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Mr and Mrs Smith - 2009 Budget Renovation
Follow the Smith family as they undergo a Cheapskates Club style Budget Renovation on their way to living life debt free, cashed up and laughing.
Mr and Mrs Smith - Part 1
A couple of months ago, during an interview, I was asked if I ever helped anyone on a one on one basis. The answer is yes, I have in the past sat down with Cheapskaters who have asked for help and hopefully helped them get their finances in order (none of them have said I haven't so I suspect that's a good sign), but it's not something I do on a regular basis. It's not because I don’t want to help, but one on one takes a lot of time and time is not something I have an excess of. I think that concentrating on the Cheapskates Club, the newsletters and the Journal are a much more efficient way to spread the message that you can be debt free, cashed up and laughing without feeling or being deprived.
The question did get me thinking though and during one of our morning chat sessions Julie and I threw a few ideas around and came up with the 2009 Budget Renovation. The successful applicant would have one year of one on one time with me to work on debt reduction and building savings and their progress would be tracked in the Journal each month.
Mrs Smith's application tore at my heart because I have been where she is now.
"First of all, thanks for the newsletter, it really is great. I'm hoping you can help us. I've had it! We spent the weekend doing the final touches on the new sandpit in the back yard, and you know what? We don't have enough money left this month for a trailer load of sand. Yep, how's that for all dressed up and no where to go? We only managed to get this far because we bought the materials bit by bit, and luckily came across exactly the amount of pavers we needed to line the bottom!
In a nutshell, we've not been financially irresponsible , but just 8 weeks before I had Junior, Mr Smith was made redundant. It ate away the buffer we had, and because at the time we decided that I should try to stay home as long as I could with Junior, we started circling the drain. So we started using the demon credit card, and it went south from there.
These days I work from home, and our family is broke. Broke as broke. I often find that it is straining our relationship so much as we have nothing left over between my partners monthly pays, and the money I earn goes straight on the bills and food. I sometimes just want to pack up and leave so that we can get some assistance from the government!
Last week (before the sandpit incident) I spoke to Mr Smith about the Budget Renovation, and out of pride obviously, he has some concerns. He's mostly scared that he's going to look foolish because "isn't it a man's job to be providing for his family?" and all of that sort of malarky. Well, yes, it is a man's job (at least a family man's) to provide. But I'm thinking that the time has come for this woman to put her foot down and take the hand of help that's been offered to them. He's not against the idea, he thinks that an extra hand would be good. I can tell you this for sure: he's sick of financially looking like a goldfish gasping for their last mouthful of water on the wrong side of the tank.
With Christmas, we're looking at having no ability to save anything at all until at least February. And that's without looking at the calendar to see if we have any triple mortgage payments coming out.
We're in a horrible spot and to be honest I'm really hoping that you don't look at us a bit closer and decide that we're not exactly what you're looking for, because that is the story of our lives at the moment. We constantly earn just a little bit too much for any assistance (and that crushed me when I looked in to solar power rebates, let me tell you!), and it just breaks our hearts knowing that if it wasn't for us robbing Peter to pay Paul we'd never get anywhere.
The thought of continuing to do nothing through to this coming February is giving me major anxiety! Just let me know what I need to do, how we're going to do it and the like, and you'll see me doing as much work as you need!" Mrs Smith
And so I would like to introduce you to Mr and Mrs Smith, the 2009 Budget Renovation case study. I know that anxious, sinking feeling when the money runs out but the bills don't so I can't wait to show the Smiths how easy it is to turn anxiety into the feeling of contentment and pride when the last debt is paid off, the Peace of Mind account is fully funded and an emergency account set up.
Here's a quick snapshot of Mr and Mrs Smith's situation:
Mr and Mrs Smith both work full-time
They have one child
They have a mortgage
They have credit cards which they use and try to pay off each month
Sudden unemployment and a new baby started them on the CC Cycle
Firstly let me say how much I admire Mr and Mrs Smith's courage. It's not easy to ask for help, especially when you have to share so much personal information for all the world to see. They are about to embark on a journey that will take them on an emotional rollercoaster and at there will be times when they just want to give up. If they stay strong and see this through to the end, the result at the end of the year will be well worth the angst and effort they put in.
Each month Mr and Mrs Smith will have some work to do, and we will be reviewing it and tracking their progress right here, in the Cheapskates Journal.
January Tasks
I'm not sure exactly what room there is in the Smith family's budget, that is what we will be working on this month. Mr and Mrs Smith have three tasks to complete this month:
Task One - An Accurate Spending Record
As a first step Mr and Mrs Smith need to track their spending for at least a month. Without knowing exactly where their money is going, they will have no idea of where they can cut back. They need to take a small notebook each (or a bunch of re-cycled envelopes stapled together or whatever) and record every cent they spend.
I suggest they rule it up so each page has three columns: What, How Much, How. At the top of each page they will write the date and then all spending for that day will be recorded on that page. In the 'What' column they will record what they spend the money on - newspapers, groceries, petrol, phone bills, mortgage etc. In the 'How Much' column Mr and Mrs Smith will write down the amount of money they spend on this item and the 'How' column will record either cash, credit card, debit card, cheque, Bpay, direct debit.
Note: Mr and Mrs Smith will only make a record when they actually spend the money i.e. use cash, cheque, debit card etc. They won't be recording any ATM withdrawals in the spending record until the money is actually spent i.e a $50 ATM withdrawal isn't recorded as $50 spent, it would be recorded as $3.25 milk, $25 petrol etc as the money is used.
Task Two - No Spending Month
January will also see a moratorium on spending in the Smith household. February is our regular Essential Spending month, but for Mr and Mrs Smith it will come early. During this month Mr and Mrs Smith are not going to spend any money unless absolutely necessary. When shopping they will be buying only what they need.
These records will help determine the priorities for the Smith family, and bring focus to their budgeting. We will use the information to create a brand new, liveable and workable spending plan for this family.
Task Three - Setting Up a Spending Plan
Setting the groundwork for a good family budget requires just a little effort but it's not hard. Often the family budget is a source of conflict. Most of the time, the major earner makes the final financial decision, which isn’t always a welcome deal for the rest. Since money is such an intrinsic part of family life, families need to achieve accord in this aspect. There is a four-step cycle in creating a spending plan for the family money to maintain peace and harmony.
1. Set your priorities
Priorities are different from goals. They are aspects in your family’s life that you, as a family, want to set focus on, say health or children’s future, while goals are specific targets that support priorities. In setting priorities, do not set too many as it defeats the purpose.
Ideally, there should only be one, but because life is not ideal, 2 to 3 are reasonable. As the priorities are set and agreed upon, write them down. Post the paper where everybody can see them to remind them of what your family is focused on for the next few years.
2. List down your goals
Once the family has set and agreed on priorities, the next step is to set the goals. Goals are specific and measurable conditions that, when achieved, will support the priorities.
In setting goals, establish a target that is both challenging yet achievable. A 10-15% slice of the family’s income is a good savings target to build an emergency fund, stretching yet reachable. Try to limit your family into setting 1-2 goals per priority, to maintain focus.
3. Work towards your goals
After setting your priorities and goals, start living by them. All of the family’s activities will be geared towards working at your goals. Track progress, particularly on financial goals, by using an income and expense-tracking tool. The simplest way is to get a notebook and list down all expenses and incomes and set a budget for future spending. There are those that invest in computer software or a family accountant. Whatever it is, the important thing is to have a system of monitoring the family’s performance towards achieving their goals.
4. Evaluate your family life
At a certain point in time, when you feel like it’s time to evaluate your life, check how your family is doing against the goals. Goals that have been achieved can be checked off the list, and new ones can be formulated.
I can't wait to see how the Smith family budget reno turns out. It's January 1st, so lets get started!
The question did get me thinking though and during one of our morning chat sessions Julie and I threw a few ideas around and came up with the 2009 Budget Renovation. The successful applicant would have one year of one on one time with me to work on debt reduction and building savings and their progress would be tracked in the Journal each month.
Mrs Smith's application tore at my heart because I have been where she is now.
"First of all, thanks for the newsletter, it really is great. I'm hoping you can help us. I've had it! We spent the weekend doing the final touches on the new sandpit in the back yard, and you know what? We don't have enough money left this month for a trailer load of sand. Yep, how's that for all dressed up and no where to go? We only managed to get this far because we bought the materials bit by bit, and luckily came across exactly the amount of pavers we needed to line the bottom!
In a nutshell, we've not been financially irresponsible , but just 8 weeks before I had Junior, Mr Smith was made redundant. It ate away the buffer we had, and because at the time we decided that I should try to stay home as long as I could with Junior, we started circling the drain. So we started using the demon credit card, and it went south from there.
These days I work from home, and our family is broke. Broke as broke. I often find that it is straining our relationship so much as we have nothing left over between my partners monthly pays, and the money I earn goes straight on the bills and food. I sometimes just want to pack up and leave so that we can get some assistance from the government!
Last week (before the sandpit incident) I spoke to Mr Smith about the Budget Renovation, and out of pride obviously, he has some concerns. He's mostly scared that he's going to look foolish because "isn't it a man's job to be providing for his family?" and all of that sort of malarky. Well, yes, it is a man's job (at least a family man's) to provide. But I'm thinking that the time has come for this woman to put her foot down and take the hand of help that's been offered to them. He's not against the idea, he thinks that an extra hand would be good. I can tell you this for sure: he's sick of financially looking like a goldfish gasping for their last mouthful of water on the wrong side of the tank.
With Christmas, we're looking at having no ability to save anything at all until at least February. And that's without looking at the calendar to see if we have any triple mortgage payments coming out.
We're in a horrible spot and to be honest I'm really hoping that you don't look at us a bit closer and decide that we're not exactly what you're looking for, because that is the story of our lives at the moment. We constantly earn just a little bit too much for any assistance (and that crushed me when I looked in to solar power rebates, let me tell you!), and it just breaks our hearts knowing that if it wasn't for us robbing Peter to pay Paul we'd never get anywhere.
