Saving It.

Who hasn’t been in this scenario?

It is the day after payday, you have a party to go to on the weekend, you really need a new dress. (shoes, bag, coat etc)
You go to the mall and “BARGAIN” you find the perfect top for just $20.  YAY!!!!  At the same shop you find a cute skirt, a shirt for work and a funky belt.

You walk out of the store feeling really good that you got some great deals.  All that for just $99.00

Still on a high, you get home, check the mail, and UH-OH the credit bill is in 🙁   (bummer)    A quick glance at it and you see that you are only slightly overdrawn, but you are pretty happy that the balance is only $2100.00, and the bill is only $140.00.

Before you get too comfortable in thinking all is good in your “debt world”…What if I was to tell you that your $99.oo “bargains” might be actually costing you  over $2000???    HOW CAN THIS BE???

It is because of the power of compounding interest.  The same super power that makes rich people richer, also works in reverse to help keep you drowning in debt.

Consider this….

Do you just pay the minimum payment on your credit card?  Have you had that same card for YEARS and still owe the same amount?  Do you have ANY idea when you will pay it out?   Let me let you in on a secret….The bank does NOT want you to pay it out!!!  You are a veritable cash cow for them.    Have a look over your statement, somewhere you should find a panel that shows how long it will take to clear your debt if you just paid the minimum payment.

In our example above, we can see that paying just the minimum payment, it will take 19 years to clear this $2100, and you will pay $4600 in interest as well.   Are you feeling a little sick right now? Are you wishing you hadn’t spent that $99.00?

What if I was to make you feel better by giving you a handy tool that shows you how much you could save by paying any amount off your credit card, mortgage, personal loan or car loan?

I have created a super easy to use excel spreadsheet that calculates the value of paying extra toward your debt.  As long as you know the amount owing, the interest rate and the time left on your loan, you can have an accurate gauge as to the real cost of any “bargain” you are considering buying.

This method has been one of the cornerstone ways we have been able to create our Champagne Lifestyle.   By really deciding if a purchase was worthy enough to buy or have that same amount clearing the most expensive debts we were able to be debt free in a few short years.

Sign in now to access the FREE basic Loan Calculator HERE  as well as other free resources..
(the download will be a .zip file, you will need to unzip it to find the excel file inside)

In this screen shot, you can see on the left,  we have entered the Loan Amount (the balance of our credit card -$2100), the Interest Rate ( also found on the credit card bill) and the Loan Period ( the time to pay out if we just paid the minimum required)   Over on the right you will see two areas to calculate the difference if you were to pay a regular amount with each payment  or a Lump Sum- one off payment.   You can see, I have entered the $99.00 “bargain” shopping spree. If you would have paid that $99.00 off the credit card along with the regular bill, would would have saved over $2000 in interest.

Want a reminder tool?

Purchase the PLUS version of the calculator and it will provide you with a reference table showing how much you could save by not spending.  Based on the details placed in the first table, this next sheet calculates the amount of often purchased items.   Also included are handy pocket sized printable tables to remind you of the power of paying your debt down rather than spending.  When I needed to pay off a large credit card debt, I wrapped the table around my card, so everytime I went to use the card I was reminded.  It really does work to rethink your purchases.

Have a look in the shop for other handy products

 *Disclaimer. This calculator is for general use only, I am not an accountant or financial planner.  Please check with your own bank to determine the exact figures.

One really simple way to save money and create your champagne lifestyle is to look at your spending habits make some quality changes.

Some ideas might be:

Coffee.
Nearly every savings blog or site you see always puts coffee at the top of the list. Certainly your daily (or three) cafe coffee can leave a huge dent in your wallet, but life is way to short for bad coffee.  in keeping with the champagne lifestyle, I am not going to suggest you drink instant 🙂   Look for alternatives.
Have a coffee machine installed at work.  If you work in a large-ish office, there are many businesses that will supply a coffee machine free to your workplace at the business just pays for the coffee used.  The price per cup is usually less than $1.00.
If a “proper” coffee machine is deemed too much hard work, what about a pod machine? You can buy any number of coffee flavours as well as hot chocolate.  Again the cost per cup is far less than cafe coffee.
Don’t have the capacity for a machine at all?   Have a look at single cup options like the good old French Press
Once you have your coffee making apparatus, ask at your favourite coffee if they sell beans to take home.

Gym: 
Look for cheaper options for fitness.   Many local councils run free fitness classes.  Check out the MeetUp site. Search for Sport and Fitness groups near you.  Who knows you might even find some new friends and get fit at the same time.

