Need saving help - fresh out of debt!

LOZBMate8911 on 26/02/2014 - 11:40

Hey guys,

Thought I'd come here and ask for some opinions.

I'll give my background first:

I'm currently 24 years old. About 4 years ago I got a student credit card from CBA, which, for some reason, the available balance of which was $10,000.

Between a drinking problem and a emotional spending problem (i.e. buying stuff when I was depressed/upset), I managed to max it out in a year and a half or so.

A friend of mine in banking said I had a case against CBA for lending negligently, or something along those lines, and I'd tend to agree. I'm not trying to pin the blame on then, it was completely from my own stupidity.

Anyways, I've just got it paid off in full yesterday. Happy days. However, now I've got a bit more on my plate.

Second week of January or so my girlfriend of 6 years has found out that she's pregnant.

I'm shitting myself, as other than a term deposit that my grandparents have authority over I have no savings. So I've been completely caught out of left field with this.

So that's my backstory.

My current position is as such:

Work

Working full time - $1,000 a week
Part time at University - 6hrs/week

Assets and Accounts

$10,162 - St George Term Deposit - maturing 02/07/14, making 4%
$10,000 - CBA MasterCard (available balance)
$1,050 - CBA Complete Access account - student concession access
$0 - CBA NetSaver account

Other notes and thoughts

Have been using Goodbudget since January, which has worked well
Generally have to set aside $100 for car, $100 for food, $0 for hobbies (Evernote sub etc) and $50 for booze/entertainment. Will rarely go over this
I put $25 a week towards savings.
Come the end of March I'll be moving in with the girl so that's $470/fortnight rent, not to mention utilities
Want to set aside a months cushion ala Goodbudget's suggestion ($4345.24) - sooner the better
ING 5% Paywave card - Use Paywave a lot, would it be worth the hassle of renewing? I hate the $200 withdrawal maximum though…
Last time I looked IMB and Ubank offered 5% introductory rates - would I be better off throwing my term deposit in there?

TL;DR

A lot of this was to spell it out in front of me as I'm quite flustered about it.

My question is - given my income and the other details I've provided would there be any benefit in obtaining additional accounts for discounts or savings? Is there any other strategies apart from Goodbudget that I should pursue? Any other tips?

Financial

Comments

  • jatcave on 26/02/2014 - 12:06
    +10

    1ST!!! Ditch the credit card. Put what you would pay into that, into a debit account instead and keep set it aside for the big emegencies, eg fridge, washing machine, hot water blow up etc.

    Add all your big bills (in yearly amounts), rego, electricity, etc. Divide those by 52 and put that in another account each week (even if you put a lesser percentage of that figure away, it'll help). There's all your bills sorted. The rest is yours.

    • ESEMCE on 26/02/2014 - 15:59
      +2

      Money wise this.. especially get rid of the CC, Chop it into tiny bits with scissors and enjoy every second of it!
      It's a temptation you don't need and can live without.

      Baby wise, ask friends/family/colleagues if they (or know of anyone) have any stuff they no longer need.
      Case in point, we got:
      - a Cot, portacot, linen for both, and 3 massive tubs of toys for free from a work colleague. He was so happy to get rid of it and free up space in his shed!
      - loads of clothes from friends whose kids are older (babies are only in them for a few weeks before they outgrow them, so all are in great condition) as well as heaps of clothes for presents
      - a high chair from another friend for nothing.
      - Pram from a mate for $100.

      About the only thing we've bought new are Cloth Nappies.

    • shortgum on 27/02/2014 - 01:58
      +4

      I love CC. It's my best friend. I pay them in full every month LOVE them

      • backpaqer on 27/02/2014 - 08:59
        +2

        I wouldn't bash the credit card. Consider the CC a cashflow tool. You know what your monthly inflows are…you just need to constrain your outflows. Your budget might look something like $300 cash for "splash" money - money you spend where credit card is not a payment option…other than that, all purchases possible are made on credit card. A good month is where your credit card bill + your $300 cash is less than what you earn. (And $300 is just a figure I plucked out of the air…make it whatever feels right to you).

        As for the kid…hold off the buying until the arrival…you'll be stunned how much you'll get as presents and they really do not need much in the first few months…a pram doubles as a bassinet for the first month…you wont need a high chair for at least 3 months…you want to be good parents and there are plenty of stores that will make you feel being a good parent involves spending lots of cash with them…not true.

        Anyway…once you understand your credit card spend patterns…you'll find that having a gold (or better) credit card actually pays for itself (you can use the points to pay for the annual fee) and it comes with lots of free insurance (purchase insurance, travel insurance, concierge services…) learn how to milk it for everything - they are very handy tools. Just make sure that they are paid off in full BEFORE the due date…if you let the interest ever kick in, switch to a new card, don't try to clear it and use it at the same time, it can get confusing. The only debt you want going forward is a mortgage…and when you do…make it hurt! I bought a $130k house 20 years ago…I could have kept the $80k flat we'd sold to pay for the house and rented it out…if we sold the flat now we'd be debt free. Or if we'd stretched ourselves to $190k at the time, we'd have a 2 storey bluestone house with a massive wine cellar in a very upmarket suburb worth over $1.5m now…that $60k difference then is probably $700k now. Buy location first, and quality if possible second).

        • lplau on 28/02/2014 - 15:59

          If you use a credit card properly and smartly…. then it can actually work for you.

          However if you are similar to the OP and use it for spending sprees, then it will work against you.

