Sunday, May 8, 2011

Jen's tips for money crises

You may want to know why I think I have any authority to give out tips on handling your finances while in crisis.  Well, in a nutshell here is my resume.

In 18 years of marriage my dh has had only 7 years of full time employment, and 2 of those have been the last 2 years.  The other 11 years have been part time or casual employment, no employment and studying.

Over that time we have had a personal loan, usually for a vehicle, almost all the time.  We have tried to not have credit cards but at times we have had them too.  Some times we have had Centrelink loans and some times student loans.  And at one time we had a mortgage.  All this to say... I know how to live with limited funds and large commitments.

Here are my tips:
  1. Have a budget, know where your money needs to go and where your money is going.
  2. While times are good pay ahead on all loans of any type.  This gives you a buffer when things hit the fan, and because of your good payment history can help if (or when) it comes time to negotiate with the lenders due to continuing tough times.
  3. Pay your bills in this order:
    1. Rent / Mortgage always; Car, Life and Contents Insurances; Utilities; Loans - minimum; Credit Cards - minimum
    2. Vehicles Expenses - Rego and Insurance, Petrol; Medicines; Groceries
    3. Savings for Car Maintenance; Clothing; School Expenses; Children's Activities; Extra on loans; Health Insurance
  4. Do Not Tweak this order.  The items in 3 should not come ahead of 1 for any reason.  (The only exception is Health Insurance if you already have a policy and can keep making payments.  My family has gotten by on the Australian public health system which is not ideal but has kept us alive and mostly healthy and can't afford health insurance at this time.)
  5. Set up automatic payments through your bank for all items in 1 so you don't have a chance to spend the money before these commitments are paid.
I have lived on such a tight budget that the items in 3 were not even a possibility unless I managed to save on groceries or on petrol.  It is not fun at first but after a while it just becomes one of those things you do.

I have added up my grocery trolley as I shop and I have ditched items at the checkout as I see the tally getting higher.  It is embarrassing but necessary.  One of the great things about life now is that I can do my shop online and tweak my list until it fits my budget before I even go near the shops.  I print the list to take to the store to make sure I am not paying more.  Thankfully my closest store is cheaper than the online shop so I have a buffer for mark downs or a treat.

Oh, and learn to bake.  It takes very little money to feed hungry boys with cocoa, flour, eggs and sugar in the house.

Best wishes
Jen

4 comments:

  1. Hi Jen. I really enjoy your money saving tips... I admire your commitment to making the most of every cent! It makes me think twice about where our money goes. :)

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  2. some good tips here Jen! I also always mentally add up the costs when I'm grocery shopping so I know how much I will be paying at the checkout and also to stick within the budget:) also I've got many freebies because supermarkets have charged me the wrong price on an item, that's always a bonus:)

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  3. Jen, my son has moved out and set up a home with his fiancé. The tips you listed I have tried to teach him so he doesn't run into financial problems. So far he is doing very well. In particular when he is grocery shopping, buying bargains, bulk buying etc.. These are skills that all young people should be taught. He rang me up the other day to tell me the tiny size of his electricity bill!!

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  4. Hey Jen, I have just quit my part-time job as a teacher (after dropping down from full-time last year). A bit freak money-wise! We are now relying on our income from our business! Between me tutoring and budgeting I'm hoping we can still make ends meet and homeschool :-) Baking sounds really,really lovely to me!

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Thank you for visiting. I would love to hear from you and tend to reply in the comments. It is nice to just have a chat some times.

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