One of the quotes at the top of the page - by Tom Robbins, I think - read, "There's a Buddhistic calm that comes from having... money in the bank."
It's true, I'm happy and not worrying now I have ten grand in my emergency fund. Of course the money won't prevent stuff happening, but knowing I've taken practical steps to deal with Murphy helps me feel relaxed and capable of dealing with whatever comes along.
Viewing the 'Thinking about Money' Category
One of the quotes at the top of the page - by Tom Robbins, I think - read, "There's a Buddhistic calm that comes from having... money in the bank."
I am dealing with the insurance company abou the new place. House - no problem, but when it came to contents I realized I have got rid of so much stuff I am now overinsured. Most of my clothes and furniture is second hand, so the company would not give me much for it, and there is quite a bit I would not bother to replace anyway. Not yet a minimalist with only 100 things, but definitely simplifying my life by reducing my possessions.
So I'm working out a list of things I would replace in the event of a disaster and the cost of doing so, buying quite a bit at thrift stores and will insure for that. My plan is to eventually save up that amount in a special fund and self insure.
I think insurance companies play on the fear factor a lot of the time to get us to take out big policies. Yes catatrophes happen, but not that often, or they wouldn't be making a profit. I want to insure myself against reasonable risk, but not get paranoid about losing my possessions.
The only money that went out today was my church offering. I am adopting the Dave Ramsey mantra "Live like no one else, so later you can live like no one else"
I have been slack about saving over the last few months. I have dad's money tucked away and part of my wages automatically going to retirement, so that's going to be allright. I have been earning more money and it seemed like I didn't have to worry about every cent spent any more so I eased the purse strings and took my eyes off the dream of Financial Independence.
But thinking it over I realise I really do have a realistic opportunity of being FI, and sooner rather than later if I really tighten up on spending now. There is a lot of difference between having to be thrifty when there is no alternative, and choosing to save money in pursuit of a goal. When I had little money I would often rebel and spend on some treat because "I don't have any other indulgences". Now I am going without because I can have it back later on. As Dave Ramsey says, Live like no one else, so later you can live like no one else.
There was an item on the news this morning about borrowing by local councils. One observer reckons it's far too high. Councils used to use sinking funds for capital projects, now they borrow against these funds. A spokesman came on to defend the council saying they used very sophisticated methods to control the debt and some councils had lazy balance sheets - they actually needed more debt.
I'm just a simple soul (it was all those "sophisticated" borrowers that got us into this financial jam). I see only that if you borrow money, you have to pay it back. With interest, so that means you pay more, or rather the taxpayers do. My rates have gone up a lot since the sophisticates took over the council.
Yes I know, you'll save money in the long run because the return on assets is greater than the cost of borrowing. I'll believe next time i see a council project come in under budget. Somehow the cost always requires more borrowing than anticipated and up go the rates again. If these financial clever clogs want to play financial geniuses, they can do it with their own money, not public funds.
I'm grumpy, can you tell I just got my property tax bill?
I was walking past First Church with a friend when he said "look what's under the food tree." I looked and under a large tree in the church grounds was a can of corn and a packet of cornstarch.
He explained. It seems the people who use the food bank go thru their parcels and take out anything they don't like and leave it under the tree.
Well, I don't know, it seems to me if you're that hungry you'll eat anything ("I'll eat all the veges, gran, just please don't make me eat the liver!") At least they could donate the food back for someone who does like it.
Do you think if I left the liver under the tree I could take the corn and cornstarch?
is sometimes inconvenient, but saves me a lot of money. I get all my exercise from walking so don't have to pay expensive gym membership - can't understand people who drive to the gym and run on a treadmill. Besides, running stuffs your knees. Need to lift weights? Try carrying a 10 kg (22 lb) sack of rice a mile home from the shop - okay, that's beyond me now, but I did when I was young.
