Budgeting

15 Tips to Reduce Food Waste and Save Money

Posted on May 28, 2019

When I first moved out of home, I thought I had everything worked out. I could vacuum by age twelve and washed my own clothes by fourteen. And thanks to that, but the time I moved out, into my very first home at 24 but I was adulting reasonably well.

Notwithstanding that, after a few years of living out of home in my mid twentys, it became pretty evident that my husband and I were binning an unbelievable amount of food (and money!) every week.

Every Sunday, our bin collection day, came the ritual. I would open up our fridge and proceed to empty it of anything that had gone out of date or that had gone bad. Some days I would have 2-3 bags of food waste. It was all being composted by our local council, but that really wasn’t the point!

We were wasting time shopping for items we didn’t need.

My Sunday was being eaten up clearing out said fridge of our excess food, time that of course, could be better spent doing anything but clearing out our fridge accumulations. We were wasted money on food we weren’t eating and were literally throwing our money down the drain. And most importantly we were being environmentally wasteful. Perfectly good food was going in the bin because we were too time poor to cook it and often ended up just grabbing KFC on the way home instead.

Once the realisation of the level of all round waste sunk in, and the acknowledgement of the invisible money we had been throwing straight into our bin, I became extremely interested in researching the correct way to store and prolong the life of food.

Over the next couple of years I picked up heaps of tips and tricks that have helped us to Reduce Food Waste and Save Money that I am going to share with you below in the hope that it too, will help you. This list is not exhaustive, and there are many more for the different foods you consume in your household, but these are the ones that have helped me the most.

Let’s get to it, here are 15 Tips to Reduce Food Waste and Save Money

15 Tips to Reduce Food Waste and Save Money

Shop ‘Just In Time’

Start Meal Plannning and reduce food waste and save money all at the same time without much effort! Check your calendar and shop for the meals you plan to eat at home, so you don’t end up buying more than you need. When you are more intentional with your grocery shop, not only can you reduce what ends up in your waste bin, but there are huge dollar savings to be had. Check out My Beginner’s Guide to Meal Planning here for more tips on how to shop intentionally for groceries.

nd something that isn’t touched on much, there is an awesome satisfaction to having just enough and using up what you do have. Give it a go and let me know if you found the same! 🙂

Capsicum

Throw your capsicum in a plastic bag when you get home to make them last a good 2-3 weeks. Normally if you leave them out in the open they will start to spoil around the 5-7 day mark. Alternatively slice them up and freeze them to use on a home-made pizza or stir fry.

Basil

I like to buy Basil plants from the local supermarket and throw them in a glass and water them each day, leaving it on my kitchen windowsill where they can get some sunlight. This usually extends the life to 2-3 weeks rather than the ones in packaging which seems to die a couple of days after they enter your fridge.

Before this I was spending $3 or more a week on basil, which seemed to always go bad when I needed it for a meal. I now can get away with spending $3 once every three weeks or as I need it.

Of course if you have a green thumb, please do grow your own, but I have tried and failed at growing it outside, but if you can you are amazing! :))

Fresh Herbs

Reduce food waste and save money by wrapping your herbs in dry paper towel, just a thin layer underneath and on top and store your herbs in a container. We’ve done this with Coriander and it helps extend the life to at least 7 days Vs just leaving the Coriander in a container and watching it wilt in a matter of days.

Alternatively you can freeze your herbs in ice cube containers with oil to use when cooking.

Chillies

We used to buy and bin red chillies too frequently. It was a ridiculous waste of food and money so I learnt from our extremely knowledgeable Mother In Law that you can easily freeze Chillies. Simply throw them into your freezer in the container or bag they come in and they’ll keep for months! When you are ready to use them, simply grab them out of the freezer and slice and they will defrost in your pan.

Spinach/Rocket leaves

Another food managed to reduce food waste and save money with was spinach/rocket salad leafs. We often ended up buying more than we needed and wasting the excess until we figured out there was an easy and less wasteful way to extend the life of your Spinach or Rocket.

Like with the Herbs, mentioned earlier, if you store your Spinach or Rocket in an airtight container lined with paper towel on the top of bottom, this will draw out any moisture from the leaves, keeping them fresher for longer. This can give you extra time to enjoy your salad and save you on those costly salad bags!

Want to Save More Money? Check out the 52 Week Savings Challenge

Carrots

This is a super new tip I learnt to reduce food waste and save money and another easy one. I cannot tell you how many times we grabbed a kilo bag of Carrots from Aldi (as they only sell them in bulk) when we only needed 3 or 4 carrots for a soup. We’d soon forget about said Carrots and before we knew it they were bad and needed to be binned.

If this has been you up to this point, here’s an easy tip to reduce food waste and save money with your carrots..

Put all of your carrots into a large cup filled with water in the fridge. And just change out the water every 2-3 days to keep them fresh. This will make them last around 2-3 weeks! And of course you can always dice them and freeze any excess, or slice them and have them as a snack with your favourite dip!

Bread

This is a pretty obvious one but one that can’t be forgotten. Freeze all your bread products! It’s just my husband and I so we don’t get through even a loaf a week but always like to have bread handy, so we got into the habit a long time ago of freezing everything: Crumpets, English Muffins, Bread, Wraps, Pizza Bases – you name it!

It doesn’t work so ideal for things you want to eat fresh, but for anything you plan to toast or put in the oven – it works a charm! Simply chuck in the microwave for 30-40 seconds and then toast away! And a great thing to utilise if you want to stock up on bread when it’s on sale!

Bananas

Another tip to reduce food waste and save money is to, take your browning bananas and chuck them in your freezer for later use with baking or use them up straightaway to make your favourite Banana baked treats! My fave being banana bread. You can also use them for making Banana Ice Cream or keep them for smoothies or milkshakes!

And if you want to enjoy them for longer, simply wrap the tops of the stems firmly with cling wrap or slow down the ripening process by storing them in the fridge until the day you are ready to eat them!

Onions

Have you ever chopped half an onion and not known what to do with the rest? Me too! An easy tip to reduce food waste and save money is to slice any left over onions and freeze them in a resealable sandwich bag. They won’t be ideal for using them fresh, but are great to throw in a curry, stir fry or on a pizza.

