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KieranR

Household Budget

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Do you have one, are you good at it?

We have always had one for the last 10 years as a single income family but only followed it loosely which kind of defeats the purpose in my opinion, but yesterday i sat down and did it properly on the money smart excel sheet, it's opened my eyes up a bit more as to where the money goes and how much better we can be at it.  we have some big family goals to do a lot more travel with our kids once we get on top of our sons health( we have always traveled with just the two of us before kids and have done so with our kids but want to do a lot more) so its been a really great exercise to actually pay 100% attention to where the money is going and look at whats wasted or can be put away and increase the savings more efficiently.  I've managed to identify we can nearly double what we currently save whilst still on single income.

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Yup, had one since 1996 when I first went into business on my own to manage the more lumpy cashflow.  Back on wages now, but still update it weekly.  Set it up myself in Excel, the only reason we're debt-free finally.  Not doing this is the reason so many Aussies are financial fools and get into big strife.  I have friends who earn a lot more than us, and are behind due to not knowing what they earn vs spend.

Also has sub-sheets with investment analysis, including Super projections.  This allowed me to scale back to 4 days/week.  Without it, I'd have been like so many others and had no idea when I could afford to retire, so just keep plugging on in misery.  We put heaps into super (45%+ for Mrs), and know cashflow wise we can do it.

Has allowed us to really know what big ticket items we can afford (e.g. this week, new stairs to the deck and a solar system went on the backburner in favour of another holiday...cos the former is too expensive, and we will remember the later forever).

I do this sort of analysis for my work (cashflows, internal rates of return, net present values, BCA etc.) - you'd be amazed how many govt entities and businesses don't.  No wonder they fail or always run in the red.

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Buggers me, the boss doesn't let me hear the money and quite rightly so. I just have to try and make it.

But I don't ever really remember us having a budget as so...... We normally lived week by week, day by day, sometimes hour by hour!

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We're lucky enough that we're DINKY and so running into the red is not really a problem yet. However I suggested to Mrs Monkie the other day that we start one because it can be used to stop us feeling guilty about spending on things. i.e. it's OK to have that nice meal out because we had budgeted for it.

For the wedding I was a spreadsheet budget nazi!

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1 hour ago, monkie said:

For the wedding I was a spreadsheet budget nazi!

Farkin weddings.  If there's one thing Aussies are really stupid about it is weddings.  We had a budget job in 1989 at a friends house for reception dinner.  Was great, did not put us in debt.  Got two daughters - gonna have to convince them :o

And cars.  My Hilux is 24yrs old, the Mrs VW 11yrs old.  They do what we need them for just fine.  Have a little company car which we can use privately, gets upgraded every 95,000kms so why buy our own flash ones?

Mortgage, Kids Education (to get them off the bank of Mum & Dad ASAP), Super, Investments, Holidays/Travel have been our financial priorities for 30yrs.  Before kids, lived off my wage, saved 100% of Mrs wage = 25% house cost saved in 2yrs.

Edited by ComfortablyNumb
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Cash flow nazi here.  Best lessons over the years learned:

on borrowing - only borrow if you can still afford the repayments if interest rates go to 15% 

never fix rates and put everything in the offset account.  That way if you decide to move house you have the option of  using the full amount in offset account to buy new house and negatively gear the old house.

on saving - treat your saving as a fixed expenditure - over the years we have had multiple online accounts each labeled what they are for: travel, building (to cover maintenance of house), education, etc.  set up with automatic payments of a fixed amounts.  Amazing how over the years how even small amounts can grow.  

credit cards - always pay full amount each month.

dont put everything into super - you never know when and how future and current governments are going to change the rules on you. 😡

 

 

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4 hours ago, ComfortablyNumb said:

.

Has allowed us to really know what big ticket items we can afford (e.g. this week, new stairs to the deck and a solar system ... 

That is sooooo cool.  I have always wanted to visit Mars!

