Managing money to make life easier

[Clues_Of_Blue]

One of the big things that causes stress and sure kicks you about when you already have mental illness to play with is money. Whether you're in debt, just scraping by, or feel like you're working to much to maintain a lifestyle. Here is a place to talk about how to make your dollars go a bit further and take off some financial pressure.

I'll start with some basic pointers:

- Plan a little with food. Make work lunches, decide on meals for the week and stick to your shopping list. If you shop a bit later you're also likely to get a lot of fresh produce at a discount.

- Check regularly (every six months or so) on your utilities. Often there is a better plan out there to switch to. As customers, loyalty to a company usually just gets us a quietly growing bill instead of discounts or rewards. Vote with your feet.

- Same with your home loan, you can refinance to one with a better interest rate, just watch out for exit fees (and LMI if you still owe more than 80% of the house value)

If you have any tips or questions, feel free to share or ask.

[ecomama]

Hey Blue

Absolutely I think it's wonderful you're looking at re-mortgaging! Why not hey...

I had a quick look 6 months ago when my Bank reduced the interest rate, I have 100% variable atm with an offset account ofcourse. It was reduced by $140 per month. Doesn't sound much to some ppl but 1c is a saving here lol!!

I kept paying the same amount so that $140 goes in as extra. I opted NOT to have a redraw this time - wish I'd locked it down when demon was here darn it lol.

My mortgage is well over $2k per month which hurts but it is what it is. In about 15y I might have knocked 1y off it at this rate lol. The offset helps a little so it all helps.

Have you read "The Barefoot Investor" yet Blue?
He has LOTS of interesting ideas... I must try and find my copy lol.
Maybe the Library has a copy.

Love EM

[Clues_Of_Blue]

Hey EM,

Thanks. Had the meeting today, with my partner along. He has zero experience with this stuff, so it was good for him to get an understanding of how it all works.

I beg to differ about $140 a month not sounding like much, it sounds like a lot to me with my pitiful part-time income and tiny loan that still stretches the budget pretty heavily. That's roughly 25% of what I pay and would make a massive difference in my world! On that subject, I negotiated almost that well today. Within the next fortnight I hope to be paying about $120 less a month on mine! That's a big win.

Wow, you do have big repayments, I can see why that hurts. I know there have been extenuating circumstances making things harder on that front. Even on that, $140 less a month counts, especially when you're paying it over and above, reducing the interest. You're doing a great job with what life has handed you.

No, I haven't yet. I did actually, on a whim, just buy Rich Dad, Poor Dad. It's one of those books that has been heavily referenced and lauded on many of the money management sites I have learnt so much from over the years. Barefoot Investor wasn't in the shop I was in. Probably online somewhere, these things aren't hard to find.

Going to throw in a few money saving thoughts I'm not sure if I have put on here yet:

- Downsize! Smaller house, smaller car - downsizing has saved me tonnes of money and also time and energy. This one ties in heavily with minimising - it doesn't just cost less, it's physically less so cleaning, maintaining, etc. are a bunch easier.

- Spend to save. Sometimes a device like an LED globe or a water saving shower head can cost a bit short term but save quite a bit over time in reducing utility usage. Working toward solar and insulation now, that's next on the list after refinancing. Big jobs ahead, but big savings too.

Blue.

[ecomama]

Hey Blue and all,

AWESOME about the refinancing Blue! GO YOU!
I'm so happy about that news for you all. Nice!
I agree $140 per month is nothing to sniff about. It's magically going on to my mortgage now, so I know it's helping A LOT!

LOVE those tips about saving.
Enquiring at your local Council can be a HUGE benefit. Quite often what they offer is not widely publicised.

About 10y ago our Council offered FREE water saving shower heads AND installation of them.
We had both showers fitted out. LOVE THAT lol.

Then at little stands in shopping centres they were giving away boxes of 6 energy saving bulbs.
When they saw me with so many children tagging along, they'd give me TWO boxes lol.
Then I'd see them again and tell them I already had some, oh have some MORE... on repeat.
I just used my last 2 bulbs this January lol!

They also offered great rebates on water tanks installed. I got TWO put in.

Phone your Council to see what's on offer.

Absolutely agree with ppl downsizing if that works for them.
I used the free National Govt calculator to work out how much my Stamp Duty would cost to buy another property with less rooms but in same area... almost $40 000 (then legals and moving costs).

So I figured it would probably cost me another $20-40k to build a bungalow to rent out, on top of the savings of Stamp Duty.
The rent for a 2 bed cabin atm here is $400 - $550 per week. Even minus any Management fees, it's a good chunk towards my mortgages then.
Then I get 30% of my rates as a tax deduction at least. There are so many other deductions too.

