Organisation - The Key To Saving Money
When it comes down to it, there is one essential ingredient that you need to save money with your everyday expenses. It’s certainly not the only ingredient, but I believe it is the main ingredient. As you can no doubt tell from the title, I’m talking about organisation.
These days companies usually market their products as a solution to a hectic lifestyle. For example, how many times have you seen ads that show take away (pizza, burger, fried chicken, etc) as the “quick, no fuss” solution to lunch or dinner? Likewise, pre-packaged meals are advertised as being “ready in minutes”.
Quick they are, but you pay for the convenience. With some pre-planning (ie: organisation), you can ensure you have everything you need for lunch or dinner on hand, and make it yourself for much less.
How about cooking up a large pot of food ahead of time, to store for meals later on? If you aren’t organised to store it properly, instead of saving money you’ve wasted the cost of the food.
What about paying bills? If you’re organised, you can ensure all your bills are paid on time and without any late fees. If you’re not organised, you risk getting late fees (and potentially a black mark on your credit score, if you worry about such things).
How about the various services you use, like phone or insurance? If you’re organised, you can keep track of when they start increasing their prices, and also make time to look at other companies to see if you’re still getting the best deal.
What about when you make a large electronics purchase (like a new TV or computer). If you’re organised, you can ensure you shop around to see what’s available, do some research about the various options, etc. If you’re pushed for time, you may just walk into the store and buy whatever the salesperson pushes you towards.
Being Organised When Things Are Hectic
Sometimes it’s just not possible to devote the time to keeping everything sorted - no matter how much planning you do, life has a habit of throwing up the unexpected! But you can prepare a head of time for such occurrences. There are two keys to being organised even when you’re too busy to properly sit down and keep on top of everything.
- Work out a “minimal check” system to maintain the task - in other words, work out the absolute minimum you can do to ensure that you don’t needlessly waste money. A good example for this is your bill paying system. Even if you don’t have the time to go through all your bills and do all your normal record keeping (see if anything is unusual compared to previous bills, make a record of the amounts, etc), still set aside a few minutes once a week or twice a month to pay the bills. That way you at least stay up to date with them.
- Create a backup plan - a default plan if you will. This is what you will use if you don’t have time to work out a specific solution. Two examples of this are a default weekly menu plan (a set menu that you’ll use when you don’t have time to organise a unique one), and a default shopping list with the basics (for when you don’t have time to look in all your cupboards to see what you need).
If you can take a few moments each day to organise the things in your life that involve money, you’ll soon start to reap the benefits by cutting your costs and saving money.
What organisation tips do you have for saving money?
Links for Living To Budget - 8th February 2009
Each week I pass on a number of links to useful posts on other personal finance blogs that you may not have seen. This weeks picks for managing your money and person finances are:
- A guest post at My Two Dollars say that When it Comes to an Emergency Fund, Cash is King. Many credit card companies are slashing people’s credit as they run around in a mad panic, so if you’re relying on keeping unused credit cards as your emergency fund you may get an unexpected surprise!
- Frugal Dad asks Is Frugality The Anti-Stimulus Plan? Elements of the media are claiming that because more people are starting to save money instead of spending it (what a horrifying though), it’s causing more problems for the economy. Frugal Dad points out what’s really to blame.
- Kelly at Almost Frugal decides to put a positive spin on a bad situation, and highlights Six Advantages to Not Having Any Money. It’s perhaps a little tongue-in-cheek, but sometimes a situation is so bad all you can do is laugh.
- Finally, JD at Get Rich Slowly talks about an important topic - “What Next?” The Third Stage of Personal Finance. Once you’ve cleared your debt and you’re putting aside money for the future, what do you do next with the money that’s left?
That’s all for this week!
Think Long Term When Comparing Costs
One key to getting value for money with everything you buy is to consider the long term cost of the different options. It can be a huge mistake to automatically choose the cheapest item when you’re looking at several options. Sometimes the cheapest option on offer isn’t actually the best value for money over the long term.
Sometimes, cheaper items aren’t as well made as their more expensive counterparts, or they are made using cheaper components. Both of these factors can mean that the item is going to break earlier (requiring expensive repair or replacement). You may find that the slightly more expensive item is made of better materials, and will last much much longer.
Kitchen appliances are a good example. The cheapest items usually have much of their internal workings made out of plastic. If you use the appliance a lot, it’s a good bet that the cheapest item will break after only a year or so. On the other hand, the more expensive brands use metal inside. With proper care, these appliances can last a lifetime (how many people have memories of their mother or grandmother using the same electric mixer in the kitchen for decades? Heck, I’m pretty sure the one my own mother owns -and still uses - is older than me!)