    • akd on 28/02/2014 - 16:38

      I completely agree to get rid of credit cards or keep them away for emergency. We cannot be more smart than Financial bankers. That is their job to con us and extract more money from us. I tried to be smart but failed.
      I got 3 credit cards and did direct debit for complete monthly balance to avoid any interest. Then used each of credit card in a way that first credit card for 10 days, second for dates 10-20 and third for dates 20-30 trying to maximise benefit of 55 days interest free. Initially all went well but suddenly one day I realised that there is no money in debit card to pay credit card balance and the combined balance on credit cards were more than $5000. I decided to ditch them all. It took me 6 months to reduce the balance to 0.
      I suggest to stay away from Bank's money and use your own money. Download monthly expense spread sheets or database to keep track of your expenses.

    • nikey2k27 on 28/02/2014 - 22:34

      Ditch the credit card. best think u can do. all best with rest of your life live cheep get used to cooking wine for drink what what 22 year old at work said with 3kids.

  • tanoshiiki on 26/02/2014 - 12:15
    +4

    Agree on ditching the credit card especially based on recent history. Unless you have $10,000 credit of your own money on the CBA card, you must not think of it as an asset.

    Is $1,000/wk pay before or after tax?

    If you really want to get into savings, you do need to start saving more. I think at least 10% of wages is the recommended amount, so you should be saving at least $100 a week. Baby costs are going to be significant!

    You may need to cut down on booze/entertainment and do more home cooking.

    Unsure of your current car arrangements, but can you finance it differently, trade-down to a cheaper model, sell-it and use PT or cycle instead?

    ING does not have a $200 maximum withdrawal, but if you want a fee-free withdrawal from ATMs, it must be a minimum $200. Otherwise, you can get cash out via EFTPOS of any amount fee free.

    TD - Although UBank and other providers have better than 4%, don't withdrawal out of your current TD now, as you'll probably be liable for penalties. After maturity, think about switching or negotiating rates with your current provider.

    • OZBMate8911 on 26/02/2014 - 14:11

      $1,000/week is after tax.

      I intend to put as much as possible towards the Month Cushion over the next 4 weeks, after that I'll put as much as I can towards it until it is at the magic $4345 amount.

      Thanks for the advice re: TD - was wondering what to do with that. It isn't earning much.

      All else I have provided more info in latest post :)

  • mskeggs on 26/02/2014 - 12:32
    +7

    You should read up on Centrelink entitlements applicable for your situation. With the info you have supplied you will be entitled to some financial support when the baby is born.
    Also, consider your housing expenses. Is $470/fortnight your half or the total rent? If half, be aware that is above average rent, yet you are earning below average income - might look to moving into a cheaper place when the lease is up. In my experience, the decision you make when you first get your own place about the level of housing you require is very important.
    If you can choose a less expensive home, you will find yourself always with money left to save compared to your peers. If you choose a relatively more expensive home, you will always be broke.
    I am sympathetic to the idea that a nice house is important, but going cheaper now will make everything easier down the track.
    My other strong suggestions are to make sure you shop to a list and a budget, cook all your meals at home with budget ingredients when you can (my wife and I used to have 'pizza toast' two nights a week made under the griller when we were your age), and buy generic brands for almost every purchase.

  • bluedufflecoat on 26/02/2014 - 12:56
    +2

    $235/wk rent is a bit steep. But I guess that may be Sydney prices. Think you may need to reconsider all your lifestyle choices and expenses. Please give up the booze (and if you smoke, then cigarettes too!! and coffee - all adds up) Rent DVDs from the Hoyts Kiosk for entertaiment. :/

    Cook more, eat at home. Get a second hand freezer and bulk cook meals and freeze. It will save you time and money (of which you will have less of, when baby comes along). Buy frozen vegetables - you get pretty good value there. Probably where you shop will also have an impact on how much you save.

    Research who provides your utility services - DoDo gives you 20% off usage fees (?) I get 30% off, but I'm in VIC. Heard Lumo offers 22% off, but that might be over the total bill which is better than just the usage fees. Please verify.

    Baby things definitely are very expensive. Go to used-baby-items market/fairs to buy baby clothes, towels, sheets. Especially at the start, they don't need pretty clothes. You can get good condition clothing for like $1/$2. Go to Salvo's & Vinnies to try and pick up good, cheap things. You might find a good cot, pram, baby carrier etc there, if not on eBay or try FreeCycle. Encourage your GF to breastfeed for at least 6 months. That would save on formula and is better for the baby. Also, for the first 6 months or so, they don't need fancy toys etc and you might get a few presents from friends & family so don't waste your money on them.

    The govt still gives assistance in the form of paid parental leave / baby bonus… so make sure you have all the paperwork ready and get whatever you're entitled to.

    Congratulations on the baby. It will change your life. :)
    And congratulations on paying off your debt too.

    All the best.

    • mskeggs on 26/02/2014 - 13:20
      +3

      Yes, baby stuff is expensive new, but dirt cheap used. If you can borrow or trade kids stuff with friends or family this is a huge saving.

    • OZBMate8911 on 26/02/2014 - 14:16
      +2

      Thanks for the advice!

      Re: smoking, I quit a year ago :)

      Re: clothes and baby items I think we'll be trying to scrounge as much as possible off of my cousin and a few of our friends that have had a kid recently. Never heard of FreeCycle though, I'll give it a gander!

    • ESEMCE on 26/02/2014 - 16:04

      Oh yeah, on PPL
      As Dad you can claim 2 weeks Dad and Partner Pay on minimum wage, BUT you have to take 2 weeks unpaid leave (has to be consecutive days).
      Sounds like a "bad deal" unless you negotiate with your boss/payroll to get some leave paid out to match or boost your income for that fortnight.

