Less than three months later, I was car-less.

Today's Resolution

Why didn't you get out of bed this morning? What was it about today that didn't allow you to enjoy it? Did you get annoyed by something which you realise you just don't need anyway?

When I asked myself about whether I really needed the coffee, I knew I didn't but it has also evolved from that now. It is no longer just about saving money by not having that coffee, but also about having more time in the day to enjoy myself. When I walk past the shop nowadays, I actually shake my head at the huge queue of people wasting 20 mins every day (or even more) waiting to be served the drink they ordered oh so long ago. I actually get more time in the day now to enjoy myself that little bit more.

These are the kind of questions you can ask yourself. Sometimes you decide that it's okay for the moment, that you still want something or you don't want to change something else. But eventually, one day you'll decide that you do want change. And when that day comes you'll know it immediately and your life will be changed forever.

The best part about all this is, you can do this every single day of your life. Why wait until a very inopportune date to change something of your life? Just do it and do it today. If you want to change something, you may even call it 'Today's Resolution' but either way, just change. You'll be happier tomorrow if you do.

Labels: planning, saving, living

Inserted: 2008-12-18 23:20 (3 years, 1 month ago)

Are You Throwing Away Money? 5 Tips to Save You Money

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Everytime you buy something with packaging, you're buying something only to throw away. Sounds crazy doesn't it but it's true. And for everything you have to throw away you also have to pay the council to come and take it away too so you're getting a double whammy against your wallet right there.

Think about it. You buy a six pack of yoghurts, or maybe a one litre container, and where does the packaging end up. That's right, in the bin. So firstly, you paid for the plastic to make the container and secondly you're having to pay to take it away again! (Unfortunately where I live, the council doesn't recycle that kind of plastic, so it has to be thrown out.)

That was just one example, but let's look at some others and some possible solutions.

1) Replacing 'Use Once' Kitchen Paper with Multi-Use Cloths

Back in October, I realised that I used a lot of kitchen paper. Usually because I use it for the cat's bowls so I don't have to use my normal tea-towel. I don't have a huge amount of space in my kitchen so I prefer to have as few things as possible in there. Then I read an article which made me wonder why I was doing this.

Two months on, I'm just about running out of kitchen paper and last weekend I bought 4 facecloths (30% off of course) of about the same size as kitchen paper to be used instead. So let's look at the maths.

Two rolls of kitchen paper lasted me around two months. At about $1.50 per roll, that'd be something like $18 over the space of a year. The 4 facecloths I bought cost me a grand total of $5.54, just a bit below four rolls of paper towels. Each paper towel roll has 80 sheets, but these cloths will keep going for years. In fact, within less than 4 months the facecloths (now multi-use-cloths) will have paid for themselves.

Let's add to the equation that paper towels add to your waste even if this is insignificant. Ok, to be fair, I will have to wash the cloths every now and again (dependent on function) but this won't add up too much either. Certainly not as much as $12 in the first year and $18 for every subsequent year. Overall I'd say this was well worth it, not just because of money but for reducing waste too. Remember the paper towels also come in plastic bags whilst the tea towels just had a small paper tag.

2) Not Accepting Plastic Shopping Bags

No matter what you think about free plastic bags, whether you use them for lining your bin or otherwise, you still have to pay for them in one way or another. Usually they are counted as overhead for the shop so it's almost like everyone has to pay a 'plastic bag tax' when shopping at that particular store.

This 'tax' can be easily avoided by shopping at places which charge for giving out plastic bags. Therefore, only the people who use them have to pay for them. I presuming here that you won't pay for them because you're cleverer than that and instead use re-usable bags.

I myself have two cotton bags which I try and use every time I head to the supermarket. I must admit, every so often I forget and have to unwillingly take a bag but every time it makes me feel sad so this is something I really need to fix and stop doing.

An example of a place in New Zealand which charges for plastic bags is Pak'n'Save. They even advertise the fact that they charge for them to keep prices lower for everyone. Good on you Pak'n'Save! Unfortunately I believe all the other supermarkets still give out free bags, which is crazy because they also try and sell reusable plastic ones too! Let me know if you know of other stores here in NZ which also charge.

(Side note: when I was in the UK back in 2001, one of the supermarkets, Sainsburys', used to give me money every time I used a bag of my own! Granted, it was only 1p but forward thinking such as this innovative and also proof of the plastic bag tax.)

3) Composting your Organic Material

Almost every bit of your organic material can be composted and again this helps in many different ways. Firstly, your volume of waste reduces and therefore lowers the amount of money you spend having it taken away. Secondly you can use the compost on your garden the following year to create a rich soil in which to grow your vegetables - another source of food at a lower cost to you.

Finally, composting also prevents the organic material from going to the tip, in which conditions, instead of breaking down aerobically (with oxygen) it breaks down anaerobically (without exygen) and produces methane. In some landfills this is captured and used as an energy source but in most cases it leaks out into the atmosphere and is a significant contributor to the greenhouse effect.

What not to compost also helps when deciding whether something belongs in the compost or the rubbish bin. You'll have to figure out which plants are classed as weeds in your local environment since I think that article was written for a North American audience.

Even if you don't have a compost heap, you can (and should) just throw your organic waste onto your land anyway so that it can decompose naturally. This is something I had not heard about before, though it makes perfect sense and seems to be called Passive Composting. Quite a few things to gain for not that much work.

4) Shop Around the Outside of the Store

The science of laying out a supermarket is very well known to make shoppers buy impulsive purchases. Those tempting and scrumptious chocolatey or sweety things (as well as other fast but processed food) are all laid out in the thin aisles in the middle of the store. When you're stuck in a trolley-jam in the middle, your eye gets tempted by all those processed foods.

Generally you don't need these items but sometimes you want them. That right there should stop you buying them since they are a want, not a need. That's the first reason not to shop in the middle of the store and to limit your trip to around the outside.

But think about this too. Not only do you not need many of those items, you're also not even getting value for money since most of these things come in layers and layers of packaging. Take a simple block of chocolate. It is firstly covered in metal foil, then has a paper sleeve. A packet of individually wrapped sweets has got to be one of the worse culprits (think individually wrapper foil, with a sticker on, stuck to a frilly cup, all enclosed in further plastic). Even something better like a jar of pickle means you're paying for the jar and lid.

Next, think about the items of food which are better for you, especially the fruit and veg. I rarely use any bags in that section and instead put my purchases directly into the basket and then directly into my cotton bags at the checkout. Occasionally I think the cashier is a little annoyed since individual tomatoes can be trickier to handle than a bag but in reality, that doesn't bother me too much. Bananas are cool since they come in their own packaging and one which can also be recycled!

In reality this point doesn't always hold true (milk cartons for example) but the majority of items in the middle of the supermarket have an excess of packaging you just don't need. Also remember that when you do need something, buying in bulk also helps reduce your waste per unit item if this item can't be avoided.

5) ... and Back to Those Yoghurt Pots

In September, I was buying those 6 packs of yoghurt for around $3.00 when they were on special. (I refused to pay the normal astronomical price of over $5!) One week when none of the brands were on sale, I progressed onto buying a one litre container for around $3.50. It had less plastic (by my unprovable calculation) and more yoghurt per 100g than the multipacks. In both circumstances, I was still throwing away a fair bit of plastic.

Recently, I have taken my yoghurt maker out of retirement. I bought it a few years ago ($20) and stopped using it, mainly for the fact that my supermarket (New World) was charging over $3.50 for a packet which makes one litre. Ignoring the packaging for now, that in itself didn't make financial sense to me and more especially so since I think the normal yoghurt is a little nicer.

It turns out that after speaking to a friend of mine, the other brand of make-it-yourself yoghurt can also be used in my maker - and why I didn't think about this before, I don't know. Also, the Pak'n'Save (to which I shall now be making regular bike trips) was selling that brand for around $2.50. Overall a $1 saving on sale yoghurt and probably about $3 on regular priced yoghurt. In fact, it's nicer than the other make-it-yourself brand too. I usually go through just over one of these yoghurts a week, so within year one, I'll be saving over $30 and over $50 annually after that.

