Savings Milestone #4 – Marching on!

Savings milestone #4 has now come and gone. We managed to save away $965 towards our 20% home loan deposit. Although we missed our fortnightly target of $1150, saving away nearly $1000 is no small feat. Unfortunately we had two unplanned visits to the doctors (kids) and some related medical costs which ate into our savings plan.

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We have managed to save a total of $5,165 since we began our journey a couple of months ago. As the time passes, we are managing to save without any real impact on our standard of living. If anything, tightening the belt has brought the family closer together as we are constant coming up with free things to do together – bike rides, walks, trips to the library and park etc.

With this in mind, highlights for the fortnight included some fun days at our communal vegetable garden, clearing out the summer crops and planting for winter. Since we started our garden in January, we spend 30% less at the grocery store and are eating healthier.

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I spent a day with our son cleaning our old cars. Its amazing how a good vacuum and clean windows can make a car feel brand new. Our son is only two years old and he loves helping his father with this job.

I also got on Twitter this past fortnight to see who else shares similar goals to ours. I managed to get in touch with Kevin at Debt Free Happens whose perseverance really inspired me. I can’t wait to get in touch with others as we continue down this savings path.

Onwards to savings milestone #5!

An unexpected windfall!

Our savings for a home loan received an unexpected windfall this week. Consistent with our attempts to declutter our lives over the past 18 months, I finally decided to get rid of all my unwanted jewellery. These are items I mostly wore in my early 20s, when it was all about wearing thick chains and half a dozen dress rings to be popular. In retrospect, I wish I could have been more mature at the time, and realised I didn’t need all of these ‘style items’ to meet interesting people and have a good time. I shudder thinking at the money I blew just trying to be popular. Oh well, hindsight is a lovely thing…

…but unfortunately I was still left with all the bling bling, long after it reached its expiry date in my life. I hadn’t worn any of it in approximately 10 years, possibly even longer. So I simply collected it all (nine items), took it to a dealer and sold it all for $850. I probably could have gotten more if I sold it myself, but in all honesty, I just couldn’t be bothered advertising, and haggling with people to make a few extra dollars. The way I saw it, I was in possession of something that no longer had value in my life, that was possibly even weighing me down. So I made the most rational decision and exchanged it for cash, which has far more value in my life right now. To be honest, I feel an overwhelming sense of freedom knowing that my life became a little bit lighter.

What this means is that our savings for a home loan deposit got a big boost of $850, taking our total for the past two months to $4,200. We are really rocking now, at 7% of our way there, inching ever so closer to our $60,000 target.

Some valuable lessons:

Buying retail gold is like purchasing a new car, in the sense that it depreciates very quickly. Those who enjoy wearing gold but think frugally could find themselves unlimited bargains on the second hand market. Generally speaking, a jeweller will purchase your gold for approximately 25% of the original purchase price, and sell it on for 50%, or melt it into a new item and sell it for its full value or even more. I have nothing against wearing jewellery, but that’s just an expensive phase I grew out of long ago. If my tastes change in the future, I can always buy myself an item of gold I really like, but for now my mind if fully focused on that saving for something far more valuable.

Onwards to savings milestone #4

Savings Milestone #3 – Reality Bites

It got a bit tough on the savings front this fortnight. We managed to save $1000, which is $150 shy of our fortnightly target ($1150). The reason was mostly due to some unforseen medical expenses as our kids became sick. We also had additional expenses purchasing some warmer clothes as the weather is starting to drop as winter approaches. Our first frost is due on Thursday morning.

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Overall, we are still saving quite well. Since we started just 6 weeks ago we have managed to save $3,300 towards our home loan deposit. There is still a long way to go though, but we are here for the long haul. Nothing will dent our enthusiasm.

Onwards to Savings Milestone #4…………………….

Savings Milestone #2 met

One month into saving for a home loan deposit ($60,000) and we are definitely off to a great start. We managed to save $1,200 towards our home loan deposit this past fortnight, an extra $50 more than our fortnightly target of $1,150!

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Saving like this not only requires careful budgeting, but also extreme dedication in the face of temptation. I guess one down side of saving money is the added urge to make an impulse purchase ‘because you can afford it now’. That happened to me this week (see picture below), but I somehow managed to fight the urge away albeit following a stern talking-too from my wife! As she said, there will be plenty of 80s-styled motorcycles for me to buy, but first we need a place with a big enough garage to put them in!

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(my latest temptation – a 1987 Honda CBR 1000F Hurricane)

….Onwards towards savings goal #3!