Entertainment:  Borrow books, magazines and DVD’s from the library. If you have not seen the inside of your local library since high school, you might be in for a surprise.  Far from the boring stuffy places of your youth, modern libraries have a great range books, magazines, DVD’s and music.   Many libraries have collections ready to download onto tablet devices and you don’t even need to go to the library.    My library offers a huge range of magazines that I download to my iPad.  Most months I cannot read all that I subscribe to.  All these magazines are ones i used to actually pay money for and still did not read them all.  If I see a particular recipe or article i really want to keep, I just screen grab the page and either email it to myself to store in my Google drive print it out.

Dining out with friends.  Have a My Kitchen Rules month with your friends.  Take it in turns to create your own “pop up restaurants” at each others homes.  Add the extra challenge of setting a budget per person. $20- $25 per person is actually easily do-able if you think about your menu carefully.
Embrace the “Pot Luck Dinner”  – task each diner to bring a course .
Rotate the course each time you hold the event. eg:
Event 1: Tom & Jan bring starter, Jack & Tracey bring main, Rick and Ash bring dessert, James & Fiona bring wine
Event 2: Tom & Jan bring main, Jack & Tracey bring dessert, Rick and Ash bring wine, James & Fiona bring starter
Event 3: Tom & Jan bring dessert, Jack & Tracey bring wine, Rick and Ash bring starter, James & Fiona bring main
Event 4: Tom & Jan bring wine, Jack & Tracey bring starter, Rick and Ash bring main, James & Fiona bring dessert

Alcohol: Have a cocktail party at home.  Grab some cocktail recipes and try some of those $15 cocktails you can never afford when you are out 🙂 (Dan Murphys have heaps here)

Spending:  Lock up your credit card for a month.  Pay everything by cash.  It might surprise you have it feel to actually hand over cold hard cash.

Give the gift of TIME:  Rather than forking out big dollars for gifts, give yourself.  If you have a hectic, busy life you no doubt rarely spend quality time with your family or friends.
Set aside time to visit with your family member or friend for a full morning (or day), it will cost you a few hours, but it will be priceless to your  recipient.

Check your bank statements:  Internet banking makes it super easy to check purchases online.  Make note of any “unknown” purchases.  Do you need to do a claim through your credit card provider?   One other nifty little saving trick is to “save your cents”.  While in your online banking have a look at your debt balance,  top up the balance to the next $1.00 ( or $5 or $10)  eg if your balance is $xxx,x23.68, you might add 32c to bring up to the next $, or  add $1.32 to bring to $xxx,x25.00 or even $76.32 bring it up to the next $100.

What are your simple methods for saving?

“Sunshine Cash” is the opposite of saving for a rainy day.

For me, Sunshine Cash is the money I earn on top of my regular income.  It is not intended to pay the bills or be saved in the emergency fund.  It is FUN MONEY!!  However, it does trickle in sporadically depending on what I am pursuing at the time, so I have a separate bank account for it.

Making the dollars s-t-r-e-t-c-h

It is not so much the saving of the amount, as maximising the value of it.  I want every sunshine dollar to be a blazing sunbeam!!!

example: If I choose to spend my Sunshine Cash, I might choose a fine dining restaurant that is promoting a two-for-one deal.  Or we might choose to buy some really expensive ingredients and cook a restaurant quality meal at home, complete with the “good” china and crystal.

Daily deals sites are brilliant for eating out. We often use Groupon, Living Social or Our Deal to have a meal out at restaurants that we would not think of.

Use deals for gifts.

Daily Deals sites also have some good ideas for gifts too.  Just last Christmas I bought these awesome hampers for just $39.00 !!!

I ended up buying 6 of them.  The recipients we MOST impressed with a (what they thought) was a very expensive gift.

Have a clothes swap party.

Instead of going out shopping, get your girlfiriends together (with a few snacks and glasses of wine) and host a clothes swap.

Stay in for a movie marathon.

Love going to the movies but don’t like the high price tag.  Host a movie marathon at home. For a “large screen” experience, hire a projector (or borrow one from work if your department has one. Make some popcorn and ice cream snacks and enjoy the saving.

Always look out for deals at the supermarket.

I am not talking extreme couponing here. I am saying, while you should always sho with a list. Don’t be a slave to the brands on that list. eg; Instead of putting Cornflakes on the list, just put Cereal.  Have a look in the aisles, you ight just find something different at a cheaper price. Same with fruit and vegetables. Don’t just write “Kale” think “green leafy” you might find baby spinach or asian greens at a fraction of the cost.

Look for deals on gift cards.

Check your autoclub to see if you can access discounted grocery cards. I regularly get our major supermarket cards at 5% discount. These are “ecards” so there is ot even any postage cost. 5% on 200 grocery bill is $10..

How do you maximise your dollars?