Budgeting or dieting – it’s the same mindset

Have you ever gone on a diet and tried to lose weight?

Many of us, at some time in our lives, have felt the need to reduce our girth and get into shape. Why do we do this?

Sometimes it’s because the doctor has told us to do this for the betterment of our health. Sometimes, we’ve believed the hype about looking more attractive by reducing our physical appearance. And sometimes we do it because we just want to feel better about the direction our lives are heading.

The first step is to decide which weight reduction formula you’ll try first. Nowadays, there’s a myriad of products available on the market. Do an internet search or even look in an old-fashioned phone book and you’ll see them all.

Their advertising tells you to ’beware of all the other fad diets’ and they lure you with promises of reducing your weight without feeling any pain. All of them are just waiting for to you to sign up.

As we all know, it doesn’t matter which diet plan you choose; if you’re not prepared to change your lifestyle somewhat then it won’t work and you’ll end up disappointed. That’s a fact.

Starting a budget shares the same mindset as losing weight. In both scenarios, success comes from making some lifestyle changes.  That doesn’t need to be difficult. It takes 21 days to change a habit.

We’re not going to make any fancy promises that we can’t keep. However we will say – if it takes just 21 days to make a new habit, then why not give our simple system a try for just one month. That gives you a week of your new financial lifestyle after you’ve created a new habit.

Doesn’t really seem so difficult, does it?

 

© 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)

The power of branding

We’ve become obsessed with brand names!

There’s no doubt that manufacturers of ‘tried and true’ products have reliable products. We recognise their brand names as representing quality and excellence in the goods or services they provide.

In every area of the commercial world in which we live, brand names have become something to be used as status symbols. Not only do we see well known brand names everywhere but we hear people talking about them and judging others by the labels that they buy, use and wear. 

A young mother I know is so very proud of herself nowadays. She has halved her household grocery bill by shopping at a supermarket that sells low cost groceries. She says that by doing this her family is now ‘surviving’ and not struggling to make ends meet.

With the money she has saved on her grocery bill she has been able to buy her 2 year old son a new pair of Reebok shoes. He’d grown out of his other leather shoes.

The car needs new ‘shoes’ too. She plans to put the new tyres on the credit card and pay them off.

Now I’m not advocating that we shouldn’t buy “the best that money can buy”. I am suggesting that maybe we need to buy the best that our money can buy.

And maybe we need to get our priorities in order as well!

 

 

 

© 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 to keep your holiday pay for holidays

Have you ever had to borrow money from your holiday account? You know – you’ve got a large bill due (usually it’s the car registration) and because you don’t have the money to pay for it, you convert some of your annual holiday (and or holiday pay) into cash.

Wouldn’t it be good if you didn’t have to do that? Wouldn’t it be great if you had the money waiting each year to pay that account? How good would it be to be able to not only pay that bill, but also have a holiday and some spending money as well?

It is possible you know – but you have to organise a budget first!

Now – straight away – I can hear you turning off.

You see the biggest trouble is – most people think that having a budget means taking things away from them. They think that if I was to come to see them, I would be telling them to stop doing things they like to do; stop having the nice things in life that they’ve been having.

But you see, I’ve never yet told anybody that they can’t have this, or to stop having that. I don’t have a problem with anybody spending money – providing that money is theirs and not borrowed! 

Having a budget is not about taking things away from you – it’s about making the most of what you already have and the money that you earn. A budget isn’t restrictive – in fact most people say it actually gives them more freedom.

How good would it be to go shopping and not feel guilty? How much would you love going away on holidays knowing that you didn’t have to borrow the money? How fabulous would it feel to know that you control your money – and not the other way around?

A budget is the most basic financial plan and yet few people have one in place. Most people spend more time worrying about their superannuation fund than how they manage their money on a daily basis.

See, I figure it’s like this – if you don’t ‘get used’ to a budget now – how are you going to manage when you do retire? Unless you’re putting away a quarter of your yearly income into a retirement fund each year, then the weekly $300 government pension is looking pretty grim. (I know lots of people who tell me that it is pretty grim) I can’t live on it – can you?

And just to reassure you – the only people who will know that I’ve been to see you – are the ones you tell.  (but you’ll be so delighted with the results, you’ll probably tell lots of people)

 

 

© 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)

Should you give Your Child a $20,000 Eighteenth Birthday Present?

