Many parents give their kids education highest priority, and a lot will resort to expensive out-of-school coaching to help them get better marks and/or pass selective school tests. Things were different when I was in primary school - you just sat for the selective ("Opportunity Class") school tests in Year 4, and if you did well on the test you were offered a place. These days many parents spend a lot of money on professional "coaching" classes or computerised study assistance programs. But there isn't much evidence that this is money well spent - in fact some recent reports suggest that having kids spend too much time on repetitive "coaching" sessions after school can get them burned out and perform worse on selective school tests than they would have without any coaching at all!

I think a small amount of preparation for selective tests is probably worthwhile - knowing what sort of questions to expect in the test, practicing the exam format and getting used to the time allowed and exam technique can only help the child relax and do as well as possible "on the day". So, rather than spend a small fortune of coaching classes I've just bought a book of practice material and some sample tests which I'll work through with DS1 over the next couple of years (the exam is in year 4, but DS1 is only in year 2 at the moment).

Another fun activity which will help DS1 academically is spelling bee practice. Although spelling bees aren't nearly as big a deal in Australia as they are in the US, there has been a state-wide

"Premier's" Spelling Bee running in NSW for the past couple of years. Entries for this year's competition closed last month - the school DS1 attends wasn't aware of the Spelling Bee until we told them, and was quite pleased to learn about it. DS1 was keen to compete in the yr 3-4 group, so the school decided that he will be able to compete against the kids in years 3-4 for selection to represent his school. The spelling lists used for the early rounds of the competition are available online, so DS1 will be able to practice learning them. A good, cheap, fun activity that will help him academically.

Copyright Enough Wealth 2007

DS1 is an avid reader - so much so that it would be uneconomical to buy him novels to read. I have bought some encyclopaedia's, dictionaries and reference books, but for novels we tend to just borrow books from the local library. He has enjoyed the Enid Blyton series "Secret Seven" and "Famous Five", even though they are very old fashioned. I remember reading a "Tom Swift" novel when I was around his age (7), so I did a search on the Gutenberg.org site to see if these books were now out of copyright. Sure enough, you can download the series for free. One thing I did notice was that the language in some of the

Tom Swift stories seems very *ist by modern standards, so you might want to either edit the text or use the books as a starting point for discussing how racial and cultural stereotypes are inaccuate and offensive...

Copyright Enough Wealth 2007

I admit to being a big kid when it comes to taste in entertainment* - I enjoy TV shows like Dr Who, Hyperdrive, Torchwood, Lost, Stargate, Star Wars... in fact anything with little green men and some flashing blinking lights (which reminds me of Flying High 2). I also enjoy reading SF and fantasy novels, so I've enjoyed reading the Harry Potter series so far, but I'm too stingy to pay for a hardcover copy when they are first released. The latest book in the HP series went on sale this morning, so I did my usual trick of standing around the book section of the local department store and read the first 88 pages of Deathly Hallows while DW took DS1 to the clothing section to buy him some school socks. I'll probably take about a week to get through the whole book, reading it for half an hour in various book shops and department stores during lunch hour and on the weekend. I don't feel too guilty about not buying the books - I have bought the DVDs of the movies as they have gone ex-rental, as the whole family enjoys watching them several times. I'll probably buy a boxed set of the entire series in paperback in a couple of years - by which time DS1 will be old enough to enjoy reading them.

The different approaches to selling the Potter book taken by various booksellers is quite interesting too. The Dymocks book store always takes pre-orders, sells the new release at full RRP (around A$44) and ran out of stock by lunchtime (there's a note in the window saying that more stock will arrive next week). I'm amazed that anyone buys the book from them - the Big W department store has lots of copies in stock, as does the Myer department store, and both are selling the same book for under $30. I'm also amazed that Dymocks ran out of stock this morning - the same thing happened when the sixth HP novel was released. I can only imagine that head office controls how many copies they can get hold of.

* I also like medieval wind ensembles and illuminated manuscripts, so I can pretend to have posh tastes if needs be.

Copyright

Enough Wealth 2007

A lot of people are careful to hold onto their receipts in case they decide to return or exchange an item. But once you have your impulse shopping under control, you still need to retain your receipts in case an item breaks while under warranty and needs to be repaired or replaced. Yesterday our toaster gave up the ghost - despite being set for a light golden brown finish, the second slice of toast came out blackened. And when DW tried a third time, flames shot out of the toaster before it shorted out. Luckily I keep all the receipts for our electrical items with the user manuals in one drawer in the kitchen, so it was easy to take the loaster back to the store we bought it from last November. I got a credit note for the full purchase price and used this (plus an extra 75c) to buy a brand new toaster with a two year warranty. If all our future toasters decide to self-destruct while they're still covered by the warranty we may never have to pay for another toaster ever again.