And did I mention that the packets the yoghurt comes in are just thin packets which scrunch up into a small ball. They take no space at all and could probably fit 100 of them into one of the one litre containers above. Yet another saving on waste collection.

You should also try it and see how it goes. You'll find that a bit of pre-planning means that you can make that yoghurt (12 hours wait), chill it and have it on the table ready whenever you need.

The Challenge is On!

This post was inspired by a challenge I read about a few weeks ago. EnviroMom blogged about the One Can a Month Challenge which I think means, in non-US terms, one trashcan/bag a month.

As I mentioned earlier, I have already noticed that the volume of waste I produce was lowering. There have also been some recent changes (such as the yoghurt and paper towel techniques) which will also reduce my waste levels and there are still some things I want to try to reduce it even further.

In trying out this challenge I decided to start when I last put out a bag for collection. That was two weeks ago and already I can see an improvement. In fact, I haven't even put my kitchen bin into the outside bin yet and usually it takes two of those for a full bag.

So far so good. I would say wish me luck but with these techniques, I won't need it!

Why don't you trial 'One Can a Month' and see how you go. Let us know how you get on or if you're already doing it.

Labels: planning, saving, consuming, shopping, spending

Inserted: 2008-12-11 22:25 (3 years, 1 month ago)

Simple Steps Taken to go Car Free

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Over time, I have taken numerous steps to become car free. Each of these steps are small, sometimes infrequent but all of them have added up in the quest of attaining car-free status.

And now they have all now been worthwhile since yesterday, I sold my car and am now officially carless! And you know what, it feels great.

Consideration

The first thing you need to consider is whether your life would be better or worse if you went car free. This one thing is the most important part of this decision since there would be no point getting rid of the car only to have your life become miserable and annoying. Everything you do should be to make your life happier, easier and more fulfilling.

For me, this decision was easy. I've never really been a fan of cars anyway and whilst I took a liking to my car (her name was Latoya because she was a Toyota) I just became sick and tired of the expense she was costing me, especially taking into account her old age and the number of repairs I had to do recently. Poor Latoya.

But after having a few chats with various friends a while ago, I decided that getting rid of the car was something that was definitely on my todo list but I just wasn't sure when. After having that short, sharp snap of car-related expenses back in September it became the final nail in the coffin with me and car ownership.

Having also moved in to town earlier this year this also made the decision to go car-free a lot easier. Transport to both work and almost all of the other places I frequent was now not required and in fact, probably slower.

If it helps, write down a pros and cons list of having, versus not having, your car. This is a good exercise since there might be some things you'd forgotten about. For example, the convenience of being able to drive to your holiday destination might be one but maybe you're more of a flier anyway. How about the reduced ongoing cost of not having a car versus the increased stress of having to ride public transport? (Unless public transport in your area is amazing.)

Add Up your Expenses - and Include the Car Price and Depreciation too

Another way to help you make a decision, is to add up how much the car is costing you vs the cost of having to pay for other travel arrangements. I can almost assume that because you are reading this blog that this particular item on the pros and cons list has a fair bit of weight in the final decision. It certainly was for me once I fully worked out all my costs.

As mentioned in my post about Two Ways Biking Substantially Improves Your Life, I mentioned a few ongoing costs of car-ownership and I'm sure there are probably others I have left out too. (For example, I think the car will have to have new tyres soon so I'm glad I didn't have to pay for that.)

Another item I forgot include in the original cost list was the actual amount of money I'd originally paid for the car. Now that I also have the sold price I can figure out that the car, over the four years I had it, cost me about another $50 per month just for the privilege of owning it. Of course, the longer I kept it, the less this would be but that's also a risk set against any upcoming repairs that might happen and one I was not willing to take. (Rust on the back windscreen and the slightly sticky gearstick are two repairs that will definitely have to be done soon.)

It Doesn't Stop There

As if you need any more convincing, there are also other factors to take into account. In the past six months, I have probably used the car 2-3 times per month and in fact, my friends borrowed her for the majority of this time. Even out of those two or three times I used it each month, two of those were probably unnecessary if a little convenient. When not in use, she would sit on the road gathering rust or having her wing mirror broken off which was no fun at all. All of these things add up to an unhappy car...

...and an unhappy me!

I knew I was having to spend over $250 per month on something I very rarely used and that amount was never going to get cheaper either (apart from the petrol price reduction recently but that's only a fragment of the ongoing costs). No matter how much or how little I used the car, I was out of pocket by a fairly reasonable percentage of my take-home pay, pay that I'd worked hard for and therefore money which wasn't returning the favour and working hard for me.

If you did choose to go car-free, that extra money would be much better off in a savings account, paying off your mortgage or even put into shares or property. Over the year, that saved money could come to something over $3,000 (or a lot more) not including any additional interest payments and that's a quite significant amount. Even just thinking that not having a car will knock years off your mortgage is really quite exciting.

Depending on the Most Reliable Form of Transport - Your Legs

Having always been a walker and now a keen cyclist too, I am relying on my legs more and more. In fact, I've always said that those legs are the most reliable form of transport ever. They've never slowed me up in a traffic jam, never broken down, never deviated from the scheduled timetable - since I set it - and almost always do exact what I want, when I want. They also never say annoying things over a tannoy system to hoards of beleaguered commuters when the points fail or the bus breaks down.

Both walking and cycling were the forms of transport I decided to concentrate on the most to help me out in the post-car era. I could say I was lucky in that most of my destinations are within walking or cycling distance but that would be wrong, In reality they are close because I specifically moved to this exact area for exactly that reason. All part of the plan, a plan which has been brewing for a year or more, with action taken over the space of six months and a final transaction yesterday to conclusively be rid of that four-wheeled contraption.

A Plan for Post-Car Blues

As shown above, I took a few steps to make sure I put myself into a situation where I could get rid of my car but there are other things to think about too. Maybe you'll find things slightly more inconvenient because you'll have to take the bus or train instead of driving but actually you don't have to make it harder on yourself by not owning any petrol-fueled transport.

Firstly, you could do what I did and buy yourself a bike. I managed to get one in the spring sales (in this hemisphere at least) and as I've said before, it's already brought a lot of joy to my life, both for exercise and for social engagements with other bikers. Essentially I have prioritised that a bike is more important to me than a car and therefore, I'm happier because of it.

Not to mention that I have already lost some weight and can feel that my stamina is steadily increasing.

Of course, you also have the option of public transport, which admittedly requires extra planning, but it's hardly a burden. If I can plan to retire at 40 then I can certainly plan to take a bus somewhere on a Sunday morning.

It's also not a bad thought if you remember you can still take cars every now and again. A taxi for a quick trip here and there doesn't work out to be too expensive (factoring in your lack of tax, parking, maintenance, insurance, breakdown cover and all the other things) or even hiring a car on the odd weekend for that jaunt away isn't going to break the bank either. In fact, you'll still probably be saving around half to three-quarters of what you were consistently spending every month and in some months near to 100% of that stays in your bank account!

All in all, no matter what transport you take during the course of the month, you'll be much better off than you were before.

Added Advantages

After selling the car yesterday, I also figured out a couple more advantages which, even if they are only small ones, still add up to extra happiness. Firstly, I was able to get some money back from my insurance company to the tune of $240 as reimbursement of my pre-paid yearly policy. It was a lovely parting note to my insurers and one that my Emergency Fund will be very happy about.

Secondly, when signing the official papers, I had to take my car key off my keyring and hand it over. And you know what, in that simple act, I went from having two keys on my keyring down to just one key and it was an amazing feeling. Simplifying my life in a most unexpected way made me smile and actually brought a little bit of joy to my face. Realising that you've just gone down from having a set of two keys to a measly one was much more fulfilling that I'd ever thought it would be.