The thought of continuing to do nothing through to this coming February is giving me major anxiety! Just let me know what I need to do, how we're going to do it and the like, and you'll see me doing as much work as you need!" Mrs Smith
And so I would like to introduce you to Mr and Mrs Smith, the 2009 Budget Renovation case study. I know that anxious, sinking feeling when the money runs out but the bills don't so I can't wait to show the Smiths how easy it is to turn anxiety into the feeling of contentment and pride when the last debt is paid off, the Peace of Mind account is fully funded and an emergency account set up.
Here's a quick snapshot of Mr and Mrs Smith's situation:
Mr and Mrs Smith both work full-time
They have one child
They have a mortgage
They have credit cards which they use and try to pay off each month
Sudden unemployment and a new baby started them on the CC Cycle
Firstly let me say how much I admire Mr and Mrs Smith's courage. It's not easy to ask for help, especially when you have to share so much personal information for all the world to see. They are about to embark on a journey that will take them on an emotional rollercoaster and at there will be times when they just want to give up. If they stay strong and see this through to the end, the result at the end of the year will be well worth the angst and effort they put in.
Each month Mr and Mrs Smith will have some work to do, and we will be reviewing it and tracking their progress right here, in the Cheapskates Journal.
January Tasks
I'm not sure exactly what room there is in the Smith family's budget, that is what we will be working on this month. Mr and Mrs Smith have three tasks to complete this month:
Task One - An Accurate Spending Record
As a first step Mr and Mrs Smith need to track their spending for at least a month. Without knowing exactly where their money is going, they will have no idea of where they can cut back. They need to take a small notebook each (or a bunch of re-cycled envelopes stapled together or whatever) and record every cent they spend.
I suggest they rule it up so each page has three columns: What, How Much, How. At the top of each page they will write the date and then all spending for that day will be recorded on that page. In the 'What' column they will record what they spend the money on - newspapers, groceries, petrol, phone bills, mortgage etc. In the 'How Much' column Mr and Mrs Smith will write down the amount of money they spend on this item and the 'How' column will record either cash, credit card, debit card, cheque, Bpay, direct debit.
Note: Mr and Mrs Smith will only make a record when they actually spend the money i.e. use cash, cheque, debit card etc. They won't be recording any ATM withdrawals in the spending record until the money is actually spent i.e a $50 ATM withdrawal isn't recorded as $50 spent, it would be recorded as $3.25 milk, $25 petrol etc as the money is used.
Task Two - No Spending Month
January will also see a moratorium on spending in the Smith household. February is our regular Essential Spending month, but for Mr and Mrs Smith it will come early. During this month Mr and Mrs Smith are not going to spend any money unless absolutely necessary. When shopping they will be buying only what they need.
These records will help determine the priorities for the Smith family, and bring focus to their budgeting. We will use the information to create a brand new, liveable and workable spending plan for this family.
Task Three - Setting Up a Spending Plan
Setting the groundwork for a good family budget requires just a little effort but it's not hard. Often the family budget is a source of conflict. Most of the time, the major earner makes the final financial decision, which isn’t always a welcome deal for the rest. Since money is such an intrinsic part of family life, families need to achieve accord in this aspect. There is a four-step cycle in creating a spending plan for the family money to maintain peace and harmony.
1. Set your priorities
Priorities are different from goals. They are aspects in your family’s life that you, as a family, want to set focus on, say health or children’s future, while goals are specific targets that support priorities. In setting priorities, do not set too many as it defeats the purpose.
Ideally, there should only be one, but because life is not ideal, 2 to 3 are reasonable. As the priorities are set and agreed upon, write them down. Post the paper where everybody can see them to remind them of what your family is focused on for the next few years.
2. List down your goals
Once the family has set and agreed on priorities, the next step is to set the goals. Goals are specific and measurable conditions that, when achieved, will support the priorities.
In setting goals, establish a target that is both challenging yet achievable. A 10-15% slice of the family’s income is a good savings target to build an emergency fund, stretching yet reachable. Try to limit your family into setting 1-2 goals per priority, to maintain focus.
3. Work towards your goals
After setting your priorities and goals, start living by them. All of the family’s activities will be geared towards working at your goals. Track progress, particularly on financial goals, by using an income and expense-tracking tool. The simplest way is to get a notebook and list down all expenses and incomes and set a budget for future spending. There are those that invest in computer software or a family accountant. Whatever it is, the important thing is to have a system of monitoring the family’s performance towards achieving their goals.
4. Evaluate your family life
At a certain point in time, when you feel like it’s time to evaluate your life, check how your family is doing against the goals. Goals that have been achieved can be checked off the list, and new ones can be formulated.
I can't wait to see how the Smith family budget reno turns out. It's January 1st, so lets get started!
Mr & Mrs Smith Part 2
Last month I introduced you to Mr and Mrs Smith, proud parents of a bouncing baby boy and the case study for the 2009 Budget Renovation. I hesitated to start this project, the time and effort commitment required by both parties is huge. Mrs Smith assured me that they were both dedicated to completing the Budget Renovation and so they were set three tasks. 1. To track their spending for four weeks and create an accurate spending record.
2. To stop spending and incur no new debt.
3. To put in the groundwork to create a workable spending plan for their family.
January is a hard month to begin something as big as a budget renovation. Right after Christmas, with sales surrounding them and plenty of holiday time on their hands, the Smiths struggled a bit with the no spending rule. Mr Smith bought a new laptop computer for $1,849, using gift money he received for Christmas and some spare cash that was in their bank account. Mrs Smith used the rest of the money in the bank to buy herself and Junior new clothes. They were on sale, but they weren't needed and they weren't in the spending plan.
Both Mr and Mrs Smith faithfully recorded their spending each day, sending their lists through to me at the end of each week. They were both shocked and embarrassed at the amount of money they just frittered away.
"I had no idea I spent so much each time I go out. The cold drink, the odd sausage roll and the occasional magazine really add up quickly" said Mrs Smith. "Writing it all down makes it so much more real, now I know why I never have any cash on me. I fritter it all away on nothing."
During our weekly chats I was able to reassure the Smiths that they had nothing to be embarrassed about. Until they knew where their money was going they couldn't control it. Now that they know where the leaks in their spending plan are they can plug them and watch the bank balance go up instead of down.
"I was amazed at how much a bottle of Coke and a packet of cigarettes really costs" said Mr Smith. "I can cut out the Coke, or at least cut down and buy it at the supermarket instead of the milk bar. And I'll try to give up smoking but I'm not promising. I'd like to stop anyway so maybe this will motivate me."
By giving up a magazine a week, and a drink every time she goes out, Mrs Smith can put around $40 back into the family budget. The big shock is how much Mr Smith can put back in if he stops smoking and cuts down on the Coke habit - $131.60 a week. Between them they could add almost $200 to their budget - without earning an extra penny!
One thing they did manage to do was not add to their debt. They didn't put one single purchase on any of their credit cards, all the purchases they made were with cash. As the cash system worked so well for them, I am going to suggest that they stay on a cash budget for the time being. February Tasks
Task 1 - Keep tracking spending.
Four weeks gives a broad overview, now it's time to get down to the nitty gritty and see the patterns in the spending. By keeping a record of the when, what and how much a pattern will emerge. This pattern will help to refine their spending plan.
Task 2 - Work on a cash budget.
Each week Mrs Smith will withdraw in cash the money the family needs for the coming week. She will take grocery money, petrol money, any money for bills to be paid that week, for gifts etc to be bought. The credit cards are going to stay tucked away for a while longer.
Task 3 - Create a Payment Push.
This is the easiest and fasted way to get out of debt without having to find more money. Mr and Mrs Smith will list their debts, the minimum payments due this month and the balance of each debt. Then, starting with the smallest and working through to the biggest, they will list the debts. And this will be the order they are paid off, smallest balance to largest balance. I can't wait to see just how soon the Smiths will be debt free.
The Smiths' budget reno has well and truly started. The end result is only 10 months away!
2. To stop spending and incur no new debt.
3. To put in the groundwork to create a workable spending plan for their family.
January is a hard month to begin something as big as a budget renovation. Right after Christmas, with sales surrounding them and plenty of holiday time on their hands, the Smiths struggled a bit with the no spending rule. Mr Smith bought a new laptop computer for $1,849, using gift money he received for Christmas and some spare cash that was in their bank account. Mrs Smith used the rest of the money in the bank to buy herself and Junior new clothes. They were on sale, but they weren't needed and they weren't in the spending plan.
Both Mr and Mrs Smith faithfully recorded their spending each day, sending their lists through to me at the end of each week. They were both shocked and embarrassed at the amount of money they just frittered away.
"I had no idea I spent so much each time I go out. The cold drink, the odd sausage roll and the occasional magazine really add up quickly" said Mrs Smith. "Writing it all down makes it so much more real, now I know why I never have any cash on me. I fritter it all away on nothing."
During our weekly chats I was able to reassure the Smiths that they had nothing to be embarrassed about. Until they knew where their money was going they couldn't control it. Now that they know where the leaks in their spending plan are they can plug them and watch the bank balance go up instead of down.
"I was amazed at how much a bottle of Coke and a packet of cigarettes really costs" said Mr Smith. "I can cut out the Coke, or at least cut down and buy it at the supermarket instead of the milk bar. And I'll try to give up smoking but I'm not promising. I'd like to stop anyway so maybe this will motivate me."
By giving up a magazine a week, and a drink every time she goes out, Mrs Smith can put around $40 back into the family budget. The big shock is how much Mr Smith can put back in if he stops smoking and cuts down on the Coke habit - $131.60 a week. Between them they could add almost $200 to their budget - without earning an extra penny!
One thing they did manage to do was not add to their debt. They didn't put one single purchase on any of their credit cards, all the purchases they made were with cash. As the cash system worked so well for them, I am going to suggest that they stay on a cash budget for the time being. February Tasks
Task 1 - Keep tracking spending.