    • danyool on 26/02/2014 - 23:04
      +5

      Rent DVDs from the Hoyts Kiosk for entertaiment.

      Goto your local library and check out their offerings for FREE. Yes, they'll all most probably be old crappy ones, but a few gems you may not have seen.

  • altomic on 26/02/2014 - 13:33
    +2

    $10,000 - CBA MasterCard (available balance)

    destroy this.

    start accumulating now. pre-buy baby things for the future. e.g. newborn nappies are discounted to a possibly never to be repeated level -buy in bulk

    • OZBMate8911 on 26/02/2014 - 14:11

      As per the post I just did I destroyed the card, just the account remains.

      I will try and close it today online, if not I'll have to do it in a branch at some point this/next week.

      • Serapis on 26/02/2014 - 19:26

        So hard to close, took me over 2 weeks to cancel and at the end, they put me in a room with what was effectively a sales consultant trying to put more credit on the card even though I wanted to cancel!

        This was for a student credit card, no fees with $5500 credit that I never touched for the entire 2 years I had it.

  • OZBMate8911 on 26/02/2014 - 13:58

    Thanks for the replies guys…I'll just do a new post as it's easier than replying to all of them.

    I'll give some further background into the situation.

    House and Appliances

    I still live at home.
    Currently, my girlfriend is renting with another one of my friends.
    Unfortunately, he lost his job last December and has been extremely lax about finding another one, so he is still out of a job. There is more to that story but that is largely irrelevant.
    The bit that is relevant is that he has enough funds to see him out to the 26th March.
    The TV, fridge + freezer unit and washing machine in the house are all his. However, I believe that we will be purchasing the fridge and washing machine off him for $500 - $550, based off of 2nd hand value on eBay.
    On top of that I will have to reimburse him for his part of the bond, which I believe to be another $500 or so, not 100% sure on that.
    We have a dryer provided to us by the landlord.
    Rent is $470/week - between two people that is $235/week, so $470/fortnight.
    This is considered "average" in the area - I am not that willing to move out of the area as my parents and grandparents are closeby if the baby needs to be sat(girlfriends parents live in Perth, relos are ~25kms+ away) but if that's what needs to be done, that's what needs to be done.

    Transport

    The car I drive is an older model Mazda.
    It's way overdue for replacement - worn piston rings is the biggest problem.
    I use $75/fortnight of petrol currently as I drive from work (in Sydney) to Wollongong for university, at least two times a week.
    I have kept the budgeted amount at $100/week as historically that's how much I'd go through with parking and petrol if I was to travel to the 'gong 3 times/week.
    Currently parents pay rego, insurance, routine repairs on the car.
    This agreement will end once I move out.
    I avoid public transport as the trip to the 'gong is roughly 1.5 times the duration of actually driving down there - I try to stay at work as long as possible.
    I'd like to replace the car but my allergy to liabilities now causes me to want to buy it outright - but that's going to take very very long to do so indeed.

    Bills

    So far, I am largely unsure of how much the bills will set us back.
    The water usage is included in the rent, however the power isn't.
    There's no way I can really gauge power usage well as the last quarters rates are through the roof as the roommate has been at home on the computer with the aircon running all day.
    The quarter previous to that they had a "friend" squatting in the living room, which didn't end well. Power usage affected there too.
    That's the only two bills they have on hand so I haven't been able to ascertain average usage under normal circumstances.
    What I do know that we'll need is Internet - I need a higher data allowance for reasons discussed under "Entertainment"…

    Booze/Entertainment

    I've cut down on my drinking dramatically in the past year or so.
    I keep the allowance at $50 as every Friday night I go to the pub with mates for dinner and beers.
    I generally don't go through the whole $50 on that night - closer to $40 - but I save that small amount for other happenings.
    This is the one night of the week I'd rather not sacrifice but if it comes to it I'll have to I suppose.
    I have replaced doing anything on a Saturday night to a night at home watching stuff on my HTPC - I have set it up as an automated Usenet box which'll grab movies and TV for me.
    The only problem with that is Internet data allowance, which I have yet to look at. I suspect that a high allowance will probably set me back $70/month or so.

    Hobbies/misc

    I keep $50/week aside for this.
    Anything that doesn't fit into other categories goes in here.
    I have subs to Evernote, Goodbudget, and Newshosting (Usenet) that come out of here on a monthly basis.
    I use Live Connected @ $16/month for phone that comes out of here as well.

    Food

    I buy food while I'm at work - $5 for my coffee in the morning and $4 for a chicken and salad roll at lunch.
    I generally buy another drink ($3) during the day as well.
    Will normally go out for lunch on a Friday arvo as well.
    Friday and Saturdays are the biggest killer as I don't eat at home, I'll usually eat out. I'll have to stop that…

    Credit Card

    I shredded the credit card a fair while ago to prevent any further purchases.
    I suppose the general consensus is cancel the account?
    I trust myself with it now but I don't want at $10,000 balance.
    Would anybody advise having a low-balance one for emergencies, or given the circumstances is it not such a good idea?

    Others

    tanoshiiki I didn't know that cashout via EFTPOS was free - makes the decision a bit easier!
    mskeggs I'll keep this in mind - I need to assess whether it's worth staying where we are. As I mentioned further up in this post I don't want to move too far away from family but I'll keep my eyes peeled.
    amelyn Thanks for the Centerlink and energy tips, I'll give them a thorough lookthrough tonight.

    • OZBMate8911 on 26/02/2014 - 13:58

      I suppose I should apologise about the wall of text, but it's good to get it out of my head onto (digital) paper I suppose.

