Making it all Work Financially; How Do They Do It?

What do you have to show for all of the money you have earnt over your working life time?

I found myself pondering this question the other day on the way to work.

Let's face it, we spend more time with the people we work with then with anybody else, and we spend more time trying to earn our keep then any other activity, so what's the point?

Why do we work so hard? Why do we bust our guts working 40 + hours a week, and often trying to score as much overtime that we can for some extra cash, or taking on second jobs just to be able to have a few more pennies to our name?

I guess the answer is to have a better life, or, for some, to be able to afford to live, and to be able to obtain all of the commodities that we'd like to make our lives comfortable.

So why then, is it, that we often get to our tax return, and scratch our heads over the amount of money that we have earnt, versus what we actually have to show for it. When we look back over the year that was, sometimes we find ourselves laughing at all of our drunken nights, or big retail therapy splurges, but are these the things that we really work towards?

Then, when we start thinking about what we really want, we find ourselves getting nervous, wondering how on earth we'll ever be able to afford to manage our spending or squeeze in repayments for that brand new car, or flash new house, on an already tight budget, that you have to work 40+ hours a week to have in your bank account.

From my own experiences, I truly believe that it's not much how you earn that dictates what you do or don't have in your life, it's more about how you choose to spend your money that counts.

If you really want something, then you will learn how to go without other things, in order to be able to afford that special purchase.

So what on earth am I talking about? Of course it matters how much you earn!

Well true, some people do work full time and still manage to be below the poverty line, struggling to pay rent, but I would argue that the majority of people, would earn roughly $40,000 plus a year, and could therefore afford to go on a holiday, or pay for a house, if that is what they really wanted.

My experience

Lately, my partner and I have been asked, how do we do it financially? We are both 25 and we own 2 properties, one in which we live in, and the other an investment property in an Australian capital city. Last year we performed some serious DIY and added an outside area to our investment property, as well as turning a shed into a granny flat with an ensuite.

At the same time as managing repayments, we are also paying for a wedding, we still manage to have a social life, and we can still travel overseas.

So how we do make ends meet? How do we manage to have any money left in the kitty after the bills?

Well, my partner and I am super lucky and we both work. We have always shared our money, in a joint bank account.

Our secret is to live off of one wage, and save the entire other pay packet.

When we bought our first house, the loan was a super small $60,000, just so that we could get in the market. Yes the house is very average, and yes, many people have told us that it needs a bulldozer, but at the end of the day, the repayments that we make each fortnight are less then the amount that we would be paying for rent, and we get to keep the house! It is going to need some tender loving care and money spent on it to bring it up to scratch, but it is a renovators delight and we're super excited to work on it next year. The fact is, that it's affordable, liveable, and gave us enough equity to be able to buy our house in Adelaide.

Which leads me on to our investment property. Luckily for us, my fiancee was always a forward thinking man, and when he bought the first place, he knew that one day we'd be able to use the equity on that property, as part of a deposit for our next big buy.

When we were looking for our second house to buy, we knew that it was only for investment proposes, and therefore, we had to firstly check out how much on average, people would pay for rent in the city that we bought. Once we learnt that, we knew what kind of a price tag that we could look for, as we knew that the repayments would have to be close to the amount that we could charge the house out for, for rent, so that eventually, the renter's could pay off our property. It wasn't an easy task. On average, fortnightly rent in the city we were looking in was roughly $600 to $700. At the time that we were looking for property, interest rates were quite high, which meant that we would've only been able to afford a house for around $280,000, with repayments that would be covered by our rental income. An evaluation of our first property, confirmed the amount of equity that we'd have, and as a result, we only needed to save $10,000 for our next property. As we were keen to buy a house over a unit, we had to do some serious researching in newspapers and on websites, for property that met our criteria (3 bedrooms, large backyard, low maintenance gardens, little to no renovating needed on the inside, ability to add value with extensions, shed, parking, close to shops and public transport, safe location etc). We ended up finding a house that ticked all of the boxes, and fortunately enough, it was close to our budget. In the end, we spent $320,000 on our investment property. As the interest rates dropped, so did the repayments.

Now we have renter's in our investment property, who fortunately enough for us, cover our repayments. All we need to pay for is water, council rates, maintenance and a real estate agent who manages the tenant and the property to ensure that both are looked after, and repayments are made on time.