Four weeks gives a broad overview, now it's time to get down to the nitty gritty and see the patterns in the spending. By keeping a record of the when, what and how much a pattern will emerge. This pattern will help to refine their spending plan.
Task 2 - Work on a cash budget.
Each week Mrs Smith will withdraw in cash the money the family needs for the coming week. She will take grocery money, petrol money, any money for bills to be paid that week, for gifts etc to be bought. The credit cards are going to stay tucked away for a while longer.
Task 3 - Create a Payment Push.
This is the easiest and fasted way to get out of debt without having to find more money. Mr and Mrs Smith will list their debts, the minimum payments due this month and the balance of each debt. Then, starting with the smallest and working through to the biggest, they will list the debts. And this will be the order they are paid off, smallest balance to largest balance. I can't wait to see just how soon the Smiths will be debt free.
The Smiths' budget reno has well and truly started. The end result is only 10 months away!
Mr & Mrs Smith Part 3
Mr and Mrs Smith are two months into their budget renovation and I am proud to be able to say they are doing really, really well. They are still faithfully tracking their spending, although they have cut back a lot on their buying. Mrs Smith says seeing what she buys and how much it costs in black and white has really opened her eyes. And being on a cash only budget has made spending a challenge, once the money is gone she can't just go to the ATM and get some more.
Mr Smith is struggling with giving up smoking and while he hasn't stopped completely he has cut down and is only buying a packet every third day. He has also managed to cut down his Coke consumption and is also buying it from the supermarket rather than the corner shop or service station saving $57.84 a week. And the good news is he is paying $58 a week straight into a savings account they have opened to build an emergency fund. By the end of the year that emergency fund will have $2,726 in it plus interest! And Mr Smith will be feeling a whole lot healthier too.
The Smith's kept up the 'no spend' challenge for February so they could take part in Essential Spending month. They both tell me that is getting easier and easier to not make spontaneous purchases, especially as they now have a Payment Push worked out and they can see how much faster they will be debt free if they don't fritter their money away. If the Smiths stick to the Payment Push they will be completely debt free (apart from their mortgage) in 33 months. Then they are planning on clearing that mortgage as fast as they can.
During February the Smiths opened a Peace of Mind account as well as their emergency fund savings account. They have their spending and saving plan worked out. They have set up automatic transfers into each account so they don't have to worry about moving money (and it takes the temptation to "borrow" away too).
Mrs Smith is so excited that she has been able to pay the electricity bill on time and get caught up on the phone bill. Having two months of no spending gave the Smiths the cash they needed to do this. Mrs Smith told me that when she paid that phone bill and had the receipt in her hand she literally felt the weight lift off her shoulders - the worry of being behind was really taking it's toll.
In the next three months the Smiths have a couple of birthdays coming up as well as house insurance and car registration and insurance and their regular monthly bills. Their Peace of Mind account should have enough in it to cover these expenses so they won't have to worry about how they are going to pay the bills.
As a bonus Mr and Mrs Smith still haven't added to their debt. Any purchases have been made from their cash budget and with their payment push they are on their way to reducing their debt quickly.
Tasks for March:
Task 1: Keep tracking spending.
Knowing exactly where the money is going and when is essential to maintaining a workable spending and saving plan.
Task 2: Maintain a cash budget.
By only withdrawing housekeeping and spending money once a week and staying away from ATMs and banks the temptation to withdraw just a little extra in the feint hope of making it up next week is gone.
Task 3: Mad Money.
Now that the Smiths have put their spending and savings plans into place they can give themselves some mad money, to use for whatever they like. It might be coffee while shopping or a magazine. It could be to save up to buy bits and bobs for their hobbies. This money is for their own personal use and they are not to be accountable to each other for how it is spent.
Task 4:
This month the Smiths are going to do some research to see if they can find a better deal on their utilities: power, gas, phones, Internet and yes, insurances. If they can save even a few dollars on each of these things each month they can add half to their emergency fund and half to their payment push without having to cut anything else from their budget.
Task 5:
The grocery bill. Each week this month Mrs Smith is going to replace one item on her grocery list with a generic item. If there is no generic equivalent she is going to replace it with the cheapest brand name equivalent. The grocery budget is the easiest place to start saving money and replacing one item at a time is a painless way to start saving money. The money saved, even if it is only a few cents is to go into the emergency fund.
Mr Smith is struggling with giving up smoking and while he hasn't stopped completely he has cut down and is only buying a packet every third day. He has also managed to cut down his Coke consumption and is also buying it from the supermarket rather than the corner shop or service station saving $57.84 a week. And the good news is he is paying $58 a week straight into a savings account they have opened to build an emergency fund. By the end of the year that emergency fund will have $2,726 in it plus interest! And Mr Smith will be feeling a whole lot healthier too.
The Smith's kept up the 'no spend' challenge for February so they could take part in Essential Spending month. They both tell me that is getting easier and easier to not make spontaneous purchases, especially as they now have a Payment Push worked out and they can see how much faster they will be debt free if they don't fritter their money away. If the Smiths stick to the Payment Push they will be completely debt free (apart from their mortgage) in 33 months. Then they are planning on clearing that mortgage as fast as they can.
During February the Smiths opened a Peace of Mind account as well as their emergency fund savings account. They have their spending and saving plan worked out. They have set up automatic transfers into each account so they don't have to worry about moving money (and it takes the temptation to "borrow" away too).
Mrs Smith is so excited that she has been able to pay the electricity bill on time and get caught up on the phone bill. Having two months of no spending gave the Smiths the cash they needed to do this. Mrs Smith told me that when she paid that phone bill and had the receipt in her hand she literally felt the weight lift off her shoulders - the worry of being behind was really taking it's toll.
In the next three months the Smiths have a couple of birthdays coming up as well as house insurance and car registration and insurance and their regular monthly bills. Their Peace of Mind account should have enough in it to cover these expenses so they won't have to worry about how they are going to pay the bills.
As a bonus Mr and Mrs Smith still haven't added to their debt. Any purchases have been made from their cash budget and with their payment push they are on their way to reducing their debt quickly.
Tasks for March:
Task 1: Keep tracking spending.
Knowing exactly where the money is going and when is essential to maintaining a workable spending and saving plan.
Task 2: Maintain a cash budget.
By only withdrawing housekeeping and spending money once a week and staying away from ATMs and banks the temptation to withdraw just a little extra in the feint hope of making it up next week is gone.
Task 3: Mad Money.
Now that the Smiths have put their spending and savings plans into place they can give themselves some mad money, to use for whatever they like. It might be coffee while shopping or a magazine. It could be to save up to buy bits and bobs for their hobbies. This money is for their own personal use and they are not to be accountable to each other for how it is spent.
Task 4:
This month the Smiths are going to do some research to see if they can find a better deal on their utilities: power, gas, phones, Internet and yes, insurances. If they can save even a few dollars on each of these things each month they can add half to their emergency fund and half to their payment push without having to cut anything else from their budget.
Task 5:
The grocery bill. Each week this month Mrs Smith is going to replace one item on her grocery list with a generic item. If there is no generic equivalent she is going to replace it with the cheapest brand name equivalent. The grocery budget is the easiest place to start saving money and replacing one item at a time is a painless way to start saving money. The money saved, even if it is only a few cents is to go into the emergency fund.
Mr & Mrs Smith Part 4
March was a bumpy ride for the Smiths. After surviving Christmas and January they were hoping that February would see them back on track. It didn't quite work out the way they had planned and they began March still baby-stepping along on their way to financial freedom. Well, it didn't take a few weeks for them to get into financial difficulties, it took quite a few months and quite a few incidents of a monetary nature to get them to where they were at the beginning of the year. So it just goes that it won't take a few weeks to climb out of the hole and reach that glorious land of financial freedom.
Let's see how far they have come in 13 weeks:
1.Mr Smith has cut his smoking habit right back - to just one packet a week! This is so huge, from a money point of view and from a health position that this has to be the No. 1 good thing that has happened.
2.The grocery bill is going down, down, down. Mrs. Smith has been using the Grocery Tracking Spreadsheet to keep track of just where their grocery money is going and she reports back that seeing just how much money is actually going in the Treats and Laundry categories has strengthened her resolve to cook more and change her washing habits.
3.Generics have taken over the pantry - brand name items are few and far between, a huge change for the Smiths.
4.Mr. Smith took their Payment Push to the newsagent and had it enlarged and stuck it on the pantry door. Each time they make a payment on a debt they are blacking it out so they can see their progress every time they go into the kitchen. He also proudly rang to tell me that the newsagent didn't charge him for the photocopying either after he explained what he was trying to accomplish!
5.They have become used to using cash rather than their credit cards and while it took some getting used to, they both say they feel like they have control over their money and their spending. If there's no cash left then they can't spend until next 'pay day'.
6.The budget they drew up in February has been tweaked and adjusted to make it realistic and workable and this is exactly what should happen. Budgets are not set in cement - they need to be fluid because our needs are fluid. There will always be expenses that are more than budgeted for and bonuses that come in that haven't been allocated. Being able to tweak and adjust is a sign of a good budget.
7.They both have mad money - money to spend on whatever they like that they don't have to be accountable to anyone for. Mrs. Smith is saving hers, she's not sure what for yet, but she'll know she wants it when she sees it. Mr. Smith keeps his in his wallet so he doesn't feel poor.
They both spent some time online researching better phone and insurance plans and have decided to stick to the phone/internet/mobile plan that they have for the time being. Their current plan has them on free local calls, capped national calls, no line rental and free calls between their mobiles, with $150 a month free credit for calls to mobiles on other networks and a 40G Internet plan that they pay $130 a month for. As most of their calls are either national or to mobiles and they are heavy Internet users they are happy to keep this plan.
The utilities and insurances are another matter and they are still researching and asking lots of questions and promise to report back when they have some news.
During April Mr and Mrs Smith have a birthday present to give and Easter to celebrate. Mrs. Smith is making LCM Easter eggs rather than buying chocolates and she very proudly told me that she is even going to make the marshmallow for the LCMs rather than spend $4 buying them! For the birthday present she is going to make up a gift box (recycled from some flowers she received) of homemade truffles and chocolates instead of spending $30 on a knick knack.