In my ageing years, if I wanted to, I could live in the cabin and rent the big house.
All pie in the sky and plans getting onto paper atm.

But I was wondering what ppl thought of paying more into Super VS paying more into mortgage?
Atm I'm doing an "each way bet" atm lol which is my favourite.

I guess getting Financial advice is the way to go.

I had an accountant years ago that said ALWAYS pay your mortgage off first. Not sure now.
The exit fees are NOT fun on early pay out. But I guess you can keep a slow flow going till the end?

Thoughts?

EMxxxx

[Clues_Of_Blue]

Hey EM,

Thanks. I may be a little proud of my work on that. It will be a little while before it's all finalised, but all is looking well. It will make a significant difference. Glad you're able to throw that $140 in over and above each month, that will definitely help you out.

Good advice about the council, I should follow that up, when I have half a smidgen of energy with which to do so. Nice work with the light bulbs.

I've made a note re the water tanks. My gutters are a horrid mess, would have to fix them before tanks are of much use to me. Oh boy, there are so many things that want fixing. Ever get that cycle of "I want to do X - but before I can do X, I have to do Y, but to do Y I have to do Z..." ad nauseum. Aargh. Feeling a bit that way about a lot of I want to do at the moment.

Horses for courses, naturally. Downsizing was the way to go for me. $60K cheaper house for starters, only a little smaller but it's still less cleaning/maintaining. Smaller car too, another 4-cylinder but with a much more efficient engine, haven't looked back. Your plans to build and rent are far more ambitious than anything I would want to do, but you've done your research and know what you stand to gain. A good course for you.

Nothing wrong with pie in the sky. The thing about having big ideas is that even if they don't pan out, we tweak them to something that will. With a small idea that's the limit of what might be accomplished.

Hm, good question re super vs mortgage. I think there are variables that could swing it either way. If you're savvy about your super fund you can get good returns on it. On the flip side, economic downturn can shake investments and do serious damage to super.

House/property prices typically go up rather than down (rural properties may experience more trouble with that, depending on the area's income source/prosperity). However, having equity is always a good thing, and coming up to retirement, not having a mortgage is bound to be a huge advantage. I'm sure you'd agree, the smaller your expenses in retirement, the better.

As for exit fees, I'm not sure how different they are from refinancing vs paying it out in completion (I'm nowhere near that point with mine). I always look for loans that allow for paying extra without penalty. I think a variable loan will be a lot easier on exit fees, so toward the end of the mortgage maybe refinance the last bit to variable? I'm not sure of all the facts, but overall my money (literally) is on mortgage.

Blue.

[Clues_Of_Blue]

Another couple of little tips I'm not sure I've put up previously, but really important ones I use all the time:

*Focus on paying off your smallest finite debt first, i.e. a rent to own TV (an example, I've never bought a TV this way). Say you're paying $20 a week on the TV. Up the payment if you can, get the TV paid for.

*Once said TV from above example is paid for, you are used to paying $20 a week for the TV, so why not keep paying $20 a week toward the next finite debt? Let's say you have a car loan (something else I avoid, but it's a common debt). Pay your usual repayment (let's say $50 a week) + the $20 a week you aren't spending on the TV any more. Now paying $70 a week you'll get it paid off quicker and save on interest.

*Now your TV and car are paid for, there is $70 a week you used to pay on debts that aren't there any more. This money becomes available to put back into your regular budget. $70 a week toward your mortgage, or your power bill, or even into savings if those things are under control.

The above principle can see pretty small change at first, but track it and you'll see a huge difference over time. Reward yourself in some way for milestones, partly because you deserve it and partly because it reinforces the good spending strategy.

I must be doing something right, when the broker looked at my credit score, he remarked that it was far and away the best credit score he had seen in years. I asked if he was going to print it out and hang it on the wall, haha. 😉

[ecomama]

Hey Blue

Sorry I haven't been on this thread for a while, but the pets situation here was hmmmm.

Please let us know how you go with remortgaging if you're willing.
I'd be very interested to know.

I know we don't need to have "loyalty" to any bank, but my bank manager was a SAINT pushing my stuff through for us at the end of Courts.

Still it got me thinking outside the square quite a bit.... I might bank up my savings as much as I can then see a few different Banks and get them to PRINT out the best possible mortgage deals for me... then take the best one back to my Saint lol and see if they can match it. Any better ones.

It needs to include an extra thing, a potential loan for the cabin. (Any expenses like this are totally tax deductible, so lowering my own home loan and raising cabin loan is beneficial if needed).

If they can't, then I'll walk.
Money is money after all.

