Are you looking too far into the future?

Posted On October 14, 2014| 3 Replies

pic14.10Money, money, where art thou money?

I’ve just figured out my biggest money mistake. I’ve been making it for years. Now I sit here dumbfounded and kind of silly admitting publicly.

I’ve been living in the future instead of focusing on today.

What does that mean exactly?
Well let me tell you, I love spreadsheets. I love putting in figures of how much my net worth will be if I do (a), (b) or (c ). I love looking through realestate.com.au and daydream about owning dozens of investment properties. I love thinking now in ten years time I’m going to have x amount of dollars in the bank.

Now there’s nothing wrong with that per se, day dreaming is perfectly normal and evening encouraged. But it also has to be followed by action that is relevant to today.

Do you know what my biggest fear is in regards to money? I have a couple.

1 – Having to work hard in a job I don’t particularly love until I’m 65 just to make ends meet.
2 – Not being financially prepared for a disastrous emergency.

Thinking back to how much money I have wasted over the past 20 years makes me want to cry. Had I used my grandparents as a positive example and the theory of investing I’ve had since I was about 18 and put everything in practice, well, I’d be well into enjoying the fruits of my labour and being financially free.

There’s been plenty of opportunity but instead of grasping it and holding on, I’ve wasted too many to mention. And yes, I want to cry. But I won’t because well that just won’t be cool and it won’t help me in the slightest, ok maybe it might like for just a second.

It’s time to stop just day dreaming and looking towards the future. It’s time to act with what I can now.

Being still on maternity leave has it’s pluses and minuses. The downside is that I’m not earning money and my paid parental leave ends tomorrow which means there’s three months of no guaranteed income. Nada. Zilch. Didly-squat. None. Zero.

Am I screwed?

 Not really. If we stick to our budget we’ll be fine and won’t have to dip into our savings. Yay, clap clap for at least being a little bit prepared.

And did I mention it’s ‘no guaranteed income’? That’s the good part because it also means that I have the ability to get off the couch, stop wasting time and create some income because I have the time. Twenty-four beautiful hours in the day, 16 after accounting for sleep, ok so let’s be fair about 5 hours a day after considering parental duties and every other responsibility that befalls me.

Five hours is huge. That’s like a full days work if you don’t include lunch, morning tea, and the half dozen tea and coffee breaks you have throughout the day or catch up on office gossip at the photocopier.

So it’s no more looking into the future. It’s time to start acting now. With J being at home at a reasonable hour I can leave our precious with him for a couple of hours and get to work. Plus my mum needs nanny practice too as she’ll be taking care of baby J two days per week once I return to work. Huh, easy peasy, that’s plenty of time for me to get my shit together.

What can I do today to ensure my financial future?

1 – Reassess the budget
2 – Limit my coffee dates to 2 per week (that’s my $9 sanity allowance)
3 – No more magazines, go to the library instead it’s cheaper and so relaxing
4 – Finish editing the novel (I’m 55% through – yes I have a spreadsheet that’s counting!)
5 – Source an extra income stream (already being done and will bring me anywhere from $0-500 per month but I’d like another one)
6 – Submit articles and queries to blogs, print magazines, e-zines
7 – Limit surfing the net…i.e. limit reading personal finance blogs to under 1 hour per day (they’re addictive, you know)
8 – Post regularly on MMGR (mymoneygoround)
9 – Approach other personal finance posts with guests posts
10 – Get some feedback on what’s working and what isn’t on my blog
11 – Get social media savvy (or hire someone to do it for me, I hear social media’s the current rage)
12 – Clean house (an organised house equals an organised mind…at least it will be for me)

I’ll try to remember update next month and let you know of the progress and what’s been effective and what hasn’t.

Do you ever look too far into the future instead of focusing on what’s doable right now? What are you doing today that will make a difference for tomorrow? 

  • Do you need a writer for your site? Regular or one off? Interested in writing a guest post on MMGR? Send me an email and let’s see if we can help each other out. 

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What does poverty mean to you?

Posted On October 12, 2014| 2 Replies

 

Pic for blogWARNING: I’m having a rant.