This month could be a challenge for the Smiths. Mr. Smith's overtime could be cut back and they have budgeted for it. Mrs. Smith has been looking at some ways they can find some quick cash to make up the temporary (hopefully) shortfall and has planned a garage sale for the weekend after Easter and has gone through the cupboards and found some books and games that she will sell on eBay to bring in some extra cash.
Tasks for April
Task 1. Payment Push.
Keep on blacking out those payments and tracking your progress.
Task 2. Cash Budget
Stick to the once a week withdrawal and be proud of your progress.
Task 3. Take a look at the Spending Plan.
Make any adjustments needed and don't forget to follow them through to the Payment Push and Peace of Mind account. Move any excess money into Emergency Fund - this needs to be at least 6 months of total living expenses.
Task 4. Enjoy Easter with Junior.
Let's see how far they have come in 13 weeks:
1.Mr Smith has cut his smoking habit right back - to just one packet a week! This is so huge, from a money point of view and from a health position that this has to be the No. 1 good thing that has happened.
2.The grocery bill is going down, down, down. Mrs. Smith has been using the Grocery Tracking Spreadsheet to keep track of just where their grocery money is going and she reports back that seeing just how much money is actually going in the Treats and Laundry categories has strengthened her resolve to cook more and change her washing habits.
3.Generics have taken over the pantry - brand name items are few and far between, a huge change for the Smiths.
4.Mr. Smith took their Payment Push to the newsagent and had it enlarged and stuck it on the pantry door. Each time they make a payment on a debt they are blacking it out so they can see their progress every time they go into the kitchen. He also proudly rang to tell me that the newsagent didn't charge him for the photocopying either after he explained what he was trying to accomplish!
5.They have become used to using cash rather than their credit cards and while it took some getting used to, they both say they feel like they have control over their money and their spending. If there's no cash left then they can't spend until next 'pay day'.
6.The budget they drew up in February has been tweaked and adjusted to make it realistic and workable and this is exactly what should happen. Budgets are not set in cement - they need to be fluid because our needs are fluid. There will always be expenses that are more than budgeted for and bonuses that come in that haven't been allocated. Being able to tweak and adjust is a sign of a good budget.
7.They both have mad money - money to spend on whatever they like that they don't have to be accountable to anyone for. Mrs. Smith is saving hers, she's not sure what for yet, but she'll know she wants it when she sees it. Mr. Smith keeps his in his wallet so he doesn't feel poor.
They both spent some time online researching better phone and insurance plans and have decided to stick to the phone/internet/mobile plan that they have for the time being. Their current plan has them on free local calls, capped national calls, no line rental and free calls between their mobiles, with $150 a month free credit for calls to mobiles on other networks and a 40G Internet plan that they pay $130 a month for. As most of their calls are either national or to mobiles and they are heavy Internet users they are happy to keep this plan.
The utilities and insurances are another matter and they are still researching and asking lots of questions and promise to report back when they have some news.
During April Mr and Mrs Smith have a birthday present to give and Easter to celebrate. Mrs. Smith is making LCM Easter eggs rather than buying chocolates and she very proudly told me that she is even going to make the marshmallow for the LCMs rather than spend $4 buying them! For the birthday present she is going to make up a gift box (recycled from some flowers she received) of homemade truffles and chocolates instead of spending $30 on a knick knack.
This month could be a challenge for the Smiths. Mr. Smith's overtime could be cut back and they have budgeted for it. Mrs. Smith has been looking at some ways they can find some quick cash to make up the temporary (hopefully) shortfall and has planned a garage sale for the weekend after Easter and has gone through the cupboards and found some books and games that she will sell on eBay to bring in some extra cash.
Tasks for April
Task 1. Payment Push.
Keep on blacking out those payments and tracking your progress.
Task 2. Cash Budget
Stick to the once a week withdrawal and be proud of your progress.
Task 3. Take a look at the Spending Plan.
Make any adjustments needed and don't forget to follow them through to the Payment Push and Peace of Mind account. Move any excess money into Emergency Fund - this needs to be at least 6 months of total living expenses.
Task 4. Enjoy Easter with Junior.
Mr & Mrs Smith Part 5
Mr & Mrs Smith Part 6
June is going to be the most money challenging month yet in this year of budget renovating for Mr and Mrs Smith. They have some big bills that fall due this month: car insurance and registration and house and contents insurance. All together these four bills total almost $3,000 and because their Peace of Mind account isn't fully funded these categories are going to go into the red and Mrs Smith is worried.
Having a fully funded Peace of Mind account takes at least twelve months to achieve, unless you already have enough cash for twelve months of everyday expenses lying around (or you win lotto!) so occasionally for the first year some categories will go into the red. Just remember to note on your plan which categories need to be refunded and repay them as quickly as you can. Because the Smiths have been very conscious of their spending and saving they have the money in their PoM account to cover these expenses and won't have to resort to using their emergency fund or credit card. Woo Hoo!
With winter coming Mrs Smith tells me she has been sorting through Junior's clothes, and she has a list of things he needs and a few things she'd like him to have for the cold weather. Top of the list are a ski suit and a good, warm parka as they are spending more time outdoors playing and walking to the shops, playgroup etc rather than using the car. Even at op shops they are beyond her clothing budget so I sent her this month's Tip Sheet early and suggested she read Host a Recycle Party and How to Run a Clothing Swap and then get together with some friends and have some fun. She's going to report back and let us know how it goes.
Longer evenings and colder days mean that the heater and lights will be on longer, pushing up the gas and electricity bills. To help keep costs down, use draught stoppers against all outside doors, make sure windows seal tightly to keep the cold air out. Keep the doors to rooms not used regularly shut and only warm the part of the house you are living in. Add another layer to everyone and make sure everyone has slippers to wear indoors to keep their feet warm.
To help keep the electricity bill low, only turn on lights you are using, turn them off when you leave a room, even for just a few minutes. Get back onto the "it's not off if it's still on at the wall" habit and turn all appliances not being used off at the wall.
I understand from Mr Smith that he's feeling a little hard done by. He is concerned that they haven't paid off enough debt and that they are making sacrifices with nothing to show for them. Doing all these things can make you feel deprived and poor or they can make you feel good about yourself and in control of your life and your money. Living the Cheapskates way isn't about being deprived, it's about making decisions that will let you have the things you want and enjoy them without worrying about how you are going to pay for them.
To help lift Mr Smith's spirits here is a list of everything this family has accomplished in just five months:
1.for the first time ever they have a budget that they can stick to
2.for the first time ever this little family has money in the bank, enough to cover their everyday bills when they come in and a baby emergency fund that grows each week
3.shopping is no longer a hobby, these days the Smiths shop with a purpose (and a list)
4.Mr Smith is tobacco free!!!!!! This really should be No. 1, not only is he not burning thousands of dollars each year, he has taken a positive step to improve his long-term health.
5.mealtimes are something to be looked forward to. Mrs Smith is trying new recipes and Mr Smith isn't complaining one little bit about that.
6.family time really is family time. Picnics, feeding the ducks, playing in the backyard with Junior, reading, working on a jigsaw together of an evening are all things that have brought the family together and they haven't cost a cent
7.there haven't been any arguments, not even a heated discussion, over money since they embarked on this journey together.
8.they have researched and found the best phone/mobile/Internet plan for them
9. they each have mad money to spend, without being accountable
10.they live on a cash basis, only making one withdrawal a week
11.in five months Mr and Mrs Smith haven't incurred any new debt!
Tasks for June
Task 1. Have one no spend day each week. Designate a day, and don't spend a cent that day. Stay away from the shops, eat at home, don't even put petrol in the car on this day, walk if you have to. Report back on the effect this has on the family and the way you think about spending.
Task 2. Review your budget. Check that you have allocated enough to cover winter utility bills etc and tweak if necessary.
Task 3. Keep plugging away at your Payment Push. Mark off each debt payment as it's made so you have a constant visual reminder of your progress.
Task 4. Track spending. It's been three months since you tracked your spending so it's time to do it again. Write down every cent you spend and how you spend it for the next 30 days.
Task 5. Gather all tax requirements, ready for the end of the financial year. Start collecting receipts, pay slips, Medicare documentation etc ready for tax time. Being organized takes a lot of the pressure out of the end of financial year craziness.
Having a fully funded Peace of Mind account takes at least twelve months to achieve, unless you already have enough cash for twelve months of everyday expenses lying around (or you win lotto!) so occasionally for the first year some categories will go into the red. Just remember to note on your plan which categories need to be refunded and repay them as quickly as you can. Because the Smiths have been very conscious of their spending and saving they have the money in their PoM account to cover these expenses and won't have to resort to using their emergency fund or credit card. Woo Hoo!
With winter coming Mrs Smith tells me she has been sorting through Junior's clothes, and she has a list of things he needs and a few things she'd like him to have for the cold weather. Top of the list are a ski suit and a good, warm parka as they are spending more time outdoors playing and walking to the shops, playgroup etc rather than using the car. Even at op shops they are beyond her clothing budget so I sent her this month's Tip Sheet early and suggested she read Host a Recycle Party and How to Run a Clothing Swap and then get together with some friends and have some fun. She's going to report back and let us know how it goes.
Longer evenings and colder days mean that the heater and lights will be on longer, pushing up the gas and electricity bills. To help keep costs down, use draught stoppers against all outside doors, make sure windows seal tightly to keep the cold air out. Keep the doors to rooms not used regularly shut and only warm the part of the house you are living in. Add another layer to everyone and make sure everyone has slippers to wear indoors to keep their feet warm.
To help keep the electricity bill low, only turn on lights you are using, turn them off when you leave a room, even for just a few minutes. Get back onto the "it's not off if it's still on at the wall" habit and turn all appliances not being used off at the wall.
