Anyway, I have to agree with Hope to Prosper that you have to cut your living expenses somehow. My husband and I rented out our spare bedroom for $500 a month for 2 years when we first moved in since we wanted a little padding. Our mortgage is only $740 a month and our property taxes are less than $3000 a year, so the renter was footing a huge portion and was happy to do it since $500 covered all his utilities too which is much cheaper than an apartment in our area. Would you be opposed to a room renter?

Otherwise, I’m assuming you can’t sell for some reason (sorry, I haven’t read a lot of your blog yet, so I don’t know your “story” yet). If you can’t sell and can’t rent out a room, maybe you can rent out space for storage or something?

Anyway, between riding to work on your bike and finding a way to make your house make you some money, your cash flow should get better…hope you tell us how it goes.

I like gift giving too, but I usually do it with photographs and $1 frames that either look more expensive or that I jazz up myself. Everybody loves a photograph from the heart…something that reminds them of a great day or moment…costs about 15 cents for the print and $1 for the frame if you even use one…sometimes the photo can be small enough for a wallet or purse.

Good luck!

Lending here works a little differently. Rather than base it on a percentage of your income. They set asside a basic amout of money to cover necessities and the rest of in can go towards servicing your loan. In practice they us the Australian poverty line, which for a single is about $300 a week. So if you earn $300 a week you have nothing to service the loan but if earn $600 a week and you have $300/week to service the loan. Does that make sense?

We do have ebay:) I just got my first free lance web design gig so that’s cool.

Argh just feeling so poor

I knew Aussies now have bigger houses than we do in the U.S., but I didn’t realize you were also getting fatter and using more oil than us. It sounds like you guys are picking up all of our bad habits. Of course, we did get Mel Gibson from you. Thankfully, we are finally getting thinner, cutting back on oil and building smaller houses. I hope it continues, after the recession ends.

It’s obvious that spending 75% of your income on housing is unsustainable. And, you aren’t going to be able to make that up by cutting back on gifts. Most mortgages won’t allow housing to exceed 40% of income. If you don’t mind me asking, how were you even able to qualify for a loan with a 75% ratio?

I recommend you concentrate aggressively on income instead of expenses. Even if you were able to cut your non-housing expenses in half, you would only loosen your budget by 12%. However, if you were able to increase your income by 25%, you would double your budget for non-housing expenses and cut your housing ratio to 60%.

I recommend finding a side-job, taking on a renter, starting a business or picking up some contract work. In the short term, I would sell everything that isn’t necessary for your daily life. Things like CDs, DVDs, sports equipment and books can bring in some fast cash and you will never miss them cluttering up your place. Do you have Craigslist, half.com or eBay over there? Or, do you have garage sales in Oz?

Good luck with your budget.

Bret

After implementing this budget, based on historical spending and known future commitments, I recommend tracking against the budget for a month or two once again. This iteration allows you to adjust your budget or reduce spending.

Anyway, this has been the way I have set budgets and tested them. Once I have felt comfortable with it, I stopped tracking daily expenses. Too cumbersome for me to do long-term. But putting the time in up front to work on a budget has been helpful for me.

I want to do something BEFORE it’s a problem, if things keep going like this I’m going to lose all the buffer I’ve build up at a rate of $7 per week if I stick to my budget.

Well the market isn’t as shinny as it was but it’s not like the US and I put down a 20% deposit so it’s definitely worth more than I owe. (I completely understand how people who owe more than the property is worth hand the keys back).

Basically it comes down to not being comfortable that 75% of my income is going to accomodation. Also I’ve been doing some more research trying to assess sustainability the poverty line in Australia for an individual is set at $270/week. So if I was to make bring my expenses down I’d be living below the poverty line and I’m not sure how sustainable that is. I really think I need to sell and buy something smaller.

10.15% of my income is going towards transportation which is nuts. And that’s just the cost of running the car, it doesn’t take into account replacement costs. I’ve been reading that 10% is a fairly typical transport cost but that’s probably when 30% of your income is spent on accomodation not 75%!!!. It’s the only expense I can look at and cutting it would save me approximately $6000/year.

Thinking the car should go…

Could you ride a bike more to go to the market and such, and at least save on some gas and wear/tear on the car? Could you pack more lunches and plan your meals better? Could you buy your groceries on sale and use coupons with them? I am betting you could shave quite a bit off your grocery bill with some planning. Plus, you will probably end up eating healthier if you plan your meals instead of eating on the go. (Plus, a bike can’t go through a drive – thru, if you even know what that is in Australia!)