In case you hadn’t noticed, the baby boomers have started to retire. By the time retirement comes they’re ‘supposed’ to have paid off their mortgages, and their debt, and have enough money saved to live comfortably for the rest of their lives.

But have they?

Unfortunately, for whatever reasons, too many of them have done too little of these actions. And they don’t want to admit they have failed, they don’t want to know… even today they bury their heads in the sand and don’t wish to face the reality that their bodies will wear out long before their mortgages are paid out and before their bank balances are large enough to stop working.

The next generations are turning up their noses at their older counterparts. And just like every generation before them – they say that they ‘will be different’ to their parents and grandparents. But will they?

Have things changed that much? What lessons have they been taught? What lessons have they learned? According to a recent survey by Rabobank it was found that almost in one in two baby boomers expect their cash to run out during retirement and almost 25% admitted that they had no savings. What sort of lesson is that!

It’s heartening to know that another survey by MasterCard shows that those aged 18-29 want to save more than any other age group.

To the Gen X and Gen Y people who think they won’t make the same mistakes as the Baby Boomers, let me ask you this –

• How much money do you have in the bank?

• How good are your savings?

• How much debt do you have?

• How many times have you gone without because you didn’t have the money?

• How many times have you saved and paid cash for something?

• Do you know how much money you need to run your household each week?

Here’s a tip –

 If you really want to be different – get yourself organised with a budget!

Carmel McCartin – Budget Bitch

Just so that you know – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions, you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

I’ve had a bit of a revelation! Let me explain…

I was reading an email from a budgeting software company that was explaining in a long and drawn out fashion, how to work out a budget. There was nothing exciting in that.

And the whole purpose of the exercise was to show how hard it was to work out a family budget with a pencil and paper. And, looking at his explanation, it was hard.

Of course, if you purchased his budgeting software, you could avoid the tedium of such a long winded process.

I’ve often wondered why it is that so many people I meet have bought such programs which then sit virtually untouched in the packaging they came in. Some of them have been opened, some of them have been attempted but I am yet to see one of these programs up and running successfully. That is, apart from the videos that the creator of the program shows you online.

Now, I’m not saying that these programs are crappy. Anything that can help you to learn how to budget has to be good. But – it has to be realistic and simple. And it has to make somebody want to adopt it like a second skin, because it’s easy.

This made me realise that the major reason people who use my system have such fabulous results is because they can understand how it works – without having to consult a computer program or a spreadsheet. They just ‘get it’.

Apart from the fact that I personally speak to them, and teach them how to set up their own budget, the main difference is that they know exactly the moment when they have overspent on their budget. There’s no waiting for a bank statement to tell them; there’s no consulting the ‘spreadsheet’ to see if they’ve blown it.

But none of that was the revelation.

What suddenly hit me was that – most ‘budgeting systems’ are based on, and want you to make, calculations and projections for the coming year. They need you to know in advance how you’re going to live your life. And that’s unrealistic.

Why? Well that’s because we all get paid weekly, fortnightly or monthly. None of us get paid on an annual basis. And none of us can accurately predict either our annual income or our annual expenditure.

Sure, we might have a fair idea of these figures – but life isn’t like that. It’s just not that predictable. Let me explain –

Unless you have a ‘fixed rate’ on your mortgage, you can’t apportion the annual interest costs of your mortgage, because interest rates are not stable.

How can you forsee the costs of your utilities – when your usage may change because of a change in circumstances? A simpler example of this – you might decide to purchase a big plasma TV, (which are known to use more power) or you might get rid of your vintage fridge for a newer model that uses less power.

What you spent last year on haircuts, clothes or car costs can change dramatically if you decide to change your style, your size or the way you use your car.

A household budget simply cannot run on the ‘annual’ figures that you forecast on any one particular day.

The other part of the revelation is this – these ‘other’ types of budgeting systems are locking you in to living your life the same way, every day, for at least the next year. That’s the way they’re designed!

And that’s so boring!

How lifeless would it be to have to live your life according to the figures that are set down on paper? There’s no room for spontaneity, no money for impromptu excitement, and nothing to look forward to.

That’s why so many people shun the idea of having a budget.

I wouldn’t like having to live that way, and I wouldn’t expect you to, either. But if I could show you a different way – would you be prepared to try it for a month?

© Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Have you ever wondered where your money goes? Does it seem to disappear into a black hole and even though you know you haven’t spent much, it’s just vanished?

Well, here’s a thought – go and have a look in your cupboards. Yes, that’s right – your cupboards – all of them. You’ll probably discover that whilst your wallet is empty – your cupboards are full.

Let’s dissect a couple of the obvious money-eating cupboards.

The bathroom cabinet/s: How many tubes of toothpaste are in there? How many bottles of shampoo? And how many of those bottles are still half full? How many razors, bars of soap, deodorants or jars of hair products can you see? Of course – the really big one – how many rolls of toilet paper are there?