There's nothing worse than having something break that you know is still covered by the warranty, but not being able to find the store receipt.

Enough Wealth

Although we have a clothes dryer, DW still prefers to dry clothes on the line when the weather is fine. When we bought our house it came with an extending clothes line attached to the remaining upright post of an old broken "Hills Hoist". The extending line has not been very easy to use as the bar attached to the old clothes hoist wobbles and makes the clothes lines sag. So DW finally took a trip to the local hardware superstore to check on new clothes hoists. The traditional Hills Hoist costs around $250 and is made in China, so she's decided to go with a cheaper brand that costs $150 (and probably also comes from China). It comes with a ten year warranty, so it should last ten years and pay for itself via the electricity saved by not using the clothes dryer very often. It also helps reduce greenhouse gas emissions, as our electricity mostly comes from coal-fired power stations.

[url=http://enoughwealth.com]Enough Wealth[url]

It was a perfect day in Sydney for the start of Winter - clear, blue skies, a light breeze and a temperature around 25C. I enjoyed a 20 minute brisk walk around the nearby landscaped gardens of a luxury apartment complex, in the process avoiding gym fees such as the $25 a week fee charged by the "boutique" gym conveniently located opposite where I work.

For lunch I had one turkey fillet and one lean ham bread roll. The turkey and ham cost around $12/kg on special, and the bread rolls were a steal at 12 for 99c! Plus an apple from a 1.5kg bag that cost $4.98. All up, lunch cost around $1.70 and was moderately healthy.

I still haven't entirely eliminated drinking diet coke uring the day at work - but at least the 2L bottle was on special for $1.90 instead of the regular price of $3.10. I've managed to cut down from 2 bottles/day to 1, substituting one bottle of coke with a 1.5L bottle of filtered tap water, which costs almost nothing.

I tend to get the urge to snack around 4 o'clock in the afternoon, so next week I'll start bringing a banana to work each day to have as an afternoon snack. At $4.98 per kg they're not cheap at the moment, but it's still cheaper (and lots healthier) than a mars bar or other junk food.

Enough Wealth

The

Air Car runs on compressed air, managing speeds of 68 mph (109 kph) and has a range of 125 miles on one tank of air. A duel-fuel version that can use petrol-powered compressor in the country would have a range of up to 2,000 miles between refills.

The tank can be filled for around $2.00 (but only at specially equipped gas stations), or can be plugged into your home power socket to fill the tank in around 4 hours.

I'd love to see an off-road version developed based on the old Haflinger AWD vehicle (I have an old haflinger that is patiently waiting restoration). Combined with a removable air tank (so you could recharge one tank using solar power while driving with the other), I think this would be the perfect "post apocalypse" transportation. And while waiting for WWIII you could drive it around town

Yesterday I discussed saving money by buying good quality, used computer hardware. Computer software is another area where there is a huge saving to be made by not buying the latest and best. Today I bought three computer games for my new PC - Doom III, European Air War and Lords of the Realm III. As these originally came out several years ago, they were available brand new from the store for prices of $5, $10 and $20. Two of them work just fine under Vista, although European Air War had a glitch with the mouse when running, so I'll have to check if there's a patch available. Overall, these are still great fun, and I can't see the point of buying the latest releases that are on sale for $70 or more.

Enough Wealth

After yesterday's fiasco trying to get a clearance sale 17" LCD monitor from DSE, today I decided to check the yellow pages for suppliers of used computer equipment. There was one located close to our home, so I called them to check on prices for 2nd hand monitors. They quoted $20 for a 17" CRT, $50 for a 15" LCD and $90 for a 17" LCD. They only had a CRT in stock, so I decided to pick that one up at lunch time and drop it off home for DS1 to be able to use his old PC again over the weekend, while he's still very enthusiastic working through the Kid's programming tutorial in QBasic.

Although the CRT was ex-lease, it was in excellent condition and the picture quality is superb. As his PC is located on a PC workstation unit there is plenty of room for the CRT on top of the computer, so an LCD really wouldn't have been any advantage. I asked the supplier to contact me when an LCD screen does become available, as I'd still like to add a second screen to my Dell PC in my loungeroom, so I can track CFD trading on the small screen while playing games or browsing the pf blogs on the main screen.