I understand from Mr Smith that he's feeling a little hard done by. He is concerned that they haven't paid off enough debt and that they are making sacrifices with nothing to show for them. Doing all these things can make you feel deprived and poor or they can make you feel good about yourself and in control of your life and your money. Living the Cheapskates way isn't about being deprived, it's about making decisions that will let you have the things you want and enjoy them without worrying about how you are going to pay for them.
To help lift Mr Smith's spirits here is a list of everything this family has accomplished in just five months:
1.for the first time ever they have a budget that they can stick to
2.for the first time ever this little family has money in the bank, enough to cover their everyday bills when they come in and a baby emergency fund that grows each week
3.shopping is no longer a hobby, these days the Smiths shop with a purpose (and a list)
4.Mr Smith is tobacco free!!!!!! This really should be No. 1, not only is he not burning thousands of dollars each year, he has taken a positive step to improve his long-term health.
5.mealtimes are something to be looked forward to. Mrs Smith is trying new recipes and Mr Smith isn't complaining one little bit about that.
6.family time really is family time. Picnics, feeding the ducks, playing in the backyard with Junior, reading, working on a jigsaw together of an evening are all things that have brought the family together and they haven't cost a cent
7.there haven't been any arguments, not even a heated discussion, over money since they embarked on this journey together.
8.they have researched and found the best phone/mobile/Internet plan for them
9. they each have mad money to spend, without being accountable
10.they live on a cash basis, only making one withdrawal a week
11.in five months Mr and Mrs Smith haven't incurred any new debt!
Tasks for June
Task 1. Have one no spend day each week. Designate a day, and don't spend a cent that day. Stay away from the shops, eat at home, don't even put petrol in the car on this day, walk if you have to. Report back on the effect this has on the family and the way you think about spending.
Task 2. Review your budget. Check that you have allocated enough to cover winter utility bills etc and tweak if necessary.
Task 3. Keep plugging away at your Payment Push. Mark off each debt payment as it's made so you have a constant visual reminder of your progress.
Task 4. Track spending. It's been three months since you tracked your spending so it's time to do it again. Write down every cent you spend and how you spend it for the next 30 days.
Task 5. Gather all tax requirements, ready for the end of the financial year. Start collecting receipts, pay slips, Medicare documentation etc ready for tax time. Being organized takes a lot of the pressure out of the end of financial year craziness.
Mr & Mrs Smith Part 7
Last month Mrs Smith was looking at buying some rather expensive winter outfits for Junior, so I suggested a clothing swap. Here's what she had to say about it: "I told you I would report back on the clothing swap if I arranged one. Well I did and it was a huge success. It was held on a playgroup day and instead of everyone going to playgroup, they came to our house. We kept to the playgroup morning tea - fruit and milk or water for the kids and tea, coffee and cheese & biscuits for the grown ups (we have mostly mums, but some dads, grandmas and carers in our group). I decided to stick to kids clothes and shoes, from newborn to size 10 to cover most of our families, for the swap and it worked well. I had a lot of fun making up a flyer/invitation on the computer and printing it. I asked Mr Smith to bring me home some used paper and I printed the details of the swap on the clean side. I got some comments, but I just told them it was all in the theme of recycling and it was a good way of saving paper too.
In a nutshell, we had lots of laughs, the kids had a ball being somewhere new, and everyone left with at least two "new" things. There were some things left over and we all agreed to donate them to the Salvos, so they were boxed up and dropped off that afternoon. By the time Mr Smith arrived home, you would never have known that our little house had been full to the brim with pre-schoolers just a couple of hours earlier.
Now Junior has everything he needs for winter now, and I was lucky enough to snag a couple of things for next winter too and they have been put away, so I don't need to spend another cent on his wardrobe until I start to think about summer. We think we'll have another swap party in September to get ready for summer."
Well done! Not a cent spent, Junior has everything he needs to round out his wardrobe, you had some fun and socialising and you obviously planned it so well your friends want another one. You are on your way to being a champion Cheapskate.
When I mentioned turning appliances off at the wall last month, Mr Smith groaned so loud I heard him here! He's not convinced that turning everything off at the wall when it's not in use actually saves enough money or energy to really count. Well it does. I've challenged Mr Smith to re-try, this time keeping a diary of what's on, when and for how long and taking a reading of the meter at the same time each day so he has a visual reinforcement. He also has to compare the usage on the next bill with the bill for the same period last year. I know that there will be a difference in usage.
Both Mr and Mrs Smith are thrilled to have as much as they can have of their tax documentation ready, and before the end of the financial year too. They are just waiting on group certificates and Centrelink statements and they can have their 08-09 tax done. They tell me it's not something they are normally organized with.
Mrs Smith has had her hours at work cut back, so she is only working 3 days a week. This was frightening for them, they had been counting on that two days wages and weren't sure how to cope. It won't be easy, they will have to re-jig the budget (they are meant to be fluid, not set in concrete) but by cutting back on childcare, travel and other work-related expenses, and letting Centrelink know about the change, they may well end up in front.
The cash budget is still working for them, despite initial hesitation. Mr and Mrs Smith only making one withdrawal a week to cover all their expenses and when the money is gone, it's gone until the next "withdrawal" day. Even Mr Smith admits that it's working out better than he thought it would and that he is actually relaxed when a bill arrives these days, rather than being tense and stressed as he has been the last few years.
As it's July, it's time to start thinking about Christmas and everything that comes with it: presents, parties, holidays, extra food, decorations, travel, postage and so on.
Mrs Smith suggested that she put $5 a week in an envelope in her sock drawer to cover Christmas expenses that won't be fully funded in their Peace of Mind account. Right now that $5 could be used elsewhere, so I suggest that Mrs Smith save any leftover grocery and petrol money at the end of the week. She can hide this in her sock drawer if she wants to. Or it could be earning a little interest in a bank account (it would be a lot more secure in the bank too). Right now she prefers the sock drawer, especially as it's not going to be a huge amount of money and I am happy to leave it that way. It's important to find a saving pattern that works for you and the sock drawer works for Mrs Smith.
Tasks for July
Task 1. Get tax done before end of the month
Task 2. Start a Sock Drawer Christmas Club
Task 3. Mr Smith is going to really try to turn everything off at the wall when it's not in use.
Task 4. Keep going with the Payment Push, those debts are really shrinking
In a nutshell, we had lots of laughs, the kids had a ball being somewhere new, and everyone left with at least two "new" things. There were some things left over and we all agreed to donate them to the Salvos, so they were boxed up and dropped off that afternoon. By the time Mr Smith arrived home, you would never have known that our little house had been full to the brim with pre-schoolers just a couple of hours earlier.
Now Junior has everything he needs for winter now, and I was lucky enough to snag a couple of things for next winter too and they have been put away, so I don't need to spend another cent on his wardrobe until I start to think about summer. We think we'll have another swap party in September to get ready for summer."
Well done! Not a cent spent, Junior has everything he needs to round out his wardrobe, you had some fun and socialising and you obviously planned it so well your friends want another one. You are on your way to being a champion Cheapskate.
When I mentioned turning appliances off at the wall last month, Mr Smith groaned so loud I heard him here! He's not convinced that turning everything off at the wall when it's not in use actually saves enough money or energy to really count. Well it does. I've challenged Mr Smith to re-try, this time keeping a diary of what's on, when and for how long and taking a reading of the meter at the same time each day so he has a visual reinforcement. He also has to compare the usage on the next bill with the bill for the same period last year. I know that there will be a difference in usage.
Both Mr and Mrs Smith are thrilled to have as much as they can have of their tax documentation ready, and before the end of the financial year too. They are just waiting on group certificates and Centrelink statements and they can have their 08-09 tax done. They tell me it's not something they are normally organized with.
Mrs Smith has had her hours at work cut back, so she is only working 3 days a week. This was frightening for them, they had been counting on that two days wages and weren't sure how to cope. It won't be easy, they will have to re-jig the budget (they are meant to be fluid, not set in concrete) but by cutting back on childcare, travel and other work-related expenses, and letting Centrelink know about the change, they may well end up in front.
The cash budget is still working for them, despite initial hesitation. Mr and Mrs Smith only making one withdrawal a week to cover all their expenses and when the money is gone, it's gone until the next "withdrawal" day. Even Mr Smith admits that it's working out better than he thought it would and that he is actually relaxed when a bill arrives these days, rather than being tense and stressed as he has been the last few years.
As it's July, it's time to start thinking about Christmas and everything that comes with it: presents, parties, holidays, extra food, decorations, travel, postage and so on.
Mrs Smith suggested that she put $5 a week in an envelope in her sock drawer to cover Christmas expenses that won't be fully funded in their Peace of Mind account. Right now that $5 could be used elsewhere, so I suggest that Mrs Smith save any leftover grocery and petrol money at the end of the week. She can hide this in her sock drawer if she wants to. Or it could be earning a little interest in a bank account (it would be a lot more secure in the bank too). Right now she prefers the sock drawer, especially as it's not going to be a huge amount of money and I am happy to leave it that way. It's important to find a saving pattern that works for you and the sock drawer works for Mrs Smith.
Tasks for July
Task 1. Get tax done before end of the month
Task 2. Start a Sock Drawer Christmas Club
Task 3. Mr Smith is going to really try to turn everything off at the wall when it's not in use.
Task 4. Keep going with the Payment Push, those debts are really shrinking
Mr & Mrs Smith Part 8
Dear Cath,
We are happy to report in and say that we have survived July. Living the Cheapskates way has become a habit for us now, we hardly notice the changes to our lifestyle anymore! Mr Smith is now a bigger Cheapskate than I am, and to think that back in December when we first approached you he was more than a little sceptical and reluctant. These days he's a dyed in the wool, true blue convert. You'd be so proud of the way he takes his lunch to work and doesn't mind telling everyone he gets gourmet lunches because his wife is a Cheapskate. He told all the fellows on his shift a couple of weeks ago that we would have two of our credit cards totally paid off by Christmas. When there was talk a few weeks ago of having to put people off, he didn't get upset as I thought he would. Instead he took out the budget folder and checked over the Peace of Mind account and then looked at the emergency fund. Because we've been following our spending plan we have money to pay the immediate bills from the Peace of Mind account and a month's worth of expenses in the emergency fund. It was such a relief to him to have that buffer, especially as it is only 11 months since he was last made redundant!