    • ESEMCE on 26/02/2014 - 16:15
      +3

      Entertainment - Keep the torrent box (and your high internet usage) at your parents (use sneakernet to transfer files to your place on a USB drive) and use your phone data or a 3G dongle at home for light browsing/email.

      You wont be going out for beers on Friday night.. you'll be home to the baby as soon as you can get out of work. In fact you'll be at home every night! Get used to being host to your friends..

    • Serapis on 26/02/2014 - 19:39
      +2

      This plan seems relatively tame… One big saver is cutting out coffee each day. As part of my training routine, I cut out coffee and realized I ended up with $100 extra to spend per month.

      *Edit: I never stopped drinking coffee, whenever I needed the kick in the morning, just mixed 2 spoons of the free coffee at work with a bit of warm water, nothing else ;D

    • ankor on 26/02/2014 - 23:07
      +4

      House/Appliances -
      Try not to use the dryer at all if possible, and don't wash your clothes at high temperatures, but at lower temperatures. Be a miser with the lighting, and try to ensure that everything is switched off if you don't need to use it. Try not to leave devices on standby where possible.

      Aircon -
      if your housemate has been at home with it on, the benefit has been to him, and not to anyone else. Explain to him that he needs to contribute more to the power bill as a result.
      If he is using more quota, try and work out roughly what percentage everyone is using, and split it by that rather than having everyone contribute equally. It's a pain in the ass, but f)ck him- he needs to get a job and stop playing wow and watching porn.

      TV-
      There are certain settings that will make the tv more costly to run, and other settings that will make it less. I'm sorry I can't provide further information, but I think basically try and run it in standard mode.
      switch that sucker off and turn it off at the wall if noone is watching it.

      Internet -
      Go to whirlpool, and broadbandchoice.com.au and see what you can scrounge up as el-cheapo. The last time I looked, TPG offered some good deals, but I'm not sure if they're still as competitive.

      Daily Discretionary Expenditure -

      Coffee + another drink + chicken roll = 8 + 3 + 4 = $15.00.
      Presuming you work 4-5 days a week, you are spending up to $75 per week on food and drink. I would like to remind you that's a lot, and unnecessary. Learn how to prepare your own lunch, go to the library and get some cookbooks on a budget- or research online.
      Surely poaching your own chicken, buying some lettuce and other stuff and bread would make that meal work out a little bit cheaper than $4.00 per lunch. You can also control the salt content, which will help your health in the long run.

      With regards to coffee- $5.00 - what the hell are you drinking? Orange mocha frappaccino?!

      Get a plunger, or aeropress. Then go to a local roaster (there are 999999 of them in Sydney), and start learning the intricacies of black coffee. It's simple, tasty, and you aren't drinking a shedload of sugar and milk. You will get a longer sustained caffeine hit compared to espresso coffee.
      The packet of beans (250g) should cost anywhere between $10-18, and per aeropress serve you are only using between 12-18grams. You will save a little more money this way.

      Places to investigate:

      Single Origin Coffee Roasters
      Allpress
      Tobys Estate
      Coffee Alchemy
      Campos
      Gabriel Coffee

      If you are drinking franchise stuff like starbucks or GJ, you should know that it is just overpriced and not good value for money.

      Groceries -
      Try and stay away from colesworths. Find out where the local farmers markets are, or go to Aldi if you can. Good farmers markets sell fresh food at a cheaper price by the kilo compared to colesworths. You'll find it also tends to last longer in your fridge and cupboard. Find yourself a local butcher, or go to some bulk butcher and get your meat in larger quantities, so it is cheaper by the kilo. Almost every butcher I've been to has been happy to help cut it up to more reasonable serving sizes, and you will be able to save that way too.

      • altomic on 26/02/2014 - 23:49

        with regards to the coffee -if you really want it a work.

        buy a little espresso machine off ebay. i bought a used breville unit for $5 off ebay. fill with boiling water (we have a zip water heater in the office kitchen) for faster production time. heat milk in microwave and then froth on the steamer. The lattes i produced were quite reasonable. on a scale of 1 to 10 I'd rate them as quite reasonable

        buy some nice ground coffee from a coffee shop (or try some supermarket 1 kg bags or baybeans seems to have some good deals occassionally. I used to buy my coffee from Alens espresso in Brisbane - awesome coffee. always a line outside the shop.)

        I worked it out that it was costing me about 50cents per large coffee.

        or switch to tea

      • ESEMCE on 27/02/2014 - 08:21
        +1

        $10-18 for 250g!
        You need to start looking at the Coffee Bargains here!
        1Kg for $25 delivered…

    • Tnetennba on 27/02/2014 - 17:19

      Is evernote subscription ($5.50 per month) actually necessary? I've never used it, but it looks like you can do what it can do for free with google keep. I may be wrong, but it seems like an unnecessary cost.

  • [Deactivated] on 26/02/2014 - 14:29
    +2

    My first thought is, what does your girlfriend do? You're taking a big step together, and you really need to discuss your finances. You don't have to tell us (duh! public forum and all), but how much does she make/save/spend, what're her financial/career goals?

    Given how much you're earning/spending, she'll need to pitch in. (Don't remember if you've mentioned this before or not). Maybe the other guys here are being chivalrous and not asking about her work situation? But I think a shared life means sharing finances, too. At the very least, you need to talk about this NOW so that you or your girlfriend don't get big shocks later on.

    You definitely need to supplement your joint income. Maybe look into Centerlink benefits? How is her work going to deal with her maternity leave? I hate to suggest this, but can you reduce uni hours temporarily to get more part-time work somewhere?

