A new Australian Mustachian case study

[nick69]

Hi Mustachians,

As recommended by Bob W and others in my previous post http://forum.mrmoneymustache.com/welcome-to-the-forum/advice-on-how-to-save-for-a-new-starter/ I've made a case study to get some experienced mustache advice and to keep a rough journal of where I'm at with my finances.   i think I've included the relevant details outlined in that "how to write a case study" thread but feel free ask if I've missed something.... 

From what i can see... there's nothing really bad about my finances but there's nothing really good about it either: I'm not in debt but i have barely any savings/investments either.

My questions for the Mustachians are basically:
Where can i tighten up my budget in both spending and savings?
Where/what should i be looking at investing in first given that i have minimal capital at this point - super/stocks/bonds/property???
What can i do to cut my Tax bill?


Life Situation: Male, 27yrs old, Single, no dependents, no Car, living in a share house with 2 others in the inner suburbs of Perth.   
I use the bus, Uber, my push bike or scab lifts to get around the place.
Goals:
Short term: In the 2015-16 financial year save $20k (about $40% of my income).  Within 12-24 months Spend $5k of that to move house and build my finances off the remainder.
Long term: Retire by the time I'm 55.

Below is a rough estimate of my current financial situation:
Income                                Fortnightly       Monthly         Yearly
Gross Income                          $2500              $5000         $65000
Income Tax (and HECS)           $660               $1320          $17160   <-  pretty much my only tax
Salary Sacrifice Super            ~$38.50           ~$77             $999
Net Income                              $1880             $3760          $48800
 
Pay Distribution                   Fortnightly       Monthly        Yearly
Every day account                  $1560             $3120            $40560
Savings account                      $300                $600              $7800    <-  not really savings, I would basically save a grand or two then spend it all on stuff.
Xmas Savings                          $20                 $40                 $520      <-  $20 a pay goes into this account and i can only withdraw money in December or I pay a massive fee.

Bills and Expenses               Fortnightly      Monthly         Yearly
Gross Expenses                       $779              $1558             $20254
Rent                                           $274               $548               $7124    <- Will go up a decent amount later this year as the place is being renovated
Net, Gas, contents Insurance  $42.5              $85                 $1105    <- bill smoothed and comes to a regular $85 a month.
Mobile Phone                           $22.50            $45                 $585      <- amaysim unlimited 4g plan - can cancel or Churn at anytime but its the cheapest I've found with a 5gb data allowance.
Bus Commute                          $50                 $100               $1300    <- This came up ~$100 as i allowed for 26 pays a year
Electricity Bill                            $50                 $100               $1300   <- estimating based off what i can see in previous bills.
Health insurance                      $40                $80                 $1040
Groceries                                  $300               $600               $7800
Fun Money (the remainder)    ~$800             $1600              $20800   <- Anything left over was spent as "Fun Money" as i was living pay to pay and not saving at all.

Assets:   Total: ~$57000
$50k in Superannuation: I'm not sure how exactly it's allocated right now.
$2500 in various ASX stocks: currently down ~$4k  (that oil price war killed me) and in some cases it would cost me more to sell than their worth so not selling unless there's a good reason to.
$2500 in various precious metals: currently down ~15% but while it earns me no income it also costs me nothing to keep so unless its integral I'll keep it until i can sell at a profit.
$1100 in a 3.25% interest savings account, but i have to deposit $200 a month and make no withdrawals to keep the high interest rate.
$200 in a 2% interest savings account:  this was formerly my "savings" account but will now be my emergency fund.
$600 in a Christmas savings account: slightly more than i expected in here as i didn't spend it all last year

Liabilities:   Total $20000
~$20000 in student HECS debt; no interest but it's indexed at CPI.   It's paid off through my income taxes at ~$3500 a year.     
$0 Credit card -  this gets regular use and is generally paid off at the end of the month.

