I hate numbers. I especially hate the word ‘budget’. I have never been good when it comes to budgeting but I have learnt through trial and error ways to get the balance we need financially to save, invest and also indulge.
We are DINKS and having two incomes and no kids mean we can spend our money however WE want. We are not dictated to by little humans who are damn expensive, as we know. I’d much rather spend $1,000 on Jimmy Choo’s rather than shoes for little Jimmy.
I had a good foundation when it comes to money that I learnt from my Dad, so I have always tried to have some savings. And I have found that building wealth is not limited by your income but how you use what you have.
I have also learnt some very valuable lessons over the last few years which changed the way I looked at our finances.
The first one was to not rely on my partner to take care of the finances. In our house, I have typically been responsible for the mortgages and he has paid the bills and credit cards.
I didn’t really take much of an interest in it. As long as my credit card went through when I used it, I was happy. (there is nothing more embarassing than your credit card being declined when you are out shopping)
Then one day I opened up the statement to see that the main credit card was 21% interest. Ouch!! After I let loose on hubby, I decided I was taking over the main finances as I had relied far too long on him doing the wrong thing (which was a big mistake).
Looking back, I can see how much money we wasted. When I was working in the corporate world, I earned more so it was easy to justify spending it. Justify being the keyword there.
It was time to make changes. Here’s what I did:
1. I found low-interest credit cards and got rid of the old ones
2. I called our phone and internet company and got better deals
3. I called our electricity company, pay TV provider & insurance companies and did the same
4. I looked at what we had subscribed too and cancelled the ones we didn’t use
5. I took control
It was amazing how much this saved us. Thousands of dollars a year saved but a few simple calls.
A few years later I read Canna Campbells “The $1000 Project” and one of her philosophy was called the Rule of 10 (which I have since altered to suit my needs). I learnt to pay myself first and break my money into different accounts.
So, my rule of 10 looks like this:
When I get income from my main business (which BTW is not this website or related products), I pay 10% into my tax account, 10% off my credit card, 10% into an investment fund and 10% into my holiday account (the most important one for me).
It allows me to invest, save and pay bills without feeling like I am missing out. Plus our Investment income goes into savings as well as any extra that we have. To save event more I have set up hubby to put $100 from each weekly pay cheque into savings. I like having little pots of money in various accounts and seeing them all grow.
I also have an online investment account that has $10 a week going into it as well as round-ups on bills. Sounds like such a small amount but it has grown quickly.
To minimise those big bills we also pay them in advance. Each month, automatic payments come out for electricity, water and land rates. That means instead of a big bill each quarter we will a small big or sometimes even a credit.
This strategy might sound simple yet these ‘simple’ things have changed our finances considerably. I am earning less money compared to 10 years ago, but my savings are the highest they have been in years.
I still buy clothes & shoes, drink nice wine, and do lunches out with my girlfriends. And I do a lot of travel. The great thing is there is always money in my holiday account so it makes it easy to book and plan so I can indulge in my passion for travel.
It is amazing how much savings add up when you aren’t watching them. I get a thrill when I look at the bank balances now. I am not wealthy but each week I feel a little bit more secure about my future.
One thing is certain, you need to empower yourself to take control of your personal finances, stop making excuses and work out a plan that works for you and your partner. We aren’t experts my any means but we’ve found what works for it so it is up to you to do the same.
NB: I am not a financial adviser and I am not qualified to give you financial advice. Speak to your own qualified adviser to do this.