Another way the cheaper item may not be the best value for money is if they have consumables you have to buy. Printers are a great example here. The company may sell their printer very cheaply, but make their money from the cost of the replacement ink or toner cartridge (which are much more expensive compared to other brands, or print much fewer pages per cartridge). The low up-front cost makes the printer seem like it’s a good buy, but over time you’ll end up paying much more.
(One brand here in Australia used to be especially bad - their replacement ink cartridges were almost the same price as the printer itself!)
Make sure you consider the long-term costs for whatever you are buying, don’t automatically buy the cheapest item, and if possible take some time out to research the options available online. You may pay a little bit more to buy the item, but the cost savings in the end will more than make up for it.
Do you have any stories of paying more to save more in the long run?
Friday Recipe: Rolled Oats & Brown Sugar Bread (Bread Machine)
We bought a new bread machine last weekend, and as you’d expect we’ve been trying out several of the recipes from the book that comes with it. While it makes fantastic regular bread (that have the two advantages of being much cheaper than buying it, and I know what’s in it), this sweet bread recipe has quickly become one of our favourites.
While it doesn’t have any in it, after cooling the bread develops a wonderful honey flavour to it. This recipe is for a 1kg loaf.
Rolled Oats & Brown Sugar Bread
375ml water
2 tbsp oil
1 1/2 tsp salt
2 tbsp brown sugar
600g bread flour
1 tsp mixed spice
1/2 tsp bread improver*
1/2 cup rolled oats
2 tbsp milk powder
1 1/2 tsp yeast
- Put the ingredients in your bread machine in the order recommended (usually it’s wet to dry, so use the order listed, but some machines recommend the reverse order).
- Bake on the “sweet” cycle (final baking time in our machine is 65min at 115C)
Notes
- The mixed spice is our addition - leave it out if you don’t like it.
- The bread improver is optional (and may be called something else outside of Australia).
- This makes a nice fruit bread as well - add 1/2 cup of sultana’s at the time your bread machine recommends you add extra ingredients.
- There’s no reason you couldn’t make this recipe by hand if you wanted (just refer to a normal bread recipe to work out kneading and rising times).
Where’s My Money Going!?! Month
I mentioned this in passing in Sunday’s “interesting links” post, but I felt this was so important that I wanted to make a specific post about it.
Mrs Micah is running what she has called “Where’s My Money Going? Month” (I’d personally add a few extra exclamation marks and question marks to the title myself, but I’m strange like that 
). The idea is really simple - for the month of February, keep a manual track (ie: on paper or in a spreadsheet) of every single cent you spend.
I’ve mentioned in the past the importantence of tracking what you spend. When you stare at the actual numbers on the page in front of you, it’s hard to ignore the fact that you’ve spent $30 this week on coffee, or $20 on “one-off” snacks because you were feeling peckish.
By writing down what you spend (and that’s everything that you spend), you can begin to not only get a grip on where all your money goes, but also start to make changes. An obvious change is to cut down on the number of extras you buy, but sometimes you may not realise just how much of a particular item you’re buying - you may be able to save money by purchasing that item in bulk.
Mrs Micah is also making a few helpful posts over the period of the challenge, to offer support and guidance if you’re struggling to make it a habit (or just not sure the best way to go about it - I’m just using a simple spreadsheet). So be sure to visit her blog regularly.
Now obviously we’re already a few days into February… that doesn’t matter! Make a start on the challenge today, and find out exactly where all your dollars are going.
You may end up rather surprised
How closely do you track your spending now? Are you going to take part?
Looking For An Easy Solution
Adam over at Your Money Relationship wrote about an ad that he spotted on the train over the weekend. To save you clicking over, I’ll copy the text of the ad that Adam transcribed to here:
DebtStoppers - Because I Deserve Financial Freedom!
DebtStoppers eliminates: Foreclosure, IRS Debt, Credit Cards, Parking Tickets, Garnishment, PayDay Loans
Then in VERY tiny writing it said this: The offices of Robert Semrad and Associates. A debt relief agency helping people find financial freedom through bankruptcy.
This ad really annoys me!
Why? Because it’s appealing to people who are in a desperate situation, and offering them what seems like their salvation (”financial freedom”). However look at the very last word of the ad.
Bankruptcy.
Don’t get me wrong. Sometimes there really is no way out, and bankruptcy is the only way you can manage to survive. I don’t think there should be any horrible stigma associated with someone who has been bankrupt - heck, most very successful business people have all been bankrupt at least once.
But bankruptcy should be a last resort, and only used if all other avenues have failed. It shouldn’t be seen as a “way out” of being responsible for your debts, and it most certainly shouldn’t be pushed as a simple and easy solution by companies looking to make a quick buck for themselves.
Before considering bankruptcy, make sure you’ve at least done the following:
- Made a budget that you can stick to.
