First things first - I’m not some money mogul and I don’t have a get rich quick scheme to sell you! I’m an every day person that has mortgage repayments and mouths to feed on the average Australian income. There are some amazing resources out there, but I wanted to share with you how we personally budget our money and how I was taught to save. Money is one of those things we’re not supposed to talk about, if you have money it can feel like you shouldn’t be talking about it - if you don’t have it you can wonder how the hell other people are able to accumulate all of their wealth.
Over the years people have asked me to help them do up budgets and it’s something that I really enjoy doing, I don’t think you should be ashamed of the fact that you’re a great saver - there is probably plenty of tips you can give to friends that would really appreciate your advice. For me it’s not about having the best of everything and stressing over how I can afford it, its about making sure we have enough to cover things we want to do in life - to get there sometimes means sacrifice.
I’m going to share with you how we did it, but keep in mind that everyones situation is different. We also started very young and the way we saved may not work for you - and thats fine! You can still use it as a guideline if you’d like.
The reason we are financially secure is simple - we stay mindful of how we spend our money and set ourselves goals. I dropped out of school in year 10 to start my hairdressing apprenticeship, I had some money saved in the bank from birthday gifts and a part time job. The wage for hairdressing was pretty low, from memory as a first year apprentice I was paid around $5 an hour! I did have the benefit of living at my parents house rent free & I drove a car that ran on fumes but I was very strict on spending any of my money.
My savings weren’t dipped into when I needed to purchase my first car because my parents had set me a goal (believe it or not I was a very rebellious teen and was basically pulled out of school - I’m sure everyone thought I wouldn’t be able to save a cent) they promised that if I started saving they would match me dollar for dollar to buy my first car. Because I’m a determined and competitive little human I saved $10,000. Understandably they wouldn’t hand over 10k and purchased me an old $2,000 car instead - absolutely nothing to scoff at but hey, I was an entitled moody teen that wanted a 20k car! Luckily I didn’t spend my money on a depreciative asset and that incentive was a huge learning curve for me, all of a sudden I had a lot of money sitting in the bank and my parents encouraged me to start saving for a house. (PS - I drove that car around FOREVER! I didn’t care that it was ugly or that my friends had “cool cars” - Jon begged me to buy a new car when I fell pregnant because the old one was getting a little run down & unreliable.)
When Jon and I met, I (kind of forcefully) encouraged him to save too, I think any other guy would have walked away because I was a teeny tiny bit controlling, but he knew that I was determined to get somewhere in life and that I only wanted the best for us. We bought our first home together and absolutely worked our butts off to pay it off. I purchased a hairdressing salon and worked 6 days a week, Jon was working in the air conditioning trade 6 days a week also. We figured out how much we would need to deposit each week to be able to pay off our home in the time frame we wanted. So NO MATTER WHAT every single week I was depositing that money into our mortgage account, it meant no partying with friends, no boozing it up on the weekends, working overtime, being very strict with our grocery bill and basically cutting out anything that wasn’t a necessity. I realize that might sound like torture for some people but we had an end date, we knew that once we paid off our mortgage we would be able to relax and be in a position that not many young people find themselves in.
It was also great that we managed to do most of that before we had kids, because they change everything! I’m a lot more relaxed with money now that I’ve had children and realize you just can’t force them to miss out on things, it’s different when it’s just you - so parents please keep that in mind.
We basically go by the same structure now - set a goal (for us it’s paying off a mortgage, but it can be anything), work out a realistic amount to pay off each week, cut down on spending where we can and have an end date! We use a calculator like this one - online mortgage calculator to work out all of the numbers (just change the loan term to the time period that suits you) and do up a weekly budget to see where we can save some money!
That is our story and you don’t have to go as crazy as we did, in fact I wouldn’t recommend it! Ha! It was super stressful, so unless you’re determined as all hell, be easy on yourself. I felt like once we got ourselves into a comfortable position money wise we were able to start easing up on how strict we were. I definitely don’t regret making sacrifices like not buying lunch every day and not going out every weekend, and I’m sure if you are able to cull some things out of your life you won’t miss them once you start seeing the effect it has on your savings.
