Archive for September, 2008

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Budgeting for Beginners

September 30, 2008

It became apparent to me a few days ago that a person I was speaking to had little to no idea how to budget. And I was surprised. Very surprised. And this is because budgeting is actually the easiest thing in the world.

Here’s the theory. If you’re on a salary, or regular waged hours, then you have  a fixed income. And that’s a good thing in budgeting theory, because you always know exactly how much you have to spend. The scheme is that every payday you take this amount and subtract your fixed costs. These will usually include accommodation, utilities and food. Everything left after you subtract the fixed costs from your fixed income is what they call “walking around money”. Simple, aeh?

How I manage my own budget and easily work out my walking around money is to run the old two-bank account scheme. In this scheme you have one bank account into which your income gets put. Then you have a second account that your fixed costs come out of. The trick is to have an autopayment that goes out of your “income account” and into your “costs account” on the same day as your pay. This means that your costs get yanked out of your spending money before you even see it.

Or put another way, everything in your account on payday is spending money!! Or… savings. But that’s another issue. Let’s just get out bills paid on time first of all.

The only problem with this scheme is that not all costs are actually fixed. The mortgage or rent is usually the same every week, but things like power and food bills vary from month to month. What I do then is to guess roughly how much the utilities will be, and get the autopayment to cover that amount, plus a little more. I do the same with food. After all, the costs account is only there as a holding account. If there’s heaps of excess money I can always recover it.

The only worry with this system is that I might draw more money out for say, a christmas food bill, than I have in the account. But really the question there is checking on how much is in the account just before the accommodation costs are drawn out, and making sure the rent is covered. For power bills, just check how much you spend in a particular calendar month and set aside a little more than that amount for the same month this year.

If you’re just plain bad with over-spending on food bills, or the power bill fluctuated wildly, then run three accounts. One for spending, one for accomodation, one for non-fixed costs. That way if the food and bills account is in trouble, you’ve still got a roof over your head.

The good news is that if you’re reading this site then you’re probably interested in making sure that you don’t wildly overspend…

As I say, this system has worked for me for years. Having the rent and bills removed early means I know exactly how much walking around money (read: pub money) I had. As long as I didn’t blow the whole lot on wine and loose women I could always chip a little more money into the costs account if it was running a little low. And likewise, if the costs account was consistently in credit at the end of the month I’d draw a little out as a reward!

Ok! Questions!

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Family history and fatherly advice

September 29, 2008

Sorry for the posting pause. My daughter is visiting for the Oz school holidays, and Dad came to stay for a few days, and what with one thing and another a coherent post didn’t make it to the top of the to do list. (And that Che fulla is just not pulling his weight).

While Dad was here we talked about this whole frugality business. My grandparents were all working class and frugality was a necessity, not a lifestyle choice. My parents were likewise careful. Mum made our clothes when we were little, Dad had a huge fruit and vegetable garden, there were home-made preserves, home-brewed beer, and a hard-nosed approach to every major purchase. So I thought that he would just approve of my new-found commitment to frugality straight away, for the ancestral habits are frugal.

But no. “What are you saving for?” he asked. And then he pointed that he and my Mum saved most of their adult lives, and just as they were beginning to be able to relax and enjoy, she died. In retrospect, he thought they might have been happier if they had spent more and scrimped less.

That is something I have been mulling over ever since.

  • Frugality preserves my independence. In highly-paid jobs there is the concept of “fuck you money”, which is the amount you need to be able to walk whenever you feel like it. Highly-paid or not, saving is the only way most of us will ever acquire fuck you money.
  • Frugality is a moral choice to take no more than our share of the communal resource.
  • Frugality is the best insurance against adverse circumstances: practising it increases my capital while decreasing my wants.
  • Frugality frees me from keeping up appearances. I am not shabby. I’m frugal. (OK, I’m shabby AND frugal, but you know what I mean).

Those answers deal with the criticism “you can’t take it with you.” It’s true that my savings are useless to me when I’m dead (although they’ll be damned handy to my family), but it is the act of saving as much as the result that provides the rewards.