    • OZBMate8911 on 26/02/2014 - 14:38

      I will withhold her occupation for obvious reasons, but to my knowledge she is turning $850 a week.

      Obviously we'll be sharing expenses as they fall due.

      This brings up an interesting question though - should we maintain our own seperate accounts and pool utilities and rent into a joint account, or should we open a joint account and live out of that?

      I personally prefer the first option as I'm the number cruncher out of the two of us, she is quite stubborn and prefers the "intuition approach" which I can see driving me nuts if we were to share an account for more than the bills. I'd rather keep a strict budget with everything accounted for.

      I will have to look into Centerlink ASAP as mentioned elsewhere in the thread.

      As for her work maternity leave she just scraped in to the period in which she can get paid parental leave.

      As for Uni - I can't reduce my hours at any cost as work and Uni are co-dependant on each other. If I reduce my hours at Uni or bin it altogether I will lose my job, which makes it hard. I'd rather not divulge any more as that would make my profession and position pretty obvious.

      • bluedufflecoat on 26/02/2014 - 14:44

        From memory, baby bonus is tax free and paid parental leave is subject to tax. :S

        • jto00 on 26/02/2014 - 22:24

          you're right, but the paid parental leave is paid like a wage through your place of employment so they withhold PAYG Tax so you're not hit with a big tax bill at the end of the F/Y

        • bluedufflecoat on 27/02/2014 - 09:22
          +1

          Ideal is to work out what the net after tax amount would be with PPL and compare it with the baby bonus and of course pick the one that's higher.

      • [Deactivated] on 26/02/2014 - 14:51

        Paid parental leave - excellent.

        Account splitting - I don't think it really matters, but I prefer option #1 too. I know people who fall into both camps, but I don't think you should have completely joint finances unless you're 100% comfortable with it. (And maybe not even then, depending on your personality)

        Oh, and congrats on the baby :)

      • Serapis on 26/02/2014 - 19:46

        Paid parental leave as others have said. Possibly worth checking whether she's under a company with some sort of workplace Enterprise / Collective agreement on Fair Work Commission website (fwc.gov.au) and see if her employer offers their own paid parental leave scheme.

        Also she can take annual leave during her parental leave period if you need the cash during the parental leave period.

        If you need 2 weeks for the birth of the baby as others mentioned above, dad and partner pay with Centrelink.

      • RandomNinja on 27/02/2014 - 01:25

        Separate accounts if your girlfriend prefers the 'intuition approach' as it sounds to me that she's happy to spend whatever and hope it works out when bills are due.

        Having successfully paid off your $10k debt, it sounds like you have a better understanding of the discipline required to manage a tight budget for the both of you.

    • danyool on 26/02/2014 - 23:28

      Think you may need to re-think rent. Yes, right now it might be 1/2 of $470 - but if she is away on maternity leave and not going to be earning income - that means you've got to cover it all.

      I think you both better get hauling ass on the savings. (Although, check Centrelink limits, cause it's a pain to be denied if you've just over. Loan some to your parents :-)

      You will probably be able to live pretty cheaply once the dull housemate is gone. Aircon is a luxury you get at the mall.

      All the best with it.

  • retiredfeline on 26/02/2014 - 14:29
    +1

    Re electricity bills, go to one of those online calculators to see which appliances are costing you the most, for example:

    http://www.actewagl.com.au/Environment/Energy-and-water-mana…

    Then see what you can do to reduce the bill. Even small things like using a door snake to block the cold draft in winter can save you on heating.

  • bluedufflecoat on 26/02/2014 - 14:49
    +1

    How disciplined are you with a CC for emergencies? Under normal circumstances, I think that it would be good to have one (Coles has a free one?) - but that is all it's supposed to do. At the end of the day, you need to have the money to pay for it, even if it's an emergency, so it's more useful to have the money than to have the CC. Separately to that, you can also ask for the credit limit to be reduced on your current card.

    This might be a "cultural difference" thing, but I would suggest doing away with the pub meal and beers every week. $50 is a lot of money for one meal and to do it 4-5 times a month. Cut it down to fortnightly and by the time you have your baby, you won't have time to go out for a pub meal and beers that frequently either. You would need to be responsible and go home after work and look after / play with the child and grow that relationship too.

    Choose between your $5 coffee and $4 lunch and your Friday lunch.
    $3 drink - is that a bottle of Coke? You can probably do without that too, or buy two large bottles for about the same amount of money and you save $12/week —> $50/month. (That's increasing your current savings by 50%!)

    • OZBMate8911 on 26/02/2014 - 15:19

      I've barely used the card in the past half year or so, so I think I can trust myself with it. I will apply to have the limit severely reduced though, if I do decide to keep it.

      The occasions I have had to use it is to buy Uni stuff, like textbooks, a laptop when my old one crapped the bed, and a few small Christmas pressies for the family.

      I see the Friday pub dinner as a sort of wind-down for the week - I work a fairly high stress job (horribly understaffed) so it's sort of my reward. Parents agree with me and are more than willing to take bubs for that period of time. But, again, if it has to go, it has to go.

      As for the $3 drink, just a bottle of Powerade Zero every now and again - probably two times a week, maybe more if I'm under stress or if it's really really hot out. It's only started recently as the water chiller I've got in the office kicked the bucket and there's no cold water around lol. I suppose I'll have to make do with tap for now.

      It's funny how it only really comes to mind once you really drill down or somebody points it out!

      • Serapis on 26/02/2014 - 19:55

        While I believe the above is the sensible approach, there's no need to drive yourself crazy.