Writing out a budget is a great way to sit down and see what you’re spending your money on, try to be 100% honest with yourself and your partner about your expenses. Once you are able to work out where all of your money is going, you can figure out ways to either lessen how much you’re spending (especially on bills, do some shopping around to find cheaper deals!) or cut that expense out completely. -
Things you can cull (at least for a while) -
Entertainment (gigs, movies & dining out)
Expensive holidays (just check out my insta for all the cheap camping spots haha!)
Your afterpay account
Break up with your credit card
If you can’t afford it right now but don’t want to live without, consider some of these alternatives!
Instead of buying new clothes, host a clothes swap party with friends - this is something I do regularly and it is amazing! It’s a great chance to catch up with girlfriends and get a whole new FREE wardrobe! Also thrift shops is where I get 90% of my clothing - I normally don’t pay over $5 for an item of clothing and I have a killer wardrobe, don’t be afraid to buy second hand.
Scour Gumtree or Facebook marketplace for literally ANYTHING you need. We furnished 80% of our home with second hand furniture, it’s a really fun process!
If a gym membership is hurting the budget but you can’t live without it, consider downloading a free app - I use the Nike training app - it’s basically a free personal trainer and I add in a run outdoors so I’m soaking up all that vitamin D and happy endorphins! Or opt for a cheaper gym, I gave up my expensive gym membership for a fitness centre that costs $13 a week! I actually prefer the fitness centre as they have a lot of facilities & different classes.
Making a meal plan for each week can cut out a huge amount of cost! Plan what you will eat for the entire week and only shop for those meals - it saves a lot of wastage and stops you from splurging on items you don’t need. Opting for shopping at Aldi or your local fruit barn will help you save too.
Instead of spending a fortune on date nights and eating out you could romance your partner by taking them on a hike, a picnic or make them their favourite meal at home. Google free date ideas and get inventive!
Make enough dinner so theres always leftovers for lunch the next day. We do this ALL THE TIME and its a lifesaver. Buying lunch may seem like a small amount but it adds up over the year. Same goes for coffee, I know this may be your little treat for yourself but those caffeine hits don’t come cheap - limit the amount you buy and try to have your coffee at home.
If you’re going out with the kids - pack snacks and water bottles so you’re not pressured into buying them fast food. Same goes for tuck shop at school, my kids just don’t get it. I’ve explained why and that we are able to do other fun things (like family holidays) because we save that money.
Books, Movies, Magazines and kids craft and learning activities are all FREE at your local library - get on that!
Whenever you can, walk or ride your bike - we walk to school every day and ride our bike to local parks or cafes.
Christmas is a little different in our household. Our kids don’t get a million presents when they wake up, I try to limit the amount they receive, because as they get older the gifts seem to get more expensive & I don’t want them to always expect a mountain of presents. I also purchase almost everything for them from op-shops throughout the year, so that if there’s a particular thing that they need/want that is a bit more expensive, I’m able to purchase that one thing and not feel like I have to sell my soul. Our average total cost for the kids christmas presents is $150 - $200, its a number that is doable for us and I also feel we’re not overspending. We have also started a tradition of donating to a charity at Christmas time, Operation Smile is very close to our hearts, Rivers surgeon donates his time to this amazing charity and we had a year that family members could choose to donate to Operation Smile instead of doing Secret Santa - which resulted in 5 children having life changing surgery, how amazing is that!
Basically try to cut back on anything that isn’t a necessity, and if you don’t want to - try to find a cheaper alternative. When you’re not earning a huge wage sometimes sacrificing those things is a great way to get ahead. Once you’ve done the hustle you can start to relax a bit - hopefully those saving skills stay with you and you can remain in control of your money.