I'm still working at home, still only 3 days a week, but at least I'm working. I've cut right back on childcare and Junior is only going one day a week at the moment. I'm working around his sleeping/playing/eating schedule and I'm so thankful that I have a boss who doesn't mind when the work is done as long as it's done because these days I'm working after he's in bed of an evening.
We have seen the tax man and should have a nice refund due to us which we have decided will go half off the credit cards, a quarter into funding the Peace of Mind account and a quarter into the emergency fund to give it a boost. It's money we haven't had so we haven't really missed it and we don't want to waste it either, unlike any money we've had back other years. I am ashamed to say I can't even tell you what we've spent it on.
We didn't get into any more debt during July, and I was able to put an extra $86.40 into the sock drawer from money left in the grocery money. I can hardly believe that I've more than halved the grocery bill and still had some leftover at the end of the month or that I have money put aside for Christmas already!
Anyway, we are so looking forward to the August challenges. We are both really liking watching the Payment Push poster become more and more colourful, and seeing those debts disappear.
Dear Mrs Smith,
You must be grinning from ear to ear! How good is it that even though you are facing another job loss, neither of you are stressing? You have done so well to have built your emergency fund to a level that will cover you for a month if needs be, and in such a short time.
And did I read right? You've more than halved your grocery bill in just 7 months, and have been able to add the excess to your Payment Push? That's just wonderful. I am so proud of you and Mr Smith. You are both to be admired, and now I have a smile on my face too.
August Tasks
Task 1. Focus on the Payment Push. Now more than ever it is important to get those debts paid of as quickly as possible. Look for some ways to make some quick cash (hold a garage sale, eBay excess household items, take a second part-time job).
Task 2. Keep building your emergency fund. Your plan for using your tax refund is a good place to start. With talk of job losses, having an Peace of Mind account and an emergency fund to fall back on are essentials.
Taks 3. Review your budget. Now you are working less hours and at home is their room to cut some categories? Petrol? Clothing? Even groceries (again)?
We are happy to report in and say that we have survived July. Living the Cheapskates way has become a habit for us now, we hardly notice the changes to our lifestyle anymore! Mr Smith is now a bigger Cheapskate than I am, and to think that back in December when we first approached you he was more than a little sceptical and reluctant. These days he's a dyed in the wool, true blue convert. You'd be so proud of the way he takes his lunch to work and doesn't mind telling everyone he gets gourmet lunches because his wife is a Cheapskate. He told all the fellows on his shift a couple of weeks ago that we would have two of our credit cards totally paid off by Christmas. When there was talk a few weeks ago of having to put people off, he didn't get upset as I thought he would. Instead he took out the budget folder and checked over the Peace of Mind account and then looked at the emergency fund. Because we've been following our spending plan we have money to pay the immediate bills from the Peace of Mind account and a month's worth of expenses in the emergency fund. It was such a relief to him to have that buffer, especially as it is only 11 months since he was last made redundant!
I'm still working at home, still only 3 days a week, but at least I'm working. I've cut right back on childcare and Junior is only going one day a week at the moment. I'm working around his sleeping/playing/eating schedule and I'm so thankful that I have a boss who doesn't mind when the work is done as long as it's done because these days I'm working after he's in bed of an evening.
We have seen the tax man and should have a nice refund due to us which we have decided will go half off the credit cards, a quarter into funding the Peace of Mind account and a quarter into the emergency fund to give it a boost. It's money we haven't had so we haven't really missed it and we don't want to waste it either, unlike any money we've had back other years. I am ashamed to say I can't even tell you what we've spent it on.
We didn't get into any more debt during July, and I was able to put an extra $86.40 into the sock drawer from money left in the grocery money. I can hardly believe that I've more than halved the grocery bill and still had some leftover at the end of the month or that I have money put aside for Christmas already!
Anyway, we are so looking forward to the August challenges. We are both really liking watching the Payment Push poster become more and more colourful, and seeing those debts disappear.
Dear Mrs Smith,
You must be grinning from ear to ear! How good is it that even though you are facing another job loss, neither of you are stressing? You have done so well to have built your emergency fund to a level that will cover you for a month if needs be, and in such a short time.
And did I read right? You've more than halved your grocery bill in just 7 months, and have been able to add the excess to your Payment Push? That's just wonderful. I am so proud of you and Mr Smith. You are both to be admired, and now I have a smile on my face too.
August Tasks
Task 1. Focus on the Payment Push. Now more than ever it is important to get those debts paid of as quickly as possible. Look for some ways to make some quick cash (hold a garage sale, eBay excess household items, take a second part-time job).
Task 2. Keep building your emergency fund. Your plan for using your tax refund is a good place to start. With talk of job losses, having an Peace of Mind account and an emergency fund to fall back on are essentials.
Taks 3. Review your budget. Now you are working less hours and at home is their room to cut some categories? Petrol? Clothing? Even groceries (again)?
Mr & Mrs Smith Part 9
Congratulations are in order this month. Mr and Mrs Smith have announced that they are expecting their second baby in June of next year and they are very excited. It's a double celebration because this month they have managed to finalize two debts on their Payment Push, one on time and one 9 weeks ahead of time.
They are so proud and happy right now, and with good reason. The last few months have been tough, with plenty of ups and downs, job insecurity and learning to live a brand new way. Every month when I get their report, I can see just how much progress they have made and how much easier it is getting for them. Every debt repayment made brings them a step closer to being debt free, and with another child on the way they seem to be even more focussed on building a Peace of Mind account and getting their emergency account fully funded.
Mr Smith took my suggestion of holding a garage sale to make some quick cash last month. While he concedes that winter is not the ideal time to hold a garage sale, it did generate more interest because it was the only one held in their town on that Sunday. The Smith family Payment Push is $816.25 better off because of that garage sale! And the house and garage are clutter free.
Mrs Smith's Christmas sock has had another $37 added to it this month. Christmas 2009 looks like being fully funded by the Christmas sock! Although she did say that the grocery bill may not be quite so high at the moment because she doesn't feel like eating a lot of her usual foods and could go up a little when she gets over her morning sickness.
I don't think there is anything worse than morning sickness. Ginger is excellent for easing nausea and can be taken in tablet form (Blackmores have a ginger tablet) or as a tea which is nice first thing in the morning. Or if you like ginger, just buy a packet of crystallised or glace ginger and nibble at it throughout the day.
Mr Smith's job prospects seem to have settled for the time being and because she is working from home Mrs Smith plans on working until at least May, so they can build a good buffer for when the baby arrives.
I am so very proud of her. She has resisted the temptation to go baby shopping, and I know how hard that is to do. As she said "This bub won't know or care that his or her big brother wore the grosuits first, or slept in sleeping bags or had the same mobile hanging over the cot. But he (or she) will care later on when he (or she) has two happy parents who don't have to work day and night just to keep a roof over his (or her) head. We have so much from Junior, some of it hasn't even been worn or used, that it seems silly to me now to go out and spend money we can't afford on stuff we don't need. If this had happened last year I would have spent all day every day out shopping to ease my morning sickness."
September Tasks
Task 1. Keep tracking spending. This is even more important now that a baby is on the way.
Task 2. Push as much spare cash as possible to your Payment Push.
Task 3. Keep on building your Peace of Mind and Emergency funds. Your Peace of Mind account should have some columns almost fully funded by now. And your Emergency fund needs to be at least two months worth of living expenses by the end of the year.
They are so proud and happy right now, and with good reason. The last few months have been tough, with plenty of ups and downs, job insecurity and learning to live a brand new way. Every month when I get their report, I can see just how much progress they have made and how much easier it is getting for them. Every debt repayment made brings them a step closer to being debt free, and with another child on the way they seem to be even more focussed on building a Peace of Mind account and getting their emergency account fully funded.
Mr Smith took my suggestion of holding a garage sale to make some quick cash last month. While he concedes that winter is not the ideal time to hold a garage sale, it did generate more interest because it was the only one held in their town on that Sunday. The Smith family Payment Push is $816.25 better off because of that garage sale! And the house and garage are clutter free.
Mrs Smith's Christmas sock has had another $37 added to it this month. Christmas 2009 looks like being fully funded by the Christmas sock! Although she did say that the grocery bill may not be quite so high at the moment because she doesn't feel like eating a lot of her usual foods and could go up a little when she gets over her morning sickness.
I don't think there is anything worse than morning sickness. Ginger is excellent for easing nausea and can be taken in tablet form (Blackmores have a ginger tablet) or as a tea which is nice first thing in the morning. Or if you like ginger, just buy a packet of crystallised or glace ginger and nibble at it throughout the day.
Mr Smith's job prospects seem to have settled for the time being and because she is working from home Mrs Smith plans on working until at least May, so they can build a good buffer for when the baby arrives.
I am so very proud of her. She has resisted the temptation to go baby shopping, and I know how hard that is to do. As she said "This bub won't know or care that his or her big brother wore the grosuits first, or slept in sleeping bags or had the same mobile hanging over the cot. But he (or she) will care later on when he (or she) has two happy parents who don't have to work day and night just to keep a roof over his (or her) head. We have so much from Junior, some of it hasn't even been worn or used, that it seems silly to me now to go out and spend money we can't afford on stuff we don't need. If this had happened last year I would have spent all day every day out shopping to ease my morning sickness."
September Tasks
Task 1. Keep tracking spending. This is even more important now that a baby is on the way.
Task 2. Push as much spare cash as possible to your Payment Push.
Task 3. Keep on building your Peace of Mind and Emergency funds. Your Peace of Mind account should have some columns almost fully funded by now. And your Emergency fund needs to be at least two months worth of living expenses by the end of the year.