Spring Onions & Leeks

I often find that I always have more spring onion than I need for my meal. Reduce waste and save money by chopping the base of the spring onion leaving about 10cm and drop the roots into a glass of water. Over the next 7 or so days you’ll have a new bunch of spring onions sprout. And surely a fun experiment for the kids!

This also works for Leaks but so far it has been less successful! I have found that around this point the base gets a bit too moist, so after this I throw it into our compost bin. But you should get two for the price of one this way 😉

With the spring onions, slice them up and freeze what you don’t need to use immediately in a zip lock back. Simply shake out the contents into your soup or stir fry when you need them and squeeze out the air in your bag when returning them to the freezer.

Tomato Paste

If your recipe calls for 3 tablespoons of tomato paste don’t feel you need to just throw it back in the fridge, ending up with that gross mould that seems to find it’s way into the jar before you bin the jar. Divvy what’s left into an ice cube tray and store in a sandwich bag when they are frozen blocks. Pop out however many you need when you are cooking.

If you do plan to use your remaining paste in the next week or so, store the jar upside down to stop that mildew from forming inside the jar. (Just be careful not to leave if for too long as ours exploded and we had sauce everywhere ‘;))

Eggs

If your eggs are out of date, reduce food waste and save money by testing your eggs before you throw them out. Wonder How To: Food Hacks suggests you fill a bowl with cold water and put the eggs inside. If they sink to the bottom they are fresh, if they float they are past their prime so go ahead and bin those. Rather than just binning ours the day they go over the use by date, we now do a quick check on them!

Berries & Grapes

Another way to reduce food waste and save money is to freeze your Berries and Grapes. Taste.com recommends layering them on an oven tray to freeze and then storing them in airtight containers. The Grapes make a great frozen, healthy snack and the berries can be added to fruit smoothies!

Celery

If you can’t quite eat a whole bunch of celery in the time it takes to go bad, try this tip from Clean My Space to reduce food waste and save money. Wrap your celery tightly in foil to keep it fresh for up to two weeks! I’ve just tested this and happy to say it certainly works! Alternatively you can dice it up and freeze it ready to use in your next batch of soup! With celery at $3-4 a bunch it’s a great way to save!

And there you have it guys, 15 Tips to Reduce Food Waste and Save Money!

This Week’s Comment Question: What do you do at home to prolong the life of you food and save money on groceries? Let me know in the comments below!

For more helpful tips to reduce food waste and save money check out:
10 Easy Tips To Save Money On your Groceries Budget and 6 Tips to Drastically Cut Your Grocery Bill!

[Photo by: Elena Koycheva @ unsplash.com]

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting

Ten of the Best Money Advice I’ve Ever Received

Posted on April 28, 2019

Looking for the best money advice around? Check out these 10 money tips!

Over the past few years I have been on a financial knowledge binge learning and absorbing as much financial information as I can. I can’t say I was raised with a wealth of financial knowledge passed down to me but I did take in as much as I could from those around me.

A lot of what I observed around me was more not what to do with money than what to do, which can often be just as valuable.

Ten of the Best Money Advice I’ve Ever Received

Some are from friends and family, and others from some financial experts I look up to.

**This post contains affiliate links. If you make a purchase of a product from the links in this post I will receive a small commission, at no cost to you. This allows me to keep my blog advertisement free and support the running costs of my blog. I only recommend products I believe will add value to others and that I love myself.**

Use an offset account for your savings to save on your mortgage – An old friend

When I was about 24 and looking to buy my first home, a friend was kind enough to share some of his financial wisdom with me, which was always welcome! He told me to make sure when I got a mortgage I utilised an offset account so I could reduce the interest paid on my mortgage with my wage and any other cash I had. You can read more about how to do this here.

It was one of the best money advice I’d ever received when I was hitting my adulting years and something that has saved me potentially tens of thousands in mortgage interests!

Pay yourself first – The Richest Man in Babylon, George S Clayson

I can’t remember who recommended I read The Richest Man in Babylon but I found it interesting to see sound financial tips that have stood the test of time, this book being released all the way back in 1926. One of my biggest takes from the book was to pay yourself first! As in set aside savings before you have paid $1 to debt or bills.

If you leave savings as a last priority, it will be your last priority. George S Clayson mentions via parables set in Ancient Babylon the importance of saving 10% of every pay cheque a habit I have kept to this day. And once you get the hang of it, it’ll become second nature.

Save up an Emergency Fund of 3-6 months of expenses – Dave Ramsey.

In Dave Ramsey’s book The Total Money Makeover Ramsey describes the 7 baby steps. This one refers to Baby Step Three, once you are consumer debt free you need to save an Emergency Fund of 3 – 6 months of expenses. When you have 3-6 months of expenses saved you give yourself a financial buffer and breathing room. If you lost your job tomorrow how long could you survive for until you found another job? Giving yourself at least three months allows you to cover yourself for the most unexpected situations like redundancy or illness and also gives you the opportunity to leave a toxic job you hate. Be kind to yourself, take note of the best money advice from Mr Ramsey & give future you options by saving up a minimum of three months of expenses.

Related reading: Dave Ramsey Financial Guidelines to Live By

Only insure things that can financially destroy you: your car, your home and contents, health, your life, Scott Pape – The Barefoot Investor

This is one of those questions that no one seems to know the answer to, so I was thrilled when Scott Pape answered it in a matter of words in his book The Barefoot Investor. Pape suggests that you should only spend money to insure things that can financially destroy you. The phone insurance or extended warranty on that TV don’t make the cut. Spend your hard earned dollars where it counts – private health insurance, permanent disablement and death and income protection insurance.

Don’t put Yourself on Sale – Women and Money by Suze Orman

I recently read Women and Money by Suze Orman where she raises the issue of women being too afraid to ask for what they are worth. Orman says to know your worth and not be afraid to ask for it. Whether it be the raise your deserve from your boss or the price your client should be paying for your skill. Don’t sell yourself short. If you deserve a raise, ask for it and if you don’t get what you feel you should, be willing to go elsewhere.