One of our wages pays for these additional costs, and the repayments on the house that we live in, as well as all of the bills (food, electricity, gas, property insurance, car insurance, car registration, food, water, council rates on both properties, phones, emergency services levy, income protection, mainytenance etc).

The entire other pay we save.

That gives us enough money each year to be able to afford a holiday, or renovations to improve our properties, or to pay for the wedding, as we are this year.

We have managed to cut down our living costs to be bare minimal, so that we can still afford to buy new cloths, go out for dinner, holiday, renovate and enjoy life.

We probably spend $50 per week, if that on food. We buy a meat pack

once a month for a local butcher worth $100 and that lasts us. We buy meat on special, frozen vegetables, tinned foods, pasta, tuna, potatoes and food that is filling, yet delicious.

We have some fairly basic foods that we eat regularly ie pasta bakes, tuna mornay, baked potatoes, home made pizza, roasts, stews, soups, curries, bbqs, gnocci, and the such, that are all very cheap to make and last a couple of days.

We turn switches off at the powerpoints, and rarely use the heater and airconditioner unless it's ridicously hot or cold to save power.

We only run one car, so that's only one lot of registration and insurance, tyres, services and petrol per year.

We use our mobile phones are wi fi hot spots, instead of paying for the internet sperately.

We are both on $59 a month plans, that we never go over as we have chosen plans that suit our needs.

We buy clothes at factory direct outlets so that we still score the big brands and decently made clothes, but at a fraction of the price.

We give ourselves a budget when we go out, and we make sure that we don't go over it so that we don't regret it the next day when we've got major hangovers and can't afford rent because we over spent on beverages.

We allow each other a certain amount of spending money per week, which can be used at our own disgression, but we don't go over it ie Mick buys a carton of beer and I might buy a jumper or have a massage. 

When special events come up that require spending out of the ordinary, we look at our budget and shuffle things around so that we don't miss out.

We try to pack our lunches for work instead of buying them (but we do splurge occasionally).

It's not really a matter of being tight asses, it's just a matter of knowing where your money is going, and where you can save, so that you can afford to live the lifestyle that you want.

In no way are my partner and I expert budgeters. Of course there are nights when we get carried away with friends and spend way too much that we're scared to check the bank account the next day. We've had to borrow money from our parents from time to time to get through the end of the month, and we've had to take out a loan to help pay for our verandah extensions when we performed major renovations last year that we pay off each fortnight.

But what we try to do is always be mindful of the life that we want to live, when making big purchases. Do we really need to buy surround sound on an interest free loan? Probably not. Do we really want to have a credit card to be able to afford that amazing honeymoon? No. Do we really need to sign up to every online website and spend money on deals that are too good to be true on items that we probably don't need anyway? Certainly not.

What we do want is to be able to eventually afford our dream home and reliable car, while still travelling the world and having an active social life, and to do that, we must be mindful of our wants versus our needs.

Do you have any tips for budgeting?

Look after yourself and those around you,

Kirsty xxx

Investing in a Bright Future - Property Investment Tips and Tricks

Via

We all know that money is hard to come by, and we work darn hard for it, so when it comes time to part with our cash, we want to make sure that we spend it wisely.

Making the decision to invest in property is one such time, that you spend countless hours wrapping your head around the number of zeros that follow a figure wondering whether you really can afford to lash out, and become indebted to the bank.

And rightfully so. If we think about the average cost of a house now in Australia, I'm guessing that we'd be looking at at least $300,000 and let me tell you, that's not really going to buy you anything extravagant; that's for a patch of dirt, a standard house, in an average suburb.

$300,000; let that amount just sink in for awhile. A 30 year loan. If you buy a house at 25, and make the standard repayments, then you will be 55 by the time you have paid it off; hopefully having your kids done and dusted and heading towards retirement!

Wow!

If we break it down to the repayments level, then with the current all time low interest rates, you'd be paying almost $1500 a month, on a $320,000 loan, interest only, which means that you aren't actually paying any capital (money off of your house).

$1500 a month for interest only repayments on an average house loan in Australia. That equates to $750 a fortnight or $375 per week.

If you actually want to pay off your house loan within the 30 years, then you're probably realistically looking more like $2000 a month, and $500 per week.