Not having a car saves me time. I've been late any number of times when someone offered me a lift because the car wouldn't start or we couldn't find a park.
when I walk somewhere I always know how long it is going to take me and I allow for that. If it's raining I catch the bus, whic is cheaper.
Now you're thinking, yeah but I have a full time job. I don't have time to walk everywhere. Here's the thing; because I don't spend money owning a car I don't have to work as many hours. I can meet all my needs with 30 hours a week - and that leaves me time to walk.
And walking, I spot all those coins dropped by rushing motorists at the parking meters. Found .70 cents today.
Today I cancelled Caller ID. I don't use it much anyway, as several of my friends have private numbers, so I often don't answer and just let people leave a message. Anyway, I worked out that at nz$2.50 a month, at current after tax interest on my new FI a/c, I will have to save $1,000 to be able to afford it in retirement. Am now looking round and calculating how much I need to save for various other unneccessary expenses. About nz$6,000 to afford coffee and tea... another way of looking at the latte factor.
Another pay day and I still had nz$25.20 left in my wallet. Go me! On my way to the bank I found another .20 cents so put $10.40 in my House a/c. The other $15 is sitting in a separate compartment of my wallet in case I need to take a taxi or suddenly decide to do something spontaneous or someone suggests lunch or or or ... any one of a thousand things.
I read somwhere it's a good idea to carry a $100 with you at all times to help you feel prosperous and so you can learn to trust yourself with money. I would be worries I'd blow all that cash so I usually stick any extra in the bank, but I know I can always get it with my card. I hate taking money out of the bank, so it's usually safe. Mind tricks, but they keep me solvent.
I've never liked seagulls since seeing that scary Hitchcock movie. A lot hang around this end of town, scavenging off the student leavings. When the scarfies are in town they live high, but now it is midterm break and the pickings are slim, so they are getting quite agressive. In the long summer vac it's as much as your life is worth to walk across campus eating a sandwich. Ain't they like people who spend it all when they're earning big money, then screech when the source of it goes.
Readers Digest has sent me an opportunity to participate in their latest prize draw for nz$450,000. Nice. Now the question is do I spend .50 cents on a stamp or do not take the risk and buy carrots for tonight's soup? decisions decisions.
I was waiting at the intersection going home, when I saw just down the road a young man trying to cross regardless of blaring horns and screeching brakes. He miraculously got across in one piece and went directly to - the ATM. Now come on laddie. The two minutes it would have taken you to walk to the crossing and wait for the light to change were surely well taken and better than risking life and limb for a few dollars in your pocket immediately. Noone ever died because they were without cash for 5 minutes.
Now all you writers out there, what is the story behind the young man and his desperate desire for dollars. I'll start.
His girlfriend had just walked out on him and he had to get flowers for her before she went back to her ex. He arrived at the florist 2 minutes before closing time and then remembered his wallet was empty. Hence the desperate dash.
Moral: always carry a credit card.
Well, no, that's not the message I want to promote on this blog. I'm sure somebody can do it better. Waht are your ideas?
Check out this website
I guess it's possible to retire in 5 years if you live a bare essentials existence and have a $80,000 income, but when your earnings are much more average and you want some of the things that make life a little more pleasant you're looking at a longer working life.
Still, it got me thinking. If living a minimalist existance for 5 years would guarantee I'd never have to work again, how much would I be prepared to give up?
No car? Don't have one anyway.
Shop in thrift stores forever after? Fine by me.
Never eat icecream and cake again? I guess so.
Give up drinking tea? Umm, I may have to think about this.
Spend the rest of my life knitting from my stash? Noooo you can't do this to me. I defend my right to buy more wool even if I'm working in Mcd's at 90.
How far are you prepared to go?
I borrowed a book from the library last month called The Armchair Economist by Steven Landsburg. I was so diligently perusing it trying to educate myself I forget to return it on time and it cost me 30 cents. Still beats signing up for a semester study on the subject.
I have decided the problem with economists, financial policy advisors and others of that ilk is they are all doing better than average so support whatever system enables them to do well. If economists earned minimum wage I bet we'd see some very different economic theories.
