Personal responsibility plays a huge role in getting yourself back on track with your money. I cannot help you with that, except to say that it is up to you to make a decision to take control of your life and start to break that cycle of debt. You are the only one who can make that decision. You can read as much as you like about reducing debt but there comes a time when you have to stop reading and start doing it.
I can tell you that when you get your debt paid off it's the most liberating feeling you can imagine. I will encourage you to take control of your finances. I will help you in any way I can within the limitations of distance. I do hope you start working towards being debt-free, but the decision and the actions are yours alone.
I hope this post hasn't sounded too school marmish. It's my intention to help, not lecture and I hope this writing sounds as friendly as it is intended.
A budget is really a spending plan. Having a budget does not restrict you but instead it gives a feeling of freedom and relief. When you spend according to your budget, YOU make the decisions on where your money will go, YOU decide how much will be spent and YOU decide how much you will save.
I resisted having a budget for years because I thought it would be a restriction and I refused to be restricted in any way. Now I know having a budget gives you a kind of freedom that not having a budget doesn't come close to. Before my budgeting days I used to feel a mild guilt and unease when I spent money, now I know that what I spend has already been allocated for spending and I have no worries when I come to buying what I want. Having a budget is not being tight either. You will still enjoy your life, probably more so, but you'll do it within the controls that you have set for yourself. Having a budget doesn't mean you'll never spend. It means that you'll identify your needs and what you really want, and save money in areas that don't matter so you have money for things that do matter.
(Please note, these downloads are no longer available.)
I have two pdfs for you to download in my downloads section on the right side of your screen - Sample Budget and My Spending Plan. One is a sample budget, the other is a blank form, based on the sample budget, that you can use to write up your own spending plan. In the sample budget, you can see the proposed spending in the left column, in the right column is the actual money spent. As you can see in this budget, it was $82 under budget. That is $82 that was allocated but not spent. This money would go straight towards your debts. You would pay your normal monthly or fortnightly payment and add $82 extra to it. If you are debt-free, you would put this money toward something you're saving for - Christmas, a holiday, a new computer, aquaponics tank, whatever.
You have two types of spending - fixed bills and cash spending:
In MY SPENDING PLAN, you can write up your own budget. The figures at the top are all your fixed bills. Get out some old bills and calculate how much you pay for all your services, insurances, registrations, rent, rates etc over the course of a year, then divide by 12 to get your monthly amount. As you can see in the sample budget, my fixed bills come to $765 per month. That amount is transferred into a special bill paying account every month and is not touched. When each bill comes in, it is paid for out of this account, preferably by direct debit.
Under the fixed bills section, there is the cash spending. This amounts to $655 in my budget. I withdraw $655 from the bank every month. I have a set of ziplock bags on which I've written the amount and the category. For instance - IGA/Aldi and I put $250 in that bag. When I go grocery shopping, I take some of that money, do the shopping and if there's anything left over, put it back in the bag when I come home. I do that for every category I've written - Groceries, Transport, Health, General. You decide what your categories are and you decide how much goes in each one. Just try to make it the least amount possible without getting yourself into trouble. At the end of the month, the left over money - $82 this month, goes to pay off debt or to what is being saved for.
PLEASE NOTE: A month, or monthly plan, actually means every four weeks. Mark this on your calendar because it's important that you transfer your amounts to your bill paying account and withdraw your month's cash every four weeks, not every month.
You need to plan for the best future you can imagine for yourself, but prepare for the worst. Your priorities now are to:
- stop spending on non-essentials. The only thing you should continue to do is to make your loan repayments and pay for food and transport costs;
- establish an honest record of your spending habits;
- calculate how much debt you have and how much that debt is costing you each year;
- work out how much you really earn. That means work out how much money you actually get in your hand each week, minus your work-related expenses. This is the real amount of money you have to live on and to pay bills;
- save for an emergency fund to act as a buffer between you and hard times;
- prepare a budget. If you already have a budget, prepare a new one with your frugal life in mind;
- pay your debts as quickly as you can.
- shop in a thoughtful and sustainable way;
- stockpile food and provisions;
- start to produce some of your own food;
- work out a plan to conserve water, electricity, petrol and gas. Stop making unnecessary phone calls.
So how do you do it?
Generally there are a few ways to cut back.
- Ask yourself if you really need it.
- Ask yourself how your life will be better with this product in it.
