If Jack Bauer can save the world in 24 hours (every year) imagine what you can do with an extra day?

Sure. You're not trying to save the world but your financial world might need a little assistance. In fact, if you've got problems sticking to your budget then I can guarantee that the 48 hour rule may be the lifesaving tip you've been looking for.

48 hours. That's all I have? That's all you need...

Imagine this picture for a second. You accompany your partner or spouse to the shopping district - as an obligatory duty that one performs for a loved one. As they head into their favourite shop you begin browsing some shop windows that interest you. And then it happens....

Sitting on the shelf, at a heavily reduced, never-to-be-repeated price is that [insert that product you've been lusting over since Christmas] - and it's the last one in the shop. You know it's not in the budget and if you buy it it's going to set you back a couple of months financially.

Or, you're doing your exercises in front of the TV when an infomercial appears showing you how their product will give you a 6-pack in three weeks. Not only that, it will tone your thighs, buttocks and pecs so well that you might even consider entering the Mr. Universe competition starting in a few months.

If you phone in the next 30 minutes and pay via your credit card you will also claim your special DVD that shows how George Clooney used the product to land his movie deals.

We've all been here and we've all had to face an on-the-spot decision that could change our current fiscal wellbeing.

This is where the 48 hour rule comes into play. The 48 hour rule is when you force yourself to walk away from the deal for at least 48 hours. If after that time, you still feel that the product or service is worth getting then go for it. Get it. Buy it and feel confident that you made a good decision.

What you will find though is that when you have time to think something through your perspective is not clouded by all the marketing hype. You might even find yourself asking the question, "What the hell was I thinking?"

Why do you think infomercials always offer such good gifts to entice your response within the next 30 mins? Because they know that if you have time to think about it you will probably work out that it's a piece of junk that doesn't deserve the light of day let alone your purchase.

It's taken us a while to master but we're getting pretty good at it these days. The true benefit though, is that we can now stick to our budget and save for the things we really want rather than the things others want for us.

Posted by Stuart at 7:36 AM | Permalink | Comments (2)

Let me start by telling you what it isn't. It isn't - Money! Nor is it - Budgeting! It has nothing to do with Spending or Tax Avoidance or Investing. And, even though it's only a little word it can be the few letters between being financially successful or a money wreck.

This word is so powerful that it can actually bind the one using it just as quickly as it can offend the person hearing it.

And the word is - NO!

Two letters. One syllable. Yet it seems to be one of the hardest words to say.

Let me place this word in context for a second;

The New Year has just rolled around and after the festivities have finished you begin to set some financial goals for the year ahead. You realise that the budget you set last year failed dismally and so you're keen not to let that happen again.

You plan another budget taking into account more of your lifestyle and less of your dreams. From the outset it seems far more manageable but if kept will still provide some future financial growth.

Then your year begins. Pressures to spend come from every direction like you're caught in a whirling blizzard. The car breaks down and needs the clutch replaced. Your youngest child gets sick and needs expensive medicine. Your oldest child HAS TO go on the next camp and your husband is thinking of renovating the boat that's been sitting in your backyard for the past six years.

And, while your budget looked incredible only two weeks earlier it's suddenly a mess that seems easier to ditch than try and make work.

Now back to that word. Yes, the NO word.

The difference between those that secure their future financially and those that don't all comes down to using this one little word. Those that succeed know when to use it - those that don't underestimated its power.

For while this word may be simple in composition it is the only thing that can actually make a budget work. Numbers and account areas on a page are meaningless until that word becomes an essential part of your vocabulary.

NO - we can't afford for little Jimmy to go on camp this year. NO - the boat is going to have to sit in the backyard for another year or two. NO - I can't meet the boys every Friday down the pub. NO - I can't give this year to the National Blind Leprechaun Society.

The reason we struggle with the word is because we know people will be disappointed with us. They'll make assumptions about our character that we don't want them to make.

And while we lick our wounds from the first person we offended by using that little word we need to remind ourselves that they're not the ones who are going to provide the financial goals that we're pursuing. In fact, they're not even trying to dissuade us from our goals - they're just ignorant of them and don't see the picture we're trying to create.

