I want to buy my next IP but..........

[Gordon Gekko]

Hi All,


......but....... I can't manage my money, so how am i meant to manage IP's.

We can't save ! We spend more that we make. We can make a budget, we stick to it for a week and then it goes out the door.

We put our expenses into quicken at end of month but by then, we have spent the money. Apart from recording money spent every day, how do u do it??

We have one IP but we will not buy our next until we can get our budget right and stick to it.

HELP !!

But by buying an IP, it is forced savings

GG

 

[Jean]

Hehe, in this case you already know what to do and the timing is up to you.

People on fixed incomes seem to manage.

 

[abcdiamond]

Gordon

You say "we cant save"

Can one of you save and the other not save ? or are you both the same ?

If its the former, then let the one that can save handle the finances ? But only if the one that cant save really wants to.

 

[Gordon Gekko]

Both "can't save"

We pay everything on Credit Card and pay it off on the day it is due, we don't pay a cent in interest but we just spend too much.

I have suggested to my wife to get rid of the credit card and pay cash for everything, that way we can only spend what cash we have but she wants to keep the cards.

We don't buy expensive this, like dvd players, expensive toys for the kids, we just buy day to day items but too much of them.

GG

 

[Kevmeister]

If you are spending money on ordinary every day items, perhaps you should also look whether your budget is actually realistic.

Like if you spend $200 per week on groceries there is no point putting $150 per week in your budget. Unless you are going to substantially change your eating/consumption habits.

You should go over your budget in detail and check whether your budget is genuinely realistic.

If your expenditure is truly on everyday items then you must ask yourself:

1. Do I really need these "everyday" items?
2. Am I willing to make a sacrifice and be without these everyday items in order to save more cash?

 

[plainsong]

Hi Gordon, I know this sounds simplistic but one technique that works is to write down absolutely everything you spend money on for a couple of weeks or so and you can easily spot where the main money hemorrages are happening!

I've done this and its embarrassing how much money we chuck away without even noticing.. (or enjoying for that matter.)
Best regards,

 

[Mikhaila]

Completely agree with Plainsong & Kevmeister. It is a very useful exercise to see where major part of the your money goes. Once found, it will be clear if there is a room to save or it is a time to find better paid job. Also, as Kevmeister said, if you constantly over budget and trying reasonably hard to stick to it – it usually means the budget is unrealistic.

 

[ocelad]

Hi GG

Determining you ability to service any additional debt is crucial - several others have offered good suggestions in this regard.

However is your problem simply a case of knowing you can afford to meet these commitments but just lacking the financial discipline to adhere to your budget? Perhaps a bank split through payroll directly into your loan account would overcome the problem (depending on your loan structures of course).

If you don't see the money in the first place then you have less chance of spending it; and I suspect over time your spending patterns may adjust to your new "take-home" pay.

Just a thought.

Cheers

ocelad

 

[arriety]

Hey, I can't save a penny - that's why I've bought IPs because the loan money comes out of my account before I get to touch it. It's compulsory saving and it's the only way I could ever get to own anything, as if the money's in my hands, I'll spend it and like you it's not fancy DVDs or clothes, it's day to day things.

Of course now my IPs are now making money, so I have to buy another one to start my savings again (or I can pay off more on the Principle).

Actually I once followed my sister around (she's what I call 'tight' with her money), and got to see how she managed her money! It was an eyeopener - she just thinks about each dollar she hands over. she doesn't buy things just because they are a bargain!!! I learn alot about mindset and money that week. Not that I'd want to be a complete tightfist like her!

goodluck
Arrietty

 

[abcdiamond]

Originally posted by plainsong
I know this sounds simplistic but one technique that works is to write down absolutely everything you spend money on for a couple of weeks or so and you can easily spot where the main money hemorrages are happening!

I've done this and its embarrassing how much money we chuck away without even noticing.. (or enjoying for that matter.)
Best regards,

The above quote is spot on. I kept records like that for two months and then showed my wife the result. It worked a treat !

 

[Jimmyjamjars]

Saving

Plainsong is absolutely right, GG
If you record absolutely EVERYTHING you spend over a 3 or 4 week period, you will be amazed at the findings. What you will find is that a huge part of the total isn't taken up with expensive items but rather items that are approximately 3 dollars and under. One last question, do you or your other half SMOKE. If you do, that is the equivalent to at least one IP.
Good luck,
JIM

 

[Aceyducey]

Gordon,

No-one can help you save. You have to do it yourself.

