Not My Mother

I’ve started helping Dave’s mum and sister with their budgets so they can learn to be better with their money. I love budgets, working out the spending plan and keeping to it, and especially paying down debt, but I hate bossing people and telling them what to do, so it’s slow going. Which is annoying because our budget isn’t that interesting at the moment. Anyway, as part of that, we all started keeping a spending diary. I bought them little notebooks where they can jot down everything they spend. It’ll help work out exactly how much they spend on each sort of budget area, but mostly it’s to try to keep them mindful of the “little” cash purchases, the ones you don’t really think about. I want them to realise that yes, that hot chocolate, or that crappy toy or that cute little outfit for their darling niece (ahem) is only $3 or $5 or $15, but the money has to come from somewhere in your budget. And also $3 or $5 or $15 might not be much in isolation but um, have you noticed how often you’re buying one of those and look what heppens if you add it all up?

So it’s all about mindfulness and just starting to work out where that $50 you took out 3 days ago has gone. I started keeping a spending diary too for moral support and to be a good example, so it’s a bit ironic that suddenly I’ve gone on a bit of a spending bender. It’s not a lot, just things like $40 at Kmart on some organisational things (a coat rack, a new foam underlay for my ironing board, a laundry basket) that I’ve been wanting for ages and make me feel happy and organised, and they all come out of my budget, but if you look through my notebook it looks like I’m spending on fripperies. Plus I keep forgetting to write stuff down. I suppose it goes to show it’s a habit that takes time for anyone to get into but I don’t like spending money willy nilly!

Anyway, my worst spending was when I was up in Ballarat. I took my laptop along with the idea that I’d get to do some writing up there (hah!) and I also took my little USB keyfob thingy that gives me 3G internet connectivity. Except once I connected up and started surfing it told me I didn’t have enough data to continue, because Ballarat is not in a 3G area, it’s only 2G, and to connect to that I needed to buy a separate block of “roaming” data, which cost $7.50. Not much, right? So I did, and wasted a happy half hour or so checking people’s Facebook statuses and stuff.

But here’s the thing. It was *only* $7.50, but it expires in a month. I’m not likely to be back in Ballarat in that time, and I don’t go anywhere anymore that I need the connectivity. (It’s true that our house is annoyingly in some sort of 3G dead area so I could use it here, but our home network works fine.) I was only in Ballarat for two days, I could have gone without internet for that time. Wasn’t getting away from everything one of the reasons I went up? Plus my phone has (annoying, clunky) internet connectivity so if I really wanted to check my email I could have done it on that.

So I’m a bit annoyed at myself. Yes, it’s only $7.50 and I used to spend more than that on lunch every day, so in the scheme of things it’s not much. It’s just annoying that I made this sort of beginner’s slip-up and it’s going to expire without being used. Plus, right now I only give myself $25 a week spending money, so there’s a huge chunk taken out of what I was saving up for more organisation stuff, or maybe even some jeans that fit.

On the other hand, I was at my Aunt’s house and when I was sitting on the floor playing with Bianca I noticed that on her shelf she has 20 DVDs (I counted) and every single one of them is of Andre Rieu. Every single one! Now, maybe she keeps her other DVDs somewhere else, but how is there even that many ways to look at that man?

That can’t be right, can it?

I’ve been trying to work out what’s changed and really our use of water is no different. (It will be, soon, when I go on maternity leave. Eek!) But, this house is about 20 years old while the last one was only about 6 and built with different standards and with newer, more efficient appliances. I think a lot of it can come down to that:

• the toilets in the last house were water efficient, while these ones… aren’t. They do at least have a half-flush option, but it seriously uses more water than the previous toilets’ full flush.
• evaporative cooling: 18 months ago we installed a system in the last house which only used 10 litres of water per session and didn’t dump it until an hour after you turned it off, in case you changed your mind. Old systems are much less efficient and also dump the water regularly while running. I’m not sure how old the system is in this house, but it’s not new, and it’s been a hot summer.
• we have an automatic watering system that comes on at midnight for 15 minutes, twice a week. This is new to us and might need to go.

Other than that, we’re using the washing machine, dishwasher and showers the same as we used to. So can all of this really add up to an extra 200 litres usage per day? It’s hard to believe. So I guess that also leaves leaks in the system, and errors in the bill. We have just been given a new water meter, maybe something went wrong there. It’s all stuff to investigate.