If you want to see your budget work for next year then start learning the word NO. It's the only thing between you and financial freedom.

Posted by Stuart at 6:44 AM | Permalink

As of today, there are only 19 sleeps until Christmas. That dreaded day of splurging in the hope of keeping everybody happy - especially your credit card provider - seems to turn up quicker every year.

Well...you knew it was coming. What have you done to prepare yourself for the shopping onslaught?

If you're like 43% of the population you will leave your Christmas shopping until the last week. That means, you will be fighting with 1 out of every 2 people in your city for parking spots, the last turkey, limited gift choices and more importantly your budget will have flown like the proverbial migrating birds.

As real estate's mantra is Location, Location, and Location - Christmas' spiel is Preparation, Preparation, and Preparation.

Here are the key expense components of Christmas;

• Gifts


• Food and Drink


• Decorations

Now, let's create a budget for them.

Continue reading "Can you do Christmas on $500?" »

Posted by Stuart at 5:50 AM | Permalink

Take this example of 30 year old, Holly Lesmeister - already $64,000 in debt and wanting to take a world holiday in the next couple of years.

Kara McGuire, from the Star Tribune, wrote this article delving into the financial world of a 30-something. The post is certainly revealing as we see a glimpse of the unreal expectations many young people have when it comes to their personal finances.

The killer for people wanting to budget their incomes is other people's expectations. Peer-pressure doesn't end with high school or the teenage years and realising that others are dictating how you spend your time and finances is an incredible paradigm to deal with.

In our own situation, we always struggle with Christmas gift-giving. I don't want to be a scrouge but I don't want to spend my life savings keeping up with family expectations. We feel bullied by others and then settle for a mediocre financial existence, always pandering to the next expectation placed upon us.

Echo Huang, gives Lesmeister some great advice after she shares her financial predicament.

Lesmeister worries about missing out on fun. Friends mentioned checking out the new Jean-Georges restaurant in the Chambers Hotel in downtown Minneapolis. "You just can't go cheaply," she says, predicting she'll stay at home more rather than lower the caliber of places she frequents.

Huang suggests Lesmeister share her financial goals with her friends so they can support her efforts. Who knows -- they might feel relieved if she steers them toward affordable activities like bet-free poker or hiking in the woods.

She didn't like that idea too much.

If your friends control your spending habits, they will certainly control your financial destiny. All I could suggest to Holly was grow some financial balls and stop selling out to the "live for today" mentality.

Posted by Stuart at 7:00 AM | Permalink

So much has been said already within personal finance blogs about budgeting that I thought it might be a nice change to reflect on pain-free budgeting.

Truthfully, when was the last time you found pure enjoyment out of the budgeting process? Never. Well of course not. That's because you're going about it the wrong way.

Being wealthy is not everything.

Your first mistake is thinking that building wealth is a 'be-all' and 'end-all'. Did you know that 95% of the world's population never experiences true wealth? That's right 95%. So, why bust your balls trying to fit into that miniscule 5% when you could just spend frivolously, incur everburgeoning debt and then leave it for the next generation to sort out?

There are people to help when budgeting becomes difficult.

Most people recognise that budgeting can be an insurmountable task so its best to take your concerns to someone who's qualified to give you good advice. These experts can guide you in matters of which credit card to get, how to consolidate your loans and why their bank is far better than the one which offers less fees.

Such guidance is hard to find yet their willingness to help you set financial goals by increasing your monthly spending limit each month is invaluable.

Other helpful people are those that are willing to invest in your working capacity and give you a quick loan to tide you over until payday. It makes budgeting even easier because then you know exactly how much you need to pay them back each week.

Budgeting takes far too much self-discipline

Discipline is such a stupid word. In fact, replacing it with the words 'torture', 'self-effacement' and 'going without' would be far more suitable. Discipline ensures that you have to think twice before buying that new shirt which has been reduced by 50%. It stops you from going night-clubbing both Friday and Saturday nights and it means you would have to change your shopping habits to purchase generics instead of named brands - and there is no way you should have to buy a substitute for your Johnson & Johnson cotton buds.