I know many people who have a ‘toilet-paper-fetish’. One girl has a whole shelf in her linen cupboard to store the rolls that can’t fit into her laundry cupboard. Another family has 105 rolls. Now considering they only use 4 rolls per week, that’s a 26 week supply, which is six months! But they still keep buying it because “it was on special”. Let me assure you – there is a ‘special price’ on toilet paper every week. If you don’t absolutely need to buy it, then you are not saving anything. In fact – you are wasting money!

Let’s move on… your pantry. How many bottles of sauce are in there? How many tins of fish, fruit, or beans can you find? Can you count the packets of biscuits, cake mix, cereal, jellies and pasta? When was the last time you saw the back of the shelves? Put your hand on something from the back of the cupboard and check the use by date. Is it still current?

How many cupboards are in your house? How much empty space is in those cupboards? It’s quite ok to have empty shelves! The stores are not going to close down overnight. It is not necessary to have a mini-supermarket in your house unless there is a sign out the front that says “welcome to the XYZ Family supermarket”.

If your cupboards are in need of an over-haul, and you don’t know where to start – give us a call. We’re only too happy to visit and help.

© Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

It’s July! And the start of a New Year! Well, it’s the beginning of a New Financial Year and hopefully, we can all put the financial woes from the past year behind us and focus on making this next year the best one ever.

If it really is the start of a New Year, then we’re sure to be looking forward to making all those New Year Resolutions again. (Remember? The ones you made on December 31^st) If you forgot to do it six months ago, then now is a perfect opportunity to make a fresh start and put some plans in place.

Apparently, more than 70% of new year resolutions are financial ones – you know the sort – get the finances in shape, stop spending so much money, clear the credit card, start a savings account etc etc. And with 92% of all resolutions failing – there’s a lot of room for improvement.

I know somebody who is always saying that he’ll make his financial New Year promises in July, and then when July comes he says he’ll be ready by January and so on…. by the time the end of any year comes around he’s never done what he says he will and wonders why he is financially always behind the eight ball.

Sometimes we can all be a bit like that – putting off the hard decisions and finding lots of excuses as to why we haven’t or can’t change something. It actually takes more energy to find a plausible reason for not doing something, than it does to do what we’re trying to avoid.

In the meantime – The only way you’ll have a happy year, financially – is if you do something to make it happier.

The simplest way – is to organise a budget!

Happy New Financial Year!

(c) Carmel McCartin –  Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

How quickly the year flies!  Soon it will be the last week of June which means we’re halfway through this year. It’s a great time of year to take stock of the promises we made to ourselves when the year had just started.

Are we on track to achieve what we wanted for this year? Are we making a little progress at least? Or have we not started as yet?

It’s also at this time of year that our thoughts turn to the shape of our finances. Are they shiny and bright like a crisp new apple? Or have they gone a little ‘pear-shaped’?

It doesn’t seem to be easy to make ends meet at the moment – Money doesn’t seem to stretch as far at the supermarket; car, health and household insurances have gone up again; council rates are due to rise and of course – electricity and gas prices  are elevated at least once every year.

It seems like our wallets are being attacked from all sides – I guess you don’t need anyone to remind you how tough it is at the moment.

The 30^th of June marks the end of the current financial year – the time when we gather together all our paperwork and receipts in preparation for filing our tax return. It’s traditionally the time when a lot of financial decisions are made or re-evaluated.

For every person and/or household that has an income now is the time to assess your money and how you’re managing. If you’ve fallen behind in your savings plan – then now is the time to make amends. If you’re falling behind in paying your bills when they’re due – then now is the time to organise or re-organise your budget.

If you don’t know how to get things started or back on track then call us!  The worst thing you can do is to leave things till they are beyond repair.

The end of the financial year doesn’t have to mean the end of your financial focus.

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Have you noticed that there is an enormous amount of ‘toy sales’ that occur at this time of year? It’s no accident; they’re designed to entice shoppers out from their warm houses and into the stores by advertising large discounts on toys so that parents can get ready for Christmas. 

In some cases they offer a ‘free lay-by’ arrangement which means that the shopper can store the toys at the shop while they pay them off.  What a great idea! 

As a kid, I often wondered where Santa stored all the goodies that so obviously couldn’t fit inside his sleigh. 

But in initiating a discussion on the topic this week, I threw in the thought that “toy sales mean that parents spend huge sums of money so that their kids can impress people they don’t even know or like”. 

It was an interesting debate. One argument was that some parents like the lay-by arrangements, as it gave them a chance to buy ‘big ticket items’ that they would not ordinarily be able to afford in December. At that, I couldn’t help myself; I had to float the idea that perhaps they could put a little money aside each week to pay for the festivities at Christmas. 