Upcoming major expenses:   ~$5000
~$2000-$5000 - $2k to move house + $3000 buy a Car: I plan to move house in the next 12 months so i will likely need a car post move.  I may inherit a rundown civic off my parents before the end of the year but if i don't I'll need to buy one out of my own pocket.

Now to the fun part.  My 1st draft Mustachian budget:

Planned budget              Fortnightly      Monthly         Yearly
Net Income                              $1880        $3760         $48800
Savings                                    $820          $1640         $21320
- $400 in HI savings
- $400 into emergency fund - until it reaches $5000) then all in HI savings.
- $20 for x-mas savings
Bills/Expenses (as above)       $779           $1558          $20254
Fun Money - (the remainder)     $280           $520             $6760

[alsoknownasDean]

I reckon you can do it pretty easily.

$300 a fortnight is a lot for groceries for one person. I know you don't have Aldi in Perth, but do you have many cheaper fruit and veg shops, markets or butcher shops? Even Coles and Woolies have OK specials from time to time.

Why the dedicated Christmas account? Why not just have the lot in a savings account earning (fuck all) interest?

How inner is the suburb in Perth? Could you ride to work?

There's an Australian investing thread, but admittedly it can be a bit in depth for me at times. :)

My approach to saving/investing is that I've aimed to keep a minimum of $5000 in the savings account at all times, and once it hits $10,000 (aiming for once a quarter or so), to buy $5000 worth of investments. YMMV of course.

Without a car and in a sharehouse? Honestly I reckon you could do better than 40%, 12 months ago I was in a sharehouse and didn't own a car, earning about the same as you, and my savings rate was around 55%.

Good luck :)

[JJNL]

I'm not an Australian (I live in the Netherlands), so bear in mind I may inadvertently spout nonsense here, but here's what jumped out at me reading your case study:
- WTF is with the moving somewhere you need a car? I can imagine you wanting your own place (living with roommates got old quickly for me as well), but why on earth would you move somewhere which requires you owning a vehicle if you can apparently also live somewhere where that's not necessary (as you do now)? Why not keep on busing / biking / Ubering it, and maybe renting a car / using a car-sharing app on the odd occasion you need one? Not owning a car if you can manage it is a guaranteed huge money saver. So don't buy into the you're-an-adult-so-you-must-own-wheels-shtick, it's total BS.
- Is it really necessary to spend 600 bucks a month on groceries? I know COL in Australia is relatively high and rising due to the mining boom, but this does seem a bit steep for 1 person. Can you go to a cheaper supermarket? Eat vegetarian meals for part of the week (HUGE moneysaver)? Eat less instant meals and cook at home more? (pro tip: when living alone, it's a lot handier to cook for several days and freeze/refrigerate in 1 meal portions. That way you only have to cook a couple of nights a week and still get to eat a healthy home-cooked meal every day).
- Good for you wanting to cut your fun money spendings - 1600 dollars a month is ridiculous. What were you doing, eating gold-dusted popcorn in the movie theatre? Going out for cocktails every night? What's the fun money for now? 500 bucks is still a large amount, what would you typically spend that on?
- Am I correct that you intend to not buy any clothes, ever? Or are they hidden in the groceries / fun money somewhere? I'd budget this separately if I were you. Tip: ONLY buy things on sale - no discount = no purchase. Or go to thrift stores, especially in the wealthier parts of town (where people tend to ditch clothes of better quality and with less wear and tear). Likewise with gadgets, bike supplies etc: budget this separately and buy somewhere second hand / on sale / cheap.
- Am I missing something, or is there no pension build-up anywhere? Are there tax-exempt / tax-lenient constructions for pensions like the US 401K in Australia? Or automatic deductions for a pension from your salary? Just one generic pile of HI savings doesn't tell me a lot. You'd want a mix of things, longer term investments for your pension/retirement, something middle term for your deposit if you want to buy a house etc. And why are you only saving and not investing?
- Have you done the math for your area on buying v. renting? This is often counterintuitive, and buying is not always the best idea. There's plenty of articles on this blog to give you some pointers.
- Eventually get out of the precious metals and individual stocks, and switch to index investing. You too cannot beat the market!