Budgeting is a wealthy persons concept.

Rich people have nothing better to do than place burdens upon those who are struggling financially. Which is why they came up with the concept of budgeting in the first place. It's their little inane game of trying to keep the middle folk unhappy. They talk about saving, investing and frugal spending habits as though it's something that everyone can do. Take my advice - they're just messing with your head.

Money was made for spending

They can't argue with one! It's a fact that the more you earn the more you can buy. And the more you can buy the happier you'll be.

So, in a nutshell, budgeting doesn't have to hurt. Its a mechanism designed to keep some sad little rich person alone in their lofty tower while the rest of us try and attain what they have.

Well, we don't want it so take your budgeting and ......

Posted by Stuart at 8:01 AM | Permalink

There's only ___ days until Christmas!

Try and imagine coming out the other side of Christmas not having anything else to pay for. The meal was great, your friends and family loved your gifts and there was more than enough cheer to behold. Yet, there are no credit card statements reminding you that you probably enjoyed yourself a little too much.

Or, you can do it the same as last year and still be paying off your credit card in June.

The reason most of us - yes, we've all been there - find that Christmas ends up on the card is due to a lack of preparation. We put Christmas off in our minds hoping that a). It will go away, b). We might win the lottery and then splash out to our hearts content, c). Relegate ourselves to "Christmas = Credit Card", or d) All of the above. And before we know it, it's Christmas Eve and I still haven't bought anybody a present.

Abraham Lincoln said,

If I had six hours to chop down a tree, I'd spend the first hour sharpening the axe.

So, it's time to sharpen the axe. I've listed a heap of links to help get your creative juices inspired and leave your credt card in your wallet - for emergencies (not bad planning!).

Continue reading "Christmas without a credit card" »

Posted by Stuart at 6:43 AM | Permalink | Comments (1)

I wrote previously on the cost of raising children but didn't really touch on the cost of raising teenagers. And as the family grows so it seems does the expenses, seemingly disproportionate to your income levels.

But it can be done on a tight budget, apparently. Nigel Lane gives 7 tips for raising teens in our current consumerist society and it's all based on being open and honest with them, especially about the limited family budget.

Lane states;

The way to control some or all of these costs is to train and teach your son/daughter to see things from your point of view and help them understand. Often they also need to be aware that owning ‘things’ and conforming to everyone else’s worldview [that, for example, brand names are best] are not the driving forces behind our choices.

Armed with information, teenagers will be in a better position to understand the pressure upon the family should their demands be met. And this is a great way to help them be more considerate of others and the choices that they make.

Posted by Stuart at 8:11 AM | Permalink

Cliff Darcy sets about to test his budgeting willpower for a whole month every year. This challenge has been likened to a financial detox as he trims and scrapes the excess fat that has crept into his budget over a period of months.

I like this challenge because it's not impossible and it empowers people to make money their slave not their master. We all surrender, like the proverbial frog in the slowly warming water, to our insatiable, spontaneous desires that are fuelled by the hunger for more. But where does all this end? Usually by living beyond your means.

It's kind of like a financial fast. Depriving yourself of the wanton purchase as you seek to minimalise and control your spending habits. Have others tried this before or would you be willing to give it a go?

Posted by Stuart at 8:06 AM | Permalink

I read an interesting article this morning titled, "Having that special talk ... about money" that discusses the merits of informing your children on the wise use of money prior to them leaving for college. While the article made some good points encouraging parents to advise their children on pitfalls of credit cards and the lack of personal financial accountability, I was left at a loss as to why this "talk" hadn't happened much sooner.

Some months ago, I wrote a post titled "15 Strategies for teaching your children to save" that touched on some key foundational thoughts. The main one was that teaching a child at a young age how to handle money was going to be far more beneficial than waiting for them to leave home before training them in fiscal matters.

I would go so far as to say that this is a key issue that parents have the responsibility for teaching their children. Much like educating them about sex, drugs and rock 'n' roll, handling finances will play a major role in their lives. It's far better to have been grounded in some wisdom long before it becomes an issue rather than closing the gate after the horse has already bolted.