They also have ex-lease computer systems available from time to time, so I'll eventually pick up a "new" 2nd-hand PC for DS1 to use when he's getting towards high school age. Although I've been guilty in the past of buying bleeding-edge technology and paying top dollar for the latest computer gear, it's really much more sensible to buy ex-lease equipment in good condition that is only a couple of years old.

Enough Wealth

DS1 has a keen interest in computers and is a good reader for his age (7), so I thought I'd have a go at teaching him computer programming. I quite like QBasic as a programming tool as its very quick and easy to type in a few lines of code and immediately run it to see what happens. There wasn't QBasic installed on my laptop (running Windows XP) so I downloaded QBasic.zip off the internet. Microsoft made QBasic public domain last century, so there are plenty of places to download it, here for example. Next step was to find a suitable programming tutorial for a seven year old. One that seems quite good is QBASIC Programming for Kids by Ted Felix. I helped DS1 work through the first six chapters last night, and he was so keen that he then sat down and read through the remainder of the 55-pages of the book on his own before he went to bed! Tonight he worked through Chapter 7 and I then gave him a simple programming assignment based on the first 6 chapters to help reinforce yesterday's lessons. Here's his first "very own" computer program:

CLS
INPUT "Enter your name: ", Name1$
INPUT "Enter your mothers name: ", Name2$
DO
PRINT Name1$, "loves ", Name2$
LOOP

DS1 seems to love computer programming - kids are empowered when they can do something "grown ups" do, and the computer has infinite patience while he slowly picks out the commands on the keyboard and fixes his typos. DS1 also loves to play the game LUDO with his grandparents, so I've told him we'll work together on a project to create his own computerised version "QUDO" once he's worked his way through all the exercises in the QBasic tutorial. QBasic has sufficient ability to handles graphics and sound to make such a project feasible, and the way Ted Felix has organised the tutorials provides an "object oriented" and structured approach to programming. (He doesn't even mention the dreaded "GOTO" command except in reference to error handling!).

All in all, provided you already have a computer, you can provide your kid with a good entry-level course in computer programming for $0. Ted recommends kids start off with LOGO first, and then progress to QBasic when they're around ten. DS1 had no trouble leaping straight into QBasic, but his reading is a couple of grades ahead of his class average, so most kids would probably enjoy this course when they're 8-10 years old.

Later on there are plenty of more advanced tutorials available on line that can be used to learn game design, 3D graphics, animation etc. When the limits of QBasic are reached it is easy to migrate to Visual Basic.

Enough Wealth

I don't drink much alcohol (just the odd glass of wine at Christmas or when dining at a restaurant) but I do drink copious quantities of diet coke. Ever since my Uni days I've consumed several litres a day. Aside from wanting to cut down or eliminate this completely for my health, it also isn't very good for my wallet. Until recently diet coke typically cost around $2.40 for a 2L bottle, and I could stock up when it was on "special" for $1.69. However, it seems that Coca-cola has increased the wholesale price of their range (their excuse was increased sugar prices - which doesn't really make sense for "diet" coke!). All the major supermarket chains in Sydney have raised the regular price to around $3.30 for a 2L bottle, with the price on "special" only dropping to $2.49 these days. Even buying only on special this means that the cost has gone up by 50%, which will cost me around $600 extra each year. Time I tried to quit drinking diet coke "cold turkey" and switch to just drinking filtered tap water and the occasional cup of tea.

Enough Wealth

I'm currently using a 3 yr-old Toshiba Satellite notebook as my main PC at home. I'd bought it after my previous Gateway PC died (OK, I was an idiot and plugged in a USB device upside down without looking and totally shorted out the motherboard. D'Oh!). The one I had before that was a "clone" Pentium-100 that I'd had for ages - it has been serving quite well as DS1's PC - he's only 6 so most of the software he runs works quite happily on a P-100. Unfortunately when I got home tonight I was informed that they'd had to turn it off when there was a "bang" and smell of smoke. I inspected the PC and all appeared OK, but the old VDU was smelling of smoke, so I think it's the monitor that has broken. I can probably pick up a replacement monitor for free as lots of people seem to put out old/broken PCs for collection when the bi-monthly council cleanup is on.

One of these days I'll buy a new desktop PC (probably a Dell) as I'd like to be able to edit and burn our home videos onto DVD and run some of the games I have. The notebook doesn't run most of my games as it doesn't have a suitable graphics card, and it only has a DVD player and CD-burner. I keep putting off buying the new PC though as each year they get cheaper and have better features. I've bought quite a few PCs since my first one (a Sinclair ZX80) and got a bit sick of spending a couple of thousand dollars every couple of years on a new PC.