Mr & Mrs Smith Part 10
When Mr & Mrs Smith reported in this month they were a little down in the dumps. Life had thrown them a few challenges (apart from the ones I've been giving them) and they felt as though they were struggling. They couldn't see the progress they have made in just 9 months, but I could and I am so proud of them.
Dear Cath,
September hasn't been a great month for us. We have had some unexpected and unbudgeted for doctor's bills and other medical expenses. For a couple of them we just had to pay the gap on the day of service and sign the Medicare claim form, but for the others ($340) we used the money in our emergency fund to cover them and now we have to start to build it up again.
Mr Smith is still working and a regular pay is helping us to keep on top of the regular bills. The money from the garage sale helped a lot. We really want to get as many debts as possible paid off before the new baby arrives so we are putting every spare cent towards our Payment Push.
I tried some ginger tea like you suggested for the morning sickness and it helped a lot. I think I've developed an addiction, I'm drinking it all the time now instead of my regular decaf, with a little honey to sweeten it. I'm being a real Cheapskate though and only using one tea bag a day, I just let it steep a little longer with each use. The tea is just as nice and I can go for a month on one box of tea bags instead of a week or less if I used a new one every time I had a cuppa.
I'm looking forward to the Christmas Countdown and have started to look for Christmas presents that are within our budget. I am planning on using the sock drawer money to pay for everything so I'll need to do some serious planning and careful shopping but I am confident that it can be done. The sock is getting very heavy, last count there was almost $300 in the sock drawer account, much more than I ever thought I'd be able to save. I have been banking the money as soon as it gets to about $20 and keeping track of it on our budget spreadsheet and I love to see it grow.
Mrs Smith
Dear Mr and Mrs Smith,
You are champions! You may have had some unexpected and unbudgeted bills last month but you were able to cover them without resorting to more debt - in fact do you realise that you haven't incurred any new debt at all since you began your budget renovation? If I could reach you right now I'd be patting you both on the back.
I am envious of your sock drawer Christmas fund. With that much money you'll have a lovely Christmas and if you stick to the plan you'll own it too. Won't it be nice to not be paying for it next year? You'll feel so good and enjoy your celebrations so much more.
When it comes to ginger tea I'm with you. It is addictive and I'll confess to drinking Twinings Lemon and Ginger tea during the day and yes, I re-use the tea bag a few times.
I applaud your efforts to get your debt paid down before the new baby arrives but you still need to concentrate on getting your Peace of Mind account fully funded (that will be one whole year's worth of regular expenses covered) and your emergency fund built up (aiming for at least 6 months of living expenses, but starting with one week, then building to one month, then three months then to six months) so I'd like you to sit down with Mr Smith and have a good look at your Payment Push and your Peace of Mind account and emergency fund. It's important to have a buffer for emergencies and while getting out of debt is important, so too is having the security of a cash back-up when life happens.
I'm looking forward to hearing about your Christmas shopping and all the great ideas you come up with to stay in budget next month.
Dear Cath,
September hasn't been a great month for us. We have had some unexpected and unbudgeted for doctor's bills and other medical expenses. For a couple of them we just had to pay the gap on the day of service and sign the Medicare claim form, but for the others ($340) we used the money in our emergency fund to cover them and now we have to start to build it up again.
Mr Smith is still working and a regular pay is helping us to keep on top of the regular bills. The money from the garage sale helped a lot. We really want to get as many debts as possible paid off before the new baby arrives so we are putting every spare cent towards our Payment Push.
I tried some ginger tea like you suggested for the morning sickness and it helped a lot. I think I've developed an addiction, I'm drinking it all the time now instead of my regular decaf, with a little honey to sweeten it. I'm being a real Cheapskate though and only using one tea bag a day, I just let it steep a little longer with each use. The tea is just as nice and I can go for a month on one box of tea bags instead of a week or less if I used a new one every time I had a cuppa.
I'm looking forward to the Christmas Countdown and have started to look for Christmas presents that are within our budget. I am planning on using the sock drawer money to pay for everything so I'll need to do some serious planning and careful shopping but I am confident that it can be done. The sock is getting very heavy, last count there was almost $300 in the sock drawer account, much more than I ever thought I'd be able to save. I have been banking the money as soon as it gets to about $20 and keeping track of it on our budget spreadsheet and I love to see it grow.
Mrs Smith
Dear Mr and Mrs Smith,
You are champions! You may have had some unexpected and unbudgeted bills last month but you were able to cover them without resorting to more debt - in fact do you realise that you haven't incurred any new debt at all since you began your budget renovation? If I could reach you right now I'd be patting you both on the back.
I am envious of your sock drawer Christmas fund. With that much money you'll have a lovely Christmas and if you stick to the plan you'll own it too. Won't it be nice to not be paying for it next year? You'll feel so good and enjoy your celebrations so much more.
When it comes to ginger tea I'm with you. It is addictive and I'll confess to drinking Twinings Lemon and Ginger tea during the day and yes, I re-use the tea bag a few times.
I applaud your efforts to get your debt paid down before the new baby arrives but you still need to concentrate on getting your Peace of Mind account fully funded (that will be one whole year's worth of regular expenses covered) and your emergency fund built up (aiming for at least 6 months of living expenses, but starting with one week, then building to one month, then three months then to six months) so I'd like you to sit down with Mr Smith and have a good look at your Payment Push and your Peace of Mind account and emergency fund. It's important to have a buffer for emergencies and while getting out of debt is important, so too is having the security of a cash back-up when life happens.
I'm looking forward to hearing about your Christmas shopping and all the great ideas you come up with to stay in budget next month.
Mr and Mrs Smith Part 11
Dear Cath,
Well the morning sickness has finally eased up and I am starting to feel enthusiastic about our budget reno again. For a few weeks I really couldn't be bothered and it has showed in our bank balance.
We have a few categories that are in the red, it is going to take us a while to catch them up. We have cleared out our emergency fund but I plan to "restock" it with the Medicare refunds we have coming. I am expecting that to be around $300 and if we get back on track then it won't be too long and it will be built up again.
Mr Smith has taken on some lawn-mowing jobs on Sundays to boost our coffers. It's not a long term thing but it will certainly help out. We have decided that all the money will go to straighten out the Peace of Mind account so that by the time the new baby arrives all the bills will be covered.
I haven't started Christmas shopping yet, but I did make up a list and add the expected costs against each item. I have $312.70 in the sock drawer savings and my Christmas list comes to $301.30 so I am hoping that there will be some money leftover for some holiday fun. Actually, there should be quite a bit leftover because now I am feeling better I am going to be making edible gifts and doing one per family. I found some platters at a $2 shop a while ago that will look great with biscuits or gingerbread on them and I'm going to give the chocolate spoons a go for my SIL who is addicted to anything chocolate. I have a lot of leftover scrapbooking papers and stickers that I haven't used and they will be turned into cards and envelopes to make up sets for the grandmas and great-grandmas. I'm planning on doing birthday cards, some thank you cards, a couple of get well cards and some blank ones in each set and I know Gran will appreciate them, she doesn't get out much so she likes to send cards to keep in touch with us all. Best of all I'm using up my stash and not spending any extra money so they are almost free gifts.
Our Payment Push has gone backwards a little, by about two months, so we won't have quite as many debts paid off by the end of the year as we thought but on the upside we are so much closer to paying them off than we were at the beginning of the year and now we have a plan we really will be debt free (apart from the mortgage) soon. Mr Smith loves crossing off each debt as it's paid out and changing the payment total for the next one, he uses a big red texta to write the new total and the final payment date on the plan so they stand out.
Mr Smith read up on square foot gardening and we now have three lovely square garden beds out the back with tomatoes, lettuce, zucchini, cucumbers, capsicum, radishes, carrots, cabbage, peas, spring onions, chives and eggplant all growing. If they all produce food we won't have to go to the greengrocer for anything other than onions and potatoes all summer, a huge saving on our grocery bill. I'm still buying apples and oranges by the case straight from the orchard, they are so much cheaper and they last a lot longer than the supermarket fruit.
Mrs Smith
Dear Mrs Smith,
I am so glad to hear that you are feeling better. Don't be discouraged, life throws everyone a curve ball now and then, it's how we deal with it that matters. You have acknowledged that some not quite so wise choices have been made and you have taken steps to fix the problems. Remember, budgets are meant to be fluid, especially when they are just getting established. They are not set in concrete because as you've found the last few weeks, unexpected things happen that need to be dealt with.
Good on Mr Smith for taking on extra work, that must have been a hard decision for him to make with the hours he works. Just remember that you both have a goal to work towards and if you have made the decision this extra income is temporary treat it as such, don't come to rely on it for your everyday living or Mr Smith will end up having a permanent weekend job.
I am so impressed with your sock drawer savings. And with your Christmas list. Edible gifts are perfect for just about everyone . They don't take up room or collect dust, they are usually very budget friendly and they are ideal for the person who has everything and needs nothing. A jar of homemade jam or relish, a plate of biscuits or a little box of fudge are always welcomed. Another really quick and easy edible gift idea is herb vinegars. If you have herb garden they cost next to nothing to make and take only a few minutes to prepare. Actually they are so good you may not want to give them away!
Growing your own veggies really is a good way to cut the grocery bill, especially this time of year. The closer we get to Christmas and New Year the more expensive basic veggies like lettuce and cucumber will become. Who want to be paying $5 a kilo for tomatoes when you can grow your own for around 25c a kilo? I hope all those lovely plants produce lots of goodies for you to enjoy. Home-grown really does taste better.
You are nearing the end of your budget renovation and the difference in your attitude and your spending habits is amazing. And I am fairly certain that your lifestyle changes have been for the better and not too difficult. During November I'd like you both to concentrate on your Payment Push, you are so close to being unsecured-debt free. Take some time to review how far you've come and then pat yourselves on the back, you are doing well.
Well the morning sickness has finally eased up and I am starting to feel enthusiastic about our budget reno again. For a few weeks I really couldn't be bothered and it has showed in our bank balance.