I was working in the shop this afternoon. It's interesting that most people chose to make even small purchases with thier debit card. I guess they just don't carry cash any more. I only made $47 in cash sales, all the rest was electronic transfer of funds. Wonder if they'll do away with cash one day. Hooray - no more balancing the cash register at the end of the day.
I used an online calculator to work out how much I would need to save. At current interest rates, to replace the sickness benefit of $nz190 a week, I would need nz200-300 thousand. That seems so much I got depressed wondering how on earth I could possibly reach that amount.
Then I realised, at the moment I earn $139 a week in the hand, so to get up to $190, I only have to have nz51 a week interest coming in. Much more manageable - smiles again.
The traditional route calls for investing in somewhere like the stock market and letting your gains compound. This does not work for me becuase of the abatement regime. I need to have use of the interest to avoid being squeezed.
So what I am going to do is start paying my savings into an interest bearing investment. As the amount of interest paid to me rises, so the amount I am recieving from the govt will go down. And I can carry on paying a percentage from my jobs into Kiwisaver for retirement. Sorted!
and now there's a new reason for saving. The rating agency Fitch is looking at downgrading New Zealand's credit rating because our national debt levels are so high. That means higher interest rates on money borrowed overseas. They say increasing household savings will help reduce the current account deficit.
I'll let the economists argue about it. I still reckon it's good for my personal economy.
According to the latest news, the governor of the NZ Reserve Bank is urging Kiwis to save and pay off debt in order to help the economy recover. He reckons the property market is recovering here, but if everyone rushes out to buy a house we will get back into a spend and borrow mode and the recession will last longer because the national debt is so high.
Bollard said that increased household saving would have the added advantage of providing a more stable source of funds for business investment and expansion, reducing reliance on foreign funding. This would contribute to more stable and lower interest rates, thus promoting a more sustainable growth path
Full story here
I am feeling very virtuous and patriotic.
So I'm looking sadly at my bank statement and asking myself whether I have any realistic hope of ever being financially independent. Perhaps not, but to me it still makes sense to save as much money from my benefit as I can. I never know when I might need a lump sum for house maintenance or travel to see family, so some needs to be put aside.
Then I think everybody should put something aside for retirement. I don't trust the govt when it comes to promises. Already they have altered the Kiwisaver scheme, and though they say they won't cut superannuation entitlements, I expect they will push the age limit out to 70. I can't see myself working that long.
Yes it is nice, to have time to do things like crafts when I'm on disbility, but basically being dependent on the govt sux. It's trying enough to have to go to the doctor all the time without having to carry forms to be filled in asking you all your personal details. Nothing is private and some anonymous bureaucrat makes decisions about how much money you are entitled to. Even if I was told I have to live on $nz184.17 a week for the rest of my life - the amount I currently get - I would do it happily knowing the money I had was mine and couldn't be taken away for some infringement. Building up my savings is a cushion of freedom for me. It cheers me to think my savings already add up to 2 years income.
Our minister recently resigned and we are looking for a new one. In the meantime we are having a variety of services. This morning we had a DVD called Indescribable, with pictures from the Hubble space telescope. Awesome, and certainly puts my troubles in perspective. It's good to be reminded I don't have to worry about running the Universe, God is doing a fine job, so I can certainly put my trust in Him for my future.
I makes my little plans and dreams my little dreams, but who can tell what the morrow will bring? Even if I never get to be fully Financially Independent, it's still good to remember I have never been without food and clothes to wear. I'm not going to give up planning and dreaming, but I'm not going to obsess with worry over the future either. Sufficient unto the day is the evil thereoff.
I thought I was doing well with the new shawl but I goofed majorly and had to unravel the whole thing. Start again. But the patience I have to exercise is a transferrable skill, especially when it comes to making my money grow.
