Welcome to the second edition of the Mr Home Budget newsletter titled “Additional saving secrets revealed... how to keep even more money in your pocket”.
Wow! What a month, things just keep getting busier and busier. The book over the last few months has had some really good media attention. We were in several newspapers and even had a radio interview. I would like to take this opportunity to thank all the media people for including my story. However, I would like to particularly thank “Lainie Anderson” who not only gave me an interview on her Adelaide radio show on 5AA, but also did an article on the book in Adelaide’s Sunday Mail. Thank you very much.
If you would like to see the media the links are below.
Also, I would like to thank everyone who has purchased a copy of the book. You really have given me hope that there are people out there wanting to change their financial life. You have taken your first step. I really hope that you are all enjoying the book.
Remember you can email me at anytime about the newsletter or the book at mrhomebudget@gmail.com.
And as always my twitter page is @mrhomebudget.
This issue we have some exciting reading for you. So sit back and relax.
You know as I get older, time seems to go by quicker and quicker. Years in my opinion, seem to be getting faster! Now this surely must be in my head, but it does feel like it. Each year Christmas just seems to sneak up on me and Renee. But over the last few years we have been ready for it!
We start getting ready for Christmas in August. Yes, right now we start planning. However, we have been doing this with the best financial defence possible.
We start off by writing down a list of everybody we intend to get presents for. Next to each name we write what present we intend to get them. Then we include the price at current retail levels.Plus we write down the present Renee and I intend to get for each other.
At the end of this list we add up the cost of the total spend at retail prices. Let’s pretend the total cost of the list is $1285 retail price. Now we know to the dollar what our Christmas presents will cost us. However, we don’t wait until Dec to start buying these gifts and run around like mad people. We start shopping now!
The fun part is trying to get the gifts people want for under the retail cost. The bigger the discount we get, the higher the overall Christmas savings for us.
Let’s face it, if you leave all your shopping until Dec you will be less price sensitive. As you have less time until the 25th, you may buy things that you have not shopped for on price. But if you start in August you can pick things up each month, as you can afford them, while still shopping for the best price you can get. It becomes fun to cross another present off the list as you buy it. However, it is even more fun when you cross it off at a cheaper price.
Let’s look at a real life example of this. My brother really wants an IPod Mini Blue 2 Gigabyte. Calling Apple’s own store, the price was $199
Now doing some shopping around I found that I could find the same product at these prices:
Harvey Norman $187. A saving of $12 or 6.03%
JB Hi-Fi $176. A saving of $23 off the original price or 11.55%
eBay (New not 2nd hand from a reputable seller) $168 A saving of $31 off the original price or 15.57%
As you can see, there is a 15.57% saving from the original price that I was first quoted. Now as we found the best price on eBay I’m glad we knew about it in Aug.
Let’s pretend we started shopping in Dec. We found the best price on eBay... this brings up a question’ Can we get it delivered in time for Christmas? As you know Christmas is the biggest month for mail. Would we be getting a great price if we have it delivered after the 25th?
Let’s pretend we started phoning around dept. stores in Dec. There are two problems that you might face here. First, due to the Christmas rush, your product might be well and truly sold out in Dec.
Apple may have worldwide shortages so you may not be able to get the product (Just look at the Nintendo Wii).
Second, what is it going to be like shopping in Dec when the mad rush is on?
As our total orginal pretend list at retail was $1265. Let’s pretend we could get this 15.57% saving that we got on my brother’s IPod right across every present. That means we would have saved $197 this Christmas. Not too shabby.
Think of all the things we could do with this extra money. Just looking at my expenses from 2008; that saving could have paid for 29% of my total gas bill last year. Or it could have paid for 3.18% of my total supermarket bill. Or even 4.21% of my total petrol bill. These amounts do add up. Imagine when you pay for your fuel for a whole year the staff member takes off 4.21% of the total price. This is effectively what you are doing by planning Christmas early.
With Christmas being your biggest month for presents/spending why not plan it and save as much as possible?