Pay off your mortgage before you retire – both my Grandmothers

I didn’t have much financially savvy family to sponge ideas from growing up, but both my Grandmother’s paid off their homes before retirement. I remember my Grandmother telling me how hard she worked and made sure every dollar she could put at the mortgage she did. It meant that by their 60s they were mortgage free and didn’t have to worry about a huge expense in retirement. Definitely the best money advice I have gotten from family over the years and one I will certainly keep in the forefront of my mind ;):)

Say no to debt other than a mortgage – The Minimalists

I discovered The Minimalist and their podcast about few years ago now and consumed everything I possibly could of their material. Once recurring piece of advice from Josh & Ryan is to stay out of debt other than your home.

When you are debt free you keep yourself free to make decisions for you. It could be the freedom to move interstate, cut back hours or take a lower paying job that gives you more purpose than your current one does. The best money advice is always to avoid debt, especially bad debt on things that don’t have a return like going into debt for holidays or shopping sprees.

Plan ahead for savings like weddings and a house – I Will Teach You To Be Rich, by Remit Sethi

Remit has a whole chapter in his book I Will Teach You to Be Rich that details how to plan and save ahead for those big ticket items in life like cars, your first home and weddings. He suggests that most people should start saving from their early 20s for a wedding, particularly if you strongly believe you will get married one day. Planning a Debt free wedding is possible and the sooner you start the better! Same goes for your first home. Please take the best money advice Remit has offered, (and take it from someone who only had 19 months to save for a wedding and month long honeymoon in Europe!) Don’t leave these huge financial undertaking for 30 year old you. Time is your friend so get started today.

Millionaire’s don’t always live like Millionaire’s – The Millionaire Next Door, by Thomas J. Stanley and William D. Danko

Reading The Millionaire Next Door was a window into the life of your everyday millionaire. Here you won’t see any mansions, or sports cars or tennis courts. This books shows how you can maintain a comfortable lifestyle without having to spend like you’re the next Kim Kardashian and to manage your wealth sustainably so it outlives you. If anything the millionaire’s interviewed in this books showed a different perspective to what most things millionaire’s are and show that you don’t have to scream ‘I’m Rich’ to the world in order to be wealthy.

Spend some on things you enjoy – Mr Minimise With Me

I was somewhat financially independent at the age of 15. My single mother put a roof over my head and food in the fridge, paid for my medical needs and utility bills but other than that I had to pay my own way. It wasn’t an ideal situation but I made it work and got myself a job as a checkout operator at 15 to cover my own expenses and spending.

As a natural saver, and someone who often though ‘how many hours did I have to work for this’, at a young age I was very reluctant to spend any money on non-essentials no matter how much value something would add to my life.

Despite having more than enough saved up, I was reluctant to spend $500 on a new guitar that I needed for my HSC music exams at the time. My Mum had bought me a beginner guitar two years earlier which I played nearly every day but I still did not see the value in parting with my money. I ended up finally buying a new guitar a few weeks out from the end of year 12 but it was the perfect example of something I should have just bought when I needed it at the beginning of the year rather than depriving myself just because.

It was a valuable lesson and made me realise that not every dollar should be saved. If you struggle with this as well, it’s a good reminder to know that it is okay to spend on yourself occasionally when you can afford to do so. Life isn’t meant to be about endless deprivation. And you can’t enjoy money when it’s just locked away in a bank account indefinitely. Money is a tool to be utilised.

It took a while, but my husband has helped me to see that it is okay to spend money on things that add value to my life. I now value travel and experiences and don’t get so caught up in the savings side of things that I miss out on somethings I want or enjoy 🙂

The best money advice is usually some nugget of wisdom on how to save faster or pay off debt faster but I think advice on how to learn to enjoy your money is also as important and helps sticking to a budget or paying off debt over the long haul more likely to happen if you get some to enjoy too!

[Photo: Sam Truong Dan @ unsplash.com]

This weeks question: What is the best piece of financial advice you’ve ever received? Let me know in the comments below! 🙂

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting

Dave Ramsey’s Financial Guidelines To Live By

Posted on April 22, 2019

Have you heard Dave Ramsey's Financial Guidelines?

For the past couple of years I have read, listened and devoured everything of Dave Ramsey’s that I could find. I have read the Total Money Make Over, Retire Inspired and The Everyday Millionaire**, which have all helped arm me with extremely valuable financial knowledge that has given me guidelines in order to make intentional financial decisions. I’ve also spent countless hours listening to the Dave Ramsey Show to pick up on those nuggets of wisdom that weren’t in The Total Money Makeover.

If you are keen to know some of Dave Ramsey’s Financial Guidelines to Live By on making intentional money decisions and building wealth read on 🙂

Here are 13 of Dave Ramsey’s Financial Guidelines to live by!

SAVINGS

1. Sell everything you own to save up your $1000 Emergency Fund

To start your path to create wealth, the first of Dave Ramsey’s financial guidelines to live by is to sell everything you own: Some great tongue-in-cheek advice from Dave, but worthy nonetheless. You need to get your Baby Step 1 Emergency fund of $1000 saved up quick smart. In order to do this, Dave suggests you sell everything not bolted down in your home ‘:).

Sell whatever you can: your clothes, electronics, furniture, old collections, appliances, decor – whatever you’ve got to boost your Emergency Fund! You’d be surprised about how much money your clutter can make you. Let’s get it done quick! 🙂

Related reading: How I made $5000 from selling my clutter

2. Save up a 3 – 6 month of expenses Emergency Fund before buying a house

Dave Ramsey’s Financial Guidelines on buying a home always suggests you save up a 3-6 month Emergency Fund before buying a home. As Dave says, if you don’t – Murphy will move right on in. When you have a fully funded emergency fund before buying a home you are well placed to deal with emergencies as they come up. If your car breaks down, you need to replace the water heater or pay your insurance excess after a storm – there is no need to panic, you’ve already got a good buffer between you and Murphy.

By all means it will delay your dreams of home ownership by a few months but when you have that piece of mind, that if anything goes wrong you can ride it out, you’ll be glad you did!

