Squeezing Every Last Cent!

By Bankruptcy Ben | Published: June 11, 2010

Over the last couple of months I haven’t really said why I’m trying to cut expenses.  We’ll a whole bunch of rate rises have taken me from being comfortable to being well a little uncomfortable… On top of that I bought a house that needed lots of work. So several thousand dollars later I’ve noticed some pain and tingling inside my wallet area.  I’m not sure what I’ve done has necessarily added any value (water proofing) and I of course did the standard new home  mistake of buying new furniture for it.  Ugh! I had some money left over after settlement that I used to buy the furniture, classic error of mistaking the banks money for mine.  Personally my feeling is that as long as I owe any one anything, any savings I’ve got is their money not mine.  The logic behind this is that if I’ve got $5,000 in savings and I owe money on my mortgage, credit card, debt consolidation loan etc,  I’m effectively paying interest on that savings by not paing it off my mortgage.

In my increasing efforts to Squeeze every last cent I’ve not that we eat alot of bread.  I had a look on gumtree.com.au and found a bread maker for $30.  That’ll crush my bread bill from $6/week to $0.60.  Not much I know but it’s $280.80/year. Plus it’ll lead the way for cheaper sandwich bassed lunches!

Any way here’s my first loaf.

Cycling hasn’t been going so well.  Didn’t cycle one day this week.  I will do better next week.   I’m about to auction my extra stuff on eBay; DVDs I’m never going to watch again, the drum kit I’m never going to play again, the “spares” (furniture, etc). Will keep you posted on how much I make.

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FFJ – 44 Ways to Save Money

By Bankruptcy Ben | Published: June 7, 2010

I’ve been thinking about other ways I can save money. So far I’ve cut petrol and alcohol expenses. In search of further savings I’ve been reading a lot of other blogs. Here’s a summary of the best tips I can find on the web thanks) . Do you have any tips for saving money

  1. Don’t buy coffee, soft-drink or other drinks while out
  2. Always do the grocery shopping with a list
  3. Stockpile items that don’t go off when prices are cheap (eg, vegemite, canned foods, washing detergent)
  4. Buy home brand
  5. Eat less meat/become vegetarian (generally the most expensive item in your shopping budget)
  6. Bring lunch from home
  7. Don’t eat Take Away
  8. Skip vending Machines
  9. Base your meals on, potatoes, rice, pasta, cous cous, noodles etc.  They’re cheaper and most Australian’s don’t get enough whole grains anyway
  10. Drink more water
  11. Make your own baby food and freeze it in ice cube trays
  12. Pay your bills online so you don’t have to drive any where, use stamps or pay check fees
  13. Be a one car family
  14. Keep your tires filled to the maximum pressure
  15. Accelerate slowly, stop slowly, saves petrol, brake pads and tire rubber
  16. Coast when you see a red light instead of driving up to the light and breaking
  17. Change your own oil, frequently
  18. Use public transport whenever possible
  19. Don’t drive into the city
  20. Don’t wait for your engine to be empty to fill up
  21. Turn off all your electrical items at the wall (saved me $50/quarter Australian dollars)
  22. Don’t use the dryer we invented the Hills Hoist for a reason!
  23. Cancel the Foxtel/pay tv
  24. Don’t put on the heater put on a Jumper (I am a Queenslander though)
  25. Get rid of the home phone
  26. Use generic medicine
  27. Shop at thrift stores for clothes
  28. shop at garage sales for clothes
  29. Make your own clothes
  30. Have overalls/work clothes so you don’t wreck good clothes
  31. Use an apron in the kitchen
  32. DIY Christmas and Birthday cards
  33. Dumps often have free mulch
  34. Use kitchen rags instead of paper towels
  35. Use the library for books, magazines and movies
  36. Use online news services
  37. Have special dinners at home
  38. Utilies free entertainment, bushwalks, free concerts, the beach, board games
  39. Get friends over for dinner
  40. Men cut your hair at home with some clippers, number 3 or 4 all over looks fine
  41. Ladies dye your own hair.
  42. Compost
  43. Sell your stuff
  44. Get a money box

Bibliography

Lazy Man and Money

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FFJ-2 Changes Made

By Bankruptcy Ben | Published: June 3, 2010

After recording my expenses for a month and tracking where my money was going I identified some areas were I can make some changes and save some money!

