I carried out the money personality profile last night on the Get Sorted site Money personality profiler | Sorted. Not too many surprises there – it told me I am not a risk taker. That’s OK – sometimes in life you have to play it safe and take stock of where you are – over the last year we have managed to save money every month due to sensible financial budgeting, hard work and me staying in a job that I absolutely detest at times. Some months we haven’t saved that much but on those months we remind ourselves that we are still heading in the right direction no matter how little we save. We can take risks a little later when we are a bit further down the road. This month we have managed to not only save money but also have been able to put away money into hubby’s kiwi saver scheme in order to qualify for the member tax credit. In the meantime I will just keep on dreaming of resigning from my job………………
Magazine Mania
A few months ago I gave up buying my two monthly magazines to save some money. There have been some weeks standing at the shopping counter that I have been very tempted but I have stuck solidly to my shopping list. Last week grocery shopping we passed a mother and 12 yr old daughter near the bread/magazine section. Mum was getting bread, daughter was browsing the magazines, begging and begging her mum for a magazine. Mum stood firm that there would be no purchasing of magazines but it did remind me of my teenage years when I too was convinced that all the answers to my happiness lived in the information that could be found in women’s magazines. I am so glad that I am well past that stage now and can comfortably accept myself and where I am in my life – one plus for getting older!.
Full Price Phobia
The Dom Post this Saturday wrote about consumers having ‘full price phobia’. Consumers have come to expect discounts since the economic downturn. I know that’s how we have run our household spending over the last two years or so and I don’t really want to go back to full price spending.
When we see a sale advertised we don’t rush in and buy though. We sit down and go over our ‘need’ list for the year to which we add things when necessary. Then we go to the sale armed with the list. And just like grocery shopping only things on the list get looked at. Shops must hate us! Last week Briscoes had a sale – we made a list of birthday presents for the rest of the year and walked out in 5 minutes with the gifts we wanted on sale.
Even if the number of sales does reduce as the economy recovers as long as you are organized you can still take sensible advantage of them.
I think this may be one phobia I’m happy to live with for a while.
It isn’t just a simple dollar
One of my library books this week is ‘Coach yourself to Wealth’ by Martin Hawes and Joan Baker. Often from a whole book you may only find one idea that really strikes a chord with you but that one idea can often be a real light bulb moment. Although I have been working hard to get our finances into a surplus situation each month I still have been seeing each dollar as simply a dollar. Hawes and Barker promote the idea of thinking of the cost of an item not just in dollars today but as dollars in the future. Working out what a dollar spent could ‘earn’ you instead in terms of investing it or paying off your mortgage can help you work out the ‘real’ cost of your spending. Every dollar you don’t spend can be put to work for you 24 hours a day every day while items you buy are depreciating rapidly. This way every time you decide not to spend you can see it almost as a mini pay increase which makes it a positive action than you want to carry out. Working out what an item can cost me over a 20 yr period would seem to be another good strategy to help slow down impulse buying.
Retail Therapy
According to the retail figures December shoppers went for feel-good spending with growth in the sectors of cafes/restaurants, jewellery and hairdressing/beauty (Dominion Post – 7/01/2010). I have to say I wasn’t responsible for any of this particular increase in spending! It’s strange reading each month’s analysis of consumer spending with analysts eagerly waiting for that growth in spending that will indicate we are returning to ‘better times’. In contrast my own monthly analysis of our household spending is driven the other way, it is a good month when we spend less than we earn and spend less than the month before. December was our household’s lowest spending month in the last six months – this is the first time in years that come January I’m not afraid of my December credit card bill. I’m not sure that I want to help the economy recover short term by returning to my old over consumption habits. Long term I feel I can do more for our economy by reducing my personal debt while also planning for my retirement.
January gardening diary
I think the lack of sunshine this summer must be taking its toll on my plants with the maturity dates totally way off. The lettuces that I grew from seeds should almost be full grown by now, instead they are still little seedlings while my beans are a few weeks off as well. My baby bush dwarf beans are absolutely gorgeous though – at the moment they have these very cute 2 cm long bean pods. I can’t wait to pop them into stir fries in a week or two. Insect wise some of my plants have thrived, others have to be watched daily for dreaded invaders. I lost my chives last week after months of being perfectly healthy and gave up on one of my tomato plants as well. Overall though my first year of herb and vegetable gardening has gone relatively well and through sharing my seeds, seedlings and plants two other households have also benefited from my growing experiments. I have learnt that I wouldn’t be without fresh herbs in the kitchen now and hope to expand a little further on my inside herb growing range this year.