Need to schedule the timing for this.

Oh yeah to this>>> "Ever get that cycle of "I want to do X - but before I can do X, I have to do Y, but to do Y I have to do Z..." ad nauseum. Aargh."

Arghh all right!
I WORK BACKWARDS... what will save (and costs) me the MOST money?
EG Water tanks vs Solar Panels.
Costs for Water vs Elec.

Then work on the trail of getting the most financially beneficial feature installed first.
Hence me researching Solar Panels asap after I secured the home.

Also if there are NO rebates for water tanks but rebates are being reduced year after year for Panels then there's your answer I think.

That kind of thinking which I think you already have lol!

Yes I like your thinking about Super VS Mortgage.
I might Barefoot research it there. When I find the book! LOL!
Pretty sure he'll be all into Mortgage down.

Alexa has a copy I bought her that I could borrow lol.

My 1h on BB is up!

Bedtime.

EMxxxx

[Clues_Of_Blue]

Hey EM,

It's quite all right, I know how things have been for you, lately.

Will be happy to keep you posted. It's still a work in progress at the moment. Looking to borrow a little more to cover a few upgrades to the house to bring our other costs down (i.e. solar and insulation). The figures we've got still have our monthly repayments significantly reduced, so it seems a reasonable option.

Have you considered talking to a mortgage broker? They could get information from a range of banks for you, for no up-front fee - they make their money in commission from providers when people sign up. You could thus find out anything you need to know from various lenders about financing the cabin as well, to bring to your current bank and see if they'll match it.

Scheduling is the trick, especially with that "X, Y, Z" equation. Working backward makes sense, re money in that situation. As mentioned, I am looking at adding to my loan to cover solar and insulation. Both will save me a lot on power, which is far and away where most of my money is going after the mortgage itself. Gotta rein that in somehow. Water is lower on the list, that cost is comparatively very manageable.

So yeah, I have that thinking too. I've been gathering info on solar, still got a lot more to learn.

Thanks. I'm sure Barefoot Investor could shed some more light on that. I'm in the "a penny saved is a penny earned" school of thought. Admittedly that has a lot to do with me not being one to prioritise working more and more to make more dollars - my focus has been on working less so my health doesn't get even worse, and trimming my mandatory expenses down as much as possible to make my small income go further. So far, it's gone fairly well, and when there are more dollars I don't inflate my expenses like most people do, I use the excess funds to reduce expenses further (i.e. paying extra on mortgage).

Good discipline there, keeping to your hour. Me, still checking twice a day, answering things once. No specific time limit. It's definitely helping me use my time better.

Before I go, do you have any quick tips on investing for newbies, EM? (A book with a name like "The Barefoot Investor" implies you've read something about it.) It hasn't been a thing so far, for me, given a lot of investments come with high minimum spend, but that threshold seems to be changing and it appears to be worth learning more.

Blue.

[ecomama]

Hey Blue! Thanks yes, pets have kept us busy.

You know I'm never offended whatsoever at all if you do or don't take my suggestions on board, right? I LOVE that we can support each other and other members by sharing things that WORK or have worked for us.
If this isn't someone wants to do then that's absolutely fine. I have zero attachment lol!

I visualise things ppl say. Even Financial decisions. They appear to me like a Landscape with trees of decision making.

I'll try to be REALLY good and respond to each of your really great points above.

Re: Solar panels firstly.
The way I did it was to:
a. compare prices ofcourse!
b. contacted 3 firms via email and chose the one who appeared to have the most comprehensive info AND offers of Interest Free Loans.
c. my BF researched them all and was looking for customer satisfaction (LOL).
d. finally phoned the ONE and got ONE contact person to negotiate with.

I found out HOW many panels I could have installed (it's all up to the HOUSE you have), the prices PLUS any other "extra costs", my firm was very good.

I could have 24 panels installed which was awesome.

From memory they would cost around $11k. Govt rebate was around $8k (YEAH I KNOW!). That left me with a personal cost of around $3k.

I asked for an Interest Free loan (my first EVER! yay lol).
I asked for the longest duration of loan since it was interest free. 3y was the longest.

I pay less per fortnight for the loan than my elec was and even ADDING my $300 elec bill for the past almost 1y, it's far less than my previous bills!

It cost around $350 for a High Level Electrician to install a fandangly thing in my meter box lol.
Yah I'm savvy around electrical knowledge, BF will freak I called it that lol.

Warning: there is a double up period at first where you may pay an Elec sum AND the loan. Mine lasted 3 months till it was reconciled.

It pays to shop around Elec providers to get the best solar pay back from the grid. I chose the highest ofcourse.