[JJNL]

And one more thing: 600 bucks per annum just for X-mas presents sounds ridiculous to me. I know gift giving over X-mas is a much bigger thing in Australia than it is here, but does it have to be this much? Can you not do your whole family a favour by proposing an upper limit on spending and/or a system where you limit the number of gifts you have to buy? In the Netherlands this is fairly common for December gift-giving among adults: you draw lots among the people attending so everybody has 1 person they have to buy a gift for (and yes, there are apps for that), and you agree on a spending limit (say: 10 or 20 euros).

[nick69]

I'm not an Australian (I live in the Netherlands), so bear in mind I may inadvertently spout nonsense here, but here's what jumped out at me reading your case study:
- WTF is with the moving somewhere you need a car? I can imagine you wanting your own place (living with roommates got old quickly for me as well), but why on earth would you move somewhere which requires you owning a vehicle if you can apparently also live somewhere where that's not necessary (as you do now)? Why not keep on busing / biking / Ubering it, and maybe renting a car / using a car-sharing app on the odd occasion you need one? Not owning a car if you can manage it is a guaranteed huge money saver. So don't buy into the you're-an-adult-so-you-must-own-wheels-shtick, it's total BS.

The car is an optional purchase IF I moved to place that required travel. Me moving house really depends on how the home renovations go as the owners are adding a fair bit to the place.  Once it's finished the rent will likely increase by 25% or more so once I know the numbers I'll have to do the maths and see where I end up
[/quote]

- Is it really necessary to spend 600 bucks a month on groceries? I know COL in Australia is relatively high and rising due to the mining boom, but this does seem a bit steep for 1 person. Can you go to a cheaper supermarket? Eat vegetarian meals for part of the week (HUGE moneysaver)? Eat less instant meals and cook at home more? (pro tip: when living alone, it's a lot handier to cook for several days and freeze/refrigerate in 1 meal portions. That way you only have to cook a couple of nights a week and still get to eat a healthy home-cooked meal every day).

$600 a month is a lot on groceries so I've already taken steps to cut that to <$400.  I have a deep freezer and have already started cooking big meals and freezing the left-overs.  that groceries heading also includes household items like soap etc.

- Good for you wanting to cut your fun money spendings - 1600 dollars a month is ridiculous. What were you doing, eating gold-dusted popcorn in the movie theatre? Going out for cocktails every night? What's the fun money for now? 500 bucks is still a large amount, what would you typically spend that on?

That $1600 included a lot of Friday night drinks, shopping, eating out, clothes, electronics etc.  It was incredibly wasteful but at ~$10 or more a drink it goes pretty quickly especially if you do it every week.  Hence why I wanted to change my budget to cut it out.

- Am I correct that you intend to not buy any clothes, ever? Or are they hidden in the groceries / fun money somewhere? I'd budget this separately if I were you. Tip: ONLY buy things on sale - no discount = no purchase. Or go to thrift stores, especially in the wealthier parts of town (where people tend to ditch clothes of better quality and with less wear and tear). Likewise with gadgets, bike supplies etc: budget this separately and buy somewhere second hand / on sale / cheap. 

Clothes were part of the fun money but yes I'll move that to a separate field in my budget.  Probably $1000 a year in a 70/30 split between work and home clothes.   I'm currently required to suit up for work and its not cheap...

- Am I missing something, or is there no pension build-up anywhere? Are there tax-exempt / tax-lenient constructions for pensions like the US 401K in Australia? Or automatic deductions for a pension from your salary? Just one generic pile of HI savings doesn't tell me a lot. You'd want a mix of things, longer term investments for your pension/retirement, something middle term for your deposit if you want to buy a house etc. And why are you only saving and not investing? 

Superannuation is the Australian pension fund.  I lose ~9.5% of my pay into it and I also salary sacrifice an additional $1k a year (pre-tax) into it.  It's currently at ~$50k and it will be released to me once I hit 60.