Of course, the ‘savings’ idea was then counteracted by mums and dads telling me that they mightn’t be able to afford everything on the Santa List if they did it that way. Whoa! If all the wants on the wish-list are being fulfilled every year, then I’m moving in! 

Using the lay-by system is a good idea, because there are no interest payments and the penalty for not making the payments is that the goods aren’t released till they’re paid for. But once again we’re conditioning ourselves to constantly paying off things we’d like to have. It means that we’re always living in debt.

 And I need to ask this question – what happens if you lay-by something now that your child has ‘gone off’ by Christmas? 

The discussion was not all one-sided. There were people who agreed that perhaps the children of today have high expectations of material possessions because constant advertising and peer pressure point them in that direction. These were the parents who freely admitted that they’d never be able to afford everything that their kids asked for. And that’s the reality that every generation of parents must face. Even with a million dollars to spend, I doubt that every wish could be fulfilled. 

Sometimes I wonder if converting a child’s bedroom to the equivalent of a mini toy store is just to satisfy our own desires. So I have to ask – “how many times have you bought a gift for your child because it’s something that you’ve always desired?” 

One father sadly admitted that the model train set that he’d insisted on buying for his son was really to complete his own childhood dream and it was only ever used when they were together. It seems that in this instance, spending time together was more valuable than spending money. 

It concerns me greatly that maybe we’re teaching our children to copy our love of consumerism and I’m curious to know if future generations will also have a ‘keep up with the joneses’ mentality. 

As I’ve said many times before – “the greatest gift you can give to anyone is the gift of time”.

So, as you line up in the queue at the toy sales ask yourself this – “if I gave my child a choice between this wonderful toy and a full day of doing things together, which would they choose?”

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Close your eyes for a moment and visualize your dream holiday; or the shiny new car that you’ve always wanted to own.  Can you see how great those things look?  Can you see yourself actually owning these dreams?

Unfortunately, for many of us, planning for these things stop right there, at the ‘dreaming-about’ stage.  However, with a little planning and some discipline the likelihood of achieving our goals can be dramatically improved. 

Consider implementing some of these tactics to improve your financial picture.

• Write down your financial goals and objectives. If you don’t write it down, it will always remain ‘just a dream’. Including deadlines will help you to stay focused.

• Use credit cards as little as possible.  Pay in cash instead. If you must use credit cards, pay them off each month.

• Spend a little, but save a little more.  As your debts get paid off, save the “extra” cash each month.  Because you are using the money you could be saving for debt repayments it’s easy to be tempted to overspend using the “extra” cash.

• Keep a savings balance of at least 3 months of expenses.  This can be used when emergencies arise which in turn will keep the stress levels to a minimum and save you from charging on credit cards.

• Protect your valuables and your income earning potential with appropriate insurance policies including mortgage, life, and disability policies.

• Don’t forget to save some money for retirement.  Social Security will cover only a fraction of the money you will need or want for retirement.  Starting as soon as possible is important and costs less in the long term. Talk to your financial advisor about preparing for retirement.

• Organise your will and create an estate plan.  Many people think they need to be super wealthy before doing estate planning, which is not true. You may not own a lot but it’s preferable to pass it on to those you love than leave it to the government.

A Finance Professional will be able to help you to reach your financial goals. The best time to get started with a plan for you and your family’s future is now, whilst it’s uppermost in your mind.

As you’ve no doubt heard before – “those that fail to plan, plan to fail”

The very first step in starting is to plan your budget.

©  Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions, you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

In an earlier post I shared the findings from a study of family finances done by St George Bank. Let’s examine the key findings of this report –

One in four said money is a source of conflict in their relationship mainly due to income stress, food and utility bills and their partner overspending. I would say that this is largely because there is no budget in place. Money doesn’t have to be a source of conflict. Open communication and a good budget will go a long way to alleviating money stress, bill-shock and heedless overspending.

62% of respondents said they manage the household finances while 38% treat it as a joint responsibility. From what I see, if there is only one person responsible for the household finances there’s more likely to be money conflict. Is it fair to lay that whole responsibility on just one person? Teamwork is a much better solution.

Half (51%) of respondents combine their income with their partner through a joint account and 37% keep separate accounts. Separate accounts can work – if you sit down at least twice every month to discuss the family finances. I find that joint accounts tend to go together with good teamwork.

63% of respondents agree there is a spender and a saver in their relationship. This doesn’t have to be a problem if the household budget works and there are no secrets. Many couples are happy to appreciate the differences in each other. So long as neither the saver or the spender is over-the-top, there is no reason for a major war.