Smack Down! Milestone #1 met!

Very happy today. It’s now been two weeks since we started saving for our 20 percent home loan deposit, and we have managed to meet our target for the fortnight. We budgeted $1,100 ($550 per week) and we managed to tuck away $1,140.

Highlights for the fortnight:

  1. Budgeting enough to cover emergencies. Our kids who recently started childcare fell ill and we had some unplanned expenditures at the doctors and paying for medication.
  2. I spent a couple of hours cleaning and servicing my car (oil change), saving myself a small fortune on mechanical repairs. I’m planning to do the same with my wife’s car to keep them both running reliably.
  3. The veggie garden we started in January is really proving its worth now. We have been eating a lot of fresh salad with our dinner and that saves us at least $10 at the grocery store on lettuce, cucumbers and tomatoes. We ate three main meals this fortnight made from zucchini we grew ourselves and it was delicious (see pic below).

Overall, I feel great being able to bank away enough money to hit our fortnightly target. Only 51 more fortnightly milestones to go!!!! Bring it on baby!

 

A simple, envelope system works best.

Today was pay day (sound the trumpets!). The first pay day since my declaration of war against the intimidating 20% home loan deposit. I’m determined to shoot down my bills one by one and inch closer to my home loan target.

With the family budget in hand I took an early morning trip to the ATM to withdraw some money for our fortnightly expenses. For this we use the age old envelope system to stay ahead. The envelope system is truly one of the worlds greatest inventions – I swear. I remember watching my mother use it to pay off “Christmas lay-buys” during the year for the kids, and it works just as good today as it did back then.

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Money set aside carefully each fortnight in labelled envelopes allows the household to plan and manage exactly where its money is going, with the added certainty that the dreaded bills will always be paid for on time or in advance. Just list down every expense you have, and create and envelope for it.

Because of the envelope system, I am never left feeling broke and overwhelmed when something major like car registration is due. These major type of expenses are the ones that really hurt people who don’t have an effect way of budgeting.

When I got home I simply pulled out the envelopes and started filling them. I put money away for everything we spend…groceries, petrol, registration, health insurance, childcare fees….etc. Ten minutes later, I put the envelopes away.

It’s that simple. Good luck!

 

 

Day 1 – Saving for a home loan adventure begins!!!!

I’m creating this blog to document our savings journey as we embark on that long and lonely road of saving enough money for 20% deposit on a decent family home. By decent, I mean a modest three bedroom house the “Australian dream” was made off (1 bathroom, backyard for the kids to play in, and garage for the car). Today is 7 March 2017. We would like to achieve our goal by March 2019 (two years).

The area we live in is designated as a ‘rural region” but in reality, we are only a 20 minute commute from a major metropolitan city. This has many benefits, the most relevant being I can purchase the decent home I mentioned above for approximately $380-$450K. For a 20% deposit we will need $90k. We already have 31.5k in the bank, so need to save around 60k from scratch. This equates to (approximately):

  • 30k per year; or
  • $1150 per fortnight
  • $575 per week

In reality, we may need a save a bit more than this as the total cost of the house includes other costs such as Stamp Duty Fees, Legal Fees, Bank Fees etc. I’ve deliberately left these expenses out of the savings goal as these can be accumulated as we shop for a home (and once we have saved the deposit).

My wife (35) and I (39) have two small children aged 4 and 2. They have just started childcare and my wife has just returned to work (part-time only) after a 4 year break to raise our two kids. I work as a professional so earn a good salary. As many people would understand though, this is a very challenging time for a young family as costs of schooling and childcare begin to consume large chunks of the family budget. Childcare costs families a lot of money. Never the less, we will persevere with our savings goal no matter the cost.

On the plus side,we have worked very hard over the past 4 years to become ‘debt free’. We have no car loans, personal loans, credit cards, or store cards. This was not easy, but there came a time in my life when I realised that living beyond my means was unsustainable.

My car is 22 years old but still runs well. My wife’s car is 13 years old and is very reliable. I expect to keep these over the next two years as we commit ourselves to saving.

The only real debt we carry is a small loan on the tiny two bedroom apartment we live in, and of course our daily living expenses. Selling our place to raise funds for the deposit is not an option for us as we would barely break even. Aside from that, given our savings goal, living here is very convenient for us.

I hope to be able to look back on this post in two years time with great pride. For those in a similar situation, I wish you all the best of luck. Two years feels like a long way away, but time has a way of passing very quickly.