You can read more about the Dave Ramsey Baby Steps Here 🙂

3. Don’t invest your Emergency Fund

Every time I hear about anyone talking about trying to invest their Emergency Fund I cringe! As Dave Ramsey’s Financial Guidelines say, this fund is not to be considered an investment and not there for the purpose of making you cash. It is there purely to give you liquid funds in the event of an emergency, a time when you might need cash immediately. You don’t want to go to use your emergency cash that you invested, only to find that half of it has disappeared.

The best you can do is find a good bank with a decent interest rate on savings. Keep your investing funds completely separate. One day you’ll be glad you did!

CARS/VEHICLES

4. Things with motors should add up to less than half your annual salary

Another amazing piece of advice from Dave Ramsey on vehicles. Dave’s rule is that you should never own more than half your household annual income in things with motors in them – that go down in value. This being cars, motor homes, motor cycles, boats and so on!

If you earn $80k and own a $55k truck you have too much money tied up in depreciating assets. You want your money invested in ways to grow it – not eat it up!

Combined Vehicles

Household income > 50% = TIME TO SELL!

Take an assessment of your current vehicle values and add them together. If the total of your vehicles values over your household income is more than 50% of your income it’s time to sell them!

5. Don’t spend more than your car is worth to repair it

One of the best pieces of advice Dave has given on The Dave Ramsey Show is how to know when to repair or replace a car. Dave says to research the market value of the vehicle and not to spend more on the vehicle in order to get it repaired than it’s market value is. For example; if your car is worth $2000 but needs $3000 of repairs you would just sell it.

This is just a guideline to know where to draw the line in the sand on whether to repair a vehicle or not. If you really love the car and it won’t cost much more than the market value to repair it you might be able to still fix the car and keep it but just be ready to let the car go if it is significantly more.

Of course don’t forget to shop around for repairs and get a second opinion which might save you some serious cash and allow you to keep the car after all!

Related post: How Much is Your Car Really Costing You?

HOME BUYING

6. Only buy a house at 25% of your salary or less

Dave Ramsey constantly refers to how people who win with money are debt free including their home. When you don’t have any payments in the world you can make huge steps to build wealth. This is why Dave recommends only getting a mortgage at a max of 25% of your salary.

When you spend more than 25% of your salary on your housing you are minimising what is left to cover other bills, insurances, spending money to enjoy yourself and your savings ability.

Keep your financial stress low by limiting your housing costs to below 25% of your household income.

7. Buy investment properties in cash

There are always people spruiking get rich quick ideas around real estate and borrowing yourself into oblivion.

Dave’s Real Estate approach takes patience and more time to carry out but it covers you for all market conditions. Dave’s advice on Real Estate is to save up for real estate investments in cash! As Dave says, if the market drops or you can’t find a tenant for 6 months you can weather out the storm. Unlike the investor who decided to buy multiple properties with large mortgages who won’t be smiling so much if the market drops.

DEBT

8. Avoiding Student Loans

Dave often reports these words on the Dave Ramsey Show ‘I’ve never told anyone to go into student debt’. But how do you pay for university without student loans?

Here are some wise suggestions from Dave Ramsey to help you avoid going into student debt:

Start your study at Community College (or TAFE in Australia). These education institutions are a lot more affordable and can give you credits for university study. I saved myself thousands of dollars in student debt by doing my Advanced Diploma in Accounting at TAFE for two years before heading to uni. By the time I got to university I had only 13 of 24 units left to complete of my BA (Accounting) thanks to my advanced standing credits. TAFE at the time I studied was $4000 for the Advanced Diploma vs $800 a subject at university which saved me approximately $6000!
Study locally so you can live at home or save on interstate fees.
Go to a less prestigious university. The bigger the name of your uni, the more you are going to have to pay to attend. Unless your parents have offered you a blank check book (and they can truly afford it) attend more affordable universities.
Save up ahead of time for your student loans. If you have kids you should be saving ahead of time to help them study at university debt free. Investing $10k when your child is born and adding just $100 a month until their 18th birthday could grow to $78,000 thanks to the magic of compound interest (with an average 7% return rate), ready to cover their education costs debt free.
Apply for scholarships to help you pay for some of the cost of university. The more you apply for, the more change you have of qualifying.

If you don’t have any financial help from your parents you can do the following to avoid student loan debt:

Save up as much as you can before you start university.
Considering getting an Internship/Cadetship that will cover your study expenses whilst also training you up in your chosen field.
Whilst you study, get a job or a side hustle to pay your fees as you go or work like a crazy person during your study breaks. Work out how much you need for the next semester and divide that by how many weeks you have to save up to give you an idea of how many hours or shifts you’ll need to take up.
Buy second hand text books and sell the prior semester to help you cover any new ones. At $100 plus a pop this can make for some huge savings!

9. Save up and make a cash settlement offer on old debt.

If you have an old debt sitting around that you haven’t make a payment on since who knows when, save up some cash and make them a cash offer on the remaining balance. Dave Ramsey suggests some you might be able to make a cash offer of 5c on the dollar. But even if they will only take 25% of the balance, you are still making a lot of headway!

Don’t forget as Dave recommends to get the offer in writing stating that this will settle the balance in full and close the account and do not give electronic access to your account to the credit company. Write them a cheque. Some very wise words from, Dave!

10. When it takes longer than 2 years to be consumer debt free

Dave Ramsey suggests that if you will take more than 2 years to pay off your remaining consumer debt that it is time to get selling. You can either hustle like a crazy person or bail yourself out by selling the car/s, boat, investment properties or your home. Do the rough math as Dave does on his show and work out a rough time line for your debt repayment. If it’s much longer than 24 months, for you sanity it’s probably time to get selling!

RAISING KIDS

11. Pay your children for chores as they are completed

Dave recommends paying your children as they compete tasks in order to show them the direct link between work and being compensated rather then waiting for the end of the week.

Make some chores family duties. Don’t pay your kids for every finger they lift. Make some chores mandatory and uncompensated, to be done for the good of the family such as, setting the table, feeding pets, washing up or making their bed.