“We wanted to do this and on the advice of our financial planner, when our child was born we set up a “strictly no touching” savings account with the funds to be given to him when he turns 18.”

What’s wrong with this sentiment?

Nothing? You say?

There are very few parents in this world who want to see their kids go without. In fact, I know there are some who go without things themselves, in order to make sure their kids have the best start in life. Being a parent is like that.

And every parent in every generation wants to give their children more than they themselves received at the same age.

But I don’t quite understand how some parents can religiously contribute to their kids’ savings accounts and never touch the money – yet are unable to save anything for themselves.

I was called to see a young couple who were having trouble making ends meet and were in fear of the bank re-possessing their home. They hadn’t been married very long, had a two year old child and were expecting another baby within a week or two.

Money-wise, with only one income, things were really tight. Apart from their mortgage which was consuming a large portion of their income, they had no other loans.

But with the husbands work hours being cut back, winter ills and the associated costs of the imminent new baby, they’d been so busy juggling things that they’d not only gotten behind with their bills; they’d also missed some mortgage payments.

Both parents looked pale and seemed fragile. Further questioning confirmed my suspicions – they didn’t eat every day. They did say that their little child ate well every day.

Together we started to add up some figures. Boy! There wasn’t much money coming in and I could certainly see why they juggled their funds all the time. Then I asked about the Family Allowance from the government: were they receiving it?

Oh yes, they assured me, they were getting it and were putting it into a bank account each fortnight; a bank account for their son, that they wouldn’t touch. And they were very proud of the fact that he now had a little over $7,000 in savings.

Oh dear! These people were in serious danger of becoming homeless and their toddler was financially secure enough to leave home and set himself up in a rental property. I think he was fast becoming the wealthiest three year old I’d ever met.

This is not an isolated story. Nowadays we seem to have lots of pre-schoolers with bank accounts containing hundreds and sometimes thousands of dollars – yet their parents are struggling to keep the roof over their head, and food on the table.

And in many cases not only do their parents have no savings of their own but they are using their credit cards each week as an extension of their salary. In many cases, they do this just to ‘get by’. Just imagine the stress this causes!

How do we explain to these young people that Family Allowance is money provided by the government to assist with feeding, clothing and educating their children? How can we get them to see that growing up in a safe home with happy parents is more important than a fistful of dollars when their kids leave school?

And how do we get them to learn that they’re teaching a lesson of saving for others, but not yourself.

The gift of saving is perhaps the greatest lesson you can give your child. The lessons you teach them will possibly last longer than the money you save in an account for them. While the end result may be wonderful, it’s the journey that they’ll always remember.

Is it fair to present them with an end result if they haven’t taken part in the journey?

 

© 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)

What is Pocket Money used for?

The Pocket Money Issue is something that I’m constantly asked to referee when I visit families.

How old they should be when pocket money needs to be started, how often they should get it and what purpose the money serves are some points for discussion. And the big question – how much should they get?

Lots of people tell me that kids need to learn how to manage their pocket money first as a stepping stone to becoming “financially astute” in later years. That’s true; although I think that financial responsibility would be a much better lesson to learn. There’s no point in understanding how money markets and share portfolios work if you live on credit and don’t pay your bills.

But whose responsibility is it to teach these lessons? Does it belong to the parents, the school or to somebody else?

The whole debate opens up a myriad of questions – where does the pocket money come from? What’s its purpose and what does it cover? Will the kids have a need to budget the money if their parents also buy them all the things their weekly money doesn’t cover or when it runs out?

Is pocket money a payment for doing household chores? If that’s the case, then how much does a ‘stay-at-home’ mother earn? And who pays her anyway? I’m sure you’ve seen the many articles that have been written about how much it would cost to employ somebody to do the mundane jobs that are a necessary part of living in a household.

So while it’s important for young people to learn from an early age that if you want money you have to be prepared to work for it, there’s got to be a happy medium.

Surely part of what our kids need to learn is that there are certain things in this life that we must do without getting paid. Some days I would like to strangle whoever not only coined the phrase – “you get nothing for nothing”, but taught it to our kids as well.