 

2.5 million living in poverty in Australia. Is increasing welfare the best option?

I don’t think so.

Low income is one of the factors of poverty but it’s not the only one. Financial illiteracy and poor choices are two others.

Apparently, living in poverty for a couple with two children is $841 per week or $400 for singles.

If you have a mortgage or rent a house living on that sort of income is very difficult if not impossible without getting into further debt and losing all your hair. Surprisingly some people manage by living off two minute noodles.

J and I will be living off $750 a week over the next three months unless I manage to make some income on the side. That’s covering rent, car repayments, food, phone, internet, bills, etc. This is due to me extending my maternity leave. Is this below the poverty line? Because I definitely don’t feel poor.

Having lived overseas for a few years I’ve seen what poverty can look like. It’s not pretty. And it has nothing to do with not being able to afford $20 for a kids birthday present or to send them to school camp or trying to live off $841 per week. No, it’s begging for a few dollars on the street in the middle of a snowy winter. It’s making do with a loaf of bread, kilo of potatoes and some milk over the course of a week, or trying to make $841 last all month.

Poverty is subjective and it’s difficult for me to believe that as much as 30% of Australians are living in true poverty. Just by taking a look at the Centrelink line up it’s evident that a significant number of people choose to be poor.

Welfare is touchy subject. Those on it want more of it, those paying for it want to cut it off. Finding a happy medium becomes tough.

The hardest hit are people with disabilities. I think that the welfare system should concentrate more on helping these people and providing them with higher payments as they truly have a more difficult time finding adequate full time employment and making ends meet due to often higher regular outgoings. Please, Abbott and Hockey, allocate more of the budget to people with disabilities, they need it most.

Then there are the dole bludgers. It’s sad when you see young fully abled people lining up to take payments from the government because they are too lazy to push trolleys or stand at the checkout or wait tables or even get an education. It’s unfortunate but these are probably the ones that also increase our crime rates. Less money from the dole means a higher need to steal so they can sustain their smoking, drinking and drug habits.

Finally, our poor pensioners. Yes they have it tough. Working on their lives to survive on a pittance when they should be enjoying themselves. Superannuation is making a slight difference but I don’t think it’s enough to make an enormous difference in retirement, maybe for those who are still young and only entering the workforce now. Living on $300 per week when you have to pay rent or a mortgage is not doable. Ladies and gents, if you have parents who are pensioners and on a low income you should help them. It’s not your obligation but it’s the nice thing to do if they wiped your butt for the first few years of your life, fed you, clothed you and loved you. If they were neglectful well then what you do is your prerogative, it’s your prerogative either way.

Financial literacy. That’s what we need more off. I don’t remember one lesson in primary or high school that dealt with money management. One term in economics we learnt about investing in the share market. It’s unfortunate that first they didn’t discuss with us savings and the dangers of credit card debt, or that small savings each week could make a significant difference over the years. That while HECS was great as it meant no need to pay for our studies now would mean a greater debt later on. It’s a shame because not all parents teach their kids these valuable skills either and hence the poverty issue.

If we all made smarter money choices from the beginning of our working lives poverty might not be such an issue. In a country like Australia, it shouldn’t be an issue. Parents, teach your kids to save from their first job. Make it mandatory. Set an example by not buying things on credit and succumbing to the ‘I have to have it now mentality,’, remember 50 months interest free doesn’t mean it’s free, you still have to pay for it down the track and if you don’t the interest will hurt you.

Ok, thanks for reading. I’ve had my spiel. Do I feel better? No different. I just wish that the people who are fully capable of working and educating themselves would get off their asses and do something instead of wasting away watching Days of our Lives or spending Friday nights at the pub. Yes I’m being judgemental, yes I’m stereotyping, and yes I know that this doesn’t apply to everyone but it applies to far too many.

How do you think poverty could be reduced in the developed world? What’s welfare like where you live? Have you ever had to live below the poverty line?

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4 Ways Debt is Costing You Emotionally

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Debt in Crosshairs by familytreasures, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Debt in Crosshairs by familytreasures, on Flickr. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

I want it, and I want it right now!