Almost halving the weight of the keyring already makes me happier and certainly puts me one more step on the road to a life of simplicity and financial independence.

What would you do? Can you go car-free? What stops you, your family, your location, your job or something else?

Labels: planning, insuring, saving, living, travelling, selling

Inserted: 2008-12-04 22:41 (3 years, 2 months ago)

December Challenge - Free Yourself of Material Possessions

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Earlier, I posted about 5 Ways to De-Clutter and Simplify Your Life but in December, we're going to take this to the next level.

Being surrounded by material possessions weighs heavily on our minds. Sometimes I wonder how big the next place I move to should be just to fit all these things in. I wonder why I keep those DVDs on my shelf that I haven't watched in ages. My wardrobe, whilst not big could do with a trim. And all those other empty appliance boxes, folders of papers and books I haven't touched in a while just sit there staring at me.

And all the time, I think about doing something about these things.

Starting Out ...

Over time, people generally acquire lots of stuff. Each time they move, they shift it with them and since the new place is bigger, it's easier to acquire even more stuff and have it diffuse into the house like all the other belongings.

A spring clean every now and again removes parts of it, either to the charity shop or the rubbish dump but mostly, it just gets dusted and put back. Those things that haven't been used in a year or so but still being kept for the sake of it.

I've managed to do this with a few things since I downsized to my newer smaller flat but I still have lots of stuff, everywhere, all over the place. It'd be nice if this wasn't the case and I could actually get rid of a lot of it.

... and Finishing Off

This December, I challenge you to start filtering through all those secret cupboards you have left closed for eternity, those drawers that seem completely jammed and those cardboard boxes in the attic or garage that haven't seen the daylight since the turn of the Millennium. Just a little bit here and there will make a huge difference. How much? 15-30 minutes a day. That's not much but, as with Personal Finance, many small changes add up to a large difference over the long term.

Not only that, but once you've filtered your possessions you'll find it hard going back and acquiring more stuff. This not only helps your peace of mind but also your wallet.

The Act of Filtering

A friend told me the other day that she has three piles: Keep, Charity and Throw Out. This sounds like a good plan since then you know exactly what you're doing with every single item you find.

You might like to add a Sell pile too but this is your choice. Maybe you have a Give to Nephew pile or a Recycle pile and of course, you may have others but the best way to do it is to keep it simple. Also, as and when you look at each item from that cupboard, drawer or box, make a decision there and then as to what you're going to do with it. The worst thing you can do is decide to decide later.

Say 'No' to a Don't Know Pile

Whatever you do, do not have a pile called Don't Know since that will just assimilate back into that stuff you didn't actually know you owned. After all, the point of this exercise if to get rid of things, not just shift them to another location in the house.

As I said, pick up each item and put it into one of the definitive piles. That way, when you look at it in the future, you know exactly what you're going to do with it (assuming you haven't already done something with it already).

Do a Little Every Day

By doing just a little bit every single day, you'll be amazed at how quickly you can get through your stuff. I shall be taking this challenge and posting one or two updates throughout the month so we can compare notes on how we're doing.

You might wonder if December is a good time for doing this since it is a very busy time of year but I suspect that this will work out well for even the busiest house host. Instead of leaving all of your tidying up until a week before Christmas and New Year then just start now and see where you are in two weeks. I suspect if you did a bit every day until mid-December you'd be more ship-shape than if you left it until later.

So what are you waiting for? Get sorting through that stuff and let's have a clear, clean, stress-free and simple Christmas and New Year.

And remember to let me know how you're getting on in the comments, state that you're partaking in the challenge and blog about it so we can spread the word.

Labels: recycling, planning, living, giving, selling

Inserted: 2008-11-30 10:06 (3 years, 2 months ago)

Welcome to Visitors from Get Rich Slowly

Firstly, I'd like to thank JD for linking to my site. It's an awesome thing to be able to say I got a link off GetRichSlowly in my first three months on this journey of mine towards financial independence and early retirement.

Retire at 40 — This personal-finance blog from Andrew Chilton is based in New Zealand, and features some excellent discussions of topics like budgeting, lifestyle inflation, and financial independence.

- JD Roth

But Things "They Are a Changing"

Soon I will be switching from Blogger to my own domain so if you guys want to keep up to date with all of my posts and not miss a beat, then please Subscribe to RSS . That way, you'll get full continuity with my posts and for which, I will be truly grateful!

Labels: planning, retiring

Inserted: 2008-11-28 14:05 (3 years, 2 months ago)

Non-Cash Based Envelope System - The Bead System

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Earlier in the week I talked about the Envelope System and how it can save you money. I also mentioned in that post that I am not a cash type of person. My transactions are almost exclusively on plastic, whether that is debit or credit, or completely electronic when banking online.

In fact, the only cash transactions I seem to do at the moment are at the Sunday Market for my fruit and veg every Sunday morning. I realised that last Sunday I still had the $8 change in my wallet that I'd received the previous Sunday. No cash entered or left my wallet for a week.

The Envelope System Without Money

Instead, I have come up with an envelope system that you can use without money. It's not as accurate or as flexible but it'll do for my needs. It goes something like this.

Collect yourself a set of jars, containers or some other smallish holders. You need as many jars as you would envelopes i.e. as many jars as you have categories for your spending. I have a number of old empty spice jars which I am going to use.

The Bead System

Then get a number of counters, be it beads, tiddly-winks or any other kind of small item which you can use for counting. Each of these represents $1 each and it is these you will use instead of cash.

At the start of the month, if you're going to spend $250 on groceries each month, then you would count out $250 beads into that particular jar. Maybe you'll also count out $50 into the Entertainment jar. Trust me, this doesn't take as long as you think and it's only a once a month job. After a while, you'll probably get to know how far up the jar 250 beads go (or maybe if you had good scales, you could use them - yes, I jest).

Then, when you're entering your expenses into your accounting program at the end of the day, you can just take out the number of beads per dollars spent from the appropriate jars and put them in a special spent jar. Since you're keeping good track of your expenses, this is not much more overhead than having to remember envelopes each time you go out and buy something. It is also easier for those transactions which have expenses in two or more categories.

Rounding

When using this system, you should consider that those beads represent full dollars and that you can't actually split a bead up any more than it's whole. In which case, if you have an expense which ends in a fraction of a dollar, just round it up to the next dollar and shift those out to the spent jar. The reason to round up is so that you don't actually go over your budget.

Even though the system isn't wholly accurate, it doesn't matter. Hopefully you track all of your spending in an accounts package so this system is just for a general idea rather than for exact detail.

Advantages of Using the Bead System

The bead system is a very visual one, especially so if you have bright blue glass beads in clear jars. It also doesn't require you to either count cash or load up your accounts on the computer just as you're heading out to the shops.

Just a quick glance can tell you approximately how much you have left in any jar. It's very easy to mentally take note of what's left in your most important jars and after a while you'll know approximately how many beads it takes to quarter, half or fully fill each jar. Knowing at a glance when you go to the supermarket how much you have left in your groceries budget is very powerful.

I'm sure that there will be times when you completely forget how much is left in any jar but in reality, most of your spending wouldn't be big enough to go over by a huge amount, unless you were doing it on purpose. If you were going for your weekly shop at the end of the month, you'd be pretty likely to find out how much you have left in the grocery jar before you left, ie. only when it's important. If you ended up getting milk on the way home from work, then I suspect that's not big enough to worry about even if you did go over.

Finally, the last advantage of the bead system is that it works without actually having to store all your cash in envelopes for the most part of each month. Instead, that money would be sitting pretty in one of your accounts earning interest instead of just sitting there not working at all.

December is Trial Month

I shall be trialling this system in December and I'll let you know how it goes. I should be able to find any deficiencies in it and then change it to make it work better. Let me know if you spot any problems or have any suggestions.

Are you going to try the Bead System? Please share your experience with our readers by leaving a comment below.