For both knitting and handling your money you require a pattern, or plan. A few creative geniuses can just start and keep it all straight in their head, but most of us require a vision of what we want to achieve, and the details of how to do it - Written Down!!
Your pattern or plan must match your current skills. Don't expect to do a complex Aran if you're a new knitter, and don't invest in complex tax shelters if you haven't mastered basic budgeting.
It's important to get good advice from experienced people in the craft. This is easy with online communities today.
Be prepared to take time. Knitting is one stitch after another, saving money is one dollar after another. It's better to do a little towards your goal every day than to do a whole load of things one day, then ignore it for weeks on end.
You need the right tools and material for the job. These are simple, but gaining proficiency requires constant practice. You will make mistakes along the way, so be prepared to go back and fix the major botch ups, but don't sweat every little glitch. So long as you stick to your plan you'll be okay.
looks spectacular. I was very careful to spend only on needs, not wants, as I'm saving for Christmas.
Total Income nz$733.26
Meeting friends for coffee 25.70
Local body taxes 90.67
Phone & ISP 67.74
When I go to the shop I feel like the Greek philosopher who went to the market and commented "who would have thought there could be so many things I have no need of." I have basically lost interest in spending money apart from meeting friends for coffee - and I'm reconsidering that expense. I'd rather save up and have a big decent trip than fritter it all away on little bits and pieces that give no lasting satisfaction.
Today was a glorious day - the sort where you smile at total strangers and say lovely day, and they smile back and say isn't it. I spent the day idling round. In the morning I seamed the cardigan I knitted. Of course I ran into the Murphy's Law of the button jar, one button short of the 10 I required. I went to the thrift store on the corner and found a dress for $1 which I snipped the buttons off. In the afternoon I went out to the beach with a friend and we sat and watched the surfies doing their thing. My sandal broke as I was walking back, but I was able to fix it with superglue. Had a yummy chocolate icecream for nz$1.50.
This is a very nice town to be in if you are broke. There are free museums, parks and art galleries, and open lectures down at the University. I live a very simple life and am totally satisfied. I keep thinking about when I was in India. If I converted my assets to rupees, I would be a millionaire, and I certainly was compared to the people around me. Even though I was staying on an ashram, living out of one suitcase and eating simple meals of lentils and rice, I felt I had so much to be grateful for. When I got back I was so annoyed with people complaining about how hard life was. I have my little house and I can afford food, clothing and power, and I still have eyes that can see and legs that can walk. There are millions in the world who would love to change places with me. I think even if I won the lottery I would not change much. I could be very happy being financially independent on an income of say, $1000 a month. The one thing I would like to do more of is travel. Not only does it broaden the mind, you feel like there's no place like home when you get back.
Happy to say I am still working on this number one goal of $5000 in emergency fund, despite tinyness of income. I am now at nz$3340. If I can keep it intact until I get a decent earning job I will be very happy. When everything seems to go on bills it's easy to get blue.
For those who are still struggling to pay off debts, I found in my case that it helped to be working on a positive savings goal at the same time. Obviously not have 000s in the bank that could be used to reduce interest paid on loans, but maybe put spare change towards a weekend away or a new car or whatever tickles your fancy. I just got too discouraged thinking everything fun had to be put off till the mortgage was paid. It is important to establish the savings habit immediately, IMHO, or you may wind up like so many people who pay off the credit cards and then run them up again because they haven't learnt good habits. I think David Bach calls this the "bury the past, jump to the future" approach or something like that. Rather than argue over whether every extra dollar should go off the loans or be stashed away, I take a 50/50 approach.
There is a thread on the forums about this so if anyone is interested in my POV...
When I found myself unable to work and facing medical bills, I sat down with my minister and the treasurer and we worked out a budget for me. When it was clear that I didn't have an income big enough to live on 90%, my minister said that part of the original use of the tithe was to help poor people. As I was now officially poor, I should not pay the tithe - in fact the church should be helping me. Which they did, with food parcels and the building team helped with home repairs and tending the garden.