- Removed most luxuries from your life (sure, keep one or two cheap ones - but remember, you’re in a desperate situation).
- Looked again to make sure you’ve actually removed most of your luxuries, and you aren’t falsely classifying “wants” as “needs” (you don’t “need” satellite TV, unless you use it for work you don’t “need” a mobile phone, etc).
- Sold off every item that you possibly can, via a yard sale, ebay, classifieds, etc.
- Taken a second, harder look to make sure you’ve really sold everything.
- Tried to find additional income somewhere (rather difficult in these times, but even a few dollars an hour delivering pizza could turn things around for you).
- Implemented every money saving tip you can find, either on sites like this or places like Simple Savings (their free newsletter publishes a handy tip each week).
- Negotiated with your creditors to see if any of them are willing to give you a grace period, or reduce your interest fees.
If none of that is helping, then sure - consider bankruptcy seriously. But don’t look for an “easy” way out of your financial problems - as the old saying goes, there’s no such thing as a free lunch.
What are your thoughts on the ad and bankruptcy?
Saving Money On Your Water Bill
We’re lucky where we live - currently we aren’t charged for water based on our usage, but instead just pay a flat fee per year. However that’s sure to change in the future, and when it does I’d rather not get caught out with a massive bill
So here are a compilation of various tips I’ve found while looking around for ideas on reducing my water usage inside the home (I have many more tips for outside the home in the garden - I’ll put them up later). As an added bonus, a few of these tips will also help reduce your electricity bill.
- Check for leaks or drips in your taps, pipes and any hoses that run to your dishwasher or washing machine. A simple dripping tap can waste more than 2,000 litres a month. (An easy way to test for leaks is to turn everything off before going to bed, take a reading of your water meter, and then check it again the next morning. If the meter has moved, you have a leak somewhere).
- Take care of the washers in your taps by only turning the taps off lightly (enough to stop any dripping) instead of turning them off hard - the washers will last longer.
- Install a water saving head in the shower (this will reduce your hot water bill too), and water efficient taps in the rest of the house.
- Don’t take long showers (if you want to spend a long time under hot water, take a bath instead).
- When you’re washing your hands, put the plug in the sink instead of just using running water.
- If you have to replace your washing machine or dishwasher, look for water usage information on the labels and pick one that uses less water (and less electricity)
- Wait until you have a full dishwasher load before running it - you use less water and electricity by using it less often. And make sure you use whatever economy or low-water setting the dishwasher has.
- In the same vein, only do full loads of washing in the washing machine - there’s no point doing a load of washing every day if you could actually do just 3 loads a week to wash the same amount of clothes.
- Wash fruit and vegetables in a sink with the plug in instead of running them under water.
- If you shave with a razor, put a plug and a little water in the wash basin to rinse the razor instead of using a constantly running tap.
- When brushing your teeth, don’t leave the tap running. Wet your brush when you start, then use a glass to rinse your mouth when you have finished.
- Insulate your hot water pipes - this means you don’t have to run the hot water tap for a long time as you wait for hot water to come out of the tap.
- In the same way, if you like a drink of cool water keep water in the fridge instead of running the tap for a few seconds while you wait for it to cool.
- Don’t have your hot water temperature on the tank set too high - if you have to add lots of cold water to reduce the hot water to a usable temperature you’re just wasting extra water.
I hope these few tips will help you reduce your next water bill.
Do you have any other tips on reducing your water bill inside your home?
Links for Living To Budget - 1st February 2009
Each week I pass on a number of links to useful posts on other personal finance blogs that you may not have seen. This weeks picks for managing your money and person finances are:
- NCN has been thinking about buying a new car in Getting Real With Myself About My Car. His reasons why he was thinking about buying one are the same trap we all fall into (thankfully he realised this in time and decided not to make the purchase )
- Kelly at Almost Frugal talked about Concepts in Frugality: Rethink Your Thinking, pointing out that a lot of the reasons we give why we “have to do” something, or “we can’t do” something are more based on habit than a solid reason.
- Mrs Micah is having a Where’s My Money Going? Month - a fantastic idea that I’ll be keeping a close eye on!
- David at My Two Dollars points out that I Am Not A Consumer; I Am A Person. He is fed up with getting the label of consumer in the media - and rightly so I say!
- A useful post over at The Digerati Life talks about How Much Debt Do You Have? Calculate Your Debt To Income Ratio. Financial institutions use it as a factor when you apply for a loan, but you can use it for your own information to work out if your debt level is in the “danger” zone.
- Finally, Frugal Dad warns us about Vampire Power Sucking Money From Your Wallet. No, he hasn’t been watching too many horror movies - the vampires he’s talking about are in every home, and cost us a huge amount in money every years.
That’s all for this week!