Enough Wealth

Easter Eggs are often a very expensive way to buy mediocre chocolate, but one way to join in the fun without breaking the bank is to wait until next Tuesday to buy. Some stores were already advertising Easter chocolates at 20% off on Saturday - desperate to sell their stock before Sunday. If the pattern of previous year's persists, come Tuesday the stores will be full of Easter Eggs at 50% off.

Of course the traditional method of having cheap Easter eggs is to use food dye and non-toxic paints to colour and decorate hard-boiled hen eggs. This is actually a fun family activity, and a healthy alternative to overdosing on chocolate.

Enough Wealth

While at home sick last Monday I heard mention that Oprah's selection of "The Road" was considered a bit unusual. I only took notice because of it's theme - I'm a SF fan and especially like post-apocalypse survivalist novels (I was actually a volunteer with the NSW State Emergency Service as "Intelligence Officer" for the Sydney Northern Division for about ten years, having been interested in civil defense at the time).

I read the short extract available online and it piqued my interest enough to enquire about it at the local bookshop at lunchtime. It was in stock (actually on sale at $28, reduced from $32 - still too expensive for my taste, especially as it is quite a thin novel), so I read a bit of it "browsing" in the bookshop. I got up to page 122 during lunchtime, so I went back after work to finish it off. I found it very moving, but depressing. While reading it I thought of my family and how it is possible in disasters for all the love in world to be insufficient to protect you're loved ones - even if you die trying. [Warning: spoiler coming...] Fortunately the novel has a relatively happy ending, but the way the story unfolded a tragic ending would have been much more likely in "reality". It made my feel a bit better, but in my view the ending was a bit too 'Hollywood' for it to be deemed a truly great novel.

ps. I DO actually buy quite a few books (mainly investment ones) from this bookseller, so I didn't feel too bad about not buying the novel today. As for the author -there was no significant loss of royalty payment; If I hadn't been able to read it for free today, I'd have just waited 'til it was available from the local library.

pps. I thought about including an amazon.com affiliate link to the novel in this post but that would have been TOO weird - posting about how to read the novel for $0, and at the same time trying the earn a commission out of one of my readers paying for the novel!

Enough Wealth

Although there are plenty of figures around to calculate depreciation rates for appliances regarding tax deductions for rental property investments, when it comes to working out how much you actually need to budget for replacement of common household appliances the figures can be harder to work out. CNNmoney.com has published some data by Bank of America Home Equity and conducted by the National Association of Home Builders that gives real world estimates of the life expectancy of a variety of home components. To save you flicking through the 13 pictures on the CNN site, here is a summary of the life expectancy of common household appliances:
Applicance Expected Life
Gas Range 15+ years
Refrigerator 13 years
Dishwasher 9 years
Cabinets 50 years
Concrete &
Masonary 100+ years
Counter tops 20+ years*
Wood decks 20+ years
Electricals 10+ years*
Plumbing 15 to 50 years
Flooring 25 to 100 years*
Roofing 20 to 50 years*
Siding 20 to 50 years*
Windows 15 to 30 years*

* depends on quality/material
If you divide the purchase cost by the life expectancy that should give you a guide as to how much "depreciation" to save up each towards the items eventual replacement. Scaling up the amount each year to allow for inflation would also be a wise move.

Enough Wealth

I remember when having a DayRunner or Filofax (preferably leather) was a status symbol for all the "executive types". Then it was a PDA, and now a BlackBerry is the cool executive toy (soon to be replaced by the iPhone ?).

Work was clearing out some old stationery items, so I grabbed half a dozen packets of DayRunner inserts they no longer used (receipt envelopes, finance pages, and calendar pages). The original prices marked on them totalled $45 -- goes to show how fast a trendy or fashionable item can depreciate! I noticed that they weren't giving away any rulers or pencils.

You can get a coupon for 10% off online Target purchases by accessing Target deals via the couponchief website. Once you've navigated to the Target site via one of the links provided, you can browse the Target online shopping site and you should automatically see the 10% discount when you get to the checkout page.

Couponchief has a wide range of other coupons and deals available online - for example, Dell, Sony, Overstock and more. You can either browse for deals from a particular merchant, or browse the website by category, or search.

Yes, I'm officially a tightwad.