Labels: planning, budgeting, spending

Inserted: 2008-11-26 21:03 (3 years, 2 months ago)

How the Envelope System can Help Save you Money

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The envelope system is a well known and much practiced system in personal finance to help stick to your budget. It's a simple system and is especially suited to those people who wish to primarily deal with cash (rather than plastic debit or credit cards).

I feel that it is falling out of favour since many transactions are now electronic but I'll present a modified version in a future article which I shall be trying out in December. This will hopefully help for people like me who hardly ever take out or spend cash.

Funnily enough, even in some high tech countries, cash is still king for normal everyday purchases so it's interesting to note that this is a very common technique in Japan, even to the extent that almost everybody does it (and not just those who are careful budgeters).

The Envelope System

The first thing you need is a budget. Without it, the system won't work. Then once you have that, you need to figure out which items on your list (whether they are broad or narrow) are those ones for which you can going to use cash. This wouldn't include things like automatic rent deductions or paying your utility bills online.

As an example, let's say you have 4 categories (a very much simplified month) for which you are going to budget cash for this particular month:

• food - groceries and tops-ups like milk and bread
• household requirements - detergent, soap, shampoo, bin-bags
• clothes - socks, shoes, jeans, skirts, dresses and tops
• entertainment - cinema, CDs, eating out with friends, hobbies
• gifts and charity - presents and donations

Take yourself 4 envelopes and on the front of each, write that particular categories' name. When I tried this system, I also wrote on the front how much I had allocated to it too. e.g:

Entertainment - $75

At the start of every month (or the start of every pay-month), you take out your total alloted money for all these categories from the hole-in-the-wall and divide it into your envelopes as specified. Each and every time you want to spend money on a particular category, you should take that envelope (or a part of it) out with you when shopping. You can do this since you've planned your purchases - right?

If you didn't plan your purchase or you had to buy something then you should re-arrange the envelopes at the earliest opportunity. If you had $20 in your wallet from the Food envelope but you had to buy a pairs of socks, then shift the correct amount of money over from the Clothing envelope to the one that was compensating it.

Easy Peasy

The great thing with this system is that it is very simple to do and fantastically easy to see exactly how much you have spent and more importantly, exactly how much you have left in each of those categories at a single glance.

There would be no need to log on to your internet banking and no reason to wonder whether you're within budget for the month since you have all the information you need right there.

It is also simple because once that particular budget is gone, it's gone and there's nothing left in there to spend. If you really desired that new top you saw in the shop today but later found out that there is nothing left in the Clothing envelope for that month, then you're completely out of luck.

Re-Budget

If you find yourself in this situation, try not to siphon some cash out from any of your other envelopes since then you'd just be cheating. In the case whereby your clothing budget is dry for the rest of the month, I'd say live with it.

However, if you are consistently running dry out of your food budget then you may wish to re-budget what you think you need for that category. This might involve spending less, changing your eating habits or it would be quite normal to increase the budget you had previously considered ok (you may well have under-budgeted by accident). So don't be ashamed if you have to increase your Food budget and of course, be more weary if you want to increase your Clothing or Entertainment budgets. Remember the differences between wants and needs.

Snowflake what's Left

Another great advantage of using the envelope system is that when you arrive at the end of the month, or the time you need to replenish your envelopes, you can use it to save a little extra money. Since you have budgeted to spend a particular amount, yet you didn't spend it all, then pretend it did all disappear and snowflake off what's left into your Emergency Fund, Freedom Fund, savings or retirement scheme.

By doing this, you wipe the slate clean every month and this helps you not accumulate extra money in your envelopes which you'll probably eventually spend anyway. If that's the case, then you're doing a disservice to the time you spent putting your budget together.

The non-Cash Based System

I have briefly played with the envelope system but I almost knew before I started that it wouldn't be for me - though please note that this is a personal preference. This system is being happily used by many people to keep their spending in check.

Firstly, I am not really a cash person though I guess I could be if I wanted to be. Secondly, I wasn't that great rebalancing the envelopes if I had spent money from one envelope on something from another. I found this strange, since I'm very particular about entering every single transaction into my double entry accounting software.

In December however, I shall be experimenting with a new system I have brewing in my head. It doesn't use cash and it amounts to much the same as the envelope system. I shall write a further post detailing this system in the near future.

I have chosen December as the start date for this trial since by that time I will have my budget in place. As I described on my budget post, I have been keeping a record of all of my expenses and by that time it will have been three months. I have noticed that my knowledge of where my money goes is increasing and therefore I'll have a greater idea of what I need to budget for and how much.

It's going to be interesting whatever happens and I'm looking forward to it already.

Do you use the envelope system? Leave me a comment noting any tips and tricks you use.

Labels: planning, budgeting, saving, spending

Inserted: 2008-11-21 23:23 (3 years, 2 months ago)

Are you Managing Your Lifestyle Inflation?

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Have you ever heard the one about the graduate student who ate beans on toast for 4 years whilst completing his degree, accepted a top-class job with high prospective pay increases but even after 10 or 15 years of working never seems to have any more money in the bank than he did when he was studying as a poor lowly student?

Okay, I made this person up but the reality is that most of us know one or two people who are exactly like this. They are earning lots of money, in some cases more than you, but they never seem to actually have any. Yes, they have great cars or a big fantastic house but they always complain about owing so much on maxed out credit cards.

This could also happen to you if you're not careful. You see, these people are victims of Lifestyle Inflation.

What is it?

Lifestyle Inflation is something that happens to all of us at one time or other. It happens when we start working, it happens when we get a pay-rise and it can happen at almost any other time of our lives too if left unchecked. It's that function of our income which makes us say "Hey, I can afford that because of my new pay-rise" so you go out and spend the extra money on that new 'thing'. Because ... you know ... you're worth it!

It also has another phrase, one that is probably more well known than Lifestyle Inflation. It is also know as:

The more you earn, the more you spend.

You've definitely heard of that one.

Now, I want you to sit back, relax and have a think about what you did the last time you got a pay rise. I'll wait right here until you come back. Think of a few things. To help you out, you might want to consider whether you:

• treated yourself to a nice meal out
• splurged on new clothes, make-up or shoes
• subscribed to another magazine
• raised your cable subscription to the next level up
• increased the amount you set aside for socialising
• went out and bought a new car

If you can tick a few of these or maybe you have some of your own, then you are inflating your lifestyle.

So what? I deserve it

Of course you deserve it, you work hard for that money. That increase didn't come without having put those extra hours in, being good at what you do and finding a good position within your company. All that extra work you put in for that pay rise was worth it in the end and therefore you feel you deserve to spend it on whatever you like.

By all means treat yourself but do something low-key as a one off rather than expensive and continuous. That way, at least it is somewhat contained (and also, you need to treat yourself every now and again, otherwise you'd probably go a bit mad).

The Paradox

But here's the crunch. Yes, you put all that extra work in, your skills have increased and you're worth much more in your field of expertise but how does that benefit you if you spend all of that extra? Especially all that extra on something you have to pay every month for a very long time.

Think about it. Your employer is paying you more as recognition that you have improved both yourself and the company. But you're not recognising yourself. If you go out and spend that extra money in your paypacket every month, then you're not actually giving yourself a pay-rise.

Those extra car payments per month might come from your pay-rise but it's basically wiping that pay-rise out. What you end up with in your pocket is the same - or possibly less - than what you were getting before!

This doesn't make any sense. It means you're more valuable, you're earning more and you're being recognised but the end result is that you come out the same at the end of the month.

That doesn't make sense to me (and yes, I've been guilty of doing this in the past).

How to Stop It

Essentially you need to stop it by not allowing yourself to spend that increased pay-packet. Much like the old phrase PF bloggers like - Spend Less than You Earn - another one can be added to that list:

Don't Increase your Spending at the Same Rate as your Pay

There may be one or two things you want to spend extra on, possibly those things you've been holding out for for years but be careful not to spend every single extra penny you take home. If your expenses increase at a lower rate than your pay-rises, then you'll be doing well.