First thing I noticed was diesel.  $70 per week, every week.  That’s $3,500 a year!!! I drive to work everyday and back, just me and my lunch. What a waste!  So I’ve bought a bike.  Cost me $250 on eBay. I already had the rack and the shoes since I used to do a bit of cycling. But you don’t really need special cycling shoes normal shoes are fine.

I been riding to work everyday for a couple of weeks now.  To be honest it’s a lot nicer than being in the car.  I get  a lot less irritated than I used to commuting plus I’ve lost a little bit of weight.  It used to take be 20mins or so to commute, now it takes me 30 mins on the bike, not a big difference.  I take it easy on the ride too, it’s not a race, so a spray of rexona and I’m fresh as a daisy:)  I’m going to try and ride every day but realistically it will probably end up averaging out at 4 days a week. Most of my driving is on the weekend so it looks like it’ll halve my petrol bill.    That’s a saving of $1,820 per year (plus the saving in wear and tear on the car).

The other thing I noticed is alcohol so I thought I’d give home brew beer a go.

It works out at about $1.30 for a 6 pack vs $16.00 in the bottle shop.  Based on 2 six packs a week that’s a $1528.80 per year saving.  (Debt Mediators does not encourage the consumption of alcohol, it’s a drug and has health consequences, if alcohol is an expense and you’re finding it difficult to make ends meet the best approach is to cease purchasing alcohol altogether)

Total Saving per year $3,348.80

We’ve got a video up now for Debt Agreements too!

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Sometimes you should just pay it.

By Bankruptcy Ben | Published: June 1, 2010

Alot of people get into trouble because they feel they’ve been done wrong by the creditor.  Which to be honest, they probably have.

I got a call from a debt collectors last month about the $48.00 I owe Blockbuster Video from 3 years ago for a video I can’t remember renting. To be frank I’m not sure I owed the money at  all, it’s was probably the 15 year old behind the counter who forgot to scan it.  What a freaking joke right? Alarge amount of $48.00 was collectors fees.  However I just cut a deal with them. I bpayed them $23 and it was done.

Yes it was only $23 not much but it’s the concept thats important.  Most of the time the easiest thing to do is cut a deal and keep on living.  It’s not justice but generally it’s cheaper, easier and better for your credit history. Don’t get stubborn and not pay it. This can lead to defaults and prevent you from getting a debt consolidation loan or a mortgage.

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FFJ, Money Diary Update.

By Bankruptcy Ben | Published: May 31, 2010

You may recall that I was recording expenses in a spirax notepad I attached to my wallet with a rubber-band. Well for the more discerning of you you may not want a spirax-pad attached to your wallet. If your female less of a problem, though finding the spirax notepad in your purse may present it’s own problems.

The other problem was that I had to enter all the data into excel to track it. So I bought a Budget Tracking Application for my IPhone it was $4.50 and has made tracking my expenses super easy.  I can export in a csv file as well. IT was called Spending, though there’s more info on Spending at the app store . Any way i’m super happer with it.

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Bankruptcy Protected Property

By Bankruptcy Ben | Published: May 28, 2010

Some property cannot be taken by your Trustee in bankruptcy

  1. Necessary clothing and household items;
  2. Tools of the trade to an indexed amount
  3. A motor vehicle to an indexed amount
  4. Life insurance or endowment policies
  5. Certain damages and compensation payments
  6. Sentimental property (as defined in the bankruptcy act
  7. Super annuation payment
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Surge in middle class bankruptcy

By Bankruptcy Ben | Published: May 26, 2010

A recet report from the University of Melbourne’s Centre for Corporate Law and Securities Regulation has found an increase in the bankruptcy rate of 6% from 2008-2009 (no suprise for readers of this blog).

The co-authore Professor Ian Ramsay has said the unsastainable home loans have been a major cause for bankruptcy in the middle class.  He also said there was a similar trend in the number of people on higher incomes declaring bankruptcy.