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When you’re starving, buy a bag of sugar

September 24, 2008

What is the cheapest staple in the supermarket? We took notes today. I looked for the cheapest brand, and the best price per unit. Food values obtained from labels, or the Food Standards Authority. Yes, I accounted for the banana peel (by weighing a handy test banana; didn’t have a taro to hand, sorry, and you can eat kumara and potato peel if you scrub them).

I’ve sorted this table by price. I reckon if you sorted it by nutritional value, it would pretty much be reversed.

Food Weight (kg)
Price ($) Price/kg kJ per 100g kJ per $1
Kumara 1 3.98 3.98 335 842
Banana 1 2.48 2.48 229 923
Taro 1 3.98 3.98 469 1,178
Brushed potatoes 10 9.98 1.00 263 2,635
Rolled oats 0.75 1.98 2.64 1590 6,023
Pasta 0.5 0.99 1.98 1530 7,727
White rice 1 1.85 1.85 1470 7,946
Standard flour 5 6.48 1.30 1450 11,188
White sugar 3 3.00 1.00 1600 16,000

And we wonder why poor people are fat.

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School holiday bleg

September 22, 2008

So the hols are upon us. Bored young minds must be kept entertained. Preferably, of course, for free (or at least very little).

On the agenda thus far:

  • Weta Cave
  • Baking
  • South coast walking
  • Te Papa (again!)
  • Reading
  • Exploiting child labour in the garden
  • Ditto in domestic chores
  • Art/craft project

What have you got up your sleeve?

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What do they take us for?

September 21, 2008

Fools.

That is what they take us for.

… A sachet of cat food is 59c. A box of 6 sachets is $4.03! Not just a little over $3 which you might expect but 49c more than six individual sachets! But wait, it gets worse. A box of 12 sachets is not a little under twice the price of the box of six but actually $8.10! Which is not only worse than buying two boxes of six but even worse still than buying a load of singles. This makes no sense to me. Can anyone please explain to me the logic here?

This has been another installment of Simple Answers To Simple Questions.

(also, foolishness is an inexhaustible commodity).

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Visit the Knack Market!

September 17, 2008

This came in from Giovanni, and I thought I’d promote it up to a post. I’m working on Saturday so I’ll miss it, but any reports are welcome:

…a couple of people talked about bartering, and I mentioned a Newtown exchange market in the process of being set up.

I can now confirm that the organisers will take part in the Knack Market this Saturday, 9.30 to 1.30 at Berhampore School, 105 Britomart Street, Berhampore, Wellers.

They’re going to have posters where people can write down what they’d be willing to exchange (things, time, knowledge) and share ideas – it’s a pretty cool setup. I realise I’m also shamelessly pimping the craft market itself, but it’s a school fundraiser and it supports local crafters so I don’t feel so bad.

Shamelessly pimp away man. The more local people not buying stuff from off-shore people being paid $2.50 an hour, the better.

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Supermarket survey: P & S still cheapest in Wellington

September 17, 2008

Via the NZ Herald, we learn that Consumer magazine has done another survey of supermarkets. Pak’N’Save are the cheapest in Wellington still, though interestingly, not in Auckland.

The Consumer survey checked the prices of 15 staple items, including milk, bread, cheese, rice and wheat biscuits.

It left out popular brands like Weet-Bix and Wattie’s Baked Beans, going for the cheapest brand on offer in each item. That meant buying Budget brand at New World and Pak’nSave, and Home Brand at Foodtown, Woolworths, Countdown, SuperValue and Fresh Choice.

When there was no house brand item available, the next cheapest item was picked.

In Auckland, Woolworths ($37.33), Countdown ($38.24) and Foodtown ($38.57) were the cheapest places to buy, followed by Pak’nSave ($40.11), New World ($40.36) and The Warehouse Extra ($41.51).

Pak’nSave was the cheapest in Wellington and Christchurch, where the same basket of goods cost $36.80 and $37.75 respectively.

Of the 15 supermarkets tested in the three centres, the most expensive was New World in Wellington’s Wakefield St, where the basic basket cost $46.58.

Interesting that Wellington is cheaper than Auckland. That was not my impression when I moved here 2 years ago.