12. Support your teenagers in making decisions about their education

Dave Ramsey’s Financial Guidelines include preparing your kids for the future. Don’t leave your teenager on their own to make huge life decisions about their future. Help them to work out what they are good at and passionate about and identify potential career paths.

Research salary averages with them based on level of education and time spent in the industry so you can see a direct link between career path and future income. Weigh up what level of education is needed to achieve that chosen career path and map out a plan with them, where they can afford to study, what course they need to get into their chosen field and how the fees will be paid.

Ensure you consider whether it is worth the investment into a uni degree. Don’t allow your teenager to go into $300k to get a Chiropractor degree if they can only earn $60k-70k. Be sure to shop around for reasonable return on your investment.

13. Teach your kids to Give, Save and Spend

As Dave always says: Live like no one so in the future you can live and give like no one. Starting to teach your kids this well before they leave the nest will help you raise “financially well rounded” kids.

You will hear these three scenarios repeat themselves on The Dave Ramsey Show with callers.

Some people are extremely generous with their money, and lend money they don’t even have and find themselves in their own financial pickle.
Others callers are avid savers and feel extreme guilt over spending anything on themselves even once they achieve financial freedom or Millionaire status.
Then there are the spenders who leave not one dollar to be saved and go beyond and find themselves in ballooning consumer debt.

None of these are ideal financial habits and all can lead you into being taken advantage of, not leading a full and happy life and being miserable and swamped with debt. You can teach your children to have a healthy relationship with money and giving, spending and savings and help them learn valuable skills for when they hit adulthood and save them the troubles that come from not having a good balance.

A great way to do this is to encourage them to split their chore money or anything else they earn into 3 jars: Give, Save and Spend.

It’s a great way to teach them to be kind and compassionate for those who are less fortunate, to teach them that not every dollar should be squirreled away – they need to enjoy some and to not whittle away every last penny either.

[Photo: Michael Longmire @ Unsplash.com]

This weeks comment question: Which of Dave Ramsey’s Financial Guidelines have help you be more intentional with your money?

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting

How Much is Your Car Really Costing You

Posted on April 2, 2019

Do you know how much your car is really costing you? Find out today!

A long while ago I sat down to do my first budget and was amazed at how much money our car was eating up. It’s often one of those necessary expenses that you never really sit down to do the maths on. Let’s face it, some of us probably would rather not know the true cost of owning our vehicles. But if we choose to live in denial we can find our car costs in more ways than one, and can deprive us from living a life we truly want.

Everyone and their dog seems to have a car these days and more often than not they come with that ever recurring five or seven year debt repayment. And I sure as hell am not innocent in this, I too, have had car loans in the past.

If you have the option to walk or bike or catch public transport in your daily routine – skipping the need for a car can be a huge budget winner! But for anyone else they are often a necessary expense.

So for those of you who do have a car let’s end the guesswork between what we think out car is costing us and what is actually is costing the budget!

Why you should calculate how much your car is really costing you
If you find yourself living pay check to pay check and wondering where all your money is going, a good step is to delve deeper into your budget expenses. Particularly if you have a loan on top of all the other vehicle costs.

Once you see how much of your income is going towards your vehicle you can make an educated guess with how to proceed. Maybe you’ll decide your car is costing you too much and you want to trade it in for a more fuel efficient one or one that is more affordable, or sell it all together if you find it will be cheaper to take public transport. Or you might find that the car you have is the right one for you and decide to keep it. These are important decisions that are often left when it is too late which can cause unnecessary stress and financial strife.

Calculating how much your car is really costing you

All the costs below will be reasonably close to my own car expense budgeted costs and in AUD. Of course these will differ for your personal budget but hopefully these will cover all your relevant expenses and give you an idea to work out How much your car is really costing you. I did leave out more specific costs like Tolls which you may or may not have to pay, so feel free to add those in as well if they are relevant.

Here are the main vehicle expenses you will face if you own a car or other vehicle.

Petrol $50 a week ($2600/year)
One of the main costs associated with your vehicle is petrol. Especially if you have an inefficient fuel guzzler of a car.

Bank Statement Method
A good way to estimate your petrol cost is to check your bank statements for how much you have spent on petrol over the past 3-6 month period and to take an average e.g. $1500 spent on petrol over three months would mean your petrol costs on average $500 a month.

Tracking Method
If you have no clue of how much you have spent in recent months (you might pay in cash), take note for the next 4 weeks of what you spend in petrol and take the average weekly amount as your petrol estimate.

Average Fuel Consumption Method
You can also take the average fuel consumption of your car which you can find on car sites to calculate your approximate petrol cost, particularly if you are trying to assess the cost of petrol for a vehicle you want to buy and don’t know the costs already.

If you know the fuel efficiency of a car, how many litres (or gallons) it needs per one hundred kilometres (or miles) and if you know approximately how many kilometres (or miles) you get out of a fuel tank and the average price of petrol you can estimate the weekly costs as follows:

Petrol cost Formula =
(Total Kilometres per tank/100) (KM) x fuel consumption (L) per 100kms x average price of fuel ($)

So to demonstrate, if your car travels 650km on a full tank of fuel and your car consumes 7.6 Litres every 100 kilometres and the cost of petrol is $1.40

Your tank cost would be $69.16 [(650km/100km) x 7.6L x $1.40]

If that tank (in this example the 650kms) lasts you 8 days the daily cost would be $8.65 ($69.16/8) or $60.52 a week (7 days x $8.65)

Total Cost – Petrol $50/ $2600 a year

2. Maintenance Costs $250 Service $500 Repairs

Services
Most cars need regular services every 10,000 to 15,000 kilometres. Depending on how much you drive your car, this might need to be done every 6-12 months.
Services can range in price depending on your mechanic, vehicle type and if the car needs a minor or major service. If you take for a service at a big brand service centre it might likely cost you twice the price of a smaller mechanic, and if you are servicing your BMW versus a Camry, there will be a large price difference there too. My services generally range from $250-$500 AUD so I will just go with the lower estimate of $250 for my calculation.

