The A to Z of household budgeting

Making your money stretch further seems to be essential these days with the cost of living increasing all the time. Through a mix of planning, budgeting and sometimes just good luck, my husband and I own our own home,  are debt free and have both retired on comfortable superannuation pensions, as of last year. Through my husbands last employer we have access to free lifetime financial planning. This financial planning has been invaluable.   At 56 years of age I now have the freedom to pursue hobbies and other interests. It does mean we need to watch our expenditure and keep within a budget though. I have always been good at managing the household finances and the tips below are some of the ways I have found to make savings. I hope you find something useful that you can adapt to suit your circumstances.

budget

A

Always shop around for bargains. Buy ,Swap, Sell  sites on Facebook, garage sales and thrift shops can be a great source of bargain items for a fraction of the new price. Remember though, it’s only a bargain if you need it.
B Be wary of “special offers” i.e. discounts for multiple purchases. It is only a bargain if you need the product and can use it before the use by date.
C Cappuccinos, lattes and cold drinks purchased on a regular basis can eat a large hole in the budget. Having your own coffee machine at home can be a budget friendly investment. Using a reusable takeaway coffee mug and drink bottle to make your own hot or cold drinks saves you time and money. A large takeaway coffee each day could be costing you over $1,000 a year!  Taking your lunch to work will also save you a lot of money. Even if you start with a couple of days a week you will notice the savings.
D Discounts are out there if you ask for them. Many stores will give you a discount on large purchases, it’s worth asking. Check through catalogues for supermarket specials each week.
E Enjoy the best things in life that are often free or low cost. A drive into the country, a picnic in the park, a long walk, watching the sunset, catching up with family or friends are all good for the soul.
F Freeze leftovers. If you have cooked too much and the food is suitable, freeze it. It will save you time and money in the near future. Just remember to clearly label it, including the date frozen. Keep a supply of takeaway containers on hand for this purpose.
G Go green with your cleaning products and make your own. Vinegar and bi-carbonate soda are your best friends in the cleaning stakes. Most products are very easy to make and store and you save so much compared to store bought products. There are plenty of home made cleaning recipes on the Internet. Start googling!
H Home brand labels at the supermarket can be your friend when you are watching your budget. Be careful though, as regular brands can sometimes be cheaper when they are on special. Only buy one of any home brand item the first time you try it. No real saving if you don’t like the product.
I Insurance is an important way to protect your assets. Accidental damage policies for contents do cost more but give you a much wider coverage.  Make sure you have adequate coverage.  Under insuring the value of rebuilding your home in the case of a catastrophe can lead to a situation called co-insurance, where you are only paid a percentage of the rebuild cost.  Shop around for the best deal as premiums and terms and conditions can vary greatly.  Pay premiums monthly if this option is available, to smooth your finances. If you have a large mortgage do consider personal income protection insurance. It may be a tax deduction as well.
J Justify expenditure on large or luxury items to yourself. Can you afford it? Do you need it? Will it hold its value, and can you find a better price or option? ….  Don’t buy these sort of items on a whim. Take some time to think it through. If it still seems like a good deal and you can justify it’s purchase.. go ahead.
K Know your budget. Create a spreadsheet to track your expenditure. It is interesting to see where your income “leaks” away. Take steps to tighten up your discretionary spending e.g. entertainment, takeaway meals.
L Libraries are a great source of books, CDs, DVDs, magazines and audio-books available for loan. You can save considerably by not purchasing these items and borrowing them instead.
M Meatless meals help stretch the food budget and can be delicious. Pasta, noodles, stir fries, risottos, etc.
N Never make a big investment such as a new car or a home without doing your research. There is plenty of information readily available these days to assist in your decision making. When you are buying a home don’t skimp on paying for pest and building inspections etc.  It can be money well spent. Do try to get your foot on the home ownership ladder. You can start with a modest home and work your way up the real estate ladder.
O Organise your finances. Set up a budget and track your expenses. Review your budget each month. Have your affairs in order including the making of a will. Keep important documents in a safe place where you can locate them easily. It gives you peace of mind knowing you have organised this part of your life.
P Pay off your mortgage as quickly as possible. If you have a little windfall, inheritance or a bonus, pay it directly off your mortgage. Consider an offset account so any interest you earn on savings goes directly off your mortgage. This is a help at tax time as well. Always try to pay more than the minimum payment and align your payments to your pay cycle i.e. make fortnightly/weekly payments.
Q Quality of life is really important. It is no use scrimping and saving for the future if it makes your life miserable now. Try and find a balance that allows you to live a fulfilling life while also thinking towards the future.
R Regular payments really help you manage your budget. Set up payments for power, water, phone, Internet, rates, credit card, etc. aligned to your pay day. Looking at old bills will help you work out how much you need to set for the payment amount. Pay insurance bills monthly to even the cost out over the year. Set up another account that you make a pay-day payment into to cover yearly or irregular costs such as holidays and car registrations and maintenance. You shouldn’t get any financial bill shock this way.
S Superannuation is an investment in your future. Consider salary sacrificing into a superannuation fund if this option is available to you, or make additional payments into your superannuation account. Consider using a reputable financial planner to help you plan your longer term financial future.
T Turn off light switches when you leave a room.  Consider turning off heating and cooling when you leave the house, depending on your energy source and circumstances. Turn off appliances at the switch when you are not using them. Consider installing solar panels. Just remember it is a medium term green investment that will pay itself off over time.
U Undertake regular maintenance on your home. It is the biggest investment you are likely to make in your lifetime. Don’t let it become run down. Cleaning gutters, fixing fly screens, and leaking taps etc. protects your investment.
V Vices are costly. Cigarettes, gambling and alcohol put a big strain on the budget. Moderation is the key, or consider giving up one or more of these habits to save large amounts. Work out what your habit is costing you and then make a conscious decision on whether to stop, slow down or give up completely.
W Water your garden late at night or early in the morning to lessen evaporation. Consider tap timers and an irrigation system for the garden to save time and water. Fix dripping taps and leaking toilets. It is amazing how much water they use. Water saving shower heads and dual flush toilets are also great water savers.
X Xmas can be a stressful time on the money front.  Keep a list of people you need to buy gifts for and buy items during the year when you see them on special. Store them and you will be well on the way to a more budget friendly holiday season. Talk to your family and discuss setting limits on expenditure at Xmas time.
Y You can start on your savings journey today. Small steps if necessary. It’s surprising how small changes can make a difference.
Z Zero interest is possible with some credit cards if you can pay the whole balance by the due date. Do shop around for the best credit card deal.  Terms and conditions and interest rates vary so much.

The information in this article is general information only and has been prepared without taking into account your personal objectives, financial situation or needs. You should consider any advice in this article in light of your personal objectives, financial situation or needs before acting on it. You may wish to consult a licensed financial planner to do this.