I wanted to write a short book on how to survive in Australia on less than $25,000 a year, seeing as this is what I manage on the pension. Then I hit a few snags, mainly;
- not everyone has a living situation like me (home owner, not renter)
- most people have kids to support (a 4-legged furry beast does NOT count)
- most people are a lot more social than me; socialising chews up the bucks
plus if you are that cash strapped you'll do what most people do; look on the internet. That or watch glossy stories such as those shown on "news" shows like A Current Affair or Today Tonight, inevitably showing the annoying Cheapskates woman showing how you can use your cheese grater to grate soap bars into washing powder or somesuch fascination.
Yet unperturbed I wanted to share the following things which I have found handy;
(1) Use a Microsoft Word table to forecast and budget for your bills.
Forget Excel, it's too fiddley, and for people not adept with spreadsheets like me I find plugging in a Word table easier. A Word table is handy too because if any of your figures alter, you can just go back into your document and re-plug the figures. I find a mega sized calculator handy too; like one you find at the $2 shops.
Once armed with these, all you need do is sit and make a list of (1) All sources of income (easy for me: Centrelink) then (2) All expenses. Include every little detail, doesn't have to sound altruistic and penny-pinching. You'll need old bills like utilties, rates, old bank statements as clues. Having done this you might have to make some hard choices as to what needs trimming or to be cut out. Mine was takeaway food. I no longer partake in a drink, but that also would have been on my hitlist.
Then draw up 4 columns; Income, In-Bank Bills, Cash Withdrawal and Cash Bills. Like the sample table below;
Income
|
In-Bank Bills
|
Cash Withdrawal
|
Cash Bills
|
"In Bank Bills" are bills to be paid over the phone using your Debit Card; NB: I said debit card using your own money, not Credit Card. If you have a Credit Card proceed to cut it up and prioritise paying it off asap. All you are ever paying is interest payments and it really gets to be a millstone round your neck. Credit is designed to tap into the whole "I must have this now" feeling. Bullshit. You can forgo most items for a few months or weeks while you save to get them.
The cash withdrawal column is important. It is your "fun money" so to speak for the fortnight to be spent on your Cash Bills. It should be around half or only slightly more than half of your overall income. It may seem odd withdrawing a wad of say $500, but this will save on your transaction amounts; plentiful visits to the ATM or using EFTpos end up with bank fee charges which can be costly. Another bonus is that you tend to be more careful when you literally see your disposable cash disappearing for the fortnight. It acts as a visual aid.
For those of you worried about keeping large sums of money in the house, do your grocery shop on payday, and if you really fret then make it a "big shop" so that in week 2 you are only getting perishables. Trust me, after payday and a visit to Mr Coles or Woollies, and after filling the petrol tank, you will be lucky to have a couple of hundred left. Find somewhere out of sight to stash it. Don't carry it in your purse; preplan when you go out what you will buy. I'm afraid you will have to wave away the impulse buying gene if it is within you.
I'm a dirty rotten smoker but I try to minimise the cost by smoking roll-your-own and I buy the cheapest brand on the market (JPS).
Out of the food budget comes some miscellaneous, like PBS prescriptions ($5.90).
With my spare $20 I tend to lurk around my local cash converters for a decent $3 DVD recycled; or the op-shop for clothing bargains. Maybe a coffee instead with a friend. The table looks like thus;
Budget Payday Fortnight Thursday 21st November 2013;
Income
|
In-Bank Bills
|
Cash Withdrawal
|
Cash Bills
|
827.50 Centrelink
|
400
|
200 Food
|
|
47.50 TV Layby
|
140 tobacco
|
||
60 Foxtel
|
40 Petrol
|
||
240 Rates
|
20 Misc
|
||
BALANCE
(after ATM Cash Withdrawal)
|
80.00
|
0.00
|
Budget Payday
Fortnight Thursday 5th December 2013;
Income
|
In-Bank Bills
|
Cash Withdrawal
|
Cash Bills
|
80 Held Over
|
165 Gas
|
400
|
200 Food
|
827.50 Centrelink
|
200 Water (get
extension to 19/12/12)
|
100 Tobacco
|
|
907.50 TOTAL
|
143.85 Health Fund
|
40 Petrol
|
|
75 Psychologist
|
60 Misc
|
||
57.75 Optus
Broadband
|
|||
49.00 TV Layby
|
|||
BALANCE
(after ATM Cash Withdrawal)
|
16.90
|
0.00
|
Notice I didn't include the water bill in my "to be paid this fortnight" column. This is because if you pay the gas on time, you get a $20 or so discount; there is no discount for paying the water on time, hence I can ask for an extension for the following fortnight. I also allowed less expenditure on Tobacco this fortnight: I have been "stocking up" in anticipation of the stated Federal Government hefty $5 price hike per pack as of December 2013. Smoking really is a killer.
Basically I anticipate when bills will fall based on the dates of my last bill; the water and electricity are 3 monthly, the gas is 2 monthly, the phone and broadband, every month. I do a rough estimate of how much it will be based on the time of year (eg: summer means more water for watering the garden; winter means more gas for heating) and on previous year's bills (use a filing cabinet) and also on my observations on my own movements (was I out much?).
Some people on a pension swear by the utilities Pay-By-The-Fortnight Plans. I would say only do this if you absolutely positively have no self-control over spending your money. If you do a payment plan you miss out on considerable savings for Gas and Electricity which can be had by (1) being on a good plan and (2) paying by the due date and getting a discount.
You may have noticed I have a "TV Lay-By" expense; this is regular direct debit. I minimise my direct debits to my health insurance and this one; you don't want to incur overdrawn fees. That's why I choose to pay most bills using my VISA Debit card even if this does often incur a $1 or $2 fee. It's easy and reliable.
Getting back to TV Layby: this is something I stumbled upon a couple of months back: Online Layby stores.
(2) The unexpected Whammy.
We all get these. Vet bills. Medical Bills. Parking Tickets, Speeding tickets. The Hot water system breaks. Suddenly you are up for hundreds, and THAT wasn't in your budget.
For those of us on Centrelink payments in Australia there is an easy solution: Centrelink will give you an annual INTEREST FREE LOAN of up to $1200 per calendar year, provided your Centrelink payment is guaranteed for that time. They just deduct it in increments from your fortnightly payment. Last March I'd been in hospital and was manic and overspent. Then I got my House and Contents insurance bill for $550. I got the loan from Centrelink and paid it off over 6 months at $40 a fortnight.
For those not on Centrelink I understand Anglicare has an interest free loan scheme available for low-income earners, or at least they did recently.
The biggest things anyone on a low income needs to be able to wrap their head around are;
(1) Delayed gratification (going without; dispensing of credit)
(2) Finding cheaper or free pastimes and interests
(3) Shop smart not poor (nobody, and I mean NOBODY needs to grate soap)
and....most important..
(4) Forecast, forecast, forecast. Those budgeting tables mean you actually look forward to receiving the bill because you expect it and have estimated what it will be; also, you've dated it's arrival (hint: make little notes in your Diary as to bill due dates). The trip to the letterbox collecting the mail need not be an exercise in dread.
Next on my To Do list is to quit the smokes. Once I can do that my world will continue to open up....
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