Of course if you service your car every 6 or 9 months you will need to adjust your annual figure.

Total Cost – Services $250

Repairs
Repairs for your vehicle can also add up quickly and will need to be done as they are needed. You will need to replace tyres, brakes, fix oil leaks, cosmetic repairs and so on for your vehicle. Repairs will vary on whether you can DIY them or pay a mechanic. But a good conservative estimate to budget is $500 annually which might cover a set of new tyres which is the figure I have used for my calculation..

Total Cost – Repairs $500

3. Car Insurance (Fully Insured) $750 a year
If you are under 25 or a bad driver, this might look more like $1300 to you but lucky for me one of the only good things about getting a little older is your car insurance costs go down 🙂

Total Cost – Car Insurance $750

4. Greenslip (Medical Insurance) $650 a year
In Oz, we all must pay for Vehicle Medical Insurance which is called a Greenslip in order to register and drive our cars. It protects anyone injured in an accident and pays for their medical costs. My most recent one cost me about $550 for the year but let’s go with $650 as it can again vary with age and vehicle.

Total Cost – Greenslip $650

5. Registration $250
Once a year we pay car registration which is approximately $250 for a small car. For a wagon sized car this goes up to about $323 and up from there based in the size of your car.

Total Cost – Car Registration $250

6. Car Repayments

If you don’t own your car, you will of course also be paying car repayments which you need to add into your calculation. This is where a car can really blow the budget as you can see from the above expense inclusions, cars are costly enough without adding a loan repayment on top.

To demonstrate here is an example of a $20,000 loan at 7% interest rate over 5 years with a $10 monthly fee. The repayment would be 60 payments of $406 or $4872 a year for 5 years.

Total Cost – Car Repayments $406

How much is your car really costing you?

In the calculation below using the amounts we have detailed above as an estimate, this particular vehicle would cost you $822.67 a month or $9872.00 a year. On a $48k after tax income, this car would eat up an estimated 20.57% of after tax wages! And keep in mind these were very conservative figures!

I have calculated the above to demonstrate how much your car is really costing you so you can accurately predict vehicles and their associated costs in your budget. And so you can keep these in mind before making vehicle purchasing decisions so you can make the right decision for you.

By comparing how much of our after tax wages goes to cover vehicle expenses we can get a true picture of how much our car is really costing us. This might be the math we need to sell a car we can’t afford or make us think again before buying a new car with a huge loan to boot.
If you are finding it difficult to save money your car may be the culprit and this calculation will help you to identify if that is the case.

Hidden Costs
Of course the cost of cars does not end there, there are two more I wanted to touch on in addition to the above.

7. Lost investment returns

Now this one is something that you should consider as an opportunity cost for spending your money on financing a car. Of course cars cost money every month and some of those costs are unavoidable, but that cost is exacerbated when you buy a car on finance. Financing a car should really be a last resort and I am going to show you why.

Imagine if instead of borrowing $20,000 on a new car that you had convinced yourself was affordable, with a $406 monthly repayment, you instead invested that money. Now let’s say you invested that money into your Superannuation or 401k from age 30 to 65, a total of 35 years at 8%. When you are 65 you would have accumulated, thanks to the magic of compound interest – $931,316!

And that is just from investing your car repayment each month from age 30 to age 65. Not adding $1 over that a month to your retirement account. Imagine if you invested your car repayment that is $100 a month! We are literally throwing money away like it’s going out of style and future you is going to pay the price to now you can have a slightly nicer car!

And cars are money pits. Take it from a girl that just had two cars damaged by hail on the same day and had to fork over $1600 for an insurance claim. (I am certainly feeling the pain of vehicle ownership at the moment!)

So the next time you see a $20,000 or $30,000 car I want you to pause. Forget for a moment how ‘cheap’ the car is and how great it will be to drive around in it and calculate how much that car will truly cost future you with this calculator before you even walk into a car yard and even think about signing for anything.

8. Depreciation

Lastly, I wanted to highlight the cost of depreciation, which isn’t someone most people think about but as an Accountant and self-confessed nerd I must include this one. Cars lose a crazy amount of value as soon as you drive them out of the car dealership – everyone knows this and I’ll try not to bore you too much.

It something that should be taken into account. I did my own calculation on my car, which I did buy brand new back in 2016 (my first and most likely last new car purchase especially after above hail incident mention) and in the space of two years my car has depreciated by 25% or the equivalent of $5000 – $2500 a year. That is a lot of money to throw down the drain! Which is exactly why so many finance experts preach that if you do buy a car, buy one that is second hand and let someone else pay for that early depreciation.

Calculating your vehicle Depreciation
You can check your car valuation at Kelley Blue Book (US readers) or Drive.com and look up your car to see what it cost when it was first released and what it is now worth to calculate your approximate depreciation amount to date.

So if you bought a 2012 Camry for $25,000 and in 2019 its market value is $12,000 your car depreciated approximately $13,000 over the past 7 years – approximately $1000 a year.

Of course all cars depreciate but it doesn’t hurt to take this into account when deciding on a car. Particularly if you are someone who does a lot of kms with your car and you will destroy the value of your vehicle a lot quicker than someone who only does 10,000km a year with theirs.

And there you go, you are now hopefully armed with a little more information on how much your car is really costing you and how to make educated budget decisions when it comes to your vehicle!

If you want to calculate what your car is costing you you can download my Car Expense Calculation Worksheet. Simply download a copy from Google Sheets and fill in the monthly or annual column for your expenses and your After Tax (net wages).

This week’s comment question: Do you have a car repayment? Do you own a car/s or did you opt out of them all together to save money? Let me know in the comments below!

[Photo: Oli Woomdan @ unsplash.com]

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting

14 Things You Should Know Before Buying Your First Home

Posted on February 12, 2019

Get the right home and mortgage for your with these tips

Buying your first home is an exciting and daunting experience. There’s the fun part, house shopping and looking for your dream home and all the excitement that comes with owning your very own place. And then there is the slightly more scary side of signing a 20 or 30 year mortgage and taking a big step into #adulting.