That mentality is the one getting people into debt. Whether you’ve just turned 18 and got your first credit card, have spent the last ten years working your butt after taking out loans for your degrees, or are nearing retirement. Consumerism has reached far and wide and given us the illusion that debt is your friend and to keep up you have to buy it right now.

Debt isn’t just a financial burden. It’s an emotional one too. Having your finances locked up to repay outstanding and overdue bills is frustrating. It’s doing damage to both your bank account and your emotional health.

DENIAL

Are you in denial. that credit card debt is rising but you still can’t say no to dinner with friends? You’ll pay for it out of next months pay cheque. And that Diesel shirt, go on you’ve been so good this week you deserve a treat. Problem, what problem, your bills are paid, so what if two days before pay day you’re digging into your daughters money box to pay for parking.

STOP. You are in denial. You do not have your spending in control, your spending is controlling you and it’s ruining your life.

ACT NOW. You owe to yourself and your family. Admit you have a problem. Cut up the credit cards. Take inventory of your earning and spending. Figure out what you owe. Create a payment plan. Ask for help. Give yourself a small sanity allowance and use the rest to pay down your debts by either using the snowball method or from high interest to low interest.

ANGER

Who are you angry at? The boss for not paying you enough. The wife who’s wardrobe resembles a fashion editors. The kids who need a new boots for soccer practice. The bank for charging exorbitant interest on your overdrawn credit card. Or maybe you’re angry at yourself for living beyond your means and forgetting to put aside for a rainy day.

Anger is normal. It’s a natural emotion to have from time to time. However, it’s not healthy when that anger becomes a constant in your life. Anger can lead to irrational behaviour and violence and can have graver effects on your life than the debt that’s causing it. You don’t want to be in the position where you accidentally tell your boss what you really think of him and lose your job or you fill up the car with fuel and drive off without paying.

STOP. You’re angry about your money problems and your relationships are the ones suffering. The only person you have a right to be angry at is yourself because you are the one who got yourself into this mess.

ACT NOW. Speak up. Talk and ask for help. See a counsellor. Sit down and figure out a solution as a family. The problem didn’t happen overnight you can’t expect it to get fixed overnight either. You need a long term solution.

STRESS

Are you losing sleep? Not eating properly? Losing your hair? Getting a rash that can’t be explained? Your debt is sky rocketing while your health is spiralling downwards.

A little bit of stress is healthy. It keeps us on our toes and keeps us moving forward. Stress caused by money woes is not. Unfortunately debt is one of the leading causes of stress in the developed world and it can lead to heart attacks and depression.

If you’re constantly thinking about how to cover the day to day bills, put food on the table, make the minimum repayments on your loans and figure out how to afford Christmas presents for the kids this year, you have a problem and until you sit down and take stock your stress levels will only escalate. Living beyond your means may have initially given you a boost in confidence and feeling rich but over the long term it’s become a burden.

STOP. Stressing out isn’t going to help you, neither is losing sleep or drowning your sorrows in a good bottle of Cabernet Sauvignon.

ACT NOW. A solution isn’t always as simple as cutting out cable, eating in more, and quitting smoking. Your money woes could be much bigger than that. Look into debt consolidation, selling things you don’t need on Craiglist or hosting a garage sale, downsizing your car and your house, bankruptcy. Research your options and get advice on what the best course of action will be for you and your family.

FEAR

Are you avoiding answering the phone in fear that it’s a creditor chasing their money? Maybe you’re letting the letters pile up scared that it’s another overdue bill that you can’t afford to pay this month?

Fear is a powerful emotion and while it’s often used as an acronym for ‘false expectations appearing real’, in the case of debt problems it’s much much more serious. The fear you’re feeling is paralysing you and creating further arrears. Not answering the phone or opening the mail is not going to make the bills and debts disappear.

STOP. It’s understandable that you’re afraid. You’ve got yourself in a bender. So have a few million other people. It’s time to grow up and take action.


ACT NOW. Open your main and answer your phone. Explain your situation and see if you can arrange a more suitable payment plan with your creditors. Creditors want their money back so whether it’s an outstanding tax bill, phone bill or credit card payment, you can negotiate a payment plan if you’re upfront with them about your inability to pay.