My eldest son (6) was excited that I've noticed and picked up a 5c coin twice this week (the money goes into his money box). I'm a bit worried though, that he wasn't impressed that it was "only" a 5c coin, and that it would take 20 of them to make $1. Stopping to pick up small change must run in our family though, because he told me that his Grandpa and done the same thing the other day.

And then, yesterday, I spent an hour in the city walking around two of the large uni campuses sticking up notices on the student notice boards - I'd printed out some info on how to open an account with EasyStreet.com.au and get a $20 "member-get-member" bonus (if they used the referral details provided). I'll get $20 each time someone opens an account this way - I'll let you all know if anything turns up in my bank account. Anyhow, I'd gotten $20 bonus when my mom opened an account, so I know it could work (in theory).

Meanwhile I rationlise it as a brisk one hour walk which was good for my health, and provided some cheap entertainment (otherwise I'd have gone to the mall, bought some junk food and browsed the bookshops).

I take bottled drinking water to work - although Sydney tap water is of good quality, I don't want to drink the tap water in my office because the building is an old converted factory building, and I'm not sure how good the pipes are. Having bought a couple of bottles of drinking water I now rotate the bottles and refill them each night with chilled filtered tap water. The filtered water costs a few cents a bottle, and the quality is just as good as your typical bottled water brand by all accounts.

If you want to impress your workmates you can spend it up on the initial purchase of bottled water and have "exclusive" name brand bottles for your home made bottled water

I usually also pop half a tablet of aspirin into the bottle in the morning - I happen to like the taste of aspirin, don't have any stomach problems, and the 150mg a day of aspirin might be good for my health.

saving

Often you can buy "old" calendars and diaries for almost nothing when the year is half over - stores don't want to hold onto stock and there's little chance of selling a calendar that only has a few months of useful life left.

If there were no leap years, then every calendar would be recycled on a 7-year cycle, the first day of the year moving forward by one each year (because there's an extra weekday each year: 365 mod 7 = 1). Due to leap years making non-leap year calendars incompatible with leap-year calendars that start on the same day, the calculation of reusable calendars is a bit complicated - usually a calendar can be reused 6 or 11 years later. I've listed the reusability years for the next 10 years worth of calendars below.

Therefore, if you find you have an unused calendar at the end of the year, and you have some spare storage space, just put it aside and you can probably reuse it in 5 years time. If you're really frugal you could wait for the chance to buy calendars for 80% off, and put them aside for 5 (or more) years until you can use them. Although you'd miss out on interest on the money paid for the calendar, the price of printed items tends to go up faster than the general inflation rate, so it's a pretty good hedge against inflation. Of course you have to be prepared for some odd looks when you use a calendar that appears to be half a decade out of date

Calendar Re-use 1-JAN 1-MAR
Year Year is a is a
2006 2017 SUN WED
2007 2018 MON THU
2008 2036 TUE SAT - it's probably not worth keeping this one!
2009 2015 THU SUN
2010 2021 FRI MON
2011 2022 SAT TUE
2012 2040 SUN THU - and you can toss this one out too
2013 2019 TUE FRI
2014 2025 WED SAT
2015 2026 THU SUN

The mechanics of creating a budget are well-known, and, while not very enjoyable for many people, not hard to complete. The difficulty lies in implementing and sticking to your budget. You can greatly increase your chance of sticking with your budget if you give careful thought to the CHANGES that need to be made to get from your old budget (starting position) and the new budget you hope to implement. Each change should be classified as either a ELIMINATION or a SUBSTITUTION.

An elimination is when you have to totally get rid of a particular spending behaviour - for example, quitting smoking or cutting up your credit card. These changes are very hard, and should only be done if absolutely necessary. A lot of changes SHOULD be classified as a substitution - for example, drinking filtered tap water and tea rather than softdrinks and Starbucks. These are usually much easier to implement as you are not having to eliminate a behaviour pattern 'cold turkey', but are still able to follow your normal routine with minor changes. Generally, after a week of substitution it will become a habit and can be followed without any further effort of will needed.

Many people make the mistake of classifying intended changes as an elimination when they should be aiming for a substitution instead. For example, if you wish to save on entertainment costs, it is far better to substitute your cable TV subscription with borrowing DVDs and books from your local library, substituting gym membership with lunchtime walks and so on. Trying to eliminate spending without introducing a suitable alterative will leave you in a permanent state of "deprivation" and you are more likely to fall back into old spending habits.

money, saving

Wow, it's amazing how the "electronic age" has made some hobbies a LOT cheaper to indulge. For example, I bought my first SLR camera kit in the early 80s. Although the cost of the Pentax MX SLR and lenses was quite high, the real expense of this hobby was film and developing, not the mention negative slides, slide mounts, photo albumns etc. Although I enjoyed taking photos on holiday (after all, ten years after an overseas trip, the only thing you really have to show for spending thousands is a collection of photos and/or video) it was a bit too expensive to "practice" photography and experiment.