- Have you done the math for your area on buying v. renting? This is often counterintuitive, and buying is not always the best idea. There's plenty of articles on this blog to give you some pointers.

House prices are very high in Perth so I'm not interested in buying atm. I've run the numbers and the only places I can afford are in crap areas or in new housing estates 30km or more out of town which would add a lot of additional costs. 

- Eventually get out of the precious metals and individual stocks, and switch to index investing. You too cannot beat the market!   

Yep will get out of them and into the indexed stocks but I will wait for the prices to get a bit better before I sell.

And one more thing: 600 bucks per annum just for X-mas presents sounds ridiculous to me. I know gift giving over X-mas is a much bigger thing in Australia than it is here, but does it have to be this much? Can you not do your whole family a favour by proposing an upper limit on spending and/or a system where you limit the number of gifts you have to buy? In the Netherlands this is fairly common for December gift-giving among adults: you draw lots among the people attending so everybody has 1 person they have to buy a gift for (and yes, there are apps for that), and you agree on a spending limit (say: 10 or 20 euros).

Xmas savings - yep $600 is a lot, I spent maybe half that last year and I can't touch it until December this year without paying hefty fees so it'll just have to sit there for now.

[nick69]

I’m going to give the advice I always give people – ditch the health insurance.

I will think about it.  I've needed it in the past and it was worthwhile. 

[HappierAtHome]

There are loads of us in Perth and we hold Meetups pretty regularly, if you're looking for new mustachian friends.

And welcome to the forum!

[deborah]

How do you want to approach your mustashian conversion? Do you want to go slowly, changing one thing a month, so it becomes a habit? Or do you want to go all out and examine every single purchase? It appears to me that you have a lot more room to save, especially if you plan to move house soon.

In fact you could spend some time thinking about the move. Work out how small you can go. Check out the hidden costs of your move (including the need for a car, and the local shops - are they cheap, is there everything you need). If you do this right, it will take you a long way in your savings plans.

[vagon]

5GB of mobile data is pretty crazy man what are you doing on that thing?
Use wifi at home for app updates, and minimise any videos etc you watch when not on wifi. They'll still be there when you get home.
Not huge savings here but you could easily get down to $30 I reckon, especially without buying the phone too.

I also second the calls to rent somewhere you could bike to work and ride share/catch uber/goget etc when you need a car.

Yep will get out of them and into the indexed stocks but I will wait for the prices to get a bit better before I sell.

What you're experiencing is loss aversion and its an irrational thing to do.
Dont try and time the market, if you have any with capital gains the losses will offset any tax you pay anyway. You need to get to buy and hold, not stay with pick and pray.

Can you give us a better breakdown of fun money?
i.e. how much is bars/consumer goods/clothes etc?
I would put work clothes in as a business expense, because it wont exist when you retire.

[englyn]

Some thoughts:

Unless you're getting an amazing interest rate in that Xmas savings account, stop putting money into it.

ING Direct has slightly better options for HI savings. I'd lump your emergency fund in with savings to improve on the 2%.

You're paying too much for health insurance, so unless you have expected health conditions, consider dropping it or at least downgrading and shopping around.

Get your super into something high growth.

Investing - index funds & super. Bond returns are insufficient, and property ties up way too much cash for too poor return & diversification and the buy/sell costs are huge.

Your income's not spectacular, is there anything you can do about that?

[nick69]

Some thoughts:

Unless you're getting an amazing interest rate in that Xmas savings account, stop putting money into it.

ING Direct has slightly better options for HI savings. I'd lump your emergency fund in with savings to improve on the 2%.

You're paying too much for health insurance, so unless you have expected health conditions, consider dropping it or at least downgrading and shopping around.

Get your super into something high growth.

Investing - index funds & super. Bond returns are insufficient, and property ties up way too much cash for too poor return & diversification and the buy/sell costs are huge.