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2 minutes ago, Cranky said:

That is sooooo cool.  I have always wanted to visit Mars!

...and he's buying a stairway to the heavens.

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Didn't have a choice but to set a very strict budget following separation and eventually divorce.  Since then, the habit has continued.

I was left with an extraordinary amount of debt post separation / divorce mainly due to legal costs so took us a long time to get that paid off, which simply wouldn't have happened without a solid budget behind it.

These days I have passed it over to my wife who is much better at managing these things than me.  Included in the budget is my "allowance".  For the last 4 years I have lived on $100.00 per fortnight, and a couple of week ago have reduced this to $80.00 per fortnight.

This allowance allows me to buy coffee, occasional lunch and anything else I want that is not included in the general family living expenses budget.

Reason for this is simple...........if I have dough it burns a hole in my pocket and I couldn't even tell you what it goes on.

Works for us, but doesn't stop me whinging about my paltry allowance ;)

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3 hours ago, ComfortablyNumb said:

Farkin weddings.  If there's one thing Aussies are really stupid about it is weddings.  We had a budget job in 1989 at a friends house for reception dinner.  Was great, did not put us in debt.  Got two daughters - gonna have to convince them :o

 

Agree, I have told my daughter that she must elope overseas. Someone told me the average wedding is something north of $30K!!   I'll even throw in the cash for the travel.  Shouldn't be too hard a decision, she loves travel, and anyway it sounds far more romantic than spending tens of thousands on a wedding here.

She can have a party for everyone when she gets home.

(That's assuming she comes home from Belgium where she is having a party doing her last year at high school and playing footy.)

 

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45 minutes ago, lawman said:

Someone told me the average wedding is something north of $30K!!  

 

 

My wedding back in 2004 was  less than 10k, add the honey moon in and it was still less than 10k.  30k is huge in my opinion...

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Less than 5k for our wedding in '94, including honeymoon.  Biggest mistake we've ever made, trying to do the typical white wedding on a crap budget.  With hindsight, we'd have taken Clikchic's dads other offer (he paid for it all) which was a bbq at his home for everyone and a week in Bali.  

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have always paid double the mortgage and live on the rest

+

Have a couple of side accounts that when a bit of money goes straight after each pay.

- holiday

- school 

- bills

- general

wife did add up once what it cost to live per year and it's frightening.

and once I didn't use an ATM or go to a bank in over 12 months. Got $50 a week to spend and my train fair was paid for for 12 months pre-tax.

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My wife works in a bank & has all that sorted. 

My allowance is $500 a fortnight.  That's for coffees, lunches, bike stuff, coaching fees etc. 

People ask how we can afford to travel so much.  The answer is easy, we budget.

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We don't stick to a strict budget, but we do little bits to stay afloat on 1 wage. I get an "incentive" every year, and that goes straight into a separate account that school fees/expenses come out of. I have money each pay that goes into a "Bills Account" that all the regular bills come out of, and we pay an extra $100 a f/n off the home-loan. Other than that we probably waste a bit.

Asset rich, cash poor for the past few years, but that should change a bit when we suddenly have $15k that we don't have to pay out on school fees in a couple years. Till then we get by.

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14 hours ago, Cranky said:

That is sooooo cool.  I have always wanted to visit Mars!

Yeah, it would have been very cool, but NZ is way cooler :wink1:

12 hours ago, lawman said:

(That's assuming she comes home from Belgium where she is having a party doing her last year at high school and playing footy.)

 

That is very cool too!

6 hours ago, Bored@work said:

People ask how we can afford to travel so much.  The answer is easy, we budget.

Us too.  NZ in Feb for 2 weeks ($6-7K), and I'm planning another solo fly-fishing week in Apr ($2.4K).  Who needs steps to the solar system when there are rivers full of big brown trout B)  I'm a big fan of spending $'s on experiences rather than material things.  The Mrs has Canada on her radar for our 30th wedding anniversary in a few yrs.  Will probably be $20K, but what the heck, she's always wanted to go and I can fly-fish with the big bears :o

2 minutes ago, Ex-Hasbeen said:

...but that should change a bit when we suddenly have $15k that we don't have to pay out on school fees in a couple years. Till then we get by.