Of course, if your expenses don't increase at all when your pay increases, then you're doing even better. This is easily done by not altering any of your expenses budget but instead adding that pay-rise straight onto your savings budget.

Lifestyle Deflation

Recently, I have been a victim of a lifestyle change but happily for me, it is in the other direction. I have no idea if there is such as thing as Lifestyle Deflation but I think this is what I have been doing recently.

I recently chose to stop, cut out or cut down a number of my expenses and hence, even though I didn't get a pay-rise at the time, it sure has felt like one. It was a random time to do it but after almost three months I am already feeling the benefit of it.

To finish off, you might also want to consider what areas of your life you can downsize, cut out, do without, sacrifice or even just spend less on. You'll be surprised at how just a few things here and there add up to a fair amount of saving each month.

Oh, and by the way, the first places to look are those things you recognised earlier as contributions to your Lifestyle Inflation. If you didn't have these things before then you can probably still do without them now.

What is on your 'Lifestyle Inflation' list? What can you cut out to help with 'Lifestyle Deflation'?

Labels: planning, budgeting, earning, saving, spending

Inserted: 2008-11-19 22:57 (3 years, 2 months ago)

Does your Bank have a Broken Business Model?

It seems that everything is moving online these days. Your communication moved online quite a few years ago, morphing from your old letter writing days into your emailing days. Commerce came online quite quickly too and instead of flicking through books at your local store, you went and looked online for them. Music has gone that way too, your news articles and your TV programmes are now online and your banks have been there for a while.

In a lot of these cases, those commercial entities have also retained a bricks and mortar presence on the high street too, for those people who want to walk into a branch, speak to a real person and see and feel cash in the hand.

Personally, I'm not one of these people. Back in 2001 I changed my bank from a traditional high street bank to a totally virtual one. That's right, it had no branches.

Reasons for Change

When I look back on that now, I think I was a bit of a pioneer. I know that every single bank in the world has an online facility but back then, doing it solely online was a bit unique.

But the thing is, I didn't switch banks because I wanted to be online but because my old bank was most annoying. They did things I didn't want them too, they annoyed me whenever I spoke to them and they charged me through the nose for all kinds of minuscule actions.

To me, it seemed like they thought I was the privileged one to be banking with them. Of course, I begged to differ and when the time was right (I'd paid my Graduate Loan off) I changed banks.

The Advantages of Living in the Virtual World

When I started looking for a new place to bank, I was immediately surprised at how little the purely on-line banks charged for their services. I was also happy to see that my normal, everyday current account, would be earning interest at a massive 5%! In comparison to other bricks and mortar banks, this seemed like lunacy (for them) but since it was loaded to my advantage I took the opportunity without so much of a second's thinking time.

By this stage, I'd realised that by doing everything online, or via phone, they were able to run their business at a lower cost to them and therefore at a lower cost to their customers. It was also very refreshing that whenever I spoke to anyone on the phone, I was made to feel good about being a customer, good about myself and they knew who the most important person in that relationship was.

Fast Forward Six Years

After a change of country, I also had to change bank. This wasn't something I wanted since I was very happy with my virtual bank but obviously it was a necessity due to my change of location.

I went with a traditional bank but that didn't last long. Whenever I wanted to transfer money from NZ to the UK it ended up being a labour intensive and very stressful time. It seemed like it would have been easier to organise a trip to the moon (for me and my cat) than for the tellers to fill in the form correctly.

I also felt like the staff were a little too inquisitive to the tune of being intrusive rather than helpful. I guess I just wanted a personal account manager and not a friend. I want my relationship with my bank to be warm but not too personal. Don't ask me why - I guess I just see that business is business.

After two years, I switched to what seemed like a more clued up and modern bank. So far I have been really happy with the service I have received from them but times-they-are-a-changin'.

The Broken Business Model

Recently, I have had to speak to my account manager on a number of occasions, mostly because my fixed mortgage is up at the end of November and I will need to renew at some stage. Of course, this means I have been doing my homework and looking online to see what the current mortgage rates are from all the banks in NZ.

It turns out that my bank's mortgage rate was quite a bit higher than one of the other banks and I told my account manager this. It wasn't just a small bit lower but at the time almost a percentage point lower!

It is no surprise that this other bank, the one with the lower mortgage rates, is mostly online too (and leverages the NZ Post Shops for any physical transactions).

As soon as I had told me current account manager that I was thinking of moving my mortgage to the online bank, my first thought was that he would say something along the lines of "Well, we can't compete with that" since it was completely obvious that was the case. Instead, he proceeded to tell me how they looked after their customers more and that they gave out better advice than those on-line type banks. That they had more personal contact (which I don't necessarily see as an advantage). Also the fact that running a branch costs them $100,000 a year!

Whoa there. Say that again! I felt like saying "Actually, it doesn't cost you $100,000 a year, it actually costs ME lots of MY money each year." And with that statement I decided there and then to leave my current bank.

Unfortunately for him (and me) my old account manager left his bank and went to work for what will eventually be my new one. Add to this the fact that my new account manager is one of the most annoying people in the world ... let's just say that I shall be moving due to many different reasons.

But one reason stands head and shoulders above everything else.

Saving Me More Money

At my new bank, I shall be saving more of my own money that I work very hard for. Here's a very quick list of advantages and I'm sure it's not a complete one:

• the interest on my mortgage will be much lower
• I have no 'relationship' fees
• there will be no transaction fees (same with the old one)
• no charges for having a credit card
• the interest on my credit card (not that this concerns me) is lower - just in case
• any savings accounts I have will earn extra interest

Due to these reasons, I shall be changing from the broken business model that is the high street bank to a purely online one. The cost of running a virtual bank is much less than a traditional one and therefore, I get to see more of those savings in my own account. My baseline will be increased due to this one decision and each and every month, I will get to keep more of my money.

It is considered difficult to change bank but in all honesty, it's no worse than changing job or even buying a car. It is important to me that I get a good and honest relationship with my bank, I want it geared towards me rather than them and I want to enjoy whomever it is I talk to about my finances. I have found that my relationship with any new bank is immediately successful since they're just happy I'm switching over, especially so because I came to them.

In conclusion, I shall be changing banks for the fourth time in 10 years during the next few months and I know that this one will be better for me in many more ways than each of the last two banks.

Are you happy with your current bank or are you thinking of switching? What would stop you from changing even if you weren't happy?

Labels: planning, banking, saving

Inserted: 2008-11-15 23:03 (3 years, 2 months ago)

Prioritising so You Can Have Your Chosen Way of Life

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Life is all about compromise. In almost everyday situation we come across, we have to trade one item off for another. For example, when I buy cream cheese, I usually go for the lower priced version rather than the much more well known Philadelphia. Why? Because I think the taste is identical and I get to save money at the same time too.

However, if I'm buying that delicious yeast spread for my toast, I always, always, always get the real Marmite. All of the others I've tried, especially in this part of the world, aren't quite the same.

I'm trading off the price of the goods for the taste. Usually I'll go for the cheaper option but in this case, there is no comparison, it has to be the original. I consider this to be a trade-off I am willing to take.

It's a Trade Off

Every single day, we're forced to trade something off against something else. Yes, you can go out for lunch with your co-workers every day but then you wouldn't be saving as much as if you'd brown-bagged your sandwiches before you left in the morning. Of course, you don't want to cut it out completely either since there wouldn't be any fun in that at all. It's a compromise.

It's the same with anything. You can take that expensive holiday abroad and enjoy it for 10-14 days, or you can choose to invest that money and spend 3-6 months there in 20 years time. By that stage in your life, you're probably more financially sound and more importantly you also have more time too (you're not still working in 20 years are you?).