Could you afford to pay $500 per week on your current wage (whether that's combined or single, to be able to afford repayments?)

Just remember, that these costs are only for the house, on top of that, you have electricity, gas, water, emergency service levies, council rates (roughly $1200 per year), food, petrol, phone bills, car registration and insurance, house insurance, income protection, maintenance on the house (as the owner, you have to fix it!), any improvements that you may like to make, a social life, clothes, gifts, travel and so much more!

So how do people afford to buy a house?

Are young people 'shut out of the market?'

How do people 'make it all work?'

My tips

1. When thinking seriously about buying a house, really consider what type of lifestyle you would like to live. We've all seen the bank adverts with the home owners staring at their belly buttons and playing with matchsticks because they have a house loan that takes up all of their money, and allows them none left over to live.

Do you just want to live life or love it?

Do you still want to travel?

Do you still want to afford being able to go to the pub for tea, or being able to buy birthday gifts, or going back to the footy club for some drinks?

If so, then it's really important to work out your budget, with all of your expenses, and then work out what kind of a loan you can afford.

2. Take advance from a bank or mortgage broker about how much you can afford financially, but use it as just that; advice. Trust me, they want to make money from you, and they will tell you exorbitant amounts of money that you can technically financially afford, but can you really afford to make those ridiculous repayments, and still live the life that you want to lead?

My partner and I were told that we could afford to buy property worth $900,000...if we have taken their advice for gospel then we'd both be working 2 jobs, 24/7 with no social life, probably extremely unhappy, stressed and frazzled, with no overseas trips or anything.

So know your budget, and the lifestyle you want to live, as it'll make it much easier.

3. Shop around; you've all heard what the experts have to say - buy the shittest house on the best street. But know what you want. Do you want a 3 bedroom or 2 bedroom house? Do you want a pantry or car parking or outside entertaining area? Are you willing to invest money and time further down the track for renovating or do you want a property that you can just walk into and it's all done? Once you have a recipe for your house, it'll be much easier to know what you want when you walk into open inspections.

4. Stick to your budget. If you fall in love with a house that is outside of your budget, you need to weigh things up. Do you really want to sacrifice your lifestyle to be able to afford payments? At the end of the day, I don't think anyone wants to become a slave to the bank, with no life, but a beautiful house.  Don't be swayed by a real estate agent. You must feel comfortable when you sign those papers. It is you that has to make the repayments.

5. Do your research. Know how much houses have gone for and are going for in the area that you are looking to buy in. Is it a good area? Are there schools and shops near by? Are you looking at staying in the property long term or are you looking at renting it out down the track? Is the public transport near by? These things are key landmarks that buyers look for if you ever want to sell your property down the track.

6. Think long term. I know that it can be scary thinking long term, but when it comes to property, it really is a must. You may not be ready for kids when you first go into property, but the chances are that at some stage you will probably be likely to have them, which means that you may need to go down to a single wage/lose a whole pay cheque. You need to be smart when budgeting and to factor this is - could you still make the repayments on one wage? 

7. Take into consideration hidden costs - there are many when buying a house. Take for example, stamp duty. Stamp duty can be upwards of $20,000. If your budget for a house is $300,000, then you should be looking for properties around $270,000-$280,000. Realistically, you need to afford stamp duty, the cost of conveyances, pest inspections, mortgage brokers, starting electricity, gas and water accounts, any maintenance that may need doing and any furniture that you may need to buy.

8. Try save for a bigger deposit; the more money you have upfront, the more money you save long term and the better deal that you will receive.

9. Be prepared to lower your standards. No body likes the idea of lowering their standards, but, when thinking realistically, you may not be able to afford that four bedroom, double garage, picket fenced property right from the get go. If you look around you, many people who own nice homes with outside entertaining areas, solar panels, and all of the works and jerks are probably 50+ and have added to the shell of the house that they bought when they were first married! 

10. Enjoy the process. I know most of these tips sound all doom and gloomy and heck..responsible, but at the end of the day, you really should enjoy the process! It is a fun and exciting time in your life. Owning your very own home is an amazing feeling - but just don't let the stress of making repayments and having your loan take over your life - get in the way of buying a house that is in your price range and still allows you to live a comfortable lifestyle.