This has totally changed since digital cameras came out, and, especially now I have a digital Pentax *ist DL SLR (it may not be the best digital SLR, but it can be used with my existing collection of lenses and my telescope adaptor), I can take LOTS of photos, and it costs me practically nothing. In fact, being able to email pics to my relatives means that I'm saving money compared to having to get duplicate prints to mail.

It's also nice to be able to grab the digital SLR and take some quick pics and immediately see what they look like. For example, a frilly lizard has taken up residence in our yard, and is quite photogenic:


saving

While clipping petrol discount coupons off my "weekly" shopping dockets I decided to analyze my spending based on the dockets sitting in my wallet. Generally I just put the total amounts into Quicken, and track the total spent on "groceries" against my budget. But I realised that this doesn't really tell me WHAT I'm spending my grocery shopping budget on. I knew that I buy the odd snack/junk food or drink items, but I was shocked to find out exactly how much money I was wasting on these items:
Analysis of my last 8 shopping dockets:
Total spend $351.86
Avg. spend per trip $ 43.98

Category Amount % of total
Household cleaning/laundry $20.07 5.70 %
Basic foodstuffs $190.06 54.02 %
Snack/Junk foods $50.78 14.43 %
Snack/Junk beverages $48.74 13.85 %
Medicines $10.82 3.08 %
Baby care $29.10 8.27 %
Toys/gifts $2.29 0.65 %The first thing that jumps out is that I'm shopping way too often (I tend to drop in to the supermarket nearly every second day while I'm collecting my mail from my post office box - this is NOT a good habit. I really should stick to one major shopping trip each week, and only get items that are on my shopping list).

The second thing is that spending 28% of the total on junk foods and drinks is ridiculous! I'm the one in our household that eats and drinks most of this junk, so I've no reason not to just eliminate this completely. This would save me around $2,500 a year AND be much better for my health. I think I'll add a new target to my blog - spend less than 5% of my grocery shopping on snack/junk food and drink.

money, saving

I used to have a gym membership, but after the gym located on my route home from work closed down I didn't bother looking for another gym. I simply walked half an hour each lunchtime at work which saved me at least $10 a week in gym fees.

Later on I helped my son do a paper round before school/work. This involved a 2 hour walk (starting at 6am) 5 days a week, and earned my son around $95 a week - it's much better getting paid for exercising than having to pay a gym fee! I also found that I got more exercise that way, as we couldn't skip a session if I wasn't in the mood.

Also, because my son was earning an income, he was eligible to contribute $1,000 into his own retirement savings account (RSA) and receive a $1,500 superannuation co-contribution from the government. Hence the net benefit of getting paid to exercise was me saving $520 pa and my son adding $6,440 pa to his net worth.

I stopped doing the paper round just before the arrival of our second child last month - getting up a 5:30am doesn't fit in well with disturbed nights and dirty nappies! I'll now have to get back in to the routine of daily lunchtime walks, and swimming during the summer months. Later on we'll look for some weekend work delivering flyers to peoples letter boxes - because our local paper has to be delivered before school each day it's not a viable long term job for a school boy and his poor, old dad!

personal finance, money, retirement

I just read the Fugal Duchess' "6 Ways I Scam Myself into Saving" and although it's an entertaining post I have to disagree with each one of her 6 ideas - I'll explain why.

1. Hide-don't-Seek: I do this occasional by accident, and any "found" money goes into the kids money box as extra pocket money (My eldest son saves 100% of his pocketmoney anyhow, so it's a good deal). I would NOT do this scam intentionally as a) you risk losing notes if you just stuff bills into your pockets!, and b) how are you going to learn GOOD spending behaviour if you just avoid the effort?

2. Break the Bill: I do the exact opposite - I try to never take out cash (I use my day-to-day credit card for grocery shopping at the supermarket, doctors visits, bill payments etc. so I earn points - an extra 1% or so saving). When I have to take out cash (to make a payment that doesn't take credit cards, or charges a surcharge for payment by CC) I will then keep all the bills unbroken for as long as possible. I've trained myself hate having to hand over a nice whole bill and get a measly handful of "shrapnel" back. Also, having a random mix of small notes and many coins makes it hard to track exactly what you have spent each day and I find the money will magically disappear over a week if I don't keep an eagle-eye on it!