Inspiring Weekend Reading
I don’t usually read the property section of the Dominion Post as I’ve found it easier over the last few years not to look at house prices while they’ve dropped. However this weekend there was a double half page coloured spread about a young refugee couple from Myanmar who have turned the barren land of their housing NZ property into an amazing vegetable plot while sewing their own clothes and upholstering their own furniture. The article was a great reminder of what can be done when you have to and have limited finances. It made me realise that hubby and I still have a way to go in terms of reducing our spending even though we have come a long way this year. If you’re interested in finding out in being a refugee helper here is the link Volunteering with Refugee Services – Refugee Services
Christmas Survival
I find around Christmas time that the ‘I want’ feeling becomes even stronger. At the moment we are trying hard to keep away from shops unless we have a specific purpose for going. I have made a list of possible gift ideas for the various people in our lives with a max price. It has made shopping a lot easier as the rule is no matter what we see we can’t buy it unless it is under the max price we have set. When we go to a shop we go with our list just as we do with grocery shopping so we don’t get tempted. It’s not a perfect system but it is keeping our gift spending down and I’m hoping that it will mean we will get through December without blowing our budget and ruining all our great efforts this year. It is also reducing the shopping stress which is a bonus. I’ve been reading Phil Strong’s “Becoming Money Wise” book this week – his website is Achieve More With Your Income! | Wisemoney Foundation . One of the ideas in it from Jackie Gower I’ve been using the last few months. To keep impulse shopping under check whenever you see something you want don’t buy it – put it on your wish list. Then wait 24 hours and look at the list again. By then sanity will probably have set in and you can cross it off the list without buying it! The things that are still on the list keep them on there until there is a sale. My extra advice is also remember that there will always be another sale after that sale (unless the shop is closing down of course). I’ve been hanging out for a tallboy in our bedroom for the last year. The one I want has come up for sale at least 4 times in that time. Every time I see the sale I am so tempted but I just keep reminding myself of how many hours I would have to work to buy the tallboy and that helps me keep it on my wish list. In the meantime I just dream for free……….
Year 10 Economics
The only thing I remember from my four week taster of Yr 10 economics twenty–six years ago was the difference between ‘needs’ and ‘wants’. It seemed such an easy concept to a 14 yr old – little did I realise then that it would be one of the hardest lessons in life to master. Looking at our monthly financial analysis for November there are still ‘wants’ that could be removed from our spending list even though again this month we have reached our goal of spending less than we earn. One of my reductions that I’ve decided on for December onwards is no magazine purchases. There is very little in magazines that can’t be found some other way for free. My local library is bursting with books and magazines and a visit for half an hour is now part of our weekend activities. It won’t save a huge amount – about $144 a year but every bit adds up in the long run. Hubby on the other hand has a list of ‘wants’ that are presently non-negotiable in terms of removing them from our spending list – amongst them is buying his lunch and smoking. There are times it can drive me crazy thinking how much money is wasted on these things (not to mention the health implications) but I know there is no point letting these feelings get in the way of ruining our financial goal. When it comes to money we all have different value systems and allowing room in the budget for the other person’s ‘needs’, even when you don’t really understand their needs, is an important part of creating a budget that will actually work. I don’t think they teach you that part in Year 10 economics!
Setting Goals in Public
One of the values of setting out goals in ‘public’ on-line is that you are more likely to stick to them. Our financial literacy month goal would probably have come to nothing if I hadn’t committed to writing it down. Getting to the end of November we have made a decision and started our second superannuation scheme. Our paperwork has all been organized and gone to the accountant for our yearly tax return. For November every weekend I have taken out books on financial literacy from the library as my weekly reading. Even if you only learn one thing from every book you read that can make a difference in the long run. A couple of times a week I now get up early so that I can watch NZI business review from 6:00am to 6:30am before heading out to work at 6:40 a little more educated . It was interesting this morning to hear the discussion about extended warranties on products that shops offer for an extra price when you buy purchases such as TVs, fridges etc. Seemingly there is no point buying them as under the Consumers Guarantee Act you are entitled to take the product back if it does not last for a reasonable amount of time which for something like a fridge would definitely be more than two years. I have never bothered to buy an extended warranty as I figure probability wise I will risk it. I know some even shops send you out letters when your normal guarantee expires encouraging you to purchase an extended warranty. For more info on extended warranties here is the Ministry of Consumer Affair’s take on it Extended Guarantees – Ministry of Consumer Affairs – Media Centre.