Posted by Stuart at 7:33 AM | Permalink

As interest rates head north many families will be sharpening their pencils bracing themselves for their increased mortgage rates. But what if you could do some calculations beforehand and even make some decisions to swap financial institutions or change the terms of your loans.

Thanks to Google Spreadsheets you can do this online if you don't already own a proprietary software copy. Googe's spreadsheets offer many of the financial functions that MS Excel does and the ones pertinent to our calculations are all there. So how do we go about it?

Firstly, login to the spreadsheets or register if this is your first Google account. When you first enter Google Labs for their spreadsheet software it will look like this;

Continue reading "Using Google Spreadsheets to Calculate Your Mortgage" »

Posted by Stuart at 7:48 AM | Permalink

Many couples are now deferring becomeing parents and instead opt for getting a mortgage, travelling and preparing a nest egg before junior arrives. The reason: the economic cost of passing up double wages and living on one income.

How do you do it?

Well, if you're reading this for the first time scratching your head and pondering this very question understand that you're not the first. And you most certainly won't be the last couple to face this dilemma. It's a big decision and you are probably already adding up all the creature comforts (the daily latte, magazine subscriptions, 2-door coupe) that are going to be side-lined.

But it doesn't have to be all bad! Reducing the working hours of one partner can free up some more lifestyle choices as well. Holidays are easier to juggle (albeit harder to pay for), socialising time is freed up and odd jobs around the house can be accomplished without spending weekends rushing around.

If you planning on living on one income in the near future you might want to peruse the 5 point Survival Kit.

Continue reading "5 point survival kit for living on one income" »

Posted by Stuart at 10:04 AM | Permalink

France has released a new budgeting game Cyber-budget that allows players to assume the role of the Finance Minister and apportion funds to various ministry portfolios.

Alas, the game is in french which counts me out but if you can understand parle vous Francais you probably can make a go at it. However, I'm a little unsure as to why this game exists. It will certainly take an enormous amount of promotion to rival the lastest War Craft and Grand Theft Auto, though I'm sure they're not the audience.

I guess, after the last bout of riots which appear to cripple the french social community, the government is looking for citizens to provide fresh ideas for their welfare portfolio. If you receive a phone call after balancing the budget while increasing funds for welfare and delivering effective tax cuts - it may the Department of Finance on the other end.

Pilfered from 1

Posted by Stuart at 7:39 AM | Permalink | Comments (1)

The ultimate in spontaneous spending is finally hitting the globe - the World Cup. If you need a reason to spend money then a sporting festival of this magnitude may be the excuse you've been looking for.

For those who've headed over to the World Cup reports have run amok that if you hadn't bought your tickets prior to the games, scalpers were willing to pass up basic seats for a minimum EUR250. Some were getting as high as EUR500 for seats that didn't even have the greatest views. Add your limited accomodation requirements on to the bill, plus the increased food charges, have-to-have sporting paraphernalia and you can kiss your budget goodbye.

But the frenzy doesn't stop in Germany. Direct Line Home Insurance conducted a survey of 2500 adults and found that one in 5 were planning to purchase a new TV prior to the world cup. Add to that new satellite connections, DVD Recorders, surround sound systems and Direct Line is predicting more than £1 billion will be generated from those who didn't make the pilgrimage.

If these purchases were made due to people saving then it we would all give them 3 cheers and congratulate their perseverance. Alas, most of these new gadgets will come at a price that will continue well after the World Cup has finished.

And some marketers will be rubbing their hands with glee, congratulating themselves on the success of an advertising campaign that helped people spend money they didn't have for things they eventually won't need.

Posted by Stuart at 8:11 AM | Permalink

I find it amusing when I often hear people say to me that they can't pay their fees because the water bill is due this week. Or somehow, out of the blue, the rates notice appeared and if it's not paid by the end of the week interest will be charged. And, how many times have we heard people getting their phone lines cut off because they haven't paid for the past couple of months.