We do have the option of making changes like installing newer toilets and hooking the automatic sprinklers to the water tank. There are companies around that can come and do an assessment of your home and suggest ways you can improve the energy efficiency, for example by changing insulation or windows, or installing solar hot water systems or panels. A friend recently had this done and it’s something I’ve been meaning to do. The Australian government also has a Green Loans program where you can borrow up to $10,000 interest free over four years to help fund the changes. We should qualify for that, assuming it doesn’t run out of money soon.

Ah, the joys of owning a slightly older home. On top of this I want to get an electrician in to do an inspection and a few odd jobs, as it turns out we don’t have a trip switch on the fuse box and the spa may not be connected properly. Plus we’ve got some vines heading into the roof space, with possibly some damage there. These are all just little nagging maintenance issues that are annoying and I don’t know how much they’ll cost to sort out, which is a bit stressful right about now.

I suppose this is where some people would start the argument for renting instead of owning, but I wouldn’t want to go back to renting. Right now we’re in a home that we love, where we can change anything we want and are not at the mercy of shonky landlords. No one cares if we put up a shelf or paint a room or let the garden go. We can fix our wireless internet problems (the house is very long, and the wireless range doesn’t cover the whole of it) by wiring everything up instead. All of this adds up to a lot of freedom. Besides, I like nesting and making a home, and I like the idea of being able to change things we don’t like and improve them. We can see ourselves being happy in this house for 10 years or more, so the idea that we can make it just the home we want is pretty exciting. Is it the absolute best frugal financial decision? Probably not, but it makes us happy and it matters to us. We can be extra frugal in other areas instead.

Anyway, if we were renting this house we’d still have to pay the water bill, and we wouldn’t be able to do anything about it :-) I guess I’ve just got another fun home project on my list now. You know, in all my upcoming spare time.

So yesterday we had to fill up the car, as you do. We had a Coles shopping voucher so we went to the local Shell station (my research has shown that their discounted unleaded price is generally cheaper than elsewhere nearby). When I went in to pay the guy told me that in addition to the usual 4 cents per litre discount for the voucher, I could get a further 2 cents per litre off just by spending $2 instore. And he helpfully pointed out the chocolates and chewing gum as candidates for me to buy.

Look, it was the end of the day and I wasn’t up to spontaneous mental arithmetic. But I wasn’t sure it was a good deal and I certainly didn’t need any chocolate so I said no. I’d rather miss out on a bargain than agree to something that wasn’t one and be ripped off. Makes me feel less stupid, somehow.

Anyway, when I got back to the car I did the sums. We bought 45 litres of petrol, so the discount would have saved me a massive 90 cents. But to get the discount I had to spend $2 instore, so I’d end up $1.10 out of pocket. So, um, no thanks. I’d have to buy 100 litres of petrol to break even; are there any cars apart from the larger 4WDs that have tanks that large?

Obviously, if there was something I was going to buy anyway, then that would have been okay. But I rarely buy things at petrol stations unless it’s something I know has a fixed price like bags of ice or magazines, so they can’t mark it up.

I’m sure there are many people who aren’t bothered about paying an extra dollar or so for a bottle of milk for convenience of not having to stop again (but then why would they get excited about saving such a small amount?). But it made me wonder,  how many other people jump at the chance to buy stuff, just because they see “2 cent discount”, without thinking about it? It wasn’t so long ago I probably would have been one of them.

Would you buy something for the discount?

So yesterday we went into Myer to buy a few things that were left on our wedding registry. They have a “completion program” whereby you get to buy anything left on your list at a 20% discount, or 10% for electrical. This is quite good and almost makes up for the rest of the registry system inhabiting the internet circa 14th century. At least, that was the plan; after we went in and sorted out the paperwork, we discovered that the midseason sale was going on and everything was discounted way more than we would have got anyway. You can’t use the registry discount as well as a normal one, so that was a good halfhour wasted in the line. I know I shouldn’t complain because everything was cheaper than it would have been anyway, but damn, I wanted to use that discount!

Shortly after I moved back to Australia someone said to me, “Australians never buy anything full price. They always wait for a sale.” At the time I got huffy because I had indeed just bought things without waiting for the January sales–but then I realised most of it was still discounted.

