Jackie Gower, We Had No Idea How To Budget:
This week we are talking to Jackie Gower. She is involved with Fiona Lippey from http://www.simplesavings.com.au/. Together they have written a book called, The $21 Challenge.

This book does exactly what the title says it does. It shows you how to feed your family for a week with just $21.

As everybody reading this newsletter knows, the key to getting out of debt is to save money. One of the biggest expenses is our shopping bill. Let's learn about Jackie and her past plus some tips and hints for you to save money.

Jackie, you admit to having an uncontrollable spending addiction until 2004. Can you tell us about your home budget and debt until this time?
There was no such thing as a budget in our household! For years we were lucky to be in a position through our work that we didn't have to pay for rent, petrol or even for meat. Almost our entire income was disposable and we disposed of it! Whatever we wanted, we bought. We earned a lot of money but had absolutely no savings and no money management skills. In fact, we were thousands of dollars in debt.


So what happened in 2004? And how did you change?
Our circumstances came to an abrupt end. We were both fortunate to find new jobs but we were earning less than half as much as we had been before. On top of that, we had become homeowners and now had a mortgage. The problem was, as I mentioned before we had no money management skills. We had no idea how to budget and spent the first 12 months saying 'we have to tighten our belts' but didn't know how and still spent money left, right and centre.

By the end of our first year as homeowners I was literally lying awake at night, worrying whether I had left enough in the bank account to pay the mortgage. I knew I needed help and had bought all sorts of finance books, as well as joining financial websites but all the jargon was overwhelming, and it just went over my head.

I just happened to be reading a magazine one day when I read an article about Fiona Lippey; a young mum who had started a money saving website called Simple Savings. Her tips were simple - they made sense even to someone as useless with money as me! I joined up, started saving straight away and never looked back.

How is your mental state of mind different now to pre-2004?
So different! Like many people I gave little or no thought to spending $2 here and $5 there on things like takeaway coffees and fast food, thinking 'it's just a few dollars'. I never thought about how those few dollars add up and stop us from being able to enjoy the bigger things in life, such as family holidays or being mortgage free.

I never knew how much money could be saved from shopping around either. Such a simple skill, but so valuable! I always used to pay the first price I saw. It never occurred to me there was a cheaper way of buying anything, or that you could ask for discounts. The first time I asked for a discount was nerve-wracking but now I pride myself on making a saving and think 'I'm not going to be a mug!' Even my husband was amazed the first time he saw me ask for a discount and I saved us $600!

Most of all though, the way we live now has had such a positive effect on my two sons. Pre-2004 they really were a couple of spoilt brats who were given so much they didn't appreciate anything that they had. Of course it wasn't their fault - it was mine! These days I'm proud to say that at 12 and 14 they are two smart kids who are entirely responsible for buying all their own things, earn their own money and appreciate that the best things in life are often free.

If you could go back in time to your 21st birthday what would you tell yourself about money?
If you don't waste all your money now and save every spare cent you can, you can retire earlier! It's true though, isn't it! The more you save and the less you spend, the less you have to work. If Simple Savings had been around when my kids were babies, I wouldn't have had to pay to put them in childcare while I went out to work. I would have known how to live within our means and would have been able to stay at home with them. One of the most rewarding things about doing what we do is receiving letters from mums who have been able to afford to give up work and stay home and look after the kids instead.

What is the most stupid purchase you ever made with money? What do you regret most?
When my spending was at its worst I would go shopping almost every day. I worked from home in a job I hated and shopping was my way of relieving the boredom. While not the most expensive, probably the most stupid purchase was when I paid $20 for a seashell. It sits on a shelf doing nothing and I feel stupid every time I see it! As for what I regret most, I really regret all the times I bought food and drink out instead of bringing it from home. Over the years it probably would have added up to a holiday of a lifetime or a new car!

What is the best purchase you ever made? And how has it benefitted you?
No question, the best purchase we ever made was the large chest freezer we bought for $20 from my husband's grandmother. If there's one thing I recommend everyone should invest in, it's a big freezer. If you don't have room for one, get rid of something else and make room! Our freezer saves us so much money. We can freeze food in bulk, meaning when we see great specials on meat, bread, milk or vegetables, we can buy them in large quantities and store them in the freezer. We grow a lot of our own food and much of this can also be frozen. And there's even plenty of room for my husband to store all the fishing bait he catches, saving a fortune on buying it!

In your opinion since the Global Financial Crisis started in 2008 have you noticed any changes in your friends and family? Have people taken their home budgets more strictly?
Definitely. Before, many people were totally unwilling to try 'budget' brands, believing if they were cheaper they had to be inferior compared to the more expensive brands. These days however, you see many more people putting them in their trolleys. A lot of my friends now bake, whereas before they would spend a fortune on muesli bars and other pre-made snacks. They used to tell me that they 'didn't have time to bake' but they have since changed their minds. Another chap I know has no less than six vegetable gardens! Of course you don't have to have that many! The important thing is that people are saving money by getting back to basics. It's the best way to get through these tough times.