The definition of "Panic Budgeting" is spending every cent your earn until you're forced to part with it from another party. "Planned Budgeting" on the other hand is to ensure there is always enough cash in the bank to pay bills as they fall due. Is planned budgeting a utopian ideal or is it possible for mere mortals to do this?

Continue reading "Panic budgeting vs Planned budgeting" »

Posted by Stuart at 7:29 AM | Permalink

Your personal financial plan is your road map to financial freedom and independence. I probably should have underlined the word YOUR because we so often hand the reins of our financial plans over to others. We may do it consciously by accepting the latest morsel of advice hoping that this new piece of knowledge may be the key we've always been looking for. Or worse, we accept the "voices" in our head that tell us to deviate from our premeditated plan.

An analogy that may encapsulate my point is the many times I would head off 4 wheel driving in the bush. If I had unlimited time and an ongoing source of fuel I would explore every track that I came across. But I usually had a destination in mind before I set off. As an undiscovered track appeared I would stop and weigh the virtue of adventure against the map. If it took me in an opposite direction or would obviously increase the time taken to get to my destination then I could easily discern that it was a wrong way.

The same applies to your own personal financial plan. Sorry...did you just say you don't have one? Well that's like hopping into you car with a blindfold covering your eyes. You drive off aimlessly hoping to arrive somewhere but readily realising your chances of success are extremely limited.

Continue reading "Stick to your personal financial plan like superglue" »

Posted by Stuart at 6:50 AM | Permalink | Comments (1)

Imagine paying a $20,000 debt in 5 years with only a $22,000 annual income. Apparently this is what Tawra Kellam did after seeing her mother raise two children as a single parent on less than $500 per month.

These two frugal champions have now published a book "Dining on a Dime Cook Book" and operate a highly regarded website www.livingonadime.com.

In this article, "Think thrifty: save yourself from spending" the writer explains some of their great tips on saving. Wise advice such as reducing the amount of drinks the families buy to cleaning up the kitchen in the morning which prevents your psyche from wimping out and ordering take-away at dinner. They're not coupon pushers and actually advise that these methods don't actually save your family money.

They recommend implementing one change at a time and being successful with that change before introducing another. These great tips could help your family back on the road to financial recovery.

Posted by Stuart at 7:21 AM | Permalink

Is there anyone...anyone at all who is also more than mildly disturbed by rising fuel costs? Why is it that every time I drive past the service station the price for fuel has escalated quicker than my Adsense earnings. It is getting tougher and tougher to keep my car on the road and yet it seems that alternatives to the oil crisis are not being sourced. Why? Do I need to stop driving my car?

This article in the Patriot News highlighted the depth of the dilemma society is now facing.

Americans [Australians too] have begun to make lifestyle changes in order to maintain some sanity. Saving energy is one thing but to be forced to carpool/vanpool, walk to work or practice frugal driving habits because we can't afford gas is ridiculous.

I've thought about ways to beat rising fuel costs like cycling to work, car pooling with friends and I've even contemplated buying a scooter. But I can't help thinking that there's more that could be done by the power's that be.

One example is that in Australia our fuel is heavily taxed. I have no qualms with the excise going to fund better roads but I'm concerned that with the rising oil price these taxes will fund better surpluses instead.

I also wonder about mining companies who tap oil and leave it to sit. They do this to control supply therefore controlling prices as well. Rising fuel costs are not a problem to them, in fact it's what they are after.

So, while us humble day-to-day people struggle to fill our cars with fuel those who could do something about it won't. Why? Because they're greedy.

Posted by Stuart at 5:55 AM | Permalink | Comments (3)

If Jew's are considered the most financially savvy race and pork is not kosher why do we have piggy banks? Do Jews have piggy banks?

It's one of those "When in Rome do as the Roman's do" type scenarios. If you want to learn from the best you need to mimic their behaviours. It seems this could be a key on how Jews teach their children about saving and budgeting. Maybe there's a lesson for us all here?

Maybe they just have a little jar or tin to stash the coins that accumulate in their pockets and wallets? It could be a simple as that. Perhaps, they don't need to save. Maybe they're just so financially savvy that they don't actually have time to put their loose change into anything at all? Who knows? Who cares?