Of course, you never know if you'll still be able to do that in 20 years time but that's not a big worry since you've already decided in your own mind what is important to you now. What is important to me now is my future lifestyle in 7 years time when I can semi-retire. If by then I want to go travelling, eat out every day or buy those large squidgy Marmite jars, then I'll do that - I'll do whatever is important to me then.

Choose Your Way of Life

Your future therefore is determined by the choices you make now. By deciding that your future is the most important thing for you, you should do everything you possibly can to make that turn out for the best.

If you have children, you might decide that they're the most important things to you, so again you should do everything you possibly can to make that turn out for the best too. You may decide the environment is your thing, in which case, give it a high priority in your life.

No matter what you decide, by channeling a lot of your energy into that area of your life, you'll be handsomely rewarded further down the line.

Prioritising for Retirement

As you all know, I have recently decided that my retirement is something which is very important to me and I am channeling a lot of effort into making it happen. Almost everything I do these days is somewhat influenced by my recent decision to both pay off my mortgage and retire from the daily grind by the time I reach my forties.

When I get up in the morning, I have my breakfast at home and wait until I'm in work for my coffee. I head home for lunch and I don't snack in the mornings or afternoons. My tea is usually planned - except when it's not - but I have reserves in the freezer for those times. I exercise plenty and am now biking. My car is about to be put on sale (just two more things to do) and my house is the smallest place I have lived in for almost 10 years.

The interesting point to note is this. Even though I have recently changed almost every aspect of my life - sometimes radically so - nothing seems overbearing. In fact, almost every decision I make now is influenced by my ultimate dream and in a lot of cases makes these decisions easier (it's almost obvious which of the choices I should take).

A Happy Life

And this brings me back to my chosen way of life. Even though my ultimate decision is to retire at 40, it has actually made the rest of my life, as it is now, a much happier and meaningful one. I prioritise time over TV, I choose exercise over going to the pub and I choose the great outdoors on a bike instead of a supermarket car-park in a car.

It just so happens that not only do these decisions make me happier, healthier and fitter, they're also making me wealthier and therefore one step closer to my ultimate goal.

What are you prioritising to get you closer to your goal?

Labels: planning, living, retiring

Inserted: 2008-11-13 22:08 (3 years, 2 months ago)

Why I Must Become Financially Independent

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I have just read a short but fantastic article over on Breaking Free. It's called Why I Must and it tells us why Brian must become financially independent.

As you know, my blog is also about becoming financially independent and his idea of keeping a list of reasons of why this must be so is really appealing to me. In fact, I think it's such a good idea, I'm going to start the list right now, copy this list to a file on my computer and add to it every time I think of a new one.

Reasons "Why I Must" Become Financially Independent

I must become financially independent so that I can:

• devote more time to developing free software
• do some volunteer work
• devote more time to organisations I am already involved in
• work for myself instead of for someone else
• enjoy my time off doing whatever it is I like
• spend more time on my hobbies
• excercise more
• get out and see more of the countryside
• spend more time with my friends
• spend more time with my family

That list is in no particular order and I guess it is only the start of what might become a fairly long list. Maybe you should try it too so that you can also see what you'll be able to do when you become financially independent. The endless possibilities may convince you to start on your journey to a prosperous and productive future.

Any others you think I should add to my list, or any that you would have on yours?

Labels: planning, living

Inserted: 2008-11-07 22:24 (3 years, 3 months ago)

Ideas and Actioning Them

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Ideas are great things. They come at you all day, every day, from all angles. Sometimes you're tying your shoelace and an idea hits you. You're daydreaming on the bus and suddenly your eyes light up with a new idea.

Occasionally you're just walking along the street when suddenly maybe you've just figured out the secret to renewable and everlasting energy.

You know what, that's just GREAT!

Invariably, 99% of those great ideas you have during the day you have completely forgotten about by the time you get home.

Write Them Down

A number of people carry a notepad with them at all times and I'm starting to come around to this idea too (hmm, maybe I should write it down on Page 1 so I don't forget). Being able to capture those ideas whilst still fresh in the memory is of huge importance. As I said earlier, if you don't write them down now, you'll forget about it completely before the day is out.

All you need is a few notes on the page. If you have a few minutes, just let the creative juices flow. Write down anything you think is applicable, even if you also think it is silly. It's easier to scratch the silly things than it is to re-visit this massive flow of creativity.

For example, let's say you decided to write an eBook to sell online and increase your passive income, you might go through a few things like this:

• yeah, I'll write an eBook
• maybe charge $15, okay maybe $10; $20 would be nice though
• oh, get a proper cover from elance
• maybe I should write a smaller one to give out free to subscribers
• or even make it viral and tell people to read it and share
• get some references from some well known bloggers
• hmm, now I need to think about what I want to write about
• how about Personal Finance :-) (too obvious, be more specific)
• 100 great, simple and frugal recipes for crockpots ...
• ... ok, how about saving money when grocery shopping
• I do enjoy going to the market though, maybe something about that

What you'll find after a brainstorming session like that is that you began with a wishy-washy idea (an eBook with no subject) and ended up with about 3 different eBook ideas and plenty of other ideas on how to market it. Within the space of just 2 minutes, you have not one but a number of fully-fledged ideas and many more smaller ones.

An Idea Which Isn't Actioned, is the Same As No Idea at All

However, no amount of ideas are good if they are never actioned. Once you have that notepad, you need to go over it more thoroughly when you have more time. Tick off or circle the things you're going to action or move them over to your wiki or other action list. After all, if you don't do anything about the idea itself, it's just the same as not having had it at all.

Whilst we're still at the start of whatever idea it is you might just want to put a few more minutes or hours effort into figuring out whether the idea is a good one or not. Tell your family or friends and see whether it is something they would be interested in. But remember, many people are negative to your ambitions or ideas so don't let them talk you out of a good idea (but it's okay if they talk you out of a bad one). Use this information to decide for yourself whether going ahead with it makes sense.

Good Luck

As with all new ideas, you need to be a little brazen and a little bold when going ahead with it. You might not see immediate results but keep at it, keep plugging away with it and hopefully the reward you deserve will eventually come.

And if that reward doesn't come, the best thing you can do is learn from your failures and keep moving. Just turn that page of your notepad to your next great idea and give that a go too.

No matter how many times you try, one of them may succeed. If you don't try at all, you're guaranteed to fail.

Tell us what you do to remember, develop and action your best ideas? Any war stories you can tell us about where you failed, succeeded or maybe even both.

Labels: planning, selling

Inserted: 2008-11-06 21:20 (3 years, 3 months ago)

'Living it Down Small' instead of 'Living it Up Large'

Have you ever seen the lights in Las Vegas? How about the skyscrapers of Hong Kong or New York? Ever been through the suburbs of Los Angeles or seen the sprawling mass of London?

To me, these cities typify places in which you can Live it up Large. Large living, large entertainment, large houses (ok, except for Hong Kong). Over the last few years however, I have been downsizing my living spaces each time I have moved and have really enjoyed moving into smaller and smaller places. Before that I had constantly moved into bigger and bigger places. Each time I moved, I ended up getting more stuff to fill it, in a lot of cases sometimes stuff that I didn't even want.

Going Smaller

Five years ago I moved into a small two bedroom house and only had two bags and a box. Over time, I bought stuff. Then I moved into a larger two bedroom house and filled that too. I then graduated to three bedrooms (and two bathrooms) and whilst I didn't fill that space, it had plenty of stuff spread throughout. Then I started going smaller. I squeezed all my stuff into a two bedroom unit and finally, I am now in a one bedroom flat.

Over that time, none of these moves have been related to my current financial plan though I guess my last move was a pre-cursor to it. I realised that I could live in town for less money than living in the burbs for more. That also generates a saving on transport too.

When I first moved in, it was physically impossible to move since I had so much stuff in such a small place. However, over the past few months I have been amazed at how well I have been getting rid of stuff. The floor is now something I see every day but I know I can clear all this stuff by a lot more.