You will probably need to adopt your life after buying a house - you probably won't be able to afford spending $200 in a weekend on alcohol, but instead, you can have friends over under your outside area, or in your  dining room for entertainment (and they can BYO!)

What tips and tricks do you have for new house owners?

Look after yourself and those around you,

Kirsty xxx

http://www.zobel.com.au/

Don't Tell The Guests

There is nothing more exciting then planning your very own wedding day.

There's definitely a lot to think about - and if you forget, there's always people to remind you (haha).

Wedding dresses, location, date, celebrants, photographers, decorations, bridal party, flowers, hair and make up, transport, videographers, shoes, guest lists, special roles, accommodation, garters, alcohol, catering, wedding cakes, invites...the list goes on!

For some, it can be a very overwhelming experience while for others, they have had the day planned out right down to the way the napkins are folded for years.

I find that it's kind of a touchy subject, the whole wedding thing. Some people are more then happy to give their opinion on where you should shop to buy your dress, who you should and shouldn't have on the guest list, and omg, don't even think about hiring such and such to do your decorations, you MUST have such and such.

I guess sometimes we're left either biting our tongue or wondering: how much advice is too much advice? Is it okay to ask the bride about how the wedding preparations are going? Should I suggest this really great celebrant or should I just back away? Should I offer to help or should I let the bride and groom do their thing? How much should you divulge about the wedding day?

Well for me, I'm an open book, and while I am going to keep some things secret, I thought that I'd create a weekly 'Don't Tell the Guests' blog post, to track the decisions made and progress of our wedding.

And then...once the wedding is all done and dusted, I can post photos of how it all came together and brag about how amazing the day was!

Here's so pictures that I've been chuckling over:



How's this for a dress? Via



Ohhh dear - please don't let this happen to us! Via

Coming from the country, this is probably what our wedding car is going to end up looking like! Via

I will definitely be needing something like this to stop me from spilling food on my dress haha Via

These bridesmaid dresses are just so sexy Via

Do you have any funny photo memories from a wedding?

Look after yourself and those around you,

Kirsty xxx



Buying Property - Making It Easier For YOU + a Hot Deal!

Buying a house is by far one of the most fun and rewarding experiences that I have ever had. There’s nothing quite like walking in through the front doors of a house that ticks all of your boxes!

At the same time, it’s also one of the most challenging and scary! Luckily for stress head me, I had a partner who just goes with the flow and calmed my nerves, and we also knew someone in the industry!

Via

Just getting your head around that many zeros is frightening, particularly when you’ve never been in debt before.

Then, on top of that, you have all of the fancy shmancy lingo that goes with the property investment world - mortgage brokers, financial advisers, real estate agents, banks with different mortgage policies and interest rates, stamp duty and this thing called conveyances?

Say what? Who? When? Where? How much? Why?

Andddd then you’ve got the choice of which company is going to be the most reliable, won’t rip you off and who actually cares.

Garrrrr!!!

I guess at the end of the day, you just want to make things as stress free as possible, and you want to find someone who you can trust with all of the banks, I mean, your moolah!

Luckily for us, we knew someone in the industry (who just happened to be the A grade footy coach at my beloved Adelaide Lutheran Club on the field, and founder of Zobel Finance off the field).

So now, luckily for you, I’m recommending a company this is reliable, friendly and just AMAZING to help make the house buying process stressfree for you!

I’ve asked them to explain what a conveyancer is in everyday language!

A Conveyancer is your personal representative who will guide you through the legal processes when dealing with property transactions.

Most people think that a Conveyancer just prepares the transfer document when you buy or sell a property. There is so much more to it than that and that is why it is really important to have a good one!

A Conveyancer will:

-          Check all contract documents, government & local council searches to make sure the details are correct

-          Prepare the necessary documentation to effect the transfer of land

-          Liaise with the Stamp Duties Office (Revenue SA) and attend to stamping of those legal documents

-          Prepare a settlement statement itemising all the costs associated with your transaction including calculating the adjustment of rates & taxes receivable or payable by you

-          Liaise and arrange settlement with any banks or financiers that are involved with the settlement

-          Attend the actual settlement on your behalf

But most importantly, they are there to protect your rights and interests throughout the whole process.

Conveyancers are not only used for the sale & purchase of a property but can also be involved in

-          Land Divisions

-          Community Titles

-          Leases

-          Sale & Purchase of a Business

Zobel Finance are offering a special deal for YOU!