Now I am going to do something a little unusual, I’m going to show you exactly what I’m going to get each one of our friends and family. This list is going to be 100% real. Each month I will update you with what I have purchased at what saving. This way you can follow with Renee and me as we “save our way to a happy Christmas”. Also, I will include what Renee and I want from each other for Christmas.
OK, here is the list. For fun I have included photos of everything we are purchasing. Over the next 5 months you will see us make savings on the following products.
Me and Renee
My Present From Renee
Grand Slam Tennis for the Nintendo Wii $99.95
From K Mart
My Present To Renee
Samsung C5220 Pre Paid Mobile Phone
My local phone dealer does this phone for $239.00
Renee’s and my present to each other
Canon FS21 Digital Camcorder ($637.00)
Harvey Norman
Adam’s Family
To both of my parents
A Nintendo Wii (with Wii Sports free) from JB Hi-Fi $379
My Brother Jarrad:
Apple Store iPod Nano 8GB $199.00
Renee’s Family
Mum Batrachenko
Friends Box Set Ezy DVD $299.97 plus an additional $30.00 for delivery
Total price of $329.97
Dad Batrachenko
Sony Blu-ray player BDP-S350
Harvey Norman total price $449
As you can see, our total preliminary Christmas list this year will cost us $2374.92 According to the orginal prices that we have been given. Now comes the fun part of trying to lower these prices by finding them cheaper elsewhere.
Each month I will give you an update on my progress. However, try and get some ideas for yourself.
Additional Savings Tips
Big families sometimes do a secret santa rather than buying everybody a gift. This is great because it can really cut back on your costs over Christmas. If your family does not do this, you need to start suggesting it now. There’s no use waiting until Dec when there is a greater chance that people have already bought you presents.
Jump on the phone or start emailing and test the interest in your family. Be upfront and honest with your family. Tell them that you want to try and save some money. Honesty is usually the best policy in these situations.
All of a sudden a $500 plus bill could come down to under $100.
Inspirational Story
Inspirational Stories
Just after we sent out the first newsletter I received an email from Jenelle. She explained her story and her saving habits.
In all honesty, Jenelle probably didn’t need to purchase my book. She seems to already have her budget in really good shape. However, even the best budgeters need some inspiration and focus sometimes, to keep them on course.I know that I still read budgeting books to pick up ideas that I might have missed or to give me focus. This is the email, as she sent it to me.
Dear Adam,
I have just received my first newsletter, and loved it..
I received your book about a week ago, after having read the review in the Sunday Mail.
I have been a single parent for about 3 years now. Things have been tough and it took a while to get back on my feet, divorce and associated costs, selling the family home etc, all took their toll. I have recently been diagnosed with Rheumatoid Arthritis, triggered by the stress of the divorce, and although it is not yet under control, we are trying new medications, hoping that this new one will work, but I have already spent over $600 on medications, and well over $1800 in medical specialists and tests, X-rays, etc. All adds to costs that I can’t predict.
I have bought my own house and have had it now for about 12 months. I thought I was doing reasonably well financially, I kept majority of my receipts for things already.
Reading the 2nd chapter (I think it was), with the questions and answers about what you do in different situations, I scored 113, which showed I was in the top category. I was surprised, but pleased. I am currently on the 4th chapter now, and I can see improvements that I can make already. I keep receipts for purchases of goods etc, but hadn’t thought about things like the odd coffee or such, where you don’t get a receipt. I have already started writing them down on paper to put in my box.
You are very right Adam, there is always money missing at the end of the month that is hard to account for. I have been noticing that in the last few months I have been borrowing money from my emergency fund to pay for other things, I do replace it when I get paid, but the point is that I shouldn’t have to borrow it in the first place. The book has made me think more realistically about where my money is going. So I am very excited to be able to change some habits, and improve others to get back on track...and beyond.