        Right now you have time to spend with friends. That time might not be available once the baby comes around. Keep one day of the week to yourself but just keep the spending tame.

  • ilostnemo on 26/02/2014 - 14:57
    +1

    Do not get rid if the credit card account.

    You need discipline but if circumstances change and you need money, you will kick yourself, not having access to the funds.

    What is going to hurt you both is the loss of an income ie hers. When you have a baby, you find ways of making ends meet.

    I sense you maybe planning a wedding soon.

    • timetoquit on 26/02/2014 - 15:57
      +2

      I agree with keeping the card. Based on your info. you've been responsible enough to pay back your credit card debt over the last 2-3 years. I'm sure you've learnt the ins and outs of using credit cards by now. We all make mistakes and history shows you are disciplined now, only "YOU" know if you can trust yourself.

    • ESEMCE on 26/02/2014 - 16:08

      Bugger that.. you can get another credit card if needs be..
      The guy has 10k savings so isn't going to die on the street waiting for a new card.

      • ilostnemo on 26/02/2014 - 17:06

        Try getting a credit card with no employment.

        Unless op has a crystal ball I wouldn't be getting rid of it.

        Savings means little to the bank when applying for credit. The main ones are employment and address.

        If the credit card isn't costing, keep it.

        And if he needs a credit card for an emergency he may be waiting a few days for approval.

        • ESEMCE on 27/02/2014 - 12:03
          +1

          Looks like he's done the best thing..
          Chopped up the card, but kept the account.
          Less temptation of having the card in wallet for a drunken late night spend on useless crap off OzB, but replacement card only a phone call (and a few days delivery) away.

  • tanoshiiki on 26/02/2014 - 15:12
    +2

    It may be long and detailed, but I think it's a mature approach to take to type out everything.

    EFTPOS cashout - best to do it while grocery shopping at Coles/Woolworths

    Food - Although $12/day doesn't sound like much, it can add up quite quickly. $12 x 5days/week x 48 weeks is $2,880. You may need to cut the coffee habit. If you prepare in advance, e.g. make sandwiches at home, this could cut your lunch costs in half.

    Rent - The rent sounds really expensive. I live in a reasonable apartment in the Melbourne CBD and that's not even $470/week. Are you sure you're getting the best value living area especially on your current budget? Which suburb is the area you want to stay in? Check sites like realestate.com.au on the suburb and look for relatively modest requirements, like one bedroom unit (maybe plus study for the baby), etc. You really need to look at lowering this component of cost down.

    Credit Card - It's the recent history that makes me advise to not have one even for emergencies…

    Breastfeeding - Just note that not all mothers are able to do this or for a prolonged period.

    Other grocery - Sounds like you have a good relationship with your family. Is there a possibility of bulk buying some products with your parents? Like large tubs of laundry powder, cleaning products, meat, etc.

    Joint account - recommended that you have one separate joint account, agree on a figure to contribute monthly.

  • pebee47 on 26/02/2014 - 18:07
    +2

    Like you I left Uni with a huge CC debt ($9K in '84). I think I beat the bank by about 1 day in ditching it, then spent the next 2 years doing it tough to pay it off and only being able to buy what I had cash for. Fast forward 14 yrs, finally got around to getting another card. Upshot? After the 2 grizzly years of blood sweat and tears I found I didn't miss it, and in fact seemed to have more money than my clever mates, all had 2 or 3 cards at various stages of Max draw.
    Not having the easy access means you will work like blazes to ensure you have a good reserve of cash for emergencies - and won't blow it on unnecessary items. Plus its amazing how keen banks are to give you one if you really need one.
    Entertainment? Get a brew kit and brew top beer. Its amazing how happy your mates will be to bring everything else for a free beer BBQ

    • Serapis on 26/02/2014 - 19:49
      +1

      $9K in '84 is a lot more than $10k in 2014… off the top of my head probably around $18 - 20k nowadays? good job

    • altomic on 26/02/2014 - 22:17
      +1

      Get a brew kit and brew top beer.

      +1

      • pebee47 on 08/03/2014 - 14:18

        Thanks Serapis.
        I didn't mention that my partner also fell pregnant at this time, but she had a secure job, so wasn't a biggie. (We always kept our finances separate).
        I'm currently using a Qantas cash card, getting used to fuelling it with a certain amount every fortnight to act as a budget control + get 1 point per $ - adds up when you pay things like car rego etc.
        On the brew thing, a bunch of us set up a (loose) "Brew Club". Made 50+ brews last year. Total cost for around 3500 small bottles approx $1000 = $100/head for a beaut year of drinking a range of great beers, stouts and ciders. Lots of the world's great problems solved with friends along the way!

  • Weezle on 26/02/2014 - 18:08

    Is there any chance you could use public transport? I know you've mentioned you prefer to drive to work and uni, but in all honesty you will save a lot of money by using public transport. Look into buying a mymulti as this will get you access to all public transport.

    Also, stop buying lunch out. Go to the supermarket, and make lunch before you go to work.

    But remember this. Think to yourself before buying something, do I need this or do I want it? If you don't need something, then don't buy it. Try and forgoe whatever it is because at the end of the day it's your money and it all adds up.

    Hope it all works out for you. Cheers.

    • pebee47 on 08/03/2014 - 14:21

      For every $20 you save, put $1 aside to reward you and your lady. When you have enough, go out and enjoy. Doing it this way ensures you savour the date, plus you don't overspend on the rewards.

  • Bystander on 26/02/2014 - 19:41

    Can't recommend this book highly enough.