Call me cynical but I have a mental image of dozens of young adults who have moved out of home with no clean clothes to wear, filthy floors and no clean dishes to eat from because there’s nobody to pay them to do the housework. Of course take-away food doesn’t need dishes to eat off, but who’ll get paid to take out the garbage?

Is pocket money a reward for good behaviour? What denotes a ‘good kid’ and what happens to the kids who have parents that I hear complaining about how ‘bad they’ve been’ lately? Do they still get their allowance? In which case, one might ask if the money is being used as a bribe for good or appropriate behaviour.

Of course, a lot of the pocket money questions that I have to answer are about how to fit these payments into the family budget. Sadly, I see many households where the pocket money portion is larger than the weekly allowance for utilities and it’s no wonder that some families are struggling to pay their bills on time.

Whilst every household and family is different, some of the potential pocket money problems can be alleviated by all parties discussing the family budget and where the allowances fit within that.

A good rule of thumb – if the children are too young to understand or participate in a family budget discussion, then they just might be too young to receive an allowance of their own.

The answers lie within our individual concepts and values of money management.

 

(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)

Don’t be afraid of second-hand places

There are so many things you can buy secondhand – clothing, furniture, white goods, electrical goods, cars, even houses. And there are so many places you can buy them – shops, private sellers, even on the internet.

But just because these things have had previous owners, doesn’t mean that they’re no good.

How often have you bought something, used it once, then given it away? Or how often have you had a garage sale to get rid of your surplus goods?

Charities appreciate people like you.  You’ve probably told those charities “there’s nothing wrong with it, it’s just like new”.

So… I challenge you –  if you’re prepared to give away things you’ve only used once, don’t be ashamed to go to a secondhand place to buy something that you’re only going to use once.

You’re sure to save a lot of money.

Of course, if you really are worried about what your friends might think – take them with you and discover the delights of a shopping expedition which won’t cost the earth. You’ll probably even have money left over for a coffee.

 

You’ll find this tip and many others in my book – Money Tips from the Budget Bitch

 

©  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 much have you forgotten?

Sometimes, when you open a paper or turn on a TV it seems that the whole world is in financial turmoil.  But we’re all feeling the pinch in some way – our incomes don’t seem to stretch as far as they once did.

Why has this happened? Is it because for so long we’ve lived in a world of ‘have it now and pay for it later’ that, amongst other things, we’ve forgotten how to be frugal?

What is ‘frugal’? Well, the Macquarie dictionary defines frugal as ‘economical in use or expenditure’ or ‘entailing little expense; costing little’. So let’s just break that down a little –

We’ve forgotten how to save water. How many loads of washing do you do each week? Is it really necessary to do that many? Do our clothes really get that dirty in a couple of hours – or have we just forgotten how to hang them up again. Is this something we can teach the younger members of our family?

We’ve forgotten how to save electricity. Are there lights on constantly in your house? What appliances are running all day inside or outside your house? Is it absolutely necessary to have them on all the time?

We’ve forgotten how to save on fuel. When was the last time you walked anywhere? How many times this week did you take the car / or drive to somewhere close enough for you, or your family, to walk to?

We’ve forgotten how to cook. How many take-away or pre-packaged meals have you had this week? How many times have you taken your lunch to work? How many times have you eaten out? It takes time to cook, and time equals money (we all know this), but if you’re spending all your money to avoid cooking (by getting others to prepare your food) – then the food budget may be a little out of kilter.

There are so many ways we can be frugal without dramatically changing our lifestyle, and these days there is no social stigma attached to the word ‘frugal’. It all comes back to that ‘B’ word (budget) and making sure that your lifestyle fits the income you earn.

While we can’t change the world situation we can make things better for ourselves and our families.

 

 

If you don’t know where to start – CALL us!

 

©  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 to buy & keep your own home

How many times have we all heard that the great Aussie dream is to own your own home?

Over the past 60+ years, since the end of the Second World War, home ownership has been hailed as the best way to keep Australia safe; by owning your own piece of the country.

Unfortunately in today’s credit-driven society the purchase of a home has been put on the back burner for many people. Too often we hear stories of people who would like to buy, but can’t afford the price.

Buying your own home has always been affordable for those who are able to curb the desire to over-spend and who set their goals early before working towards the end result. Of course, managing your money realistically has a lot to do with attaining the outcome.