I am grateful I only have one credit card, with a small limit, plus a few thousand in my account, as an emergency ‘buffer’ (thankfully, suggested by my mortgage broker in setting up my home loan, and being in an offset account it is working for me at the same time). I treat this balance as my new ZERO level. I try at all costs not to go below that, as you never know when you might need it. It did go below by a couple of hundred dollars 2 months ago due to unexpected car repairs, but last month I crawled back to my threshold. I was so pleased, and determined not to let it happen again.
Once again, I can’t thank you enough for your brilliant book, and I hope to report more success in the coming months.
Thanks Jenelle
I sent some questions to Jenelle and she was happy to answer for you the readers.
Jenelle, in the email you talked about having some health problems. How have you been handling these problems moneywise?
That has probably been part of the reason for “borrowing money from Peter to pay Paul” so to speak.
Do you think had you not been such a good saver these health problems would be worse with the extra pressure to come up with the cash?
Absolutely. Stress can make the condition much worse, so anything I can do to alleviate stress is in my favour, and everyone needs extra cash flow.
You’re a good saver already? Tell me why you purchased the book and have you changed anything since starting to read it?
I love reading as much as I can about saving money, as being a single parent, I only have my income to rely on, so I am doing everything I can to boost it. I have already begun to keep track of incidental spending where you don’t always get a receipt, like a coffee, cake, or small things like that. It is so easy to forget about the odd few dollars here and there, until you start adding them up. I was very surprised, and have started cutting back already.
Tell me a saving tip that might not be in the book? How much do you think you save a year by doing this?
One thing I have found, is that shampoo and conditioner can be relatively expensive grocery items. To make them go further, I wait till the bottle is ¾ full, then top them back up with water and mix. They are quite often very thick anyway, so they still work just as well, and last longer. I also bought a dispenser for them in the shower, it dispenses smaller amounts, and you don’t pour it from the bottle into your wet hand, and drop it on the floor and it goes straight down the drain. I have done the same thing with body wash too. If you buy them in bulk to start with, then it is also cheaper. A saving estimate would be $40-60.
Tell me something that you do to increase you offence or attack?
I collect empty cans and bottles and recycle them, currently have several hundred dollars planning towards a holiday in the future. I also try to make muffins or healthy slices for our morning tea or the kid’s recess during the week, as a batch of homemade goods is so much cheaper than buying them.
If you could give advice to people who haven’t read the book what would you say?
Read it definitely, there is always something more you can learn about saving.
What’s your opinion on the world financial crisis? Has it affected you personally or your work?
Things have been worse overseas, for sure. It hasn’t affected me too much personally, as I started to cut back on luxuries early on, and I think everyone’s workplace has suffered to a degree, but at my work we still have our jobs so we have been lucky.
Is there any story you can tell us of people not appreciating your saving ways?
A few people I know buy morning tea and lunch every day, so there goes around $15 per day. Add that up and they are probably spending around $3500 per year, wasted, all for not being bothered to spend a few minutes extra in the mornings to make their lunch etc.
What did you like most about the book?
The ease of reading. Very simple to understand, and it was very hard to put down, I wanted to get started with its suggestions straight away.
What did you like least about the book?
The worksheets were a little small.
Any plans to get rid of your credit card in the future?
No, as sometimes I need that backup, I don’t know how much medical bills will be from time to time, and don’t like to carry excess cash with me just for that, it is too easy to spend. Easier to use the card, and then pay it off. I always pay the entire amount each month, and don’t use it if I don’t have the means to pay it off. I have refused to get a second one, too tempting to use it, and I get worried when I read about people that use one to pay off another, no one wins in that situation.
Do you think that more people in the future will start saving and stop using credit cards?
I would like to think so, or at least use them wisely.
Do you know anybody who has done this?
Yes, someone I worked with years ago, would not buy anything if he didn’t have the cash to pay for it. Would never consider interest free terms or anything like that, cash or nothing.
Thanks Jenelle. We wish you luck in the future and hope your health problems are soon under control..
Funny Moments with Money
This is a very American You Tube video. However this is very good. A funeral for a credit card...
I love the people lining up to cut their cards up to throw in. This is such a good idea, maybe we should do this in Australia.