- Separate your wants from your needs and be firm with this.
- If you do need it, can you barter something for it instead of spending money. Bartering used to be quite a common way of obtaining goods in small communities. Ask around, you’ll probably find people who are keen to barter.
- If you can’t do without it, can’t barter for it, can you make it yourself? One of the skills you’ll develop in your simple life will be to hand-make many things from food to clothes.
- Above all else you need to cut back on what you’re spending. This will give you the money to create more choices for yourself by reducing your debt, and in the end it gives you freedom to live the life you want.
CHANGE JAR & EMERGENCY FUND
If you're on a low income or trying to get out of debt, it's a good idea to try to create a buffer between you and an emergency. For instance, our dogs were sick last year and the vet bill was $800, we paid it from our emergency fund.
Get yourself an old jar or tin and empty your purse or pockets when you come home. If you have change left over from groceries etc. that change goes back into your marked ziplocks, Whatever spare change you have, put it in the jar. NEVER TAKE FROM THE CHANGE JAR. Don't think of it as extra money, it's money that has a purpose in your life and you need to keep it for your emergency fund. Put every spare cent you have in your change jar.When the jar is full, deposit it into your bank account. Try to build your emergency fund to at least $500. It will help you when something unexpected happens and having it will help you feel less stressed about living on less. You will know you have that emergency money, just in case.
TRACKING WHAT YOU SPEND
Most people know how much money they earn each week but few know how much they spend. You must have a realistic understanding of where you money goes to be able to budget and stick to it. If you want to know how to stop your money disappearing, you need to know exactly where the problem starts. You can’t stop leaks unless you know where the leak is coming from.
Get yourself a small notebook and write down everything you spend. That means everything you spend, every day. This might include mortgage payments, groceries, newspapers, chewing gum, lunches, Lotto tickets, your kids’ pocket money, coffee, petrol, your pocket money, travel, birthday gifts, an apple, bottles of water and Coke. Every time you spend something you must record it, no matter how trivial it might be. Take the book with you every time you go out, even if you’re not going shopping. You might stop for petrol, a newspaper or buy a bargain bag of tomatoes at a road side stall. Write down your purchase right after you spend.
Often when we spend on small items we don’t notice how much it adds up to over a longer period of time. For instance, if you’re buying a cup of coffee on the way to work that costs about three dollars for each cup, you’re spending fifteen dollars a week and around seven hundred dollars a year. If you’re in the same job for five years and you buy that cup of coffee every morning, you’ll spend $3,500 on coffee over that five year period. That’s for just a cup of coffee. The same logic applies to buying the newspaper everyday. Our local state newspaper costs one dollar during the week now. If you buy that on your way to work each day, you’ll spend about $1,125 over five years just to have something to read on the train or in your lunch break. A bit of organisation would allow you to have your coffee and reading material for a fraction of that price. You will only know that, however, if you track what you spend and see for yourself.
Attach a paper clip to the cover of your notebook and when you go grocery shopping, attach your dockets to the book with the clip. Dockets are aids to help you map your current spending habits. When you go home, record everything you spent on your shopping trip. Above all else, be honest with yourself. Make sure you record every cent. You are the only person who will see your spending record so if you cheat, you cheat yourself. Write everything down and at the end of the week, make your total. You’ll be surprised how those small amounts add up when you calculate it all. This record of your spending will be a valuable resource when you’re doing up your budget.
Make sure you know when all your bills are due. Forgetting or spending the money on something else is not an option. Store all your bills in a folder and mark on your calendar when they must be paid.
CONSERVING YOUR RESOURCES
Almost everything you use will cost you money. Now that you’re trying to save you should be mindful of everything you do that will save you money. Try to cut back on the amount you will have to pay in utility bills and for transport. Saving a dollar is better than earning a dollar – you don’t pay tax on money you save.
Turn off the lights when you leave a room.
Install CF light bulbs.
Turn off the TV when no one is watching it.
Don’t leave electrical appliances on standby. This uses a lot of electricity.
Turn off appliances at the power point, not just at the appliance on/off button.
Fill the kettle with just enough water for your tea or coffee. Boiling water you won’t use, is an expensive waste.
Cook larger portions of food and freeze leftovers for use on other days. This will enable you to cook meals for more than one day and use only the electricity to warm the food again.
If you’re using your oven, cook more than one thing.