Yes, we really noticed that when the school and uni accomm fees disappeared.  Much more moola in the coola.

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School fees is a touchy subject in our household - currently im paying $5200 a year for our son in Kindy & daughter in year 2 at the local catholic school, we are not religious at all and I battled and lost the fight in regards to sending them to this school where I'm happy to send them to a high quality public school that is within our zoning region.  My wife's argument is that they will get a better education at the private school and class numbers are smaller........

Im not so sure, isn't their a curriculum that all schools follow in regards to learning.....i have not seen anything different to this day between our kids learning and that of our public school friends kids..apart form the religion stuff.

Class numbers are the same also.  I'd rather put that 5.2k on the home loan instead.

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Our kids started at a public school, but we moved them to a Catholic school early and they improved quickly. I don't think it was the curriculum, but more a matter of the local State school was overcrowded, and they had poor teachers (maybe just unlucky), where-as the Catholic school was smaller and had great staff led by a really good Principal. That changed when they got a new Principal, and my son spent year 6 & 7 at the local Samford State school. It was even better than the Catholic one.

He now goes to a private high school (Anglican I think) which is mid range in costs. The nearest couple of State High is creeping toward toward 2000 students, and with issues he has, the smaller school, with the focus on 3Rs and community has worked really well for him.

So to answer your questions, sometimes the private school is better, sometimes it's not. It all depends on the individual schools, and the kid.

Would we have liked the extra money not sending him there? Yes. But setting the kids up to succeed in life is more important than a few extra dollars for holidays each year.

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The state high school my kids go to is about equal third in town for results, and if you look at just the girls results it's actually the best school in town for them. The two schools above them are a Catholic boys school that's about 20k/year (day fees, and the principal is on over 300k/year) and the other is a Catholic girls school that's about 16k/year.  Add to that, they have the lax'est uniform code in town for any high school, Sports uniform every day for everyone (and they're unisex so can pass them down from girls to boys), any sneakers you want. They rarely wear formal uniform so there's next to no ironing, and doesn't matter if stuff gets a bit ragged.

And I still complain about how much things the cost! :rolleyes:

Edited by goughy

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Just now, goughy said:

The state high school my kids go to is about equal third in town for results, and if you look at just the girls results it's actually the best school in town for them. The two schools above them are a Catholic boys school that's about 20k/year (day fees, and the principal is on over 300k/year) and the other is a Catholic girls school that's about 16k/year.  Add to that, they have the lax'est uniform code in town for any high school, Sports uniform every day for everyone (and they're unisex so can pass them down from girls to boys), any sneakers you want. They rarely wear formal uniform so there's next to no ironing, and doesn't matter if stuff gets a bit ragged.

And I still complain about how much things the cost! :rolleyes:

 

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1 hour ago, Ex-Hasbeen said:

Would we have liked the extra money not sending him there? Yes. But setting the kids up to succeed in life is more important than a few extra dollars for holidays each year.

Whaaattt!!! Ah f*ck that mate, there are big trout to be caught :lol:

We had both in all-girls private high school ($20K+/yr, both on 50% academic scholarships) but the eldest hated it so we put her in the local co-ed High Catholic school ($3K/yr) which worked much better for her.  But the difference in ATAR result was 95.25 private vs 90.25 Catholic (and I reckon the one that got 90.25 is more academically gifted)....not that those ATARs mattered for what they wanted to do job wise.

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we run a relatively loose budget, but are cost conscious.

I have had the same $20 in my wallet for a month (with the moths).

I only buy coffee if with others as it is then a social event, weekday lunch is left overs every day or sandwiches etc from home.

Dinner takeaways is at most once a week. (and less than buying lunch everyday).