3. The Break-the-Bank trick: I've nothing against using banks or credit unions that have few ATMs or branches so that it is hard to take out funds (although these days you can use electronic payments to pay bills, transfer to savings accounts etc. so this doesn't really impact me as I don't use much cash) but I think selecting a bank where "the rates may be lousy" is just plain stupid - I'm sure you can find an inconvient bank with lousy service and GOOD rates!

4. Duck-the-Flyer: It's almost impossible to avoid getting bombarded with junk mail, so I've trained myself to look through them but never buy anything that I hadn't been already planning on (of course this means that you need to think about your needs and wants in a quiet corner - not when window shopping or reading through catalogues!). If you avoid advertising flyers completely you'll miss out on specials/discounts on the stuff you DID intend to buy - never buy at full price.

5. Cart-the-Check Around or Keep the Check in the Mail: Cash it and transfer the money immediately into your high-yield online savings account. You have to cash it eventually anyway (or lose the money entirely), so what's the point in missing out on interest in the meantime?

And as for her favorite trick:

Eat gourmet ice cream.

If you can only avoid over-spending when you feel "over-indulged" you need both overeaters anonymous and spenders anonymous!.

Yes, Credit Cards CAN be good for you! I have one credit card that I use for all my day-to-day expenses (shopping, petrol, bill payments) but as I pay off the balance each month in full, it doesn't cost me a cent in interest - the only cost to me is the annual fee of $19.80

The card has a "rewards" program which gives you some points for spend, and one of the redemption options is to get a $100 credit onto your card for 13,500 points.

This past year I've made $75.46 net profit from using my credit card (no, using a card for payments does NOT change my shopping habits and encourage me to spend more - in my mind putting $10 onto the card is exactly the same as taking a $10 note out of my wallet):
Spend = $35,234.89
Points = 12,861
= $95.26 credit onto my card
fee = -$19.80 pa
profit = $75.46Of course, this only works if you have the self-discipline to
a) not spend any more using the card than you would using cash,
b) always pay it off in full each month,
c) the card has a low (or no) annual fee, and
d) there's no fee for participating in the rewards program.

Over the past 20 years that I've had this same credit card, I've forgotten to pay it off by the due date three times, and have then had to pay interest on all purchases for the current month and next next billing period. On each occasion it would have cost me as much in interest as I earn in points for the entire year! This makes me VERY careful to pay the balance off in full on time - these days its much easier as I can schedule an automatic payment from my credit union savings account to my bank credit card on the due date.

One other benefit of having a credit card is that the credit limit ($15,000 on my day-to-day credit card) would allow me to cover my basic living costs for six months in the event of an "emergency". So I can choose how much to keep in interest-bearing cash accounts, rather than having to keep six months spending money sitting there.

Of course I have some other credit cards that are only used to obtain a 0% balance transfer offers, which will earn me interest on the amount I've borrowed from those lenders at 0%.

And I have one credit card used only for making internet purchases - usually only $20 or so every couple of months. I use a separate card for these purchases so that if the card details ever got stolen and misused I could cancel the card immediately to avoid liability, and it wouldn't cause any problems with my scheduled bill payments coming off my day-to-day credit card as usual.

saving

I recently finished builing a tree-house for my two sons. I had always thought that having a tree-house would be "cool", and as our house has a huge liquid amber tree growing right outside our front porch I couldn't resist letting my "inner tradesman" run amok. (Actually its TOO close to the house - one day I'll have to get it removed before it damages the house).

Luckily my eldest son was keen on the idea, having enjoyed reading the "magic treehouse" series of books (written by Mary Pope Osborne) in pre-school. The materials cost around $500 altogether, mostly spent on the wood decking and handrails, plus some screws, decking nails and poly rope for the ladder. Luckily I already had some suitable wood lying around to use for the main beams and floor joists, and had all the required tools already.

Construction took longer than expected (doesn't it always) - around 5 days all told, spread over several weekends and a couple of days off work (the company I work for allows you to take up to half of your "sick leave" entitlement as "personal days"). I went for a simple "open" architecture - just a floor and safety rails (with fly-screen glued and nailed to the rails for added safety). As my two boys are aged 6 and 0, they'll be able to enjoy playing in it with their friends for the next 15 years, so the cost works out at only 32c per week per boy





When the boys are older I'll be able to increase the "fear factor" by adding a "flying fox" (zip-line) which is available as a kit for around US$80 [link]. Hopefully the tree doesn't do any more damage to our house in the meantime - it had already put a small crack in the brickwork at the front of the house before we bought the place 3 years ago, and we've had a couple of visits from the plumber to clear tree roots out of the sewer pipes. Hmmm - perhaps the total "cost of ownership" will average out at a bit more than 64c a week.

