Savings is being eaten away :( Need to take back control

My savings is being eaten away! Over the last 11 months my priority has been to lose weight and my finances have taken a back seat. I'm really not even sure where the money has been going. I think I have been spending a lot on good healthy food (fruits and veges) and bananas are so expensive now. Apart from that my spending hasn't been too bad. I havent been going crazy.

Anyway the way i'm going I wont be able to afford to buy again in 2012 like I have been planning. I'm concentrating on making sure I can hold onto my ip. I'm out of pocket $3800 pa with my ip. I guess it wouldn't be such a bad move to wait till my ip is neutrally geared before buying again! I'm currently getting $230 a week in rent and when I can get $270 a week rent then it'll be neutral. By then I should see some equity growth of which I need to be able to leverage into #3 property.

I'm going to need to start saving again and start tightening my belt if I'm in any position to be able to buy another one. I really have to get my act together again. How do you guys do it day in day out. Be so good with your money and save? I was a good saver for a couple of years but since buying my last one at the end of 2009 I have gotten lax!

Anyone else in the same boat? or anyone else finding it difficult to hold onto your properties or save?

You know what... i'll take the same principle into account as when I decided to lose this weight. I had the determination that this was what I wanted and nothing was going to stop me. It has been a 24/7 thing for me, have not waned one bit. Always focused. I need to get this back again in regards to my finances. I'm sure I will get that passion back again. I hope it comes soon though cos my bank balance is going down and I'm starting to feel outa control with this side of my life now. The rest of my life is going well. My personal self development and relationships are great. Confident again and cocky haha. Now I have to focus on my finances and pronto before I get myself into deep ****.

I am on long service leave for 3 weeks now. I'll get myself organised and turn things around. It will be hard but its time now!


:)

Gotta keep positive!
 
Some months are more expensive than others for us ...March and April being the worse (snow plowing costs for our IPs)Starting in a couple of months I will put a few hundred away each month to spread out the cost.
When extra expenses sneak up on us, we still pay our bills first, and "make do" with whatever is leftover.

I would suggest you put money in your savings account, after paying your fixed expenses. Whatever is leftover, you purchase groceries, entertainment,car fuel etc. You will be surprised how resourceful you can be, when you need to be.
 
I can now see why there are a lot of people that only have the 1 ip. Its so easy to get back into that spending mentality. The more weight i lose the more i'm going out. I'm going to have to be careful with spending when i'm out. Also I'll be needing to buy some clothes. Theres all sorts of things now that i'm out more and taking better care of myself. It all costs money. I'll just have to try to find a balance.
 
I think you have mentioned prevously that you aren't on a large income. Try to keep it in perspective. If your income is low, it is not as easy for you to invest as it is for the high income earners, and there appears to be plenty of them on the forum.

Investing is a long term thing and it can't be done all at once. Just plod along doing your thing, but keep an eye on the finances. Make sure that you keep your expenses below your expenditure and eventually you will get where you want to go, so long as the goal is realistic.
 
I'll jump on the losing savings band wagon!

Shifting my whole life to another state last year, having to pay rent and other expenses on $25k wasn't easy and couldn't save very easily (then of course the car blows up, I lose my job and it's all down hill!!) I lost a good $3-5k in as many months. I'm still making up that money.

I'm now saving $250pw and living off the bear minimum, although now I just don't care. I'm looking for that motivation to save because I want my house, but I just can't seem to locate it..
 
I've had a few large bills this month

Car rego + insurance (expensive for a young fella)
Major service coming up
Land tax bill (ouch)
Defaulting tenants
Vacant IP

Also moved some cash into shares

But yes my savings habbits have been pretty bad as of late, majority of excess spending is going towards take away food ;D
 
APK:
I'm going to need to start saving again and start tightening my belt if I'm in any position to be able to buy another one. I really have to get my act together again. How do you guys do it day in day out. Be so good with your money and save? I was a good saver for a couple of years but since buying my last one at the end of 2009 I have gotten lax!

Anyone else in the same boat? or anyone else finding it difficult to hold onto your properties or save?

I never understood how it would make sense for me venturing into property investing to do so 'at a loss'. that is where after 'getting the concept' of building wealth from 'Rich dad, Poor Dad' I got my sweaty hands on Steve McKnight and Jan Somer's books. reading about other people experiences, creating deals, adding value, trying for the cashflow positive properties, or if not, the positive gearing's (in my favor as much as possible).

I wanted to build assets, I wanted to build wealth, generally speaking I am not of the experience or opinion that 'because I am an investor therefore-I-suffer' mentally and/or financially. But I do have a deep determination.

So, it turns out 'my backyard' of regional Victoria had/has little nuggets of gold to dig.

My learning and understanding from this game and people's stories has been to acquire property that puts funds in my pocket from the beginning, 'buying well'. All about the deal.

I want to keep acquiring assets that make money for me immediately, (or almost immediately), and that enables me to keep buying, adding to my income, not detracting from it. Until I'm ready to springboard funds/equity into something else perhaps. Or I might just keep acquiring properties, we seem to get on just fine. All on a relatively low income.

