I’ve been trying to decide how best to start this new blog – I have a rough idea of how I want it to look in my head, but because I have this view of perfection, I’ve been putting off starting it at all – and that obviously is going to defeat the purpose entirely!
So I thought I’d start with the obvious and talk about budgeting.
Budgeting is really the core of living frugally – even people who say “we have nothing to budget”, would find, that if they allocated EVERY cent, they would be financially better off.
We have a varied income. Catherine works 2 and a half days a week and studies the other two days. There is potential for her to pick up more work soon, but for now, we are on a tight budget.
We are far from well off, but we are certainly not destitute. If you can afford broadband, pay tv, mobiles, debt, longer than 4 minute showers, running more than one car and to buy a can of coke or an iceblock when you fill up the petrol station – you really can’t be doing too bad.
Personally, as someone who was a single mum for many, many years, living solely on the sole parents pension, I have *had* to make do living on a low income. budgeting is no great drama for me, but I wasn’t always very good at it. I had many weeks where I had *nothing* left and had to wait till my next pay day before any more funds would come in. Those times were always quite depressing. Homeschooling the kids also added an extra element of expense.
So, how do I work out a budget? Do I make complicated spreadsheets? No way – I am a but a simple soul, who is FAR from mathematically inclined. What I do is figure what my incomings for the fortnight are and then figure out what needs to go out. I also make sure I put *something* away into savings – even it if is only $5 a week, at the end of the year you will have $260 sitting in your account – and whilst that is certainly not a king’s ransom, it is better than nothing and can certainly be put to good use.
Now, for the sake of maintaining a semblance of privacy, I will make up actual amounts, just so as I can give a working example of how we organise our finances.
So, say our income was $800 per week, after tax. This is how I would break it down:
Weekly Rent – $300
Food $150 (this is actually really how much we spend to feed our family of four,as well as one dog and one cat!)
Electricity $35 (When you get your bill – divide the total by 12 and put that amount, every week onto your electricity account – just set it up using bpay in your internet banking, or take your bill to the post office every week)
Mobiles (we have 3) $10 (have a look at TPG who have great deals)
home phone/internet $25
car insurance $20
Car loan/Credit card $50
Kids pocket money $20 (total)
Parents spending money – fuel and frivolities – $120*
Total weekly expenses would be $730 leaving $70
*Catherine and I both get a little bit of ‘free’ money every week – we have to pay for our fuel out of that money and any other bits and bobs we may like – for Catherine that might be a can of coke, or her smokes. For me, it probably goes on my obsession with op-shops, getting the kids a treat every now and then, putting in extra fuel – or whatever.
The reason I do this, is because it can feel quite depressing and constraining to have NO free money – even $5 that is yours to do with as you wish, is better than nothing.
You can also have some of your FTB withheld and get it as a lump sum every 6 months it’s about $350 each time, I think. Don’t forget you may also get money back at tax time and other FTB money – this should all go into savings which helps pay for the extra on yearly rego and kids activities etc.
Ok, so do you get to run amuk with that leftover $70, seeing as your weekly expenses are covered? Not a chance. You need savings. You have yearly car insurances/rego, Christmases and Birthdays, unexpected car repairs, everyone will need new clothes/shoes at some stage – all kinds of things can come up and if you’ve got nothing there to cover them what are you going to do?
Every one in our family has their own savings account. I tend to put little bits in my kids accounts and they are also encouraged to save – at the moment, my 16 year old has more savings than I do!
So, if we had $70 left for savings, we would break it up like this:
Our Savings (not to be touched unless for pre agreed reasons) $30 (giving you $1560 at the end of the year)
Cat Savings $20
Mel savings $20
And that’s it – DONE! Every cent is accounted for (except personal spending money) The Mel/Cat savings accounts are ours to do with as we wish – usually we would use that to buy each other gifts for birthday/Christmas etc or to get ourselves something that we really would like.
So, how do we feed our whole family for $150 a week? First up, I menu plan – that is crucial – I go through all my recipe books and find recipes that I know will be easy for me to prepare (remember, I’m lazy) and try to work out a 4week plan. Catherine and I take turns cooking – I do Monday, Tuesday and Wednesday and she does Thursday, Friday and Sunday – we both do Saturday which is our home made pizza and movie night.
I try and incorporate something vegetarian two nights a week (that cuts down on meat). We have our own hens, so that means we get our own eggs. We have veggie gardens, but we certainly couldn’t live off them at this stage, but every little bit helps. I shop at Aldi, which is probably where we save the most money.
I do not buy biscuits, cakes, fruit bars, chips etc on a regular basis, primarily I make all our snack food. The only regular snack I buy would be plain cracker type biscuits that Jak likes eat with cheese. I have also had to buy some foods I wouldn’t ordinarily have bought, as Catherine likes a bit more flavour and variety – and whilst this was challenging for me at first, being the control freak who thinks everyone should do things *my* way because it works, I am slowly accepting that it is ok if she wants cordial to take to work or to buy little foods that I find disgusting but that she really enjoys. She is, after all the primary bread winner – the least I can do is accommodate her tastes for the hard work she does for us. And, I have discovered that these things don’t break the budget at all, so I have started to *encourage* her to get the things she likes.
For the cat and dog, I buy Aldi pet mince, I also cook up a heap of rice and some veggies, mix it all together and put it into containers which they get fed every evening. They also get dry food, which I try and buy on sale, or the cheapest brand that I know they will eat. The chickens get a bag of feed once a month which probably costs us about $20, as well as all our scraps.
Regarding utilities, I think it is important to shop around. For example, TPG have some really great deals. All three mobile users in this house are on the $10 a month plans and we’ve never had an issue – running 3 mobile phones for $30 a month in total is a pretty good deal!
Shop around for phone and broadband deals – There are some *really* cheap deals around at the moment – I think dodo has a good one going, but most of them do from time to time. (Though I find the big players tend to be the most expensive)
And like I said before, for your electricity, gas, water and insurances, just make sure you put some money aside every week, either straight onto those accounts, or in another savings account that doesn’t get touched, so that when bills come, you don’t suddenly wish the ground would open up and swallow you
When it comes to clothes and other odds and ends, don’t be afraid of garage sales and op shops etc. Often times you will get higher quality items (especially when it comes to toys – I can’t handle the cheap plastic crap that Kmart and the like sell, I prefer good quality wooden or cloth toys for younger kids) for a fraction of the price.
Opshops also help you think outside the square when it comes to furnishing your home and gift giving. I’ve found a couple of nice gifts in the past for various relatives that I wouldn’t have thought to buy, had I seen them brand new.
Most of my furniture is second hand – our dining table, which I have had for about 9 years, was picked up by a friend’s ex husband from the side of the road. Other furniture I have purchased from op-shops or sourced myself from the side of the road pickups that some councils have.
Ebay is another great source for cheap gifts – I got my son a game for his DS that he *really* wanted, second hand, a fraction of the new price and it works perfectly fine.
Also, you can join up with sites like freecycle most areas have a local one, and they are GREAT source of getting and giving items for FREE. Also, check out LETS which is a trading system using their own currency – no money exchanges hands from my understanding – we have plans to join up, but have yet to do so, so can’t comment on it personally, but lots of people love them.
Blogs are another great source for learning how to live frugally, some of my favourites are:
Down To Earth
Funky Front Yard Farmers
Living the Good Life
Frugal and Thriving
You can also join up with sites like Simple Savings and Cheapskates
Also check out your local neighbourhood centres, some of them have all kinds of classes and resources that you can take advantage of for no or minimal cost.