2million has a post on starting to plan for his wedding - there are a lot of interesting comments about how much is "enough" to spend on a great wedding ("perfect" weddings don't exist in reality, and planning for them costs a fortune).

I put in my two cents worth on how to plan an affordable wedding that still provides priceless memories (and not too much stress for everyone):

As my wife's parent were both deceased, I (and my parents) paid for our wedding. We did it "on the cheap", but it was still very nice - and I used the money we saved to splurge on a "round the world, New York , London and Paris (with QEII from NY to the UK)" honeymoon

We spent a few enjoyable weekends driving around Sydney looking for a church with the right "atmosphere", did up our own wedding invitations using some nice paper, an inkjet printer and a sketch of the church the minister gave us. The biggest saving was to do the reception as an "afternoon tea" at my parent's house, which was possible because we only invited very best friends and our relatives (we don't have many living here in Australia anyhow), so we only had around 30 guests. We also got a couple of standard cakes with suitable icing from a local bakery and staked them up to construct a wedding cake - "real" wedding cakes cost a fortune and are practically inedible. It looks fantastic on the wedding photos.

We also got several of the relatives to take photos, videos etc. and got copies of everything. Unless you're planning on sending your footage to "funniest home videos" you don't need a "professional" photographer (most are pretty average anyhow).

The wife borrowed her wedding dress from one of her best friends, and my sister made up a veil and other bits and pieces which made nice keepsakes . (You intend to keep the dress and the wedding cake forever? Sounds like "Great Expectations")

Anyhow, you should discuss this option with your fiancee (doing a "home made" wedding rather than the "crass, commercialised" version) and see what she says. You never know till you ask.

I must confess, aside from spending time on "big ticket" items (like continual self-education to boost my salary income, reading about investing and trying to inch towards the efficient frontier by tweaking my asset mix and minimising fees) I also like to waste my time dabbling in getting "freebies".

For anyone else who likes getting something for nothing (of course this assumes that your down time would otherwise earn $0 per hour - say watching TV) I list a few of my favourites.

1. Email cash - You can earn a regular 5c per day doing a couple of clicks on their website, occasionally get advertising emails which also pay 5c when you open them and click the link. Most fun is the daily number guessing game which you get to pick 5-7 numbers between 1-1000. If your number comes up you get 200 pts ($2 worth). You can invest up to 10000 pts ($100 worth) in their "eBank" which pays around 15% interest. When you have some pts to cash in you just exchange them for e$ which can be used to buy a real money cheque. Cheques are only available for $30, and there is a 1e$ admin fee. So far I have got about $90 of real cash from this. Makes a good diversion during a tea break or when you're on hold. If anyone wants to join up, go to email cash. Using this link will get me a few pts for a referral

2. FlyBuys - Joining this program is free, and just flashing the card when buying your normal shopping at Coles, Myer, Shell petrol, Target etc. will get you 1 pt per $5. You can earn pts much faster however if you have a NAB credit card. You'll then get a 2nd pt per dollar on such purchases if you pay by CC. You will also get 1 pt per dollar for all purchases using your NAB CC. Obviously this is NOT good if it means you run up CC debt. I always pay off the balance in full during the interest free period (up to 55 days) so my only cost is the annual card fee (about $28 pa). I use my CC for all my regular payments - shopping, doctor, dentist, water, phone, electricity, car rego etc, etc, so I put through about $2000 per month on CC and earn around 6,000 pts per month. You can redeem 13,500 pts for $100 paid off your NAB CC - so I'm getting about $45 value per month for free.

3. Mypoints - a US based email "clicking" program. You can redeem pts for Barnes & Noble gift cards or webcertificates. If you have a US address available to get the gift cards sent to, then you can use the gift card number and PIN number to order B&N books online and get shipped as gifts to the US. Not really worth getting books sent to Australia as the P&H is exhorbitant. If you redeem for a webcertificate, you basically get a VISA debit card number with an available balance. Theoretically you could use this to pay yourself if you have a merchant website - eg. CC payment processing via Paypal. I'll let you know if this actually works out in practice. I tried it once years ago and had trouble "activating" the Webcertificate so couldn't use it, so I've since just redeemed MyPoints for B&N giftcards to send friends and relatives in the US.