24% of respondents keep a financial secret from their partner. The top four secrets are a secret bank account (23%), a large debt (22%) an expensive purchase (21%) and a secret credit card. Your family finances are doomed if this happens in your house. Why are you doing this? The good news is that an open and honest discussion followed by some sensible budget planning can

70% of respondents said they taught themselves how to budget, followed by learning from their mum (23%) and their dad (20%). It doesn’t matter where you learn to budget, just so long as you do budget. If you have a system that works for you, then continue to use it. If you don’t have a good working budget, or you don’t know how to get one sorted, the all you need to do is call me. It’s simple!

Mum vs Dad

Mum’s top ‘financial secret’ was a large debt vs Dad’s secret bank account. Sometimes this is the other way around. When it comes to money, keeping secrets never works. Once again, open and honest communication can alleviate problems related to this practice. If you’re keeping secrets, I suggest you ‘fess up now. There may be a little pain, but everybody will feel better in the long-run.

4 in 10 Mum’s consider themselves the spender vs 3 in 10 of Dad’s who say this is the case. If you think that you’re the over-spender, then stop doing it. You’re probably only thinking that way because you feel guilty about what you’ve spent the money on. Ask yourself why you’re doing it – and stop!

49% of Mum’s make the financial decisions on the children vs 28% of Dad’s. Why is this so? Are Mums a softer touch when it comes to spending money on the kids?

Mum’s (41%) and Dad’s (42%) tie when it comes to thinking it’s the other who overspends. Nobody wants to admit that they’re at fault and it’s sometimes easier to play the blame game. A good budget, teamwork and more communication will help to remove this negative thinking.

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you must make up your own mind. If you don’t like the content – then either stop reading or send me an email)

“A quarter of Australian family’s state they are conflicted over money and admit to keeping a financial secret from their partner”  This was the leading statement on a white-paper issued from St George Bank in May 2018.  (A whitepaper is an in-depth report on a specific topic that presents a problem and provides a solution)

It’s an interesting read …

New research by St.George Bank reveals one in four Australian families find money a source of conflict at home, with 40% believing this is due to their partner overspending.

The survey conducted with 1500 parents around Australia, also found that despite having children together only half (51%) of families combine their income, and nearly four in 10 (37%) keep their money separate.

One in four parents said they keep a financial secret from their other half. For Mums the top financial secret was a large debt while for Dads it’s a secret bank account.

The research also found six in every 10 households rely on only one parent to manage the money and agree one of them is a spender and the other a saver.

Ross Miller General Manager for St.George Bank said it was very clear from the research that ‘saving more’ was the number one financial goal for families well ahead of ‘having a better household budget’.

“It was interesting to see that only half of families combine their income, and only four in 10 parents tackle the household budget as a joint responsibility.

“This was also the case when it came to parents making financial decisions on children’s expenses such as education and hobbies, again half of Aussie parents said they make these decisions alone.

“By looking at the household expenses together and agreeing on key financial decisions, families may be able to budget better and improve on their savings strategy.

“Opening up a joint account is a great way for parents to share mutual financial goals and keep track of their household spending, and conversely combining savings into one account can help boost their savings,” says Ross.

Ross added only 17% of households had sought some financial advice, with 70% stating their household finances were self-taught.

The white-paper concluded by saying that it is recommended that families review their finances and accounts at least once a year.

If you haven’t reviewed your budget for a while, now is a good time to do it before the end of the financial year. Give me a call – I’ll be happy to assist.

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)

Some time ago I was talking to a lady in her mid-forties, who told me that they “don’t need a budget”. Naturally, my curiosity was aroused. Not five minutes before that statement she was complaining that she had to work, and she hated it.

“So why don’t you need a budget?” I asked. Her reply was simple – they “don’t have a credit card and they don’t owe any money”.

My question about how much money they have saved in a bank account was met with a blank stare and an answer of ‘Nil savings’.  Their future? – Well, they have nothing apart from the employer funded superannuation which now amounts to about $35,000.

How are they planning to spend their retirement? What activities would they like to enjoy? Have they even thought about this? You see, at the moment the old age pension is a little more than $400 per week. Now I don’t know about you, but that will barely cover my household expenses.

So while this lady has worked hard to make sure she has all her debts paid out, she hasn’t given much thought to what lies ahead in the future. She readily admitted that they’ve frittered a lot of money away each week, since they paid off the mortgage. But then she also realized that if the fridge packs it in tomorrow, they don’t even have the price of a new one in their bank account. That would mean going back into debt again.

Even if they just saved half of their old mortgage payment each week, they’d be in a much better situation when they retire and that could mean the difference between eating out in a restaurant and eating out on the back lawn.

Having a workable budget will  ensure they can remain financially stress-free now and into the future.

©   Carmel McCartin – Budget Bitch

And don’t forget – (The views expressed in this blog are the personal opinions of the author. Don’t rely on them to make financial decisions; you have to make up your own mind. If you don’t like the content – then either stop reading or send me an email)