    Simple, straightforward, timeless advice, wrapped in an easy to read style. Seriously worth the time!

    http://goo.gl/vSWw1c

    or pdf
    http://goo.gl/jmiyA

  • Typical16-bitEnjoyer on 26/02/2014 - 22:49
    +5

    " Any other tips?"

    Paternity test.

  • RandomNinja on 27/02/2014 - 01:19
    +4

    Rather than moving out, have you considered moving your girlfriend in to your home (assuming your folks have space and are ok with it)? It can be tough having the missus and parents under one roof, but is it tougher than paying Sydney rents?

    Cost savings aside (and they will be substantial), having a baby is one of the toughest things you'll do in life. Minimising financial stress and having support on hand will make it a much better experience for you and the missus.

  • devpress on 27/02/2014 - 01:36
    +1

    I commend you for trying to reduce your cost base …

    … however, it seems to me that you're already running a relatively "lean" household. Instead of trying to attain the proverbial last "5%" of savings, I have a different take - focus on the income side of your budget equation.

    Although its a longer-term proposition relative to cost reductions (which, in most cases you can implement almost immediately given the costs you've listed above), the financial gains from income raising can be exponentially greater than whatever saving you can eek out from your already low cost base (diminishing returns, in economics speak).

    While it seems like you have immediate budget issues to address (which you obviously need to), remember that providing for your family is a long-term proposition — so therefore you need to keep a long-term view on things. And, in my humble opinion and from observations of others, income is generally the determinant factor of affluence and prosperity — which I'm guessing is a position you / your family would want to be in at some point.

    Having said that, maintaining discipline on current spending is still important, as is seeking advice on how to minimise likely future costs as they arise (e.g. new baby), as per your op.

    Addressing your income opens up a whole new discussion as the info. you've provided is on the cost-side of the budget equation. Happy to offer viewpoints on how you could do that if you're willing to share further info. on that aspect of your personal circumstance.

    Good luck!

  • spersephone on 27/02/2014 - 07:31

    You could request a credit card limit of $500 for emergencies, or alternatively do what we did, and only have a Visa Debit card. It gives you the Visa facility which comes in handy, without the debt. You obviously need to have funds sitting in there though.

  • tomleonhart on 27/02/2014 - 08:34
    +1

    Have you considered the Ubank Ultra saver ? Best on the market at the moment for 4.62% permanent rate, catch is that you have to put 2000 in it a month. But with your Salary and living at home, i don't think you will have any problem.

    I also drink instant coffee at work. Pack lunch from left over from dinner. Buy tea when it's on discount.

  • dentani on 27/02/2014 - 12:25
    +2

    Some condoms would be a good investment. ;)

  • forever saving on 27/02/2014 - 12:41

    I agree with most of what's being said here (Small credit card, centrelink allowances, parental leave). So I'll go for a different approach just to give more (crazy) alternatives.

    You just found out she's pregnant.. (I'm guessing it was unplanned)

    • Are you absolutely certain you are ready to raise the baby? If not, would you ever consider adoption?
    • Can you live with one of your parents until your married? The help they can provide with baby care is huge
    • Do you have any hobbies you can monetize? Start a blog about how you got out of debt and into baby debt?
    • YouTube can also provide a casual source of income if you want to do some vlogs

    Increasing your income seems more appropriate since you are largely aware and in control of your expenses. You could probably try to control your girlfriend's spending too if you find she's spending too intuition money.

    These online hobbies could be viable seeing as how you would be spending a lot of time at home after the birth. Good luck and congratulations.

    • [Deactivated] on 28/02/2014 - 09:56
      +1

      Adoption. LOL. That would certainly go down well with the girlfriend. (As in get rid of her too.) I guess in some strange way that does qualify as saving money.

  • Tcm9669 on 27/02/2014 - 16:05

    Just a thought… What do you do on Saturday and Sunday? Maybe find a part time job. You have around 8 months left before the baby comes, until then you can certainly find part time employment. Aside from a little extra spending here and there you seem to be in control… so your only option left is to increase your income (as previously mentioned) therefore you need to find some other part time job, if you manage to get some casual job paying around $20 (should be standard considering you are over 21), and you work 5 hours only (leaving you enough time to enjoy your weekend still) That's an extra $100 Sat and $100 Sun.. potentially… of course if that is something you are willing to do. That's a potential of $3200 / $6400 extra income (before tax) BEFORE the baby comes.

  • iSamurai on 28/02/2014 - 09:12

    Don't count the available balance of your cc as money you can spend… You have to pay it back as that money is not yours. I pay my CC off as I spend each week (using the 28degrees card anyway so with price protection you'd have to pay it off before the statement is generated not to be charged for the insurance).

    Pocketbook is a really good tool to track your spending and analyse where your money is going. Every transaction is pretty much automatically categorised. I highly recommend it. I also use YNAB to plan my budget and do that once a month.

    A colleague at work says one of the best ways to save money for his baby is to use reusable nappies and don't buy all sorts of baby stuff they sell. Secondhand stuff are often quite good.

  • [Deactivated] on 28/02/2014 - 09:46
    +3

    On the premise that not spending a dollar is another dollar to invest…

    Anything that you were going to buy… www.freecycle.org - who cares if it's second hand. Who cares if you get a fridge that leaks, or a washing machine that needs to be turned one click to spin by hand because the timer is broken. It's all money that stays in your pocket. And I mean ANYTHING. Some of the stuff most frequently given away is baby stuff. (Security gates, toys, clothes, prams, car seats, cloth nappies, cots, etc.)