If you’re baking bread, do more than one loaf and freeze a couple of loaves for later.
Ask people to call you, resist the temptation to phone friends for a chat. While you’re saving, use the phone only when absolutely necessary.
While you’re waiting for the shower water to warm up, fill a bucket with the cold water and use it on your garden or in the washing machine.
Turn the tap off when brushing teeth.
When washing your hands, wet your hands, turn the tap off, apply soap and lather, turn the tap on again to rinse.
When it rains, collect water in buckets for your garden.
Have short showers.
Only flush the toilet when necessary.
Plan your trips – work out what you have to do and plan your trip to use the least amount of petrol.If you have to take the children to school – share that with other parents in your neighbourhood. Even if you share with your next door neighbour so that you take them and she picks them up, it will halve your school trips.
Start a walking bus. Parents take it in turns to take a group of children to school by walking with them.
Check http://www.motormouth.com.au for the cheapest petrol in your area.
Every dollar you spend has a certain amount of greenhouse gases attached to it. Generally what you buy has been produced and delivered to your waiting hands, using fossil fuels. Not spending saves not only your money but also the environment we all live in.
Every dollar you don’t spend and every person you encourage to live simply allows the planet to recover just a tiny bit more. It will take huge changes in spending patterns and attitude to heal the damage done, but true change starts in your own backyard. Never let anyone tell you otherwise. Thrift plays a part in almost everything you’ll do in your simple life. You need to use less of almost everything you have. You’ll be thrifty with your money, the way you buy your groceries and how you use them. There are many ways to be thrifty with clothes and shoes. Shopping at thrift shops and making your own are two important strategies. You’ll develop ways to pay off your mortgage early or save for a deposit for a home – all by being thrifty. You’ll be thrifty with your consumption of electricity, petrol, gas and telephone calls.
We all know that money doesn’t buy happiness. A quick look at the newspapers will reveal the miserable lives many wealthy people live. Of course, happiness doesn’t automatically come with a low income either. That will take a change of attitude. It takes a commitment to your future and to your quality of life to make it happen. When you’re content with what you have, be that a lot or a little, and when you see that your future is full of possibilities, then happiness will not be not far away.
Contentment is not dependent on how much money you have, in part, it flows from the way you view money and how you deal with it, but it’s more to do with how well you use what you have. When you’ve got all your simple systems set up, you’ll feel in control of your life and what happens to you. If it’s the first time you’ve felt that control, it will be very liberating.
Our consumer culture has taken away our ability to provide for our own needs. It’s lured us in with promises of an easy life where everything you need is made for you. Let’s take back our power to make the things we need. What you make yourself will be better quality, healthier, safer and more suited to you and your family than almost anything you can buy at the store. When you start making your own things you’ll wonder why it took you so long to start.
This is my recipe for ginger beer, which is made in two stages - making a ginger beer plant, then making and bottling the drink.
GINGER BEER PLANT
Dissolve 3 cups of sugar in 20 cups of water. Add juice of 2 lemons and the ginger mix. Stir and bottle in plastic bottles. Place the caps on the bottles but don't screw them on. Leave the ginger beer on the kitchen bench for a couple of days to ferment a little more, then tighten the caps and place the bottles in the fridge. Placing it in the fridge will slow the fermentation process to almost zero.
I've never been an organised person, and never had a good reason to be until now. Living simply gives you a reason. It makes sense to me now to make lists, collect recipes, keep records, have up-to-date information and generally know what I'm doing around the house.
Generosity was one of the values I hoped to develop when I left full time work to live simply. I used to be a technical writer and journalist and ran a writing business for about 20 years. When my husband was retrenched, we left the mining town we'd lived in for 13 years and came to live in our present home. I opened an office in our little town here and continued to work as a technical writer. H decided to retire but was bored after a year so he bought a shop in Montville. We had that shop for almost seven years and when we closed the doors, just 18 months after I'd closed down my business, it was one of the best days of my life.
I was convinced we could live well on much less that we formerly spent. I was sick of waste, I'd stopped shopping and I ached to live a more sustainable life. We owned our own home, had no debts and long ago had stopped trying to impress anyone with what we owned. The time was right. H wasn't sure that we'd make it with no regular income but to his credit, he took the plunge anyway and things have worked out really well for us.