Kids earn pocket money through cores, it is not a right.

Sports nutrition from the supermarket is a household expense not sport.

I also get $ for $ of spend on dog for sports gear. This generally adds up pretty quickly. 

We also work on minimal debt (except mortgage, which we try and reduce as fast as.)

Our compromise was no significant overseas trips while kids in private school, Kids have been given option on number of occasions to change schools and have holiday but have chosen not to.

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No budget for us, but my wife puts money where it needs to be. My job is to make sure it is deposited. From there we buy what we need to and like.

Our wedding was under $300 back in 1985 - that included the celebrant and meals at the local Rissole for 22 guests.

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Me and the wife both come from pretty ordinary financial families. We were used to working pretty hard and not spending much.

We’ve never had a budget but..

We were renting and still managed to pay for our own wedding and save up $30k for a deposit (20 years ago) 

I think neither of us drinking coffee, she doesn’t drink alcohol, I hardly drink, we obviously don’t smoke, I generally buy fruit from the supermarket for my lunches and she takes hers too. 

Discretionary stuff for me is really only tri stuff. We have had a few holidays overseas but also have family or friends in lots of places so they are not hugely expensive in the scheme of things.

kidd are both in public education at the moment, and we are now over all the childcare, Oosh etc costs so that has freed up a bit more money.

we had cleared the mortgage but the house needed a bit of work. Then a well timed tornado renovated the whole house for nothing. We chipped in some extra to get some renos done at the same time and now have cleared that debt too do currently we are debt free and the house is worth a whole lot more now. So it’s been a bit of a win. 

Now once I get a new bike we can look at finding an investment so we don’t waste too much money. 

I figure if we got this far without a budget we should be ok for a while longer. 

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We have never had a budget but we aren't big spenders on stuff for the sake of it , heck if any one has seen my dress sence they know I save heaps! 

The wife worked out a while ago some expenses we had I nearly had a farrking heart attack !

i found if I just made sure what came in was more then going out I was happy .surf holidays family holidays and eating out was our thing.

in saying this though now that I have taken a massive income reduction I might set something up   But I'll probably be to lazy lol and just coast along again . The expenses down here are know where near Sydney .school fees are half .even gymnastics is way cheaper eg Sydney was $30 per kid every Saturday so for us $60 bucks down here in The New Gods Country $8 bucks !!!crazy 

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I hav create a height spreadsheet Listimg all disposables and bills 

I don't buy a lot but by Vostok of groceries which I budged for $300 per fortnight between me an d my cat has exploded, it is now more lie 450. So the cat I expect it ordering cats scaping things such as moisturisers,mouwashes. Scented pottie.  I don't know yet but I will have to have a meeting regarding this.   

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On 9/27/2017 at 2:56 PM, Cat Lady said:

dont put everything into super - you never know when and how future and current governments are going to change the rules on you. 😡

 

 

I see where you are coming from, but given the need to get as many people as possible off welfare (including the pension), I don't think they'll mess with it too radically.  Maybe some tinkering at the edges re the age you can access it, and levels of tax deductibility but atm, it is hard for me to find a better investment that a good industry super fund.  And the tax treatment of earnings and salary sacrifice are still very favourable, so we'll pump in the $s while we can. Might all change if the neucs start flying of course....and then my super won't even matter!

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Private school here is a different ball game to the UK. I want to put my kids into the education I had but without scholarships we're looking at £150k each. That's a really nice car...

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150k is over their entire schooling life?????

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Had a strict budget for the 1st 20 years of marriage but have waned the last 15 years. I do however, keep a balance of all assets (loans, shares, A/Cs, super etc) and we are always heading in the right direction every year. As I am looking at retiring from work in 2 years (i.e. stop what I am doing now and start doing other stuff), we are reintroducing a budget next year. This will allow us to get get a bit stricter and rid the housing loan.

It will be tough as I manage the funds. We don't go out on spending sprees but we do but stuff occasionally on a whim. We built a new home just under 3 years ago so it should be OK for a long while.