    Get over the pride factor - of buying new things to appease other toffee-nosed people (or toffee-nosed yourself). ;-p Pram dirty? Then wash the cover. Toy has scratches? So will a new one in a month when baby throws it from their high chair - so disinfect a used one. Cot has teeth marks? Get a $20 Ozito sander from Bunnings, some sandpaper and varnish. Fridge rusty? Cover it with stickers you printed from artscow/vistaprint using family photos.

    Oh - and: https://www.ozbargain.com.au/node/69388

    • Geewhizz on 08/03/2014 - 09:06

      who cares if it's second hand. Who cares if you get a fridge that leaks, or a washing machine that needs to be turned one click to spin by hand because the timer is broken.

      It's false economy to buy a fridge that is going to chew excessive power, and to throw food out because the fridge has not kept it at the appropriate temperature.

      $235 a week for rent really ISN'T that high. Obviously in some areas it must be, but in many areas you'd be lucky to get a flea infested pit for that. If it is clean and comfortable and well maintained, with a good landlord, and decent neighbours, and your girlfriend is happy living I'd be seriously considering staying there for the current time being. At least you know what you're getting.

      My suggestion would be, if between you you are currently bringing home roughly $1850 per week, to put AT LEAST that amount away in savings (I'd be leaning more toward about $400, which will still leave you $1200 a week after rent (if you can't 'manage' on that there's something wrong.) Even after the baby is born, if finances decrease dramatically, still commit to putting even a little into your savings. Down the track when you're possibly considering buying your own home you'll have a hefty part of a decent deposit saved, relatively pain free.

      So many of the posts here seem to be focused on scrimping and scraping in the extreme. Get a weekend job (as suggested somewhere) that ties up what free time you now have, and you can pretty much guarantee you'll be paying child support for a lot of years to come. Good spending and saving habits don't have to mean sacrificing quality of life and time together.

  • Aeonx on 28/02/2014 - 11:49
    +1

    You're saving from every possible avenue but that is only a fraction of what could be saved if you'll consider renting cheaper accommodation assuming you'll be sharing your Gf's current residence once her housemate moves out.

    Also have you spoken with your Gf about the long term plans after her maternity leave - will she return to work f/t or p/t; is the baby going to childcare. This will have a significant impact on your finances.

  • georgedeka on 28/02/2014 - 13:40
    +2

    Not much I can add.
    However make sure you shop at aldi etc.

    I use and love pocketsmith for my budgeting, it lets me see a forecast of where my financial position will be, so I know if I can afford something or not.

    • altomic on 01/03/2014 - 10:09

      baby expense - aldi nappies are very good.

      • pebee47 on 08/03/2014 - 14:37

        Throwaway nappies? = throwaway money to me. Get a heap of "pre-loved" ones from Vinnies or the like and sterilise them (again, although they'll come washed clean); plus buy a few of the brightly coloured ones for "Sunday Best" outings. Polypropyline liners wick moisture away from little creases so nappy rash isn't a problem. We used less than one packet of throwaways for each of our kids (emergencies and sometimes first up when we went out, so when the nappy was changed (into nice coloured cotton one) we could dispose of throwaway. Also Chinese style muslin nappies are really cool and comfortable in Summer (babe looks like a little Sumo wrestler in them, LOL)
        Don't forget Bottle sterilent is chlorine bleach, just diluted to 1% strength.

  • Baghern on 28/02/2014 - 16:41
    +1

    Lot of good suggestions here.

    Only think I'd say is to what I see as the situation - your not exactly struggling and you are young.

    Don't need to go the whole hog of what has been suggested here, ie poaching your own Chicken - costs savings is minimal compared to buying whole Chicken from Woolies/Coles. Maybe not even give up coffee.

    You're not struggling, enjoy some of the luxuries. Take on some of the advice, but no need to take all.

    This is what a lot of first home buyers go through, they scrimp every penny into the loan, 5 years down the track, they see they're destroying their lives for a mortgage that is actually manageable and start going on big holidays again.

  • pyro love bird on 08/03/2014 - 04:57

    First of all congratulations on the baby!

    I think that with going out and things, have you thought about spending a bit "smarter" so dont dish out on fancy food, share a pizza or whatever. There are a lot of cheap/free things on gumtree, otherwise check your local sammys, salvos sort of things. There's a heap of exchange/free things going on in certain "groups" on facebook (at least in WA there are). So maybe check those out.

    Also, not sure about your student services support at uni, but maybe try and check them out, a lot of them have emergency loans, and they have "scholarships" set aside for people facing financial hardship, perhaps you can find out what they can offer and ask them to help?

  • JoyVee on 16/03/2014 - 00:53

    I subscribe to the Cheapskates Club newsletter which is free on line. It has lots of helpful hints on how to save money and live well. There is a $300 a month challenge to feed a family of four and has practical recipes - but quite a few meals are vegetarian or have little meat.
    I particularly like the make your own cleaning liquid and the practical hints given in each newsletter. It costs $35 a year to join but I haven't joined it yet.
    Here is a link
    http://www.debtfreecashedupandlaughing.com.au/2011/05/spray-…
    Good luck with the new baby - my sister put her newborn into a large drawer in her bedroom until they could get a cot. Everyone was happy and survived.
    JoyV

    • JoyVee on 16/03/2014 - 01:00

      Forgot to mention Credit Unions. If you have a local large Credit Union they often have less bank charges than banks. Maybe your Uni has one or your workplace or your wife's work place. always worth investigating. Good for loans and they will evaluate applications on your ability to repay rather than which of your assets they can sell if you default. Community Banks may be another option worth investigating. Make sure you are comparing apples with apples. JoyV

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