If you've ever wondered where the piggy bank idea came from take a moment to read this article.

Posted by Stuart at 10:08 AM | Permalink

Is personal finance an issue that can be taught or do you just pick it up along the journey of life? The 'school-of-hard-knocks" is where many seem to sharpen their teeth on fiscal matters but is that the right playground for our society to be maintaining?

I've just read another article Back to personal-finance basics on a school system hoping to influence young students in money matters. I'm bouyed by the optimism but I struggle with the pressures that you can't teach kids that will inevitably inch their way into their lives.

For instance, here's a big one: Will they teach them that staying together in a relationship and working hard at it to make it successful makes better financial sense that separating years down the track? What about those ridiculous purchasing terms of "Pay nothing now - 4 years interest free" - how do you teach kids when they're mates all have the latest Plasma that delayed gratification is a better deal?

I'm all for education, but education taught as theory only seems to me to be the biggest waste of time. You would never train a doctor purely from manuals and tutorials. They need experience with the tools of their trade - bodies and scalpels. The same needs to happen with teaching kids about personal financial skills. They need to somehow deal with the pressures of this world in a simulated environment that's as close to real as possible.

Where can this happen? Where it should happen - in the home.

Posted by Stuart at 6:24 AM | Permalink

It can't be too hard to save money, surely? It must be though as credit becomes more and more rampant and those financial gurus seem more and more concerned with our lack of saving habits.

I have a few friends who struggle with saving and are using the tax system as a saving mechanism. They happily allow their employers to deduct extra tax from their wages with the hope of being able to claim it all back once they submit their annual return. They brag to me about their supposed 'windfall' not realising that they were allowing the government to borrow their money free-of-charge for the past 12 months.

On the other hand though they now have this pool of money available to them which they probably would have struggled to save during the course of the year. Which begs the question, why is it so hard to save money? And, is forced savings a key to helping these people get ahead with their finances?

Posted by Stuart at 7:19 AM | Permalink

Setting up a budgeting worksheet isn't a hard chore. In fact, if you like using spreadsheets it can actually become quite enjoyable.

The beauty of a budgeting worksheet is that you can see all your numbers at a quick glance in an easy to read format. It's instantly editable so changes can be made on the run and will save considerably on white-out. And perhaps the best feature, is that you can always keep a history of your transactions (depending on your hard-drive space).

I'm a fan of MS Excel - my apologies for those who have issues with Microsoft - because I find its powerful calculations are easy to manipulate to help me better understand my finances. It doesn't really matter though which spreadsheeting package you use so long as you are able to calculate your amounts effectively.

There are commercial budgeting worksheets available but if you want to create your own its a simple process.

Continue reading "Creating budgeting worksheets that work" »

Posted by Stuart at 6:51 AM | Permalink

OK. Are you ready? Pen and paper in hand. Good - let's go!

1. Put your income at the top of the page. Include all income that comes into the household; wages, government payments, maintenance from ex-spouse, board from the kids, christmas bonues etc. Divide this by 52 weeks to arrive at a weekly income. (You can use any other period division you prefer).
2. The first 10% I'm a Christian who believes in giving back to God what is God's so I will always give the first 10% back to Him. If you don't, no probs but I would encourage you to give some of it away to others. Hold money loosely and it won't hold you!
3. The first 10% (or 2nd depending on where you're at) Is yours!!! Put it away in a savings account that charges exhorbitant fees for withdrawals. That way you're more inclined to leave it where it is until you really need it.
4. Prioritise the needs These are the essentials that you can't live without. Paying the rent/mortgage, groceries, utility bills (water, electricity). I won't include phone here because although it's necessary you have so many options of how to save with these that depending on how you're financing this now you may be able to save a lot more by changing some habits.
5. The remainder The remainder needs to be divided between all your wants. This may be a car and fuel and all the other associated costs or if you're running out on the income side it may be using public transport. The kids ballet lessons, the Sunday newspaper that gets home delivered are all great things but if you're living from day to day they may just be the things that need to be released from your financial world.

Posted by Stuart at 7:17 AM | Permalink