I get a little surprised however, by the young folk of today that live with their parents for 25+ years. They have a good income yet pay no living costs and don’t have any money saved towards a deposit for a home. It makes me wonder what on earth they spend all their money on.

Sadly, for some people the only hope of owning a home will depend on an inheritance from the generosity of their parents.

It makes me curious to know if they’ll continue to live in the family home until that time.

If you really want to buy and then keep your own home then the first thing to do when getting started is to organise a budget. But you knew I was going to say that, didn’t you?

 

©  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)

Keep your credit report in good order

If ever there was a time to get your budget organised, it’s now.

Australia’s credit reporting system has made some major changes and whilst many people would say it’s about time, how much do you know about your personal credit rating?

In the past, Australia used a negative data-reporting system. This meant that your credit report only included a narrow range of negative information – such as bankruptcies, defaults and any instances where you’ve been denied credit. They also included information about habitual ‘late payers’ of utility and other accounts.

In March of this year, legislative reforms brought Australia into line with other Western countries where positive credit scores are the norm.

Credit agencies will now consider new variables such as your payment history and they will also recognize and reward good credit behaviour. (You won’t get prizes, but you will have a record to show if you pay on time)

Currently there are three credit reporting agencies in Australia – Experian, Veda and Dun & Bradstreet.

As an individual, you have the right to request a free copy of your personal credit report every year by contacting any of these national credit reporting agencies. You can do it online and you’ll find their websites easily.

Once you submit the paperwork, credit reports are required to be provided within 10 days of the receipt of your request. If you want your report immediately, you may find that there is a charge involved.

Lots of people tell me that they couldn’t be bothered getting a copy of their personal report but there are good reasons for doing so.

Nowadays when online and personal fraud seems to be more prevalent, obtaining your credit report will help to prevent identity theft; you really can’t afford to be too blasé about this.

Your credit report will also confirm the accuracy of your credit history. Have you ever wondered if there’s a ‘black mark’ against your name? And if there is – did you ever wonder how it got there?

Under this new system, if you miss a loan payment by more than five days, your credit file will be given a black mark and your credit rating will deteriorate. However, it will also show how often you have made repayments on time.

Some of the things that your new credit report will show are:

  • Whether repayments have been made on time over a two-year period
  • If a repayment of over $150 is more than 60 days late, it will be listed as a default
  • The limit on the credit cards for which you have applied
  • The type of card for which you have applied
  • The date you opened a credit account, the type of account, and when it was closed
  • If, because of a default, you have entered into a new arrangement for repayments

What can you do to keep your report in good order?

  • Make sure that you pay a debt/loan on time. More than five days late and you’ll get a black mark.
  • Do your research for credit cards and store cards at a time when you don’t need them. It’s when you’re under pressure to pay for something quickly, that you get the worst deal.
  • If you’re having trouble covering your debt obligations, contact the lender to renegotiate your repayment terms.

Now, you might be thinking that you don’t need to worry about a credit report, but the very next time you apply for, or change a mortgage, a credit card or even a contract for your phone – you can be sure that a credit provider will be looking at your borrowing history.

Of course, sorting out your budget will assist in making sure you are never late in paying a bill, or defaulting on a loan; thus ensuring your credit report stays in good order.

 

 

©  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)

 

What would they think?

 

Today,  whilst thinking about two things that will happen this month, both Easter and ANZAC Day, I couldn’t help but reflect on the reasons for these spiritual celebrations.

In both cases we have good reason to look back and be not only thankful for those who came before us; but grateful to those who unselfishly put themselves on the line so that we can live our lives today in peace and freedom.

And then I began to wonder if they would understand the ways of the world today. What would they think about the changing times and values? Could they even comprehend our desire to ‘have it all at whatever cost’ when all we’re talking about are material possessions?

The important thing for them was the fight for basic rights for all of us – freedom and the protection of our way of life.

The important thing for us is….

Well, only you can answer that for yourself. But let me ask you this …. Did they fight so that we could destroy ourselves?

In 2015 we celebrated the centenary of the ANZACS. Perhaps whilst you’re enjoying the Easter break and the ANZAC holiday, you could spare a thought for those who went before.

Just as we’re proud of what they did for us, ask yourself if they’d be proud of what we’re doing today.

©  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)

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