The art of saving money is very much a woman's province. Women handle most of the money in the world. Though men are often good with money, women are generally better. Once they have established a goal, they can find ways to cut costs, while maintaining their living standards.
The first goal should be stabilising the family expenditure, the second to establish a sinking fund for emergencies, the third, getting hold of some money on which to base the family fortune.
"Are you making the most of your money?"
Australian Home Journal, February 1967
You can't turn around at the moment without encountering a reference to the Global Financial Crisis (GFC). The newspapers, TV news, radio reports - they're all full of it.
All of which is having the effect of making people very conscious of their own personal finances. Every day I have casual conversations with people about the changes they are making to their spending, or the impact the GFC has had on their superannuation accounts, or how their families, friends or acquaintances have been affected by job restructuring.
The boom-time mentality of the past ten years or so is definitely over.
Perhaps it is time to revisit some of the wisdom regarding finances from before our time.
I was intrigued to read an article from the February 1967 issue of Australian Home Journal and realise how much of what was written then has application today.
"A home is as much a business as a corner shop, and books should be kept. Not the great ledgers of Charles Dickens' times, and certainly not the soul-destroying budget books which list every packet of chewing gum. Just buy a small cashbook, write the month at the top of a double page, make one side the credit side and the other the debit."
In today's world it is easy to lose track of money coming in and going out. ATM withdrawals, direct debiting, eftpos, internet banking, cheque books, credit card charges...it takes a fastidious home accountant to keep on top of it all. But unless you do, how can you keep track of where your money is going and where savings could be made?
"Food is the most flexible item on the agenda and the one where all the economy usually starts."
It seems obvious, but we've become so used to buying what we want, when we want it, that we often forget there is a price to eating out of season. Fruit and vegetables are cheapest when they are in season. With a large freezer, food can be bought in bulk when it's cheap and then consumed
throughout the year. Of course, if you don't have a large freezer already it may be false economy to go out and buy one! In our own household, we're currently clearing out our freezer in order to buy a half-side of beef. There are a number of
'cow-pooling' schemes springing up around the world, where families get together to buy a whole cow direct from a farmer and split it up between them. This means you may have to be a little more creative in your menu choices and start to exploring cooking with cuts of meat you don't normally buy, but it can bring the cost per kilo of the meat over the entire carcass down considerably.
"Impulse-buying, according to one bank manager, is probably the worst sin in the business of managing money...'Impulse spending can become a habit that grows and grows, until the impulse is an expensive holiday, or even an unsuitable house.'"
I don't think it takes a bank manager to point out the flaws in the habit of impulse buying! But I'm sure we've all been guilty of buying something on an impulse. It takes a fortitude of spirit to stop and ask, "Do I really need this?"
"Live within your income."
Again, obvious. But do you think all of our global financial managers followed this rule?
"Spend no more than one fifth of your income on rent, or equivalent mortgage payment."
This is one area where costs have slowly crept up over the past forty years. According to the Australian Bureau of Statistics 2008 Yearbook in 2005-2006, "For the majority of owner and renter households, housing costs represented less than 25% of gross household income, but for some it was more than 50%.
"Wherever possible buy goods for cash - and use the fact that you are a cash buyer to obtain a discount."
Cash talks. In the current environment, you can certainly negotiate discounts by offering cash.
Definitely some food for fiscal thought there.
What is your favourite money-management tip from before our time?
10 comments:
All this talk about impulse spending makes me want to go SHOPPING!!!
I think our housing budgets often consume 50% of our income over here, or more.... ....part of the reason for the crisis. :(
I grew up on the poor side of the tracks and learned to be a master of frugality. My husband calls me Mother Russia, especially when I insist we keep the heat down and wear more layers.
I need to soak up all and any tips from this post!
Rob keeps a spreadsheet budget on our PC and sets aside money each month for annual expenses like property tax, insurance, etc. He is a master in the grocery store and chooses things to put back if they go over the budget for the week. So much for the female part of our family being better than the male.
I get quite upset with some of the people crying foul about foreclosures. We are each responsible for being smart about our money. Using 40-50% of your gross income for a mortgage is YOUR fault. Just because a bank says they will loan you a certain amount, doesn't mean you are absolved of the responsibility to due your homework to see what you can afford. We crunched numbers and used mortgage calculators to find our how much we could comfortably afford... allowing money for emergencies, insurance, taxes and repairs.
A very timely post indeed!
We've moved to the country, and the Bloke is working from home again, so we're saving on rent without a big rise in transport. It's not an option for everyone, but it's working so far for us.
I also find we save money on food if we stick to buying real food, and keeping the Bloke out of the supermarket. I buggered that one up today so we've got pretendy bread and crappy processed pasta sauce to eat today. With potato gems. The farmer's market is much safer, and growing veggies at home helps.
Hi Megan and Alison
there's a fabulous award waiting for you on my blog. Come and get it! And thanks for all your great posts.
I am staggered by the amount spent on takeaway food and at cafes. (I had lunch at a cafe yesterday and then we had a takeaway dinner, but this is fairly unusual.) I notice that many of the children on their way to school - they go past my house - are eating takeaway of some sort, and drinking Coke or milkshakes, and I wonder whether they actually eat any breakfast at home. After school the same thing happens. And at the pool children seem generally to be bought carbohydrate snacks after their swims. There is room for reduction of expenditure.
Could we speak to the landlords about keeping the rent to 1/5 of our income? That made me snort in bitterness, that one.
Buying 'real' food is certainly a way to cut the budget - even when you are buying good quality real food.
I read about a mother who found she saved buckets of money simply by making sure that trips to the shops/movies/outdoor activities were planned after mealtimes so that she didn't spend money on hungry children at expensive takeaway places.
Great blog.
I live on my own and am a fan of freezing. The nights I can't find the energy to cook or the mornings I am running late and have to dash o work, I am able to grab a soup, casserole or pasta from the freezer for my lunch or late shift. There's always salad and I save a heap by not buying lunch so often. Easier to control my weight too, as I know precisely what's in everything!
my neighbour is big on cooking in bulk and freezing it all, quite funny to see all the little containers of food in his freezer, but it saves him cooking every night. I am a real scrooge when it comes to shopping, I lean towards specials, and buy in season where I can, which is rally hard when the little one wants a peach at $12 a kilo, unfortunately, "too expensive" is becoming part of their vocabluarly.
We all need landlords like my workmate, she said she would not raise the rent as she had a moral responsiblity to the tenant to keep it at a reasonable cost.
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