I remember how overwhelmed and stressed I felt when we were in the process of buying our first home. It happened to be the weekend before my last CPA exam. We had decided to hold off looking at a home until my exams were over so I could concentrate on studying. It was a well thought out, mature plan. Unfortunately that reasoning went out the window and instead of waiting we went house hunting the weekend before my exam when we found a home we liked that was having an open home (it was a hot market, yadda yadda).

Instead of studying, we hopped in the car that Saturday with my (now) In Laws and looked at 7 homes that day. The 6th being the one we put a deposit on later that afternoon. It all happened so fast. We saw the house around 3.30pm and by 5pm we were in the realtor’s office paying our $1000 deposit. It was one of the most stressful weeks of my life. I remember the sheer fear of signing my life away on the dotted line, both on the property and the mortgage documents taking away my freedom for potentially the next 30 years of my life.

Looking back there were some things we did right and a lot of things we did wrong. Of course at the time, filled with excitement and the impending doom of not being able to find a house in our price range and the FOMO we jumped at the chance of getting a home in our budget.

Thankfully it all worked out – I passed my final CPA exam and we managed to buy our home before house prices in Sydney sky rocketed not long after. But we were lucky. With no Emergency Fund in place we could have opened ourselves to a visit from Mr Murphy.

Your home is most likely going to be the biggest purchase of your life so it’s not a decision to take lightly. Your best bet is to prepared and plan ahead! Here are 14 Things To Know Before Buying Your First Home.

1. You should aim to have an Emergency Fund of 3 months expenses saved
Before buying your first home it is important to have a sizable Emergency Fund, ideally 3 months of expenses or more (Dave Ramsey would be proud :)). This will ensure that when your car dies, your hot water system goes or if you have an unexpected job loss that you are prepared financially to weather those storms as they come up relatively stress free.

Life is stressful enough without having to worry about every little thing that breaks or needs to be repaired or replaced. And as a soon to be home owner you should get ready for things to break and need replacing 😉

Of course you might not know exactly what your expenses are if you are moving out for the first time but a reasonable estimate tweaked as you go is better than nothing!

2. Shop around for mortgage rates and low fees
Before you apply for any mortgage shop around for the best rates. Don’t forget to check if there are any establishment fees or monthly fees. Ideally pick one that has no monthly fees, I personally refuse to pay for the privilege of paying a mortgage. To get you started Canstar offers a comparison tool for over 100 lenders.

Related Post: Check out My Top 5 Personal Finance books for what books you need to read to get your finances in order!

3. Get a home loan with a 100% Offset Account
Offset accounts are a great way to reduce your mortgage interest bill without having to actually pay the money on your mortgage. When you are picking a home loan make sure to find one that has a 100% offset account to save you on your monthly interest bill. This will save you some serious cash so don’t glaze over this tip.

The way it works is, any money you have in the offset account linked to your mortgage will offset the interest you pay on your mortgage. So if you had a $200,000 mortgage and you had $10,000 of savings in your offset account, the interest on your mortgage would only be applied to $190,000 of the mortgage not the full balance.

With saving accounts interest rates around the 2.8% mark versus mortgage rates around 4% it is a great way to get more bang for your buck. An added bonus, as the interest savings on your mortgage are not income, they’re tax free savings!

4. Aim for a 20% deposit to avoid LMI
Having a 20% deposit does two things when buying your first home.
a. It allows you to borrow less money and pay less interest over the life of the mortgage. This alone adds up to tens of thousands of dollars saved.
b. It allows you to avoid paying Lenders Mortgage Insurance (LMI) which is insurance that covers your bank from you defaulting on repayments (it does not cover you!) – and it is not cheap! LMI on a $650,000 home with a deposit of 10% would set you back $14508. This is often added to the mortgage balance unless you have the money upfront and will end up costing you $24,918 over a 30 year loan term. The more you can save ahead of buying a home to avoid paying LMI the better!

5. Do your research
Before buying your home you need to do your research. Learn about the area, is there anything you don’t like? Think about why you want to live in that area and if it is suitable for your lifestyle. Look at online listings months ahead of buying to get an idea of what is out there and what you can get for your money, you don’t want to over pay. By looking at a lot of listings you will get an idea of what you do and don’t love in your home.

6. Renting is not dead money
I previously considered rent money as dead money but have since learned that this is not always the case. Renting and saving up for a home deposit is preferable to buying a home you can’t afford and potentially losing it. Saving up for a home and your Emergency Fund takes time and determination and if that means you have to rent a little longer – so be it.

Renting can also help you make more intentional purchasing decisions. Consider renting for 6 months in the area you’d to buy in before you actually buy to get a real feel for if this is an area you want to live for the next 5 + years. Learn what you do and don’t want in a home so you can buy the right house for you. Buying a house is expensive, as is selling one so you want to make sure you are making the right long term decision for you!

Don’t think of rent money as dead money but as money well spent to make sure you are making an informed, intentional decision for your biggest asset. Of course whilst you are renting save any extra that you can on top so you can afford to buy a home one day in the not too distant future 🙂

For more tips on your mortgage check out 14 Realistic Tips to Pay off Your Mortgage Faster

7. Don’t spend more than 25% of your combined gross income on your mortgage repayment
Buying a home with a repayment that is more than 25% of your gross salary (that is after tax) can put a huge financial strain on your budget. By keeping it to 25% of your after tax salary, or as close to that as possible, you give yourself room to cover unexpected costs, and changes in life. Things such as a new baby, a child starting school, a partner wanting to go back to school or needing to upgrade a car are much more affordable when you have room in your budget that isn’t eaten up by a huge mortgage repayment.

8. Know your budget
Before you even look at home or mortgages and what you can afford do a budget. You need to know how much is going in and how much is going out before you can know what mortgage you can afford. Speak to friends and family if you need advice on how much to budget for things like utilities and groceries.

Make sure you add in for those often forgotten budget expenses that might not come up every month like clothing, dental, gifts and car expenses. And don’t forget to make sure you still can save money after paying for all your expenses and mortgage. Ideally you want to still have 10% of each pay check to put into saving or investing. When you know what you can put towards your mortgage, staying close to that 25% goal or less you can look at what you can afford to borrow.