All you have to do is quote is "kirsty's blog" when speaking to Zobel Finance and you will receive a $50 discount!

To find out more about Zobel Finance and how to contact them, please visit their website .

This could be your property! Via

Look after yourself and those around you,

Kirsty xxx

Unleash Your Inner Green Thumb.

Tight ass Tuesday strikes again and today I'm sharing the joys of whipping out that inner green thumb in you and planting your very own herb garden.

Okay, so I admit, I cheated a little. We scored a Bunnings voucher for our engagement party so Mick and I hoped skipped and jumped down to our local store for the declicious $2 sausages and onion, I mean punnets of herb seedlings.

Mick wanted super dooper hot chili bushes so that he could burn the tongues and bums off of his mates and I wanted mint for fruit punch in summer, rosemary to garnish our delicious lamb roasts, garlic to scare away the vampires, basil, oregano and thyme for spag bog, a bay leaf tree for pasta bakes and of course, the old faithfuls in chives and parsley.

Our bargains from the old faithful Bunnings!

Strategically placing the plants!

Fertilising my babies!

Still alive! Amazing!

Yummy!

So amazing in scrambled eggs!

Mick's bum burning chilli plant!

Let me tell you, nothing brings me greater joy then whipping up a delicious meal with a glass of wine in hand, dancing around the kitchen and dashing out to the garden to grab some fresh herbs to top off our meal.

Fresh herbs are much cheaper then buying dried herbs and are so incredibly delicious.

Do you have a herb garden? What are your favourite herbs? Any green thumb tip ideas?

Mick thinks that I should sing to them to make them grow faster...I think they'd hibernate to escape my voice haha.

Look after yourself and those around you,

Kirsty xxxx

Want to travel...tips for tightening your belt.

Today I welcome back my best friend Samara for Tight Ass Tuesday to share her tips for saving some moolah!

Samara, like me, is a pro saver. She has travelled the world while studying and continues to travel the world despite paying a mortgage, socialising and everything else in between.

How does she do it I hear you say?

Take it away Samara...

(To check out other money saving tips, including photographic docket proof of Samara and Joel's super savers, check out Samara's blog over the The Secret Life of Samara)

Our fridge is bare!! Ha ha.

Seriously though, this is at the end of the fortnight before our shop. Contrary to popular belief, Joel and I are actually still eating.

 I thought I would share a few hints and tips that I have to get your food bill down…

1. Shopping fortnightly really helps to stop all those smaller bills adding up.

2. We have moved to more ‘basic’ meals (i.e spaghetti, stir fry).

3. We get fresh produce from the market and then use that as ‘snack food’.

4. We are saying no to eating out.

5. We buy our meat in bulk.

6. We are snacking less- once upon a time we would get home from work and devour a bag of chips. Now we’re learning a bit of self control and either just waiting until dinner time or eating a piece of fruit.

7. Ensuring there is no wastage of food- every thing gets eaten instead of food going off.

8. Being flexible with your meals and using what is in the fridge instead of going out and buying more food when there is sufficient food already.

9. Making home made food if you need to bring something for a supper etc. Here’s an awesome biscuit recipe.

10. Eat less (within reason). People get all antsy when it is suggested that we eat less, however it is a fact that Westerners eat too much food. Cut back and your body may actually function better for it. You don’t need dessert every night. You don’t need to eat until you feel like vomiting. You don’t need a mid night snack.

This style of shopping is not necessarily a long term thing- I would go crazy. But if you need to save some money quick, it’s an amazingly fast way to get a few extra coins in your purse. Some of these methods would however be good to consider long term- I know Joel and I certainly will be using many of these methods even once we have stopped saving like crazy. Until that time comes though I just spend my days dreaming about our holiday and it makes it all that little bit more bearable!

Samara

xo

Thanks Samara. I know that I can learn something from your tips!

Do you have any tips to share for ways to save some moolah? I'm allllll ears haha.

Look after yourself and those around you,

Kirsty xxxx

Money, money, money!

Don't we wish that we all had one of these? Via

 

Money. Something that we rarely discuss openly with people but something we all struggle with from time to time.

I've got something to admit...