The key to this for me has been to try to grow and make as much for ourselves as we can, be that food, drinks, soap, shampoo, gifts, clothes or entertainment. Whatever we use, we try to make it ourselves. Grocery spending is always done at the cheapest place we can find, which is usually Aldi. If we have to buy anything of a non-grocery nature, we start local and work our way out.
I started this post writing about generosity, so what of it? One of the few things I do away from our home now is to work as a volunteer at the local neighbourhood centre. On Mondays and Tuesdays I work on reception, teach budgeting, organise free worshops, give out food relief, talk to people and try to help as many as I can. At the moment I'm standing in for the co-ordinator who has been off sick all year. Basically we all do whatever needs to be done and often I come home absolutely worn out - physically and mentally. But the time I spend there is the most satisfying and rewarding time for me. It renews my spirit, it teaches me to think in new ways and it makes me better than I really am. But that's the nature of generosity, it gives more than it takes.
So far it's been excellent, we've had no recent visits from the moth family and our food is safe and free of pests when we eat it. The good thing is that if the power goes off it won't matter as nothing in the frozen stockpile will deterioate, even if the power stays off for a week.
This is my Fowlers Vacola unit, circa 1970s
STARTING YOUR PRESERVING SESSION
Make sure your kitchen is clean and organised before you start. Hygiene is important. You’ll need clean utensils, clean benches, clean tea towels and clean hands. Organise your jars first by checking for damaged tops and cracks and then washing them in warm soapy water. Rinse and place onto a clean tea towel. Check every lid for small holes, wash them in warm soapy water, rinse and place on a clean tea towel. Never use rusty, dented or damaged lids. If you are using new stainless steel Fowlers lids, there will be a coating on them. Wash the lids in warm soapy water and scrub with a brush to remove the coating, particularly on the inside. Rinse and place on the tea towel. Next check all your clips. They must be undamaged and not rusty. Wash them and rinse. Place on the tea towel.
So are you ready to preserve? I'll have some more info for you tomorrow.
Generally we grow regular fruit and vegetables like potatoes, tomatoes, lettuce, cabbage, beans and spinach but we also grow a few permaculture plants like Madagascar beans and pigeon peas, We planted two Madagascar beans and they've grow in a huge wall of green tendrils. The beans themselves are pink and white and are a flat bean, good for adding to soups and casseroles. You harvest them as dry beans so they grow to maturity as a flat green pod, then you wait till they dry on the vine and then harvest. The pigeon peas are a dahl, similar to the split peas we use for pea soup. Our bushes have just started to flower so we are still a while away from harvest. Along with the Madagascar beans, the pigeon peas will be harvested dry and stored in the stockpile cupboard in jars until they're used.
Pigeon pea flowers
These chickens are Cocobelle and Cocochanel. Both excellent layers of around 18 months in age. We generally get about four or five eggs every day from our seven chooks.
Bread is baked at our home almost every day. My husband and I eat it fresh for lunch, the chooks have some soaked in powdered milk and warm water on a cold morning to warm their tiny bellies and the dogs gulp it down when we give them the chance. I don’t rely on clocks or watches any more, I never wear a watch now, and rarely look at the clocks in the house. I just do things when it’s their time, and I know that time by the light and by my routine.
Baking fresh bread is a focal point in my day – it’s how I measure the end of the early hours and the beginning of the morning. I suppose it happens around 9am but in my “time” it comes after making the bed and washing up and before going to the garden. I wonder sometimes if it’s common to bake bread. I know a lot of people have bread makers and make bread by hand, but is it common place or do most of us buy bread? If you buy bread, you may like to try this easy recipe. It works with hand kneading or in a machine, it contains no preservatives, it’s easily modified with different flours and it tastes divine.
I pack all the plates, cutlery, cups etc. in the dishwasher after each meal. If there are any pots, pans or large serving dishes, I wash them by hand straight away. I do this by running a small amount of hot water in the sink, I wash the pots, then rinse them with a small amount of water. Doing this allows me to run the dishwasher every two days. I have my meter readings for the daily dishwasher, as well as hand washing, so it will be interesting to see how those meter readings compare when using the dishwasher every two days - both in electricity and water usage. I think it's working very well, but I’ll check the meters for a week before I declare success.
We are also having two minute showers, and I’m pleased to say that we are clean and comfortable doing it. I remember back to days when we would spend five minutes or more in the shower. Or worst still, when I used to luxuriate in a huge spa bath we have in our bathroom. It’s still there but is never used. I think I might be the only woman who dusts her bath instead of cleaning it.