9. Allow for repairs in your budget
A good rule of thumb I learnt from Mr J Money at Budgets are Sexy is to allow for repairs on your home annually at 1% of your homes value. So if your home is valued at $600,000 you should be putting away $6000 annually for any repairs, maintenance or upgrades. That’s $500 a month!

Even at a minimum, you should be allowing $100 a month just to cover costs like small repairs, pest sprays, cleaning, gardening costs and that excludes any upgrades you might want or need.

10. Budget in a buffer for potential rate rises
What your interest rate is today isn’t necessarily what you will be paying next month or in 10 years from now – 30 years is a long time! Know that your rate could go up or down.

This graph below from Trading Economics shows the Australia interest rates all the way back to 1995. Just 10 years ago in 2008 they hit 8%. Ouch!

source: tradingeconomics.com

When I first got my home rates were around 5.4%, they are now at 3.9% thankfully my repayments went down over that time period by more than $100 a week, but can you imagine if they had gone up $100 a week in that same period?

A good rule of thumb when calculating your home budget is to make sure you factor in an increase of 2% on your home loan interest rate. So if you are looking at a mortgage at 4% make sure you can still afford to pay it if it increased to 6% on your current income level. And as mentioned above, ideally at only 25% of your total combined after tax household income.

11. This may not be your forever home
A lot of people get stuck on the concept that this is their forever home which can lead them to hold onto a home that is financially crippling them. By all means houses come with attachments and emotions, I am not immune to that I love our humble abode, but be prepared to downsize or sell up completely and rent for a small period if the need ever arises.

12. You CAN pay your mortgage off sooner than 30 years
Just because your loan term says 30 years doesn’t mean that you need to drag it out that long. Aim to pay off your home within 15-20 years. At least by the time you are 50, giving yourself 15 years to focus on your retirement – but of course, the earlier the better. Check out some tips on how you can pay off your mortgage faster here.

13. Think about the true cost of space
It’s amazing how many people will go out of their way to tack on a $100 a week repayment for the next 20 to 30 years to accommodate once-a-year guests. Or get a more expensive house for the extra storage space rather than just decluttering and having a garage sale. The costs of these do add a lot onto your mortgage so really consider how much you are willing to pay for them. You could be paying an additional $5000 a year, every year to house clutter that you don’t need.

14. Consider the hidden costs
When buying a home there are hidden costs. Sometimes it is something you missed when you were looking at it. For us it was a leaking shower and the space behind the fridge that had not been plastered fully. There are always surprises which may not have been identified at the initial inspection or the building inspection and can end up costing you more than you were expecting.

Then there are the other costs that might just cost you not only money but your time. If you buy the home with the huge back yard are you going to be willing to spend 2 hours every fortnight mowing it? Or are you willing to pay someone $50 to do it for you? Three and a half bathrooms may sounds like a luxury but will you have the time each week to clean an additional set of bathrooms? Will you be able to afford the cost of hiring a cleaner to help out? Can you afford the cost of replacing carpet, or tiling or paying a painter for all that extra space when it comes time for renos? And consider if you are willing to pay the higher utilities bills to have extra space to heat and cool.

The mortgage is by no means the only cost you need to consider so it is important to think of the bigger picture before running with your heart at a home.

[Photo: Dan Gold @ unsplash.com]

This weeks Comment question: Do you have any tips to add when buying your first home? Let us know in the comments!

If you found value in this post I would be super appreciative if you could share it with others who might also find value in it 🙂

Budgeting Freebies

52 Week Savings Challenge – Save $1820 in a year!

Posted on January 2, 2019

Kick Off Your Savings With this 52 Week Savings Challenge!

Minimise With Me: 52-Week Savings Challenge

If you want to kick start your savings account join the Minimise With Me: 52-Week Savings Challenge and get your free Savings Challenge Printable Tracker and start your new savings habit today! Saving small amounts of money can seem like it’ll never get you to your goals and like it isn’t worth the effort but it’s important to remember that saving can start with just $5 a week and is a habit that can be built up over time.

The key is to make it a regular habit so you build your savings muscle. Eventually, it will be an automatic behavior and you won’t know why you didn’t start it sooner!

To help you get started and find some savings in your budget, here are 10 Tips to Jump Start Your Savings Fund.

Start with one or two of the savings options below, or come up with your own and add one as you move through the year. The more you pick or add to the list, the quicker you will build up your savings balance! These don’t have to be enormous life-altering behaviors like moving back home or never having a night out for the foreseeable future. The smallest habits can add up to a big amount of spare cash you can save!

10 Tips to Jump-Start Your Savings Fund

1. Bring your lunch from home: Savings $10/day

2. Skip the coke at lunch and bring a water bottle from home: Savings $3.80/day

3. Bring coffee from home in a stainless steel travel mug: Savings $4.40/day

4. Sell something you no longer need: Savings $20/week

5. Skip the bag of chips on your afternoon tea break and bring your own snacks from home: Savings $2.50/day

6. Call up a bill provider like your electricity or mobile phone provider and ask for a better deal: Savings $5/week

7. Skip going shopping on your lunch break: Savings $15

8. Invite friends over for dinner and ask each friend to bring a plate instead of going out for dinner and drinks: Savings – Ubers, alcohol, dinner $100

9. Reduce your grocery bill by meal planning. Check out some extra tips to save on groceries here. – Savings $10/week (I’m talking minimum!)

10. Cancel any subscriptions you are not currently watching or using: Savings $10/month

Want More Savings Tips?

For more tips on how you can save money don’t forget to sign up for the Minimise With Me Mailing List and get access to your free copy of my eBook: 101 Ways to Save Money Whilst Living Awesomely” for even more ideas on how you can add to your savings challenge fund each week.

Let’s Get Started!

Now that you have your tips to get started let’s get into the challenge!

Here it is, the 52-Week Challenge Printable check out the PDF and download your own copy to print and mark off as you save!

grab your free 52-week savings challenge tracker printable

What savings tips do you have that can help others on the challenge? Share them in the comments below 🙂

Good Luck, Minimisers!

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