Just like smoking or other addictions - YOU have to do the work.

You simply have to make a choice - income now or later.

Obviously you want the income now, simply accept you won't have that income later - you will retire in poverty at the mandated age.

if you don't like it - well you're the ones who have to change and there is nothing preventing you from changing.

Harsh, but true.

Cheers,

Aceyducey

 

[Les]

G'day all,

Some interesting ideas - and, collectively, they reminded me of a workmate (who was into IP's WAY before me...)

He once said that he considers the ACTUAL cost of anything that he was about to purchase (it was a hot day in Brissie, and I wanted to buy an icecream - cost $2). What he said was that icecream was costing nearly $4 !!!!!! Of course, it cost me $2 out of "after Tax" dollars !! I still bought it, but he decided he didn't need one.

He owned 4 IP's before I owned 1 - hardly a surprise. But, in case I give the wrong impression of this bloke, he was NOT a tightwad - he gave of himself, and his time, rather than his after Tax dollars.

In fact, I should give him a call tomorrow, now that you've reminded me of him - Thanks!!

Regards,

 

[ani]

Keep the credit cards in the freezer

That way you have to come home to get it and wait for it to thaw out!

By then you'll know if it is a need purchase or a want.

 

[Gordon Gekko]

Thanks for all the great suggestions.

We have drawn up a budget (realalistic) and we have started to record all transactions but after a week or so....we stop doing it.

I know, i know, if we want to get somewhere we have to knuckledown.

I have just download last months transactions from our credit card and i am putting it into a excel spreadsheet, this should tell a few stories.....i will keep you all posted

GG

 

[Kristine..]

Gordon

When I was little, the packed lunch and thermos went into the car before the kids got in.

Even when we did things like going to the Melbourne Show, only a specific amount of money was taken.

Nowadays, the 'coffee culture' means a take away coffee for morning tea ($2.50) plus a slice of something ($2.50)as well, at lunch oh! the ravioli looks good ($6.95 small plate) plus another cafe latte ($2.50), plus a Mars bar for afternoon tea ($1.85), with a cup of lunchroom tea to wash it down (paid for by the boss).

So how much did my food cost me at work today? $16.30.

Both of you work? that's $32.60 per day, x 5 days = $163.00 per week.

You could rent a two bedroom flat for $163 per week. You could pay off a three bedroom house for $163 per week.

$163 per week is $8,476 per year, on coffee and snacks at work!

Buy a plunger, take in a packet of coffee from the supermarket, bake some muffins at home, buy fresh rolls on the way home to make your lunches for the next day.

If you can cut the cost of snacks and lunches down to $7.50 per day each, you will increase your savings by nearly $5,000 per year.

Dust off your copy of The Richest Man in Babylon and remind yourself why you are working in the first place. If you can't resist those tasty date slices, perhaps you should consider buying a Baker's Delight franchise and making your fortune out of all those other hungry workers?!

Cheers

Kristine

 

[plainsong]

Oh, arent coffee shops are deadly on the budget-I know someone who actually went through a $2.500 gift from his mother over the space of a few months, just by sitting round coffee shops a lot with his friends-

I recall some famous rich man made the comment that we dont spend our wealth in big chunks so much as we "nickel and dime it away, "
Once we get down to it budgeting is just prioritizing the funds available and getting tough on ourselves about the wants and needs thing- we are all very obedient little consumers , we really convince ourselves that we need those designer jeans when we can comb through a few thrift shops and find a decent pair for 10 bucks, and so on..
And yes, take lunch with you from home, as Kristine said it saves
a fortune!

Cheers,

 

[Gordon Gekko]

Thanks once again for all the great replies.

Does anybody have a budget written up in Excel.......if so, would they be kind enough to post it onto the forum ??

Kind regard

GG

 

[sbe]

I'm with you Gordon.

I'm a pathetic saver.

But.....


I'm great at paying debt......

Hence, I bought anyway, and meet the payments.

I always manage to spend every cent left though....

Good luck.

 

[agent007]

Hey GG,

I had the same issue you have till I read a book: The 7 Steps to ... (I forgot the name).
The thing is that you don't do any budget at all. All you do right after getting your wages is taking 10% to a saving account (even better if you set this up with your payroll master). Then, you do whatever you want with the rest (that's why majority of us don't have problems paying TAX at the end of the year- we never see that money).
Now the challenge here is for you to forget about that other account and if possible get rid of the credit cards or leave them at home.

Regards,
James.