• We got our fridge, washing machine and microwave directly from the Whirlpool factory, saving several hundred dollars on even the Good Guys’ prices.
• Our car was an ex-demo model (this was by accident, not design, but I would try to go that way next time too).
• There was even a slight discount of a couple hundred dollars on our new sofas.

Of course since then I’ve bought plenty of things full price (Ikea rarely has a sale on things I want), but I was quite chuffed to realise that all the big-ticket purchases we made were indeed on sale!

I don’t think we (Australians) really have a culture of bargaining–I’ve certainly never had much success haggling for anything–but we do get good oppurtunities with sales, and they seem to happen every couple of months. Right now Myers has 30% off homewares, 15% off electrical, and up to 50% off other departments; Target has its perennial 20% off all clothing; even Harvey Norman is getting in on the act with 22 months interest free. There’s plenty more where they came from — and it’s only going to get better as we slide into recession and stores get desperate to get your cash.

With that in mind, here are a few things I’ve learned about making the most of bargains.

Note: Remember these tips only work if the item is something you actually need. Don’t fall into the trap of buying things just because they’re on sale!

do your research first
Decide on what you want before the sales. Say you want a new sofa. Shop around to work out what features you want (fabric, colour, high back or low? recliner seats? How big?) before you go in to buy. If you need a fridge, work out the size and features that you need ahead of time. This is window shopping and as long as you can keep your credit card in your wallet it’s harmless fun.

It’s worth doing this even if you are only vaguely thinking about buying something. That way if you walk into a store and find a fantastic deal you can snap it up knowing it is exactly what you want rather than something you’ll regret later.

patience, grasshopper
Once you know what you’d like, and even where you’d like to get it, then wait for the next special offer. There’s always another sale coming on. Make friends with the salesperson and maybe they’ll tell you when the next sale is. Just keep in mind that they do want to make sales so they may tell you something’s going out of stock when it isn’t.

A couple of weeks ago we were in Myers and we saw some Royal Doulton wine glasses on special for 30% off. They were much nicer than the ones we put on the registry so we thought that we’d try to subsitute those instead (at that point we didn’t realise we couldn’t use our 20% discount on top of any other savings offer). Of course by the time we went in yesterday they were no longer on sale. No problem, it’s not like we need them, so we’ll just wait for the next time. I got our details added to the customer mailing list and hopefully they’ll contact us before the next sale.

save up first
I know this is really unsexy in the instant-gratification world we live in but trust me, a bargain is not a bargain if you are paying it off a credit card at 18% for months afterwards. If you take the time to save up — especially for the big items — then you can be sure you really want the thing and it’s not just a whim.

Of course if the reason you need a new fridge is because your old one blew up then you can’t really do this. But in that case at least try for the next tip.

take advantage of interest-free periods
Interest free periods are a good option as long as you can pay it off within the interest-free time. Last April our vacuum cleaner packed up and I didn’t have the $1000 for a decent replacement, but the store offered $100 deposit and the other $900 on 12 months’ interest free. I liked it because it was much easier to find $75 in our monthly budget; they liked it because it guaranteed them a sale and a cashflow for the next few months.

Just be sure to read the small print to see if there are any monthly ‘account charges’ and beware what happens if you get to the end of the interest-free period without repaying the whole amount — some companies charge interest over 30% on the entire balance from the date you bought the item – ouch! And don’t be embarrassed to walk away if the terms aren’t right. The salesperson may try to make you feel awkward but you don’t even know them so who cares what they think? It’d be much worse to sign something you’re not happy with and literally pay the cost later.

Another option is a credit card with an 0% period, which I’ll talk more about at another time.

get a registry
If you have an event coming up like a wedding or a housewarming party, do consider registering with a company like Myer who offer completion programs, so you can buy your items at a discount. You might even tell people to give you gift cards or cash so you get more for your money afterwards. (But beware prices going up, our espresso machine increased by $100 in 5 months!) Make sure to put on the things you really want. Sure, no one is likely to buy you that new bedroom suite, but if you can get it at a discount afterwards it might be worth the wait.

And this is what we’ve done. The espresso machine is Dave’s parents’ gift to us, replacing the one that sadly exploded a few months ago. And tonight Dave gets to set up his new PS3. It was a fair shot that no one would buy him that as a wedding gift (although he did get a toy Ferrari!) but he got it in the end, and hopefully appreciates it more now that he’s waited and decided that he really wants it after all.