Debt can stop you from doing what you love whether that’d be spending more time with your family, traveling around the world, volunteering in your local community, or taking a year out to finish a degree or learn a foreign language. If you’re stuck in a job just because you need the money to survive and make your debt repayments, you are slowly but steadily hurting yourself emotionally in the short to long term depending on your predicament.

Moving backwards is a common problem when you’re in debt. You think you’re making money but instead all your hard earned cash is being used up to pay off your existing loans. It feels like you’re working your butt off to pay someone other than you. Denial, anger, stress and fear are some a few of the emotions you might experience in any order. The sooner you do something about the the debt, the sooner you can regain control of your life and your emotions.

 

* The information on this site is for informational and entertainment purposes only and does not constitute as financial advice. If you have money issues seek professional help to get advice that meets your needs and turns your frown into a smile.

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How to entertain on a budget

Posted On October 11, 2014| Leave a reply

Housewife material. Me? Not even slightly. The cleaning gets done but I long for a cleaning lady. I keep telling hubby once we buy house we’re getting one. I think of it as giving back to society by providing someone with a job. Win win I say. Unfortunately, he’s not buying it. It’s a good thing we split the house chores.

The cooking I enjoy as long as I don’t have to do it everyday. Hubby is used to leftovers and eating the same meal two or even three days in a row. Gotta love cooking in bulk. Fortunately, he sees it as a form of saving. Another win win. The thought of creating a menu for a larger number of guests gets me excited though. What can I say, I like to entertain.

BIRTHDAYS
Birthdays at our house are big. Our immediate family is small but our ‘extended family’ which includes friends who are like family, means that when there’s a celebration there are between 20-25 people. This also means that there are about 20-25 birthdays throughout the year, or about 2 per month which can also get expensive if we’re not careful but that’s another story.

Trying to feed over 20 people isn’t difficult especially if you’re willing to go buffet style. Cook a batch of your favourite meals – spaghetti, stir fry, stroganoff, a couple of salads, some bread and butter, and a cake or two – leave it all on the kitchen bench along with some paper plates and cutlery and you’re good to go. This works every time and has been perfected to an art. Everyone goes home feeling full and satisfied.

DINNER PARTIES
Dinner parties are generally more intimate but they don’t need to be extravagant to be delicious, memorable and above all fun. With a little preparation and thought you can host a dinner party without breaking the bank.

Firstly, choose a theme. Italian, Greek, Turkish, Japanese, Australian. Or whatever you wish. I find Italian is generally the easiest and cheapest choice.

Secondly, do some research and formulate your menu. Use cookbooks, magazines, websites, or your own personal experience. Seek out recipes with few ingredients and lots of flavour. Decide on an entree, a main and a dessert. Three course dinners are yummy and you’ll impress the socks off your guests and yourself.

Thirdly, take stock of what’s in your pantry and fridge that you can use. Whatever else you need add it to a shopping list. Stick to non brand items, they’re cheaper and usually just as good.

Finally, get cooking, have fun and enjoy every mouthful. Here’s an example of an Italian Dinner Party menu that is making me hungry just thinking about it.

Entree:
Bruschetta drizzled with olive oil OR a Salad Caprese
Main:
Spaghetti & Meatballs in Rich Tomato Sauce OR Spinach & Ricotta Cannelloni
Dessert:
Tiramisu OR Strawberry Semifreddo

OUTDOOR DINING
You can swap your dinner party for a barbecue lunch or dinner. In Australia BBQs are popular and people find any old excuse to have them. Every park you go to has an accessible BBQ for the public to use too free of charge, all you have to do is clean up after yourself which most people do, so it’s clean for the next person to use.

No BBQ, not problem. Get your guests to all bring a plate instead…not a bare plate, a plate of food that is. Say you’ll make the main meal but get one of the guests to bring the dessert and another to organise the entree. This saves you time and money and is growing more popular. We’re having a BBQ tomorrow and one friend offered to bring the dessert and a salad, another will bring the drinks, while we will organise the meat and a couple of side dishes. Easy and much cheaper and less stressful than if we had to do the entire menu.