I am now at the point where I am able to pay a portion to my church; when I get work I hope to be able to gradually get back up to 10%.
My church always provides financial counselling for people who are having difficulty, and will alleviate the tithe if there are genuine difficulties. If it is just bad money management, they are expected to tighten their belt and make a plan to pay off debt while continuing to contribute to the church. The ideal is:
80% bills and debt payment
If this cannot be done, then they may start by saving and giving as little as $5, and gradually increase it to a percentage. Our minister insists that no one should compromise their future (retirement savings) for the sake of giving to the church, as they will wind up a burden in their old age. Nor does he insist on the full 10% being given to the church; most people give 6 or 7% and support charities of thier choice with the rest.
I do not think tithing is a "magic key" unless it is accompanied by good management of the 90%, and the churches' responsibility is to teach this. I agree it is disgusting when a church demands tithes from poor people and the minister lives in luxury while the congregation struggle - I have seen this happen with a church that had a lot of people on welfare. A few found their situation got better and gave glory to God; most wound up walking away in despair, their faith shipwrecked.
ETA: I was responsible for ds at the time. The key verse given me was "If any provide not for his own, he has denied the faith and is worse than an unbeliever." My minister said he couldn't think of a better way to turn a child into a heathen than to have the parents giving to the church while not meeting the child's needs. (needs, not wants)
Another verse to bear in mind is: "Children should not lay up for their parents, but parents for their children." That is where the saving for retirement comes in. It is wrong if people give to the church all their life and wind up dependent on their children. In those cases the church should pay back the tither by helping them out.
So in a situation of real hardship don't feel bad if you can't make the tithe; remember - "if the eagerness to give is there, the gift is acceptable according to what one has, not according to what one does not have."
I haven't blogged for a while, i know. It's been a bit of a struggle lately, and I'm rather depressed about having so little money to live on. It's nice catching up with you guys, to know I'm not alone and see everybody working so hard toward their goals.
Today I had a job interview, which i think went well. The interviewer asked me one question - what was the achievement I was proudest of? I suppose I should have said something work related, but the first thing came to me: I'm really proud of the fact tho I had nothing after my relationship breakup, I managed to buy a house for myself and ds - and get it paid off in 15 years.
Well, he WAS impressed. He said, "that's amazing. I'm 55 and I'm scared I won't get my mortgage paid off before retirement." I didn't say I only had a little cottage, and he prob has a huge mansion, but I went home feeling much happier. I remember when I got the final letter from the bank, I threw a mortgage burning party. It felt like a great burden had been lifted off me to be debtfree.
Since then I've been drifting a bit I guess. I was so focused on that goal, i wasn't sure what to do next, and the idea of saving up 00s of 000s for my retiremnt seemed so enormous, it was hard see progress. But now I'm motivated to get started again. When you're a bit down it helps to remember past victories.
Ooo pretty new colors. Somebody's been very creative. Me like.
Was chatting with a friend yesterday who is forever coming up with new schemes, but never acts on them. She's been stuck in her job for 20 years and hates it, but always finds a reason for not getting a new one. She is a very arty crafty type in her spare time, and many of her ideas revolve around setting up her own small business. Well, that certainly works for some, but you need good business skills and strong motivation to carry it out - and I don't think she's got them. I guess she knows in her heart it's all a dream and she'll never do it; she's what they call an innovative thinker but not strong on carry thru, and doesn't pay enough attention to detail.
Lately, she has got it into her head that instead of looking for a job, I should become self employed as well. She keeps coming up with all these bright ideas for me whenever I do something a bit creative. "You knit beautifully; sell your work to craftshops." "You give great speeches at Toastmasters, become a public speaker." "You do good writing, you could be a bestseller."