Your income's not spectacular, is there anything you can do about that?

Xmas saver interest is 1.25%, no maintenance fees but I can only withdraw December to Jan.  Come Xmas time I'll withdraw cash and move it to something higher interest.

I'd prefer to keep the HI savings where it is for now and separate from the emergency fund as I'll lose the HI rate if I'm forced to make a withdrawal.  ING do have a slightly higher interest rate but i would need to move at least $1000 a month into the account to make it worthwhile which is slightly out of my budget at this point.

That's 2 counts now for get rid of/cheaper private health insurance.  i'll have a look and see what can be done.

Investing - index fund/super is my current plan.   I need to do more research into bonds.  I was reading on bogleheads site that I should consider owning my age in bonds as a %  - i.e I would have 27% of my investment portfolio as bonds in order to reduce overall risk from stocks/whatever else.

I know the income ain't great but the job market is pretty harsh at the moment.  I've been looking for a while but I haven't gotten any offers attractive enough to jump ship.

5GB of mobile data is pretty crazy man what are you doing on that thing?
Use wifi at home for app updates, and minimise any videos etc you watch when not on wifi. They'll still be there when you get home.
Not huge savings here but you could easily get down to $30 I reckon, especially without buying the phone too.

I also second the calls to rent somewhere you could bike to work and ride share/catch uber/goget etc when you need a car.

Yep will get out of them and into the indexed stocks but I will wait for the prices to get a bit better before I sell.

What you're experiencing is loss aversion and its an irrational thing to do.
Dont try and time the market, if you have any with capital gains the losses will offset any tax you pay anyway. You need to get to buy and hold, not stay with pick and pray.

Can you give us a better breakdown of fun money?
i.e. how much is bars/consumer goods/clothes etc?
I would put work clothes in as a business expense, because it wont exist when you retire.

5gb of data isn't enough :P
I use it for both work and personal use.  I claim it as an expense on my tax because of that.

Yep, the plan is to move closer to work for the same/less rent (and thus save $ on transport).  I'll only move further away if it works out cheaper even with the car involved.

With the stocks I own - not really - most of it is tied up in exploration mining companies which have gone down considerably in recent times. The price is so low on some that it will quite simply cost me more in fee's to sell than they are currently worth so there's no point in selling at this point.

-I'm not home atm so i don't have the information available,  I'll post it once I have the information handy.

-I don't think I can claim business shirts/suits as a work expense as they aren't a company uniform/required safety equipment: https://www.ato.gov.au/individuals/tax-return/2015/tax-return/deduction-questions-d1-d10/d3-work-related-clothing,-laundry-and-dry-cleaning-expenses/

[vagon]

RE: biz clothes, I meant categorise them in your budget as a business expense rather than for tax purposes. Unless you want to sew a logo on!

RE: stocks, most brokers will sell them for you and not charge you above what they are worth. E.g. you have $10 worth of mining stock CommSec will only charge you the $10.
Only thing to keep in mind is because its a CGT event you cant claim it against your income, only roll it over to offset against future CGT events.

[Anatidae V]

Welcome!

Step 1: Head over to the meetups section and come to our next meetup :)
Step 2: start tracking every single time you spend anything. I recommend a pencil and paper or a simple excel spreadsheet to start with. You have so much money going to "misc/fun" right now that I bet is hiding some other regular expenses plus a lot of wasted money.

We spend anywhere from $550 to $850 each month on groceries for two adults with a lot of waste, and we've managed $650 for several months now. You're feeding one person on that, so $400 should be a nice achievable goal to start with.

We spend $300 on Christmas. I'm stingy with presents and we don't have nieces or nephews to buy for yet.

On health insurance - we spend too much on it as well. That said, consider how comfortable you feel on this one. Once our stash is larger I might feel more comfortable self-insuring, but then I get about $300 per person per year in physio that I have maxed out at least 3 years so far. If you get ambulance cover I think that means you don't pay the Medicare surcharge, or it