Having said that I did land bank a heap of stuff that has increased considerably in value, but nowhere near the yield and growth that houses have worked for me. So, in a sense while I haven't been stagnating, I haven't achieved anywhere near the momentum I would prefer.
 
If it's a choice between living a healthy lifestyle or saving more money, you should choose a healthy lifestyle. Your health is more important than money.

Record all your outgoings and post it here. Maybe we'll be able to see where you can cut your spending. At the moment you've only indcated a healthy lifestyle has effected your savings.
 
stay away from the bananas. they're not that healthy. Hows that for advice?

I've been saving for 35 years. it becomes a mentality thats hard to shake if you stick to it. I think it actually gets harder the more income you have. every few years i celebrate with a big purchase. getting the wife the convertible "she" always wanted. A Porsche 911 Carrera S. Happy days ahead.

the old adage "pay yourself first" is classic. Make it automatic and put it somewhere hard to get hold of. like an an index share fund for example.

good luck
 
Great post OO, i;m with you on this one. Kudos.

Negative gearing and low income are not a good combination and go against investing fundamentals. For one, you have to struggle and scrimp and save. For two, the ax benefits don't really do it justice.

Especially at times like i think we are heading into the next couple years.

Thats tough, but true.

Alex. how you can neg gear, save money, pay to live, (meaning car, house etc) and buy 'healthy' food all on a low income is beyond me. Do you have a life?

If you can manage all the above, congrats.




APK:

I never understood how it would make sense for me venturing into property investing to do so 'at a loss'. that is where after 'getting the concept' of building wealth from 'Rich dad, Poor Dad' I got my sweaty hands on Steve McKnight and Jan Somer's books. reading about other people experiences, creating deals, adding value, trying for the cashflow positive properties, or if not, the positive gearing's (in my favor as much as possible).

I wanted to build assets, I wanted to build wealth, generally speaking I am not of the experience or opinion that 'because I am an investor therefore-I-suffer' mentally and/or financially. But I do have a deep determination.

So, it turns out 'my backyard' of regional Victoria had/has little nuggets of gold to dig.

My learning and understanding from this game and people's stories has been to acquire property that puts funds in my pocket from the beginning, 'buying well'. All about the deal.

I want to keep acquiring assets that make money for me immediately, (or almost immediately), and that enables me to keep buying, adding to my income, not detracting from it. Until I'm ready to springboard funds/equity into something else perhaps. Or I might just keep acquiring properties, we seem to get on just fine. All on a relatively low income.

Having said that I did land bank a heap of stuff that has increased considerably in value, but nowhere near the yield and growth that houses have worked for me. So, in a sense while I haven't been stagnating, I haven't achieved anywhere near the momentum I would prefer.
 
Looking back to my purchase in Dec 2009, the bank would only lend me $199 K on a property that cost me $210 K. I had to put $11 K of my own savings into the deal. After settlement my savings went down to $13 K. I got a loan from mum and dad for the $5 K stamp duty so that I'd have a bit of buffer and SANF. I paid off the SD over the course of one year. So in the space of 16 months my bank balance has gone down from $13 K to $4,500.

One thing I have learnt... for someone on a low income it takes a hell of a lot of time (and a lot of discipline) to be able to save $11 K. In a way I kind of wish I didnt have to dip into my savings to buy the ip because I knew it would set me back a bit and it would take a long time to save that amount again, but decided to go for it anyhow. Was having 2nd thoughts about the purchase but something deep inside me told me to go for it. I dont regret buying though!

I dont think i'd dip into my own savings ever again. The loan would have to cover the amount in full. I think the next one will have to be close to neutral. It gets hard when your on $50 K pa.


Ok I'm looking at the positives and a plan of action I can take as of today:


I can make some real savings in my food purchases.

I need to switch to woolies rather than growers market. I love the convenience of the growers market but its just to expensive and I can be saving money here. I also need to research the prices of common foods (esp fruit and veg) and know where to buy. Need to plan better.

I commit myself to halve my night time take away purchases. Cut back to twice a week. Mum and dad dont mind if i'm over their for dinner, so i'll accept more invitations. I will also make more cheap basic dinners.

I will plan/prepare more of my own lunches for work. atm I'm buying lunch twice a week. I will cut back to once a fortnight!


Need to stem the blood or before I know it my bank balance will be in the $2000's range. No SANF! Will be scared out of my brains.


Keeping a positive attitude!! I can do it!! I will do it!! I am doing it!!
 
I think you have mentioned prevously that you aren't on a large income. Try to keep it in perspective. If your income is low, it is not as easy for you to invest as it is for the high income earners, and there appears to be plenty of them on the forum.

Investing is a long term thing and it can't be done all at once. Just plod along doing your thing, but keep an eye on the finances. Make sure that you keep your expenses below your expenditure and eventually you will get where you want to go, so long as the goal is realistic.

Thanks for the encouragement skater. :) Yes... I'm starting to see that I need to be realistic. I'm not one who wants to retire when im young like some here. I dont mind retiring at the retirement age and picking up a property every few years as I am able to do so. My health/life balance is important to me. Main goal is to be happy. I can see it is going to take me a bit longer than some others and thats ok. This is what im comfortable with.
 