DRINKS
On a hot day no need to buy expensive soft drinks. Fill a jug of cold water, add a sliced lemon and some mint leaves. If you want to sweeten it, add a tablespoon of honey. Serve chilled, a perfect refreshing summer drink at a fraction of the cost.

Alcohol is expensive. It’s not too good for you either. But a dinner party without wine or beer or a whisky might not be everyone’s cup of tea. You can get good wine for under $10 a bottle. If you have a large number of guests shop around at the big stores to see if you can get the bottles cheaper. Dan Murphy’s can be $3-5 cheaper per bottle than other alcohol stores. When you’re buying three or four bottles the extra couple dollars can make a huge difference.

Don’t want to encourage your family and friends drinking habits? Tell everyone to BYO (bring your own). That way they’ll drink what they like and you don’t have to worry about overspending.

Food is an important part of our culture. It brings family and friends together, satisfies our tummies and puts smiles on our faces. Entertaining family and friends is an enjoyable way to spend time together and take pleasure in the food you eat. Enjoy it, because life is too short to be on a constant diet.

Do you enjoy entertaining and cooking for others? Have any times for entertaining on a budget?

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How do you feeling about lending money?

Posted On October 9, 2014| Leave a reply
@istockphoto.com/sebastian-julian

@istockphoto.com/sebastian-julian

Money, money, money, where art thou money?

In my fantasy world, I have enough money to give away to whoever needs it. If someone has bills outstanding, I lend a helping hand; if they’ve stuck hard times, I offer a job; if they have an emergency, I can go to the teller and cover the cost. Unfortunately, the reality is much different.

A few days ago we got a call to help out a distant family member across the globe who just lost someone very close. We haven’t had much contact with them over the past decade or so but we did tell them that if they needed anything they should let us know. They didn’t have enough cash for all the costs involved – flights, funeral costs, miscellaneous expenses, etc. They asked us for help until the insurance money came through. The figure they asked for left me gobsmacked.

After discussing it with the family we decided that between us we could lend half of the amount they were asking for. That was all we could comfortably afford and were comfortable in lending. Now even though the person has said they will return the money as soon as they receive their insurance claim, it’s not guaranteed that we will ever see the money again.  In fact, given the family’s track record, I give it a 10% chance of seeing it again. But they’re family, and if I was in their situation I would hope that someone would be willing to lend a helping hand in any way possible.

I don’t like borrowing money from family or friends. Fortunately, we haven’t had a situation where this was required and I hope that we will never need to do this. The current situation is actually making me even more motivated to ensure that J and I have a comfortable bank balance to get us through and the right insurance to ensure we are adequately covered.

When it comes to lending money, I’m more than happy to help with as much as I can. However, not at the risk of hurting myself.

J, myself and our family have had an expensive year. We have spent a large sum of money having family travel to visit us twice this year. We had a baby, a baptism and a wedding. I’m still currently on maternity leave. Money is tight. We have enough but being flamboyant and overly generous is not an option even if half of me would love to be.

Money and family and friends don’t always mix well. It’s unfortunate that something so trivial as a few dollars or a few thousand can break relationships.

So, when someone asks to borrow money from you;

* Find out why they need the money in a kind and diplomatic way. Yes it is your business to know what you’re giving your money for.

* Ask yourself: are you likely to see the money again and can you afford to take that risk?

* Make sure you make it clear whether the money is a loan or a gift. Sometimes a person can misinterpret your intentions and assume that you are offering an overly generous gift.

* If you choose to lend the money, work out a repayment plan immediately. There’s nothing worse than asking to get your money back. Believe me, there are people out there who won’t pay it back and pretend they’ve forgotten about borrowing cash from you. If you agree on a repayment plan before you hand over your hard earned/saved cash.

* The money you lend should not cost you. Make sure that you aren’t leaving yourself in a vulnerable position or getting yourself into debt.

* Say no, if you don’t feel comfortable lending the money. You don’t want to be losing sleep over it and putting strain on your relationship.

Would you ever lend money to family or friends? Have you ever been in a situation where you had to borrow money from a family member or friend?

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