It's been very liberating to be free of the shackles of extra stuff and I can already see some benefits of living in less space. Also, all that extra floor space you fill with junk, actually costs rather a large amount of money.

Interesting how spending money on extra stuff you don't need actually ends up costing you even more money!

The Simple Life

Over the past few years which have included my downsizing moves, I have hankered for the simple life. Mostly I did nothing about it but this year my breakthrough came. Not only did I move into a one bedroom and start to de-clutter, I have of course, started this blog and becoming more financially aware with a view to becoming financially independent.

There are so many benefits to heading in this direction, most notably having to pay less rent/mortgage for my accommodation but also because there is less space to put extra (and unnecessary) things. Things I wouldn't be able to buy since there wouldn't actually be any place to put them. If it was something that was desperately needed, it would have to be space-exchanged for something no longer needed.

So think about where you live and whether you actually need all that space. After all, most of that area is space you probably don't even use on a day to day basis, yet you're paying for it in rent/mortgage and you're buying things to fill it up!

I shall be continuing my plan on annexing a lot of my stuff and hopefully when the time comes to move again, I shall be able to find a place of a reasonable size, for a reasonable price and it still be like a castle to me.

What are your thoughts on the size of your house? Do you need more or less? Would you be able to survive in a smaller place?

Labels: planning, living, consuming

Inserted: 2008-11-03 23:08 (3 years, 3 months ago)

Sorting Out your Finances in Stages

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When was the last time you jumped from your house to work, and then at the end of the day, jumped right back in one massive leap back to your front door.

What? You've never done that before?

Maybe if you work from home you have managed to do that but for the rest of us, work is usually further away than just a large leap. Usually, to get to work we do something like the following: walk, wait, step up, sit down, step down, walk and finally rest when we get in the lift. We do it in stages, one after the other, each building on what went before.

The Journey to Financial Independence is also like that. We do it in stages and each one builds on the one before.

"I'm Not Ready to Switch Over Right Now"

Over the past couple of months, I have had many conversations with many of my friends about finances. I'm not sure why they come and talk to me (ok, I can guess a little) but mostly it works out for both sides in which we each learn something more. Some conversations have been small and to the point, others larger and covering many bases.

I have, however, figured out a slight pattern to what a lot of people are telling me. They say things like "Maybe I don't do it now but I'll do it later" or "I'm not quite there yet but soon, I promise" or "I'm not ready to switch over right now, I have a few things I want to sort out first".

So it seems that people want to change things but don't really want to commit to it yet. It is definitely a recurring theme.

My advice to any and all of you thinking about doing something about your finances, whether it's opening a freedom fund, starting your savings or even planning your retirement:

... JUST START NOW!

Sorry I screamed but take my advice, if you don't start today, you probably won't start tomorrow either and as we all know, tomorrow never comes. You'll wake up one day and say "I wish I started saving 10 years ago".

It turns out that I wish I'd started sorting out my financial future about 5 years ago but I'm just happy that I'm now on the right road. To those younger than I am, just go and re-read your high-school maths books about compound interest and you'll be glad you started when you did (and I wouldn't mind some credit when you're old and rich). If you still don't believe me and you didn't click that previous link, go and do it now since it has already said everything I could have said (and more).

Do It In Stages

The other thing you have to remember is that this particular area of your life, your financial matters, are pretty complex. There are strategies to make it simpler but in all honesty no matter how you look at it, it's fairly complex. Because of which, it also means there are a number of different ways you can do things. There are also a number of different things you can do and a number of different things you can consider.

All this adds up to an extremely rich set of paths you can take from here (now) to there (retirement or any other goal of yours).

With all those paths open to you, you can choose which direction you want to go, hopefully choosing one which takes you forward and therefore you can choose exactly what you want to do.

As you would get to work in the morning, you don't just take a big leap at the start of your journey and arrive there, you do it in stages. At first you might start off your emergency fund, you might decide to spend less or you might decide to earn more. You can of course choose everything at the same time but it's much easier to break it down into little steps and just start wherever you feel comfortable.

And that is the key, that you have to start somewhere! Starting earlier rather than later is better so why not choose to start today? Something, anything, whatever you like. Start today and maybe tomorrow, do something more. You surely won't regret it.

Call for you to pledge below to start RIGHT NOW. It doesn't have to be much but just start. Leave a comment and we'll all cheer you on your merry way to financial independence.

Labels: planning, earning, saving, living

Inserted: 2008-10-30 21:37 (3 years, 3 months ago)

The Key to the Future: Zero Dollar Days

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Here's a simple question for you. Can you get through a normal day without spending any money at all?

How about 2 days on the run, or even 3 or 4 days a week without spending anything? If you baulked at the first question, I'm sure the answer for the second is just laughter.

Does it seem too hard to do? Maybe it even seems alien. No matter what you think of these questions, I'm here to tell you that Zero Dollar Days are the key to your future.

A Day Without Spending

When I first wrote in 10 Little Sacrifices that I'd had three Zero Dollar Days, I was absolutely shocked and stunned that I had even had one. For me, my previous daily routine was to spend money, maybe a little, maybe a lot, but essentially I would spend something every day. Now I try to have three Zero Dollar Days every week.

You should try the same. You mightn't think you can do it, like I couldn't, but it's actually easier than what you think. Your habits will have to change, but if you follow those 10 Little Sacrifices (and maybe some of your own), you'll find that you've already eliminated most of your daily spending - which at the end of the day are non-essentials anyway.

It's harder to create those Zero Dollar Days when you have essentials to buy; like breakfast, lunch and tea, or maybe journeying to and from work. In those cases, giving up isn't feasible so you have to do it another way. Yet again though, it is relatively easy since all it takes is planning.

For travel, all you need to do is pre-pay your train or bus ticket or fill up the car at the start of the week. Of course, if you walk or bicycle to work, you're already on to a winner.

For food, you just need to figure out what you're having and when. Breakfast is usually at home so that's already been paid for when you last went grocery shopping. Evening meal is also similar and as usual lunch is the hardest thing to figure out. Being able to get home for lunch (like I do) is a little privilege but brown-bagging it surely is the cheapest option though it requires the most planning.

Other than those two things, you can probably get through a work day without spending anything. Weekends are hardest but even they can be Zero Dollar days too. Work on the weekdays first and move onto the weekends later.

For the Future

All of those savings you're making to get those spend-free days should be whipped straight out of your account and put into your debt repayment or into your savings. Just get it out of your current account so you can't spend it on anything else.

You'll find that these savings really start to add up and once you start earning interest on the amount saved, you'll be happy with the results.

My Progress

In the past two months, I haven't kept a complete check of my Zero Dollar Days but I will do from now on. Sometimes it's hard to figure out if you had a Zero Dollar Day - for example what if your utility bill came out of your bank account but you didn't spend anything else. I'd still consider that a Zero Dollar Day since that payment was pre-planned and didn't come out of your wallet (either cash, debit or credit). I'd also say the same for a grocery shop of essentials, especially if it's pre-planning all your food for the next while (but not if it contains any of the non-essentials you promised to give up)!

At a guess though, I think I've been doing either 3 or 4 Zero Dollar Days a week during the past two months. I definitely think it has made a big difference to how much I'm spending. I'm going to the supermarket a lot more but that's because I'm making and eating much more of my food at home. The cost of the supermarket (or Sunday Market) is still much cheaper than paying for someone's labour making it when you buy those take-aways, deli sandwiches or cafe food.

As I mentioned at the start, if the idea of going through a day without spending doesn't fit with you, then just try it for one day and one day only. Once you've done that, you'll be able to do it again and again and again. Good luck with your new spending habit and enjoy your new increasing balance in your savings account.

Do you have any tips on how to attain more Zero Dollar Days? What do you call them? Let me know below.

Labels: planning, saving, spending

Inserted: 2008-10-29 22:57 (3 years, 3 months ago)

Who do you Consider Rich?