Daughter is still at home (27) and son is married with his own place. Not much outgo on that front. I have already done a budget for retiring. It is a "want" value rather than a "need" value. It's the way we want to live.

FM   

Edited by Flanman

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On 9/28/2017 at 11:46 AM, ComfortablyNumb said:

We had both in all-girls private high school ($20K+/yr, both on 50% academic scholarships) but the eldest hated it so we put her in the local co-ed High Catholic school ($3K/yr) which worked much better for her.  But the difference in ATAR result was 95.25 private vs 90.25 Catholic (and I reckon the one that got 90.25 is more academically gifted)....not that those ATARs mattered for what they wanted to do job wise.

Catholic is private, no?  :confused1:

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I'd say so, but jeeze there can be varying different costs for private schools.  My old school would only cost about 3k a year. Still wouldn't send my kids there.

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On 29/09/2017 at 11:57 AM, goughy said:

150k is over their entire schooling life?????

That would be for 13 - 18. And that's boarding, you could do less for a day school if you wanted that option. And that's GBP not AUD. It's mind boggling.

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It most certainly is! I can't even fathom having enough money to even put something like that into consideration!

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On 9/29/2017 at 6:49 AM, ComfortablyNumb said:

I see where you are coming from, but given the need to get as many people as possible off welfare (including the pension), I don't think they'll mess with it too radically.  Maybe some tinkering at the edges re the age you can access it, and levels of tax deductibility but atm, it is hard for me to find a better investment that a good industry super fund.  And the tax treatment of earnings and salary sacrifice are still very favourable, so we'll pump in the $s while we can. Might all change if the neucs start flying of course....and then my super won't even matter!

I'm with Cat Lady on this.  I put my "extra contributions" into the mortgage, now that is down to a bit over 5 years to go to zero balance, have started to look at the super.  I'm planning on cutting back the work somewhere in the 55 - 60 age bracket, so around 15 years away, might look at part time work or consultancy work post this but want the option to take a year or a month off when I want. 

As it stands at present my super won't be able to be touched until I hit 70, so I'll have 10 - 15 years of super not being able to be touched.  There are some tax benefits, however unless going to the expense and hassle of setting up a SMSF I'm restricted on investments.  In my current super fund, I do my own choosing of stocks etc, with around 50% in my own selections, 50% in the "fund" selected shares, properties etc.  I tend to outperform the fund managers by about 60% (based on the last 3 years of data), taking into account the tax benefits I'm still just ahead if I invest outside of super - and will be able to access it when I want.  Most funds "share" options get outperformed by the ASX200 indices - it's not rocket science to diversify in quality shares and keep an interest on the market - the return is even better when super fund fees and compliance costs are factored in

There is going to have to be some changes in the next 5 - 6 years or next 2 terms of the fed government.  The current rules are on a collision course with the maximum allowable contribution cap of $25,000 due to be overtaken by the employers minimum cap (currently just over $21,000) in that time frame - and that's before any proposed increase to the super above 9.5% which is just going to hasten the conflict.  Unless the budget is returned to surplus before then (and all indications are it won't), the cap is going to have to be raised, and with the govt addicted to the revenue from wages taxation, this will have to be traded off with either less tax concession or some other cap on the total in the super fund

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Almost went into Bankruptcy back in 2000 and started a spreadsheet of incomings and outgoings. Have maintained this ever since and it's one of the reasons I know where money comes from and goes to. 

The wife, on the other hand, comes from a bit of money, has never needed to consider these things and - most importantly - is a GP with a strong income. Trying to get her to see sense in a budget was hard until we had to get a mortgage together and look at things like different tax rates in the different countries we work in, interest rate changes and ForEx.

When you consider how easy this can be, if people don't have a budget and still complain about these things .... it's their own fault, really.

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God cat lady, don't talk about retiring time! Buggers me what we're gonna do.

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