Hi everyone! Im one of the newbies in this forum. As my husband’s posts say that we wanted to enter the market of IP. I just wanted to ask some of your opinions & suggestions for us to start saving. If you don’t mind please share your ways of savings… For sure everyone in this forum will be motivated to be in this market & get a good start. Thanks!
Hi Lovelyn,
Hubby and I stick to a strict budget where my wage is used for expenses and his wage is totally savings. We work out a specific budget for everything.EG,
£70 food
£40 travel
£40 Expenses (the little things you need from time to time, eg, a dinner treat out, a new bra etc)
£40 pocket money Paul
£40 pocket money Steph (ME)
TOtal- £230.
Then the rest of the money in my account sits there ready for bills to come out. I try and use direct debit whenever I can coz it is easier for them to pay my bills than me!!Some months it works out that my wage is enough but as you know, some months you encounter some hefy bills which can burn your hand a little. But we just take it out of paul’s account and shrug our shoulders. As long as we are saving £500 a week we are happy.
Even in Australia we had such a strict regime and it worked coz we saved over $20K in 6 months!! You just have to be prepared to change your lifestyle slightly and learn to enjoy the simpler things in life. The fact that your bank account increases and once you make it past the $10000 mark it is easy to save!
Opps, gotta go to work. Hope my comments have helped.
Steph.Success is 1% inspiration and 99% perspiration.
hi there
i reckon the only way to start saving is in the first 2 months write down everything you spend. and this means everything.
this will mean
– you will know what you are spending your money on
– every night when you write down what you spent yr money on you get this guilty feeling when you bought that extra magazine or suit etc etcwork on building up as much guilt as possible
seriously though – you will be amazed how effective this is.
cheers
You don’t specify if you both work or not but this is what my fiance’ and I did (now married) when we were saving to buy our first house.
1. My fiance’ paid for ALL our living expenses. However, of note was the fact that we were both living at home with our parents. Still our living expenses were: board, insurance, petrol, food/clothes etc
2. I saved ALL my money for a deposit.
Works well if your living at home (ie no rates/insurance/mortgage) and both have a job… not sure if it applies to you though.
I agree with what aussieR said.
List down everything.We still do that after 3 yrs of marriage…every single transaction we made, even a 40cents soft serve from Maccas go into our diary. The we put in Quicken and tabulate it monthly to see if we have gone over or under budget for each category.
Of course, take time out to reward yourself when you have done well.
We will be doing this for the rest of our lives even though people think we are crazy. We do what’s working and now we have 2 properties and we are looking for the 3rd.
It’s not what you earn but how you spend.
All the best…(I love my budget!)
All of the above posts are an excellent start, however, don’t be afraid to look at something like Simply Budgets. This software is like having a crystal ball for your bank account. Costs about $70 odd dollars, and works very well, I use it myself. Have a look at http://www.simplybudgets.com.
Gary Young
Home Loan Connexion
Mobile 0407 64 66 32
Fax +61 7 4636 4841
email [email protected]Writing down what you spend your money on before you start is the best way to go in my opinion. My accounting class was set to do this as our first task in UNI so we could build a ledger, profit and loss etc. It opens your eye’s as to where you spend your money.
I have an excel spreadsheet that I have configured with mine and my partners budget, it is great as you can see how much money you put away a week will accumulate to in a year. We also split our funds across bank accounts. For example money for Food, Petrol, pocket money, train fare’s etc goes into an account that can be accessed via a debit card. Money for bills and savings goes into our offset account, it reduces the interest on our home loan and we cannot access it via a card. We also have only one credit card between us, we only use this as an interm measure for a large cost and quickly pay it off from our offset account. We don’t have any store cards or anything like that either. We also have an account we put money away for xmas, you know all that extra food and presents, we found it is a time of year when all kinds of unexpected costs come up that you don’t budget for.
We also “buy smart”, home brand sugar and olive oil tastes the same as stuff that costs a dollar more. I believe if you can’t taste the difference then why pay more, for anyone who has read the book “no logo” you know that with the popular brands you pay for shelf space, the “brand”,advertising and for someone to sell it to you. By the same token I have never found a no name washing powder that works on clothes as good as omo for front loaders.
I would also say it depends on your “personality” my partner never saved a cent until we moved in together. Now she has saved enough to pay her car loan off twice as quick and still have more left over.
It is important to reward yourself, I generally save for two things, Investments 90% and “toys” 10%(stuff I want). This way you still get little rewards while doing the big save for important things. There is no point in having money if you can’t enjoy life by going out for a nice dinner occasionaly or going away for a weekend.Happy saving.
McDeyessThis post reminds me of a couple of savings …
“Income 100 dollars payments 101 dollars – misery
Income 100 dollars payments 99 dollars – happiness”and
“We spend money we don’t have to buy things we don’t need to impress people re don’t really like”
As one of the owners of the largest privatley owned business in a 5000 head country town (fully picked over for positive property and there was some a year or so ago) the trick in your business and personal life is to know exactly where each and every cent is spent.
Look at any large “turnaround” and succesful company it’s on the expense side that they make the change, often by slashing the people and that’s why sucessful people know exactly where the expense is even if it is $ 40 bottles of wine at least you know where the hell it went.
Cheers!
I don’t worry too much about budgets, but I:
1. Have a very clear idea of what is essential and what is not
2. Question every non-essential expenditure at point of purchase
3. Have money automatically taken out of my bank account by managed funds, extra payments on your credit cards, home mortgage or special ‘IP deposit savings account’. (20-25% of pay is good)
4. Buy IP so that the tenant’s rent provides an income used to build equity in real estateAs for motivation, for me that’s simple! Think of the end product of all this. As your portfolio grows think of the growing proportion of your income coming from investments and the declining proportion from your job. Eventually you’ll be able to quit or reduce the latter and have more freedom.
Then once you have freedom, what do you want to do with it? This is a tough question that only you must answer. If you have no idea, then you will waste your freedom. Also bear in mind that with freedom comes responsibility. But if you get some serious answers on this one, this should help motivate you to do what is necessary.
rgds, Peter
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