“More and more people are declaring bankruptcy coming from what we call higher occupation positions” he said.

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Debt Consolidation –Credit Card Balance Transfer

By Bankruptcy Ben | Published: May 24, 2010

Golden rule of debt consolidation: Only enter into it if you know you will be better off in the long run. Balance transfer is often a debt consolidation strategy people take to minimise their monthly payments on their credit card debts by transferring their current balance to an account with a lower interest rate. Many banks also offer special introductory rate promotions that allow people to pay a lower interest rate than usual for a certain period of time or free transfer of balance.

The thing to be aware of with this is the fine prints. Before rushing in to transferring all your balances to the credit card that seems the most attractive, you must look at the terms and conditions of the account they are offering. Although they may seem attractive on the surface they might have a lot of hidden fees. You must take extra care when transferring your balance to an account with an introductory rate, as they may seem a lot cheaper for the first few months, but the rate afterwards could be a lot higher than the rate you’re paying now. There is also the matter of bank fees – is the annual fee higher? How much do they charge for supplementary cards? What is the over limit fee? It may also be worth looking into the support services they provide (and the cost of them) with regards to things like transaction verification, emergency card replacement, and overseas support.

To eliminate the shock and grieve you could received later on down the track you should have a full understanding of the fees, and the terms and conditions offered in the new account before transferring all your current balance over and make sure, above all, you will be better off after the transfer than you were before.

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Spend Now Pay Later

By Bankruptcy Ben | Published: May 20, 2010

Has anyone noticed how much of a’ spend now pay later’ culture our society has become? Everything in our current society pushes as to spend. Glamorous advertisements, enticing sales, special promotions, and even reward credit cards. How can we say no to that ‘to-die-for’ pair of shoes that is now 20% off or that new PS3 that’s coming with every Sony television? We don’t even need to have money in our bank accounts! We can just pay on the credit card (get some reward points while we’re at it) and we can pay it off when we have the money. Simple, right? Wrong.

According to the Australian Bureau of Statistics the average family with a credit card debt owes $3,433 compared to the $580 owed by each household in 1998-1999. The more alarming thing is that these figures are growing. This is not surprising considering the ‘credit’ on the card often seen as actual cash just waiting to be spent. To add, the credit card reward programs are leading people to spend more than they should for extra points. Small wonder than bankruptcy rates are rising. Bankruptcy does come with a price but for many the price of staying in debt is higher. Read some of the other bankruptcy blogs on here for more information.

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Debt consolidation pros vs cons

By Bankruptcy Ben | Published: May 17, 2010

Many people have mixed feelings about debt consolidation and what it can do for them.  Debt consolidation like many other things in life is not the ‘best’ step for every person who’s in debt.  It is different for each person and for each individual’s debt situation.  To find out if debt consolidation is really the best step for you the pros and the cons must be weighed up and it is probably worth visiting a finance consultant as well.  Some of the main pros and cons of debt consolidation that could be considered are listed below.

Pros:

  • Lower interest rates/ fixed rate:  this means you’re paying less on debt every month.
  • One creditor, one monthly payment:  instead of several payments you’ve concentrated it all into one big payment which may make it easier to manage.
  • Reduction of the overall amount paid each month.

Cons:

  • One creditor, one monthly payment:  although it may be easier to manage, it takes away your ability to negotiate with your different creditors if further financial troubles arise.
  • Cause difficult in gaining loans or discharging your debts into bankruptcy.
  • Longer term to pay
  • Pay more overall due to the increase of payment time
  • If the person going into debt consolidation has a bad spending habit, it could lead them into more debt as they free up their credit cards.

In addition to the pros and cons listed above, it is vital to do the maths and don’t get pushed or rushed into anything. You have to be sure of what you’re doing and that it is the best option for you. There are dodgy debt consolidation companies out there who do not have your best interest at hand and this is when your research will come handy. You should definitely be better off after the debt consolidation than before it (e.g. new rates after debt consolidation are lower than the rates you are paying now), if that’s not the case then it’s time to reconsider because debt consolidation may not be the best step for you.

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