I'll jump on the losing savings band wagon!

Shifting my whole life to another state last year, having to pay rent and other expenses on $25k wasn't easy and couldn't save very easily (then of course the car blows up, I lose my job and it's all down hill!!) I lost a good $3-5k in as many months. I'm still making up that money.

I'm now saving $250pw and living off the bear minimum, although now I just don't care. I'm looking for that motivation to save because I want my house, but I just can't seem to locate it..

Keep at it mate. You'll get there! :) That is amazing that your saving $250 pw well done!!
 
Alex. how you can neg gear, save money, pay to live, (meaning car, house etc) and buy 'healthy' food all on a low income is beyond me. Do you have a life?

If you can manage all the above, congrats.


lol yes, i now have a life haha and thats what is the problem! Now that i've lost so much weight i have been spending more and saving less. Out socialising more and all the expenses associated with it. ;)

i agree with both you and oo. ng is not for me!
 
If it helps any, here are a few things I learnt from my very, very poor days:

Take at least one drink with you, wherever you go. This alone will save you quite a bit if you buy drinks when you are out. If you drink water, you can freeze a half bottle, then top it up when you go out. This will keep cool for a long time.

Take your lunch.

Don't even walk into a coffee shop.

Don't buy take away.

Buy large size snacks and make your own individual serves.

Make stuff yourself. (Not only food)


Good luck!
 
lol yes, i now have a life haha and thats what is the problem! Now that i've lost so much weight i have been spending more and saving less. Out socialising more and all the expenses associated with it. ;)

Hi APK,

This post probably won't help you save, but thought i'd throw a bit of perspective in. You seem to be quite worried about making some additional small savings - I wouldn't be.

You are already doing a good job on a lower income. You have acquired the disclipline of a regular savings pattern, and built the financial intelligence to put those savings to good use through acquiring residential property. You are already well ahead of most people.

I know savings are very important in the early years, but as you grow and start leveraging off capital, saving or spending an extra couple of k every year really becomes inconsequential.

When you look back at your time on this earth i doubt you will be thinking of how you were able to save a bit more money, you will be thinking of the experiences you've had through socialising, gaining new experiences, and spending time with friends and loved ones.

So don't sweat on it too much, save as much as you can, but don't let it be to the detriment of your life quality. Remember the balance and the reasons we all aspire to financial independence in the first place.
 
lol yes, i now have a life haha and thats what is the problem! Now that i've lost so much weight i have been spending more and saving less. Out socialising more and all the expenses associated with it. ;)

Hey Kim, I agree with what Rick said above.

You gotta have a life. I don't mind spending money on good food - what you put into your body is what you get out. No point have loads of cash and health issues. Give me health over money any day.

The answer here is about the cream. It takes a certain amount to "get by" and the rest is cream. Let's say someone requires 40k pa to live - if they earn 60k, the 20k is the cream.

How do you get more cream? Lower your expenses (boring) or earn more of the good stuff (challenging).
 
If it helps any, here are a few things I learnt from my very, very poor days:

Take at least one drink with you, wherever you go. This alone will save you quite a bit if you buy drinks when you are out. If you drink water, you can freeze a half bottle, then top it up when you go out. This will keep cool for a long time.

Take your lunch.

Don't even walk into a coffee shop.

Don't buy take away.

Buy large size snacks and make your own individual serves.

Make stuff yourself. (Not only food)


Good luck!

Never, ever, ever ?

I thikn first it depnds on udnerstanding what you might be able to achieve and then looking at stuff like that, or at least knowing those options (which most of us do) before you start planning out what you want.

Otherise, yeah, it makes me feel like I would have no life either.

How far do you go ?

What's a guy who doesn't carry a hand bag or anuything with him 99.999% meant to carry the frozen water bottle in when they go out "everywhere" like you suggested ? I would suggst most blokes dont' carry anything with them most of the time
 
Never, ever, ever ?

I thikn first it depnds on udnerstanding what you might be able to achieve and then looking at stuff like that, or at least knowing those options (which most of us do) before you start planning out what you want.

Otherise, yeah, it makes me feel like I would have no life either.

With all due respect Jaycee, if you read my first line I said it was in my very, very poor days. Unless you have been there, you just would not understand what it is like. We were living on a diet of rice, baked beans, processed meat and instant noodles. Hubby had been made redundant and I had two small children at home with us. We were paying off our PPOR on 17.5% interest rates.

The fact is that we lived on basically nothing for over two years. But you know what, it doesn't last. We held on, kept our home and survived. Life is what you make of it. You can even be happy living like that. It's all about attitude.

Those suggestions (and hey, they are only suggestions) are only the tip of the iceberg. They are easily done without impacting too much on your lifestyle. If you can take one drink a day from home, there is a saving of around $3 per day, more if you have other family members. OK, it's not a lot, but over a week if you do it each work day, there is $15. Over a year, you save around $750. For someone on a low income, that is a considerable saving.

Now, do this with lunches & takeaways too and it really adds up.
 
Top