We have a few categories that are in the red, it is going to take us a while to catch them up. We have cleared out our emergency fund but I plan to "restock" it with the Medicare refunds we have coming. I am expecting that to be around $300 and if we get back on track then it won't be too long and it will be built up again.
Mr Smith has taken on some lawn-mowing jobs on Sundays to boost our coffers. It's not a long term thing but it will certainly help out. We have decided that all the money will go to straighten out the Peace of Mind account so that by the time the new baby arrives all the bills will be covered.
I haven't started Christmas shopping yet, but I did make up a list and add the expected costs against each item. I have $312.70 in the sock drawer savings and my Christmas list comes to $301.30 so I am hoping that there will be some money leftover for some holiday fun. Actually, there should be quite a bit leftover because now I am feeling better I am going to be making edible gifts and doing one per family. I found some platters at a $2 shop a while ago that will look great with biscuits or gingerbread on them and I'm going to give the chocolate spoons a go for my SIL who is addicted to anything chocolate. I have a lot of leftover scrapbooking papers and stickers that I haven't used and they will be turned into cards and envelopes to make up sets for the grandmas and great-grandmas. I'm planning on doing birthday cards, some thank you cards, a couple of get well cards and some blank ones in each set and I know Gran will appreciate them, she doesn't get out much so she likes to send cards to keep in touch with us all. Best of all I'm using up my stash and not spending any extra money so they are almost free gifts.
Our Payment Push has gone backwards a little, by about two months, so we won't have quite as many debts paid off by the end of the year as we thought but on the upside we are so much closer to paying them off than we were at the beginning of the year and now we have a plan we really will be debt free (apart from the mortgage) soon. Mr Smith loves crossing off each debt as it's paid out and changing the payment total for the next one, he uses a big red texta to write the new total and the final payment date on the plan so they stand out.
Mr Smith read up on square foot gardening and we now have three lovely square garden beds out the back with tomatoes, lettuce, zucchini, cucumbers, capsicum, radishes, carrots, cabbage, peas, spring onions, chives and eggplant all growing. If they all produce food we won't have to go to the greengrocer for anything other than onions and potatoes all summer, a huge saving on our grocery bill. I'm still buying apples and oranges by the case straight from the orchard, they are so much cheaper and they last a lot longer than the supermarket fruit.
Mrs Smith
Dear Mrs Smith,
I am so glad to hear that you are feeling better. Don't be discouraged, life throws everyone a curve ball now and then, it's how we deal with it that matters. You have acknowledged that some not quite so wise choices have been made and you have taken steps to fix the problems. Remember, budgets are meant to be fluid, especially when they are just getting established. They are not set in concrete because as you've found the last few weeks, unexpected things happen that need to be dealt with.
Good on Mr Smith for taking on extra work, that must have been a hard decision for him to make with the hours he works. Just remember that you both have a goal to work towards and if you have made the decision this extra income is temporary treat it as such, don't come to rely on it for your everyday living or Mr Smith will end up having a permanent weekend job.
I am so impressed with your sock drawer savings. And with your Christmas list. Edible gifts are perfect for just about everyone . They don't take up room or collect dust, they are usually very budget friendly and they are ideal for the person who has everything and needs nothing. A jar of homemade jam or relish, a plate of biscuits or a little box of fudge are always welcomed. Another really quick and easy edible gift idea is herb vinegars. If you have herb garden they cost next to nothing to make and take only a few minutes to prepare. Actually they are so good you may not want to give them away!
Growing your own veggies really is a good way to cut the grocery bill, especially this time of year. The closer we get to Christmas and New Year the more expensive basic veggies like lettuce and cucumber will become. Who want to be paying $5 a kilo for tomatoes when you can grow your own for around 25c a kilo? I hope all those lovely plants produce lots of goodies for you to enjoy. Home-grown really does taste better.
You are nearing the end of your budget renovation and the difference in your attitude and your spending habits is amazing. And I am fairly certain that your lifestyle changes have been for the better and not too difficult. During November I'd like you both to concentrate on your Payment Push, you are so close to being unsecured-debt free. Take some time to review how far you've come and then pat yourselves on the back, you are doing well.
Mr & Mrs Smith Part 12
Dear Cath,
I can hardly believe that our year of budget renovating is almost over! Thanks to you we have come such a long way. We are so much further ahead and we both firmly believe that if we hadn't taken on the budget reno we would be facing a very bleak and miserable future.
I know Mr Smith has been reluctant to share information with you and I've had to really nag him to let me send you our figures but he's over that now. We have money in the bank for an emergency fund (one months full living expenses as they are today, we adjusted the figures again this week). We've never had more than maybe two pay packets in the bank before, and then only until we could withdraw it. Last night we had $2,485 in our emergency account!
We only have one more month to go and our Peace of Mind account will be fully funded. It's so good to know that when the bills come in we can pay them without even thinking about it. Actually we do think about it, because we are trying to get some of them down, particularly the electricity and water, so each time we get a bill we compare it to last year, if it's lower we try to get it down even more, if it's higher (yuk) we actually talk about how we can work together to get it down.
We are back on track with our Payment Push too. We decided we didn't like going backwards so Mr Smith did some extra work for a neighbour and we sold some more things we were never going to use to get us back on track. A few months ago that set back would have been permanent and we'd have been moaning about how hard life is and how unfair that we were trying so hard and getting nowhere. Talk about an attitude adjustment.
I've learnt that cooking isn't a chore unless I make it one. And that it's just as fast to cook at home as it is to go out and get takeaway (I should have known you'd be right). And that babies don't really care whether their clothes and toys are new or not, just that they have them and that they are loved.
I have finished Christmas shopping and wrapping, jus the baking to go and I have the ingredients already. And the cards have all been sent (they went off this morning). I made some of them and used up the strays that were leftover from last year and the year before. I used to worry so much about getting the right card for the right person, no matter how much it cost. This year I realised that it's what we write in the card that's important, not whether it's a bulk buy box or a Hallmark classic. It was a real DOH! moment for me I can tell you.
I almost forgot to tell you about the garden. It's going so well, thanks for the tip on setting up a watering system from the washing machine for the grass to, Junior loves playing outside and having soft, green grass is so much nicer than parched, dry earth. I've been picking lettuce for a couple of weeks and we have tomatoes almost ready to pick. Hope there are enough for us to eat and to make sauce. And tiny eggplants, they look really cute. Cucumbers are growing like weeds so it looks like I'll be sharing them around with friends and family. It's so nice to be able to share and not worry about the cost.
Well this has turned into a novel. We just want to say thank you for your encouragement and your help and even for the kicks. You may not have known it but we really do appreciate it.
We wish you, Wayne and the kids a very happy Christmas and a blessed new year.
Mr & Mrs Smith and Junior.
Dear Mrs Smith,
Your email brought tears to my eyes. I know how far you've come, and the obstacles you've climbed over, crawled under or smashed through this year.
I have been honoured to work with you both as you started your journey to living life debt free, cashed up and laughing. You have both been wonderful students and I am so proud of the way you have embraced the Cheapskates way of life and made it your own.
Merry Christmas to you both, and to Junior.
May 2010 be even better for you and your family.
I can hardly believe that our year of budget renovating is almost over! Thanks to you we have come such a long way. We are so much further ahead and we both firmly believe that if we hadn't taken on the budget reno we would be facing a very bleak and miserable future.
I know Mr Smith has been reluctant to share information with you and I've had to really nag him to let me send you our figures but he's over that now. We have money in the bank for an emergency fund (one months full living expenses as they are today, we adjusted the figures again this week). We've never had more than maybe two pay packets in the bank before, and then only until we could withdraw it. Last night we had $2,485 in our emergency account!
We only have one more month to go and our Peace of Mind account will be fully funded. It's so good to know that when the bills come in we can pay them without even thinking about it. Actually we do think about it, because we are trying to get some of them down, particularly the electricity and water, so each time we get a bill we compare it to last year, if it's lower we try to get it down even more, if it's higher (yuk) we actually talk about how we can work together to get it down.
We are back on track with our Payment Push too. We decided we didn't like going backwards so Mr Smith did some extra work for a neighbour and we sold some more things we were never going to use to get us back on track. A few months ago that set back would have been permanent and we'd have been moaning about how hard life is and how unfair that we were trying so hard and getting nowhere. Talk about an attitude adjustment.
I've learnt that cooking isn't a chore unless I make it one. And that it's just as fast to cook at home as it is to go out and get takeaway (I should have known you'd be right). And that babies don't really care whether their clothes and toys are new or not, just that they have them and that they are loved.
I have finished Christmas shopping and wrapping, jus the baking to go and I have the ingredients already. And the cards have all been sent (they went off this morning). I made some of them and used up the strays that were leftover from last year and the year before. I used to worry so much about getting the right card for the right person, no matter how much it cost. This year I realised that it's what we write in the card that's important, not whether it's a bulk buy box or a Hallmark classic. It was a real DOH! moment for me I can tell you.
I almost forgot to tell you about the garden. It's going so well, thanks for the tip on setting up a watering system from the washing machine for the grass to, Junior loves playing outside and having soft, green grass is so much nicer than parched, dry earth. I've been picking lettuce for a couple of weeks and we have tomatoes almost ready to pick. Hope there are enough for us to eat and to make sauce. And tiny eggplants, they look really cute. Cucumbers are growing like weeds so it looks like I'll be sharing them around with friends and family. It's so nice to be able to share and not worry about the cost.
Well this has turned into a novel. We just want to say thank you for your encouragement and your help and even for the kicks. You may not have known it but we really do appreciate it.
We wish you, Wayne and the kids a very happy Christmas and a blessed new year.
Mr & Mrs Smith and Junior.
Dear Mrs Smith,
Your email brought tears to my eyes. I know how far you've come, and the obstacles you've climbed over, crawled under or smashed through this year.
I have been honoured to work with you both as you started your journey to living life debt free, cashed up and laughing. You have both been wonderful students and I am so proud of the way you have embraced the Cheapskates way of life and made it your own.
Merry Christmas to you both, and to Junior.
May 2010 be even better for you and your family.