I think she overrates my skills and underestimates just how hard it is to make a living on these things. Even if I started making some money on them, I would probably need to continue working a regular job to have a regular income until I became sufficiently rich and succesful. Most self employed start out as parttime hobbyists. It's not that I dont' play with the ideas sometimes; it's that I'm not sufficiently interested in doing them to put in all that time and effort. Call me lazy. Or maybe it's that I prefer the security of a regular income. And I like my laid back daily routine. Like the proverbial Mexican fisherman who refused the offer of a well paid business job so he could work hard for 20 years, make a bundle, and then retire and go fishing in Mexico. He was doing that right then. We hear so much about work/life balance nowadays; I think I'm pretty well sorted on that one the way I live now.
The one idea that really appeals to me is the last one. I enjoy writing in my spare time and I'd like to have a book published some day, even if it never becomes a bestseller. And writers are often asked to do public speaking.
Here's what my friend said when I floated the idea: "Write a book on knitting! There's heaps of them being published right now. You could be a best seller!"
Um, I personally think a lot of the new knitting books are terrible and I could certainly do a better one; but there are also some brilliant ones by real experts. How do I make mine stand out? I need a creative approach.
Second suggestion from my friend. "You're really good with money. Books on money sell well. And you've just lost weight. Diet books sell well. If you write a book that talks about both money and weight loss you'd make millions!"
Bingo! I'm off to write the Accountant's Diet. See you on Oprah in 18 months.
There was an article on the news today about increasing bankruptcy in New Zealand. Bankruptcy rates have gone up 22% in just ONE year. Stunning. Interestingly, the main causes are given as unemployment, health problems and divorce. In other words, people took on debt they thought they could handle, then life pulled the rug out from under them. In the same article, the bank workers union has called for changes to be made to their bonus scheme. They are not happy about being paid extra for selling more credit cards, as they don't think people should be encouraged to get into debt. Sadly, most of our banks are now owned by overseas financial interests, so policies are not being made with New Zealanders interests in mind, but to make profits that will go offshore. My own town has one of the highest bankruptcy levels. I think this is due to the fact we have low income levels combined with skyrocketing property prices - which is now starting to bust; the number of mortgagee sales is increasing. It is all very sad when you think we were founded 160 years ago by thrifty hard working Scottish pioneers. We seem to have lost our traditional values in the last generation.
Being committed to debtfree living, I have done quite well without a credit card for the last few years. I guess not running up debts is a good way to avoid credit card solicitations, for I seldom get them. So I was surprised to recieve in the mail this morning a preapproved credit card offer with -gasp!- a limit of $nz4500. It took me all of 2 seconds to realise that this is the Westpac bank I have $18000 invested with, so they were likely banking (sorry for the pun) on grabbing my assets if I default. They obviously don't know the smallness of my income. Up until recently in NZ you had to have a decent sized income to apply for a card from a bank, but they have become much pushier.
The presentation was ridiculous, with blather about my star sign and how they'd matched me in heaven. It wasn't all that great a deal either, with an initial 6 month offer of 6.99%, going up to 12.65%. Fees of 32.50, and 13.95% on cash advances. I did have a credit card when I travelled overseas, but I already had the money saved up and paid it all off at once. I will say, if I had a spare $4,500, I would travel to visit ds in England, but I'd be looking for a card with plenty of airpoints.
Actually, I'm thinking that maybe the best thing to do is take my CD money, and invest it in Westpac bank shares. They must be making a huge profit.
A warm breezy day so I hung the laundry on the line to dry. I called on a friend and we went for a drive to the harbour. We sat and watched the windsurfers and ate the peanut butter and banana sammies we'd brought. It was so peaceful and I was thinking of all the millions in the world who would love to change places with me. Of course there are all the people in starving wartorn countries, to whom it would seem a millionaires life: but also there are high earners driven by a desire to make millions so then they can afford to retire and live a laidback life in a lovely place like this . When I first came back from India I got very annoyed with people who are always complaining about how hard up they are. Don't they realise that in the game of life, they already won the lottery? But I guess when they don't know how to be grateful for what they already have, they'll always be wanting more and never have enough.
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