We have a large organic vegetable garden but we installed rainwater tanks so we only use water we harvest from the roof in our garden. It's the most sustainable way to go with water. Our storage capacity at the moment is 15,000 litres, in two tanks.
You might have noticed my post on aquaponics - which is sustainable backyard fish and vegetable production. We use rainwater entirely for that. I'll write more about it tomorrow.
This link has some good hints: http://www.savewater.com.au/index.php?sectionid=12
The following table is very interesting, but also a bit depressing. It shows the amount of water - in thousands of litres - that one person uses per year in various countries. How does your country stack up? I can't get the figures to line up well for easy reading but I hope you can decipher it. Australia's consumption is shocking for a country that's got a long history of droughts.
Thousands of litres per person per year
Country * Domestic * Agriculture * Industry * Total
Australia * 341 * 777 * 275 * 1393
Bangladesh * 16 * 875 * 6 * 896
Canada * 279 * 1238 * 532 * 2049
China * 26 * 605 * 71 * 702
Britain * 38 * 810 * 398 * 1245
US * 217 * 1459 * 806 * 2483
Global average * 57 * 1067 * 119 * 1243
I planted asparagus. How can this be the act of a rebel, you ask? I planted it in the aquaponics garden. Asparagus lives for about 20 years, it has a huge root system and generally needs a garden bed divided from the rest of the tamer vegetables. It doesn’t play well with others. So I guess I identify with the humble asparagus and planted it right next to the parsley and silverbeet, expecting it to be accepted, despite its differences.
I asked at the aquaponics site how to grow it that way but no one could tell me as it hasn’t been done before. LOL! I don’t know how well it will go. I hope it gives me something to brag about but even if it doesn’t, it made me smile when I was planting it, because I realised that deep down I haven’t changed one little bit. And that in itself is worth its weigh in asparagus tips.
The equivalent amount of laundry liquid (10 litres) from a supermarket would cost around $43. To buy all these ingredients will cost you around $6.70, less if you buy generic laundry soap. This will give you enough materials to make this recipe twice, and you'll have some ingredients left over. Give it a try. It really does work.
CONCENTRATED LAUNDRY POWDER
4 cups grated laundry soap or soap flakes (Lux)
2 cups borax
2 cups washing soda
Mix all the ingredients thoroughly and store in a plastic container with a lid. Use 2 tablespoons per wash. This powder will not make suds and this is perfectly okay.
LIQUID LAUNDRY DETERGENT
Makes 10 litres
You may add any essential oil of your choice to these homemade cleaners. Oils like tea tree, eucalyptus, lavender or rose are ideal. They are not necessary to the recipe but do not detract from the effectiveness by adding them. Use essential oil and not a fragrant oil.
1½ litres water
1 bar Sunlight or generic laundry soap or any similar pure laundry soap, grated on a cheese grater OR 1 cup of Lux flakes
½ cup washing soda – NOT baking or bicarb soda
½ cup borax
10 litre bucket
Slotted spoon or wooden spoon for mixing
Into a medium sized saucepan add 1½ litres of water and the soap. Over a medium heat, stir this until it is completely dissolved. Make sure the soap dissolves properly or the mixture will separate when cold.Add the washing soda and borax. Stir until thickened, and remove from heat. Pour this mixture into your 9-10 litre bucket then fill the bucket with hot water from the tap. Stir to combine all the ingredients.
The laundry liquid will thicken up more as it cools. When cool, store in a plastic container. I use one of those 10 litre flat plastic box containers with a lid. Use 1/4 cup of mixture per load or monitor to see what works well for you. I keep a quarter cup measuring scoop in the box to measure the mixture into the washing machine.
PLEASE NOTE: If you are going to use your washing water on the garden, don't add the borax to these recipes.
Over in the earth garden we have crops of lettuce, silverbeet, cucumbers, spinach, turnips, carrots, potatoes, beans, peppers, radishes, onions, garlic, kale, peas and green beans. We've been growing vegetables for about 25 years but in the past few years we've relied on our backyard produce to keep us healthy and alive. It's a totally organic garden which is a real pleasure to work in, and when I'm gathering vegetables and fruit in the late afternoon, there isn't another place on earth I'd rather be.
That gate at the back leads to the chook house. I'll tell you about my girls one day soon.