Can you tell us any interesting stories of people you have personally helped get out of debt? How did you help them achieve this and what changes did you see in them?
The two stories which really stick in my mind were of a young girl of 18. She was living with her mother but there was no food in the house. She was receiving a benefit and every night she went to whichever fast food restaurant she felt like for dinner. She was spending over $100 a week on her evening meal alone! Not only that, she was understandably overweight. It was so sad. I took her to the supermarket and showed her how much real food she could buy for $100 a week. She was absolutely flabbergasted! I gave her some recipe books and we worked out a menu plan of what she was going to cook for the week. Then she took all the food home to her mum and told her from now on they were both going to eat a home cooked dinner every night. It was brilliant to see the change in her. It wasn't her fault, she simply didn't know any other way.

The other one which was really rewarding was with a young couple with two children. They earned good money but loved the finer things in life and were never able to save. I challenged them to a 'No Spend Month', where for a month they were not allowed to spend a cent on ANYTHING unnecessary. All they were allowed to spend money on was basic food, existing bills and essential transport. The whole family really threw themselves into the challenge and it was wonderful to see them getting so creative. Instead of driving to and from work, the husband caught the bus outside his house every day and took a packed lunch and a Thermos instead of ducking down to the local cafe. They even managed to throw a birthday party for their son and celebrate Valentine's Day without spending a cent! At the end of the month, the bank statement showed that instead of 66 EFTPOS transactions the previous month, they had used their cards just 11 times. Best of all, they had saved over $1000!

If someone came to you drowning in debt, they felt all alone and didn't know where to turn what would be your advice?
The old saying 'look after the pennies and the pounds will look after themselves' really is true. Start with baby steps, one saving at a time. The problem I found when I read financial books or visited most of the financial websites was that they made saving money sound hard. They wanted me to draw up complicated spreadsheets, sift through mountains of paperwork and other things I just didn't have the brain for. When you're under financial pressure, you really don't need the extra stress of doing that sort of thing. What I loved about Simple Savings was that it gave me tips to help me save money on every single thing I bought. I didn't have to do anything other than pick a tip I liked the sound of and go and try it out. I think the first one I tried was keeping my husband's razor in a small dish of olive oil. A small triumph maybe, but at least I was saving and I didn't have to replace the blade for four months! Look at the big picture. If you can reduce your food bill by $20 a week, don't think of it as just $20 a week. Think of it as $1040 per year. Before long, you'll feel as though you're really getting somewhere.

Could you give our readers three money saving tips around the house that you really believe save big dollars?
1. Cleaning products. I haven't bought any cleaning products for over five years, I make my own. As well as being much cheaper they are also a lot more environmentally friendly and safer for the family too. You can't go past good old baking soda or vinegar! There are heaps of all-purpose cleaning recipes available on the Internet if you do a Google search, otherwise you can download a fantastic booklet from Simple Savings.

2. Laundry savings. Just this week I heard of a family who saved $600 in six months just by changing the way they did their laundry! Instead of using the default washing machine cycle, as many people do, they changed the settings to a more economical cycle, cutting the washing time in half and reducing the wash temperature from 60 degrees to cold water. Like many other households, they also never hung their washing out, drying over 10 loads of washing a week in their dryer! Instead they bought a timer and set the washing machine to start at night, so the washing is ready to hang out before going to work in the morning and dry when they return. They have reduced their dryer use by 100%. Such an easy way to save big dollars!

3. Secondhand goods. Many couples get themselves into serious financial strife by buying big ticket items brand new. Fortunately, thanks to sites such as eBay, secondhand goods have become trendy! They are usually high quality and good value. What I love about secondhand items is that they have stood the test of time. If it has been used for ten years and is still working, then it stands a chance in your home.

Now without giving the secrets away in the book, could you give us an easy to follow recipe to save money; maybe a dinner meal for four people?
Sure! This one is super easy and is a $21 Challenge classic. It's a brilliant way to use up spare crackers in your pantry and enables you to turn one small can of tuna into a whole meal. This recipe makes a great dinner dish or can be enjoyed cold for lunch the next day. So quick to make too!

Naomi's Tuna Pie

2 largish handfuls of cracker biscuits
1 cup milk
1 onion, diced
3 eggs
2 sprigs fresh parsley
1 cup grated cheese
1 large tin tuna (or you can use a small tin if that's all you have)

Break your crackers up into a blender and pour the milk over them. Add your onion, eggs, parsley and grated cheese. Drain the tuna well and add to the other ingredients. Blitz everything together until well combined. If you don't have a blender you can put all the ingredients in a large bowl and use a potato masher to break up the lumps and bind the ingredients together. Cook in a greased pie or baking dish at 180C for 30-40 minutes. This tastes lovely with just about any salad or vegetable dish!

Finally, tell us how the book is going. Have you had a good response and where can people buy it?
The response to the $21 Challenge book has been fantastic! We have received the most wonderful letters from people who have slashed their weekly food bill to lower than they ever thought possible. What we love most is the number people we hear of who buy a copy for themselves, then find it so helpful they end up giving it to their daughters, neighbours or friends and have had to go and get themselves another one!