I am scared to open my mail box. Not the actual piece of wood on a stand that it is, I'm just afraid of its contents inside. Yup, those pieces of paper that seem to come around far too frequently with ridiculous rental charges and dollar signs. Bills. For some odd reason I feel as though if I avoid the mail box, it will somehow turn into an atm with a never ending supply of finances and will pay our bills.

Please.

This growing old thing and becoming a responsible adult sucks. Things were much easier when mum and dad paid the bills and we just got to mooch off of them.

Now, all it seems like all we do on pay day is log into the internet, click a couple of buttons and BAM...pay cheque disappears down to $20 until next payday. Talk about disheartening.

Don't get me wrong. I am incredibly grateful for the roof over my head, clothes on my body and Home Brand pasta in my belly but jingo it sucks having to constantly think of things in terms of dollars and cents and justifying everything ALL of the time.

Via

Take for example doing the grocery shopping. A task that is meant to be fairly mundane.

Have you ever experienced that awkward, blood flowing to your cheeks moment when you miscalculate the contents in your trolley when you get to the check out?

That moment when you shuffle your feet and stare at the total amount and start to sweat when you realise you have $100 to spend and the grand total is at $93 with 10 items left in your trolley. Then you have to awkwardly giggle and make some lame joke about being pov and you tell the attendant to stop swiping when the total gets to $100 as you start working out what's left in your trolley that's a necessity and what must, ashamedly be taken back?

I have.

Or when you swipe your best friend aka your plastic card and start sweating as the stupid bloody machine that seems to take forever processes your payment and you stress that that magical word approved won't come up?

I have.

You see, I've come to realise that we're always scrimping and saving for something. Whether that be paying the electricity bill or making your mortgage or saving for a holiday or wedding, there's always something.

I never wanted to fight about money, after all, its just paper and metal..right? But the fact is, this year, my partner and I have had times when we do get frustrated and grumpy over money. When all we want is a carton of beer or to buy those super cute jeans in the Target window but we can't afford to, it sucks. There's been times when I have thrown a little tanty over working full time and still HAVING NO MONEY to do anything. God damn it.

Have you ever gotten to that point? Where you just think - what's the point? I earn it and I burn it and I still can't afford to buy a coffee everyday. Yes, I have to be the lame one in my office who makes a pot of coffee because I can't afford (or justify) spending $3 on a coffee a day.

We've had to cut out a lot of extras this year.

Yes, that means that Mick has had to cut back to one carton of beer a month, and I've had to become a massive repeat offender with my clothes. We also pretty much both turned vegetarian for about a month, and trust me, for two country kids who pretty much grew up chomping on a cow, that was tough because meat is SO expensive. Yes, we've gone months with nothing but tomato sauce and butter in the fridge and with nothing but tinned tuna, corn, Home Brand tomato paste and pasta in the cupboard. We can also turn sausages into anything elaborate and we were starting to look like chickens from the amount of thighs we've eaten.

Via

I guess one of the most difficult things about being on a tight budget is having to say no to doing fun things with friends. It's often difficult as you start to get older and you are on a different page and have different amounts of expendable cash to splurge. It really does suck having to be the ones to say, actually, can we watch the footy at our house instead of going to the pub or I'm sorry that I can't afford to go the movies, how about a girls night in? Sometimes you feel guilty about not having any money.

But you know what, owning a house, renovating and travelling is all worth scrimping and saving.

I'm sure you don't regret any of the things that you have purchased or have created or are working towards too.

Money.

It sucks, but unfortunately it's a part of life, whether we want to accept that or not.

Money, money, money! Via

I must admit that not having loads of cash left over after each pay day has made me so much more apprecitive for when we can lash out and go out for tea. It's made me appreciate the date nights with candles and a home cooked meal over bursting our budget to go out. It's made appreciate the weeks that I can sneak a block of chocolate into the shopping. But mostly, it's made me appreciate that you don't have to have loads of cash to be happy and to have fun.

I'd prefer having friends over for a BBQ and drinks in our backyard under the outside area that we've worked our asses off to build over going out for tea.

And I'd prefer a night in snuggling on our couch watching a movie on our TV over the movies.

So hello being POV, if it means that we can work towards our future goals.

I'm happy eating Home Brand pasta for a while longer yet.

Money. How do you make it stretch? Do you ever get down about money? How did you stay positive about it?

Look after yourself and those around you,

Kirsty xxx