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When you were a child, who did you think was rich? Was it those movie or pop stars who had earned millions and had their own private planes? Was it those people who'd inherited their wealth, owned a mansion and had their own swimming pools? Or was it those people who could afford to go abroad for their holidays every year?

For me, it was all of the above. I used to look at a lot of people and figure that they were rich. And for some reason, I wanted to be rich too. At that stage of my life, it all equated to material wealth, personal possessions and the ability to spend money on whatever I pleased.

Nowadays though, my view of people who are rich is not exclusively based on money. I view people as rich if they are financially independent, keeping as busy as they like (maybe even working for themselves of course) and are happy in their lives. I also rate very highly those people who can spend time doing the things they love, whether it's volunteer work, a hobby or two, being with their families or even making a little money doing something of their own choosing.

The funny thing is most of the people I now consider rich, defined by the categories above, are either semi-retired or fully retired.

Who are these People?

It is mainly understood, but mistaken, that the people who retire early are wealthy. However, there are a number of factors which goes against this viewpoint. For a start, to be retired doesn't mean you have to have a whole heap of money in your account. Nor does it mean you have earned millions and millions over a long and prosperous career.

All it means is that you can live on the amount of money you passively earn.

Or put it another way, you have reached that crossover point whereby your expenses are lower than your passive income. This means that, without lifting a finger and being careful with your expenditure, you no longer have to work.

Of course if you are only semi-retired and you still work a little, that income also adds up to offset your expenses so you can probably reach this point earlier than complete retirement. Yes, you might have quit working for someone else but at least you get to work on your own terms.

Getting There Faster

When you look at what I said earlier - live on the amount of money you passively earn - you can see that it is an easy equation.

Passive Income > Expenses

Whilst it is fairly simple to understand it is a lot harder to put into practice. Writing this blog, for example, helps me to put more things into place so that it becomes easier and easier and hopefully, I can reach that crossover point sooner rather than later.

As you can see, you can attain this point by increasing your passive income. But you can also attain this point earlier if you reduce your expenses. You'll start to realise that this is also exactly what you should be doing now and not just in retirement. You life should be organised so that your lifestyle in retirement is similar to your lifestyle now. There's no point scrimping and saving now to then splurge in retirement.

Similarly, there's no point spending like crazy now hoping that you'll be more frugal in your retirement.

By actively setting out your stand, how much you earn, how much you spend, you'll also be setting up what you need to get past that crossover point and into retirement. In fact, you might even be able to plan it years in advance, like me!

Everyday People

You mightn't have realised, that many people who are already retired, look exactly the same as you. They never had a hit record, they didn't inherit large amounts of money nor did they win the lottery. Instead, they seem to go for the bargains, don't buy designer clothes and clip coupons when they can.

They don't buy new cars, they don't need a huge house nor do they try and keep up with the Jones. In fact, they look just like regular people next door. You might even think that they don't have a whole lot of money at all, after all, their car isn't as big nor shiny as all the others in the local driveways.

But the truth of the matter is that they are richer than many of the people living in the same street. Probably richer in monetary value yes, but even more importantly, they are also richer in time too.

The reason?

Because they are retired.

They have been through the cost-cutting exercises, paid off their debts, own their houses outright, saved up an emergency fund, invested in the stock market or property and increased their income. Because they've done all of this previously, they now have the time to do whatever it is they please.

It is these people I now consider rich. They have the time to enjoy a great many things in life. After all, time is the one thing we can't earn more of.

Let me know who you consider to be rich?

Labels: planning, living, retiring

Inserted: 2008-10-24 22:18 (3 years, 3 months ago)

Why You Should Tell the People Around You

One of the best ways of sticking to your goal is to tell the people around you what you are doing. In my case, my goal is to Retire at 40. In your case, you might want to be Frugal, blog away debt or get money smart.

There are a myriad of reasons why telling people about your goal helps. For now though, I'm going to talk about just three.

1. Encouragement

Most of the time you tell people about something you're doing, they are generally encouraging. Many times they probably think you're a bit weird but wish you happy thoughts anyway. Sometimes you will be berated, knocked and told you're completely mad. Luckily, this last set of people is pretty rare though it does happen. As Peter Jones (the highly successful entrepreneur) says in 'Tycoon':

Find people who are passionate about your idea. If your idea is in the musical-instrument market, go and speak to people who are passionate about playing the guitar. [snip]

And the same goes for you and your goal, whatever it is. Find other people who are also passionate about what you are doing, that way, you can lean on each other and help each other out. I've already spoken to a number of people who seem very enthralled to my idea of retiring at 40 and from those people I have already had good luck wishes and smiles.

2. Having a Similar Situation

I had two examples today of where this either helps or it doesn't. In the first case where I hadn't told my friends what my goal was, I ended up buying lunch when in fact, I already had stuff for lunch at home. The suggestion was made to go out for food but for some reason I figured it was easier to say yes than to start the whole explanation of why my lunch at home will help me reach my goal.

In the second example, my friend asked if I would like to join them at a nice restaurant for food in the evening. I replied "I've already got my tea at home" (Teriyaki Chicken, and very nice it was too). He knows my goals the aim to mainly eat at home (especially if it's already planned) and he asked no questions of it. It was both easier and it saved me money - even though I would have loved to have gone.

So hanging around with people who have similar goals and ideas to yours means you probably end up getting long better and saving money in the process. I reckon that works very well indeed.

3. Sharing Ideas

Again, after telling people of my new goal, the first or second thing people would say is something along the lines of "You should try my recipe" or "You can re-use to do " or "You can save money when buying by doing it ".

Almost immediately, you have a number of new tips you can work on or just store for future reference. And again, that person may be a source for new information at any time. Of course, it's reciprocal whereby you can tell your tips to your network of family and friends and that way, everyone gets something out of it.

Just Try It and Tell People

You never know, you might unearth a stronger relationship, a bucketload of money saving tips or even just the odd "Keep Going" comments every now and again. Remember, it's like running a marathon, you need as much encouragement as you can get since you're in it for the long haul. Even better if you're in it with someone else too.

Labels: planning, budgeting

Inserted: 2008-09-28 00:28 (3 years, 4 months ago)

What's Your Dream?

At the start and at the end of the movie Pretty Woman, there's a guy who walks along the street and shouts "Hey, what's your dream?" Similarly, when I used to walk down the street, I used to look at the people passing me and wonder what their story was. You know, the history that got that particular person into that very spot on that very day.

I still find things like that interesting but I guess I now look to the future more than I do the past. I too wonder what people's dreams are. The past is interesting but what is done is done. I now think it's more exciting thinking about the future and how you can influence it.

Which is why I have a goal; a dream even. I didn't know this before I started (and named) this blog but a number of things I have read about Personal Finance revolve around having a goal to head towards. Here's a list of a few things which crop up in people's PF blogs again and again:

• getting out of debt
• paying for a wedding
• saving for a house deposit
• paying through education
• becoming better with money
• attaining financial independence
• paying off a house
• retiring early

I'm lucky in the fact that I have no debt - apart from the mortgage - and currently I am not planning a wedding :-) However, I am interested in the last 4 items from the above list. Especially the last two which are my current goals - to pay off the house and become financially independent.

It turns out that having a goal is the best way to keep on track. If you don't have a goal then I'd suggest that you have less inclination to go through with the things you need to do. These are the things that everyone who practices sensible spending and saving should be doing and happily the things I am currently learning about.

So if you're thinking of spending less and saving more, figure out a goal you can head towards to help that dream come true. If you don't have a dream then you're less inclined to make it that far.

So what's your dream?

P.S. I think I'm going to coin the acronym 'Sx3' which stands for "Sensible Spending and Saving". I like that much better than phrases like "Become a Millionaire", "I'll make you Rich" or even "Get Wealthy with my 10 Step Plan"! Ahh, it's nice being down-to-earth :-)

Labels: planning

Inserted: 2008-09-16 22:33 (3 years, 4 months ago)