BLUE.... please reconsider adding the personal cost of the panels to your mortgage!
Do some calculations.... mine was a 3y Interest free loan. Zero interest (quite unlike a mortgage!).

IF you are paying lower mortgage costs with your new mortgage, then PART of what you save can pay the interest free loan till it's done. Not mortgage duration.

Food for thought.

EMxxxx

[ecomama]

Hey Blue

In responding to your other points. No I won't go through Brokers any more. Had my fill of that experience in the demon era lol, I fare better dealing direct.

My Bank Manager is AMAZING but still she's only able to offer what her Bank approves.
IF I can provide evidence of a better deal then she'll do her best to match it.
If not, then I'll walk.
All good.

Re: Insulation.
Great idea.
We got ours done with the Stimulus package for $200 years ago. They left 2 packs lol and I'll use them for the cabin.
Consider the cost of a few packets from Bunnings AND a Handyman to install them. Mine works for $25 / hour, he's a semi retired builder.

"Quick Investment advice" lol! Are you kidding? lol. Oh that made me laugh, the reason why ppl aren't making huge sums all over the place is because it takes some hard work!

I had a good think about that question and I'd never dare prescribe Investment Advice to others.
I'd refer them to find out about their options.

Barefoot is in the name.
It shows you how to go from NOTHING, as in "barefoot", to financial wealth.

The ONE thing I wanted to turn yours and everyone's attention to is what is most commonly overlooked, which so many ppl have already.

WHERE their Super is invested. <<< THIS was a serendipitous game changer for me. No joke!

You won't like WHY I changed all the places my Super invested lol!
It was in response to Prayer and intuition. Also heart.

About 10y ago or so, I pondered the options my Super gave me of WHERE to invest it.
The returns came flowing in AFTER my separation! LOL! (There are PLENTY of Family Law tips I could give others about needing to "Split Super" with a greedy ex spouse, worked brilliantly for me lol).

There are HIGH risk, LOW risk and in between.
At the time mine were IDK, not much return.

I changed to 3 out of 5 HIGH risk & possible high return but I looked at WHAT they were & they aligned with my personal values.
I was rewarded.

Then 2 middle risk. Still worked out well.

I'd start there. Costs nothing, returns can increase so much!

Yes I have Shares but they were given to me for free, with a company I was a member of, and I've had them for a very long time. Returns were in the thousands at first which was AWESOME. Less now but still a quarterly return. ALL GOOD.

Barefoot has VERY prescriptive financial advice of EVERY possible kind!
Even to the quality of your sleeping pillows!
My new mattress will be an excellent one, heeding his advice lol.

Love EM

[Clues_Of_Blue]

Hey EM,

Yep, I know, and I'm the same. What works for one doesn't work for all, we have different circumstances after all.

Re solar, there sure is a lot of info out there, little of it makes sense - I'm working on the stuff you said though, trying to get my head around it. You make a good point re borrowing. I didn't like my chances of interest free repayments, but research says it's vaguely possible. I may still borrow a bit extra for the million and one things that need fixing around the place for comfort, safety and functionality - so much of it is driving me nuts and there's no way in hell I can save for it as things are, we'd be waiting decades to do the work. I mean stuff like getting gutters without gaping holes, a bath that isn't rusty, kitchen drawers that actually open and a bunch of things like that. I bought the place cheap, there's your reason. There is much to think on.

Ah, okay. I do find brokers can take some of the hassle out of it, I don't have the energy for one appointment, let alone running around to all the banks. Makes sense re your bank - manager can only do what she can do, you have to make the decision with your hip pocket.

Sounds good. Sadly my roof has a very small space between roof and ceiling, so it'd probably have to be the stuff they blow in. Can't imagine that will be a Bunnings job. Or a handyman, for that matter.

Ha, I don't mean advice to get rich quick, that's imaginary as a general rule. I meant more a quick overview of anything that's worked for you, as a starting point for research. Guess I could have phrased it better.

You make sense, re super. Glad your returns are good. I really should learn more about it. I admit most of the investing stuff is hard to get my head around, and I don't want to mess it up, given I don't have money to spare on mistakes. So far research has just confused me more, I need it demystified a bit. I dunno, maybe a course in investing for how stuff like stocks and shares work? And yes, the Barefoot Investor for ideas.

I have had shares through an employee share programme. Small dividends, but not many shares - any income counts. I think I'll get more when the offer comes up again.

Interesting scope of advice, re Barefoot. I'll invest in that once some funds free up, I sure am skint at the moment. All the annual stuff has hit at once, which would be fine if I hadn't had two months sans income, as I put money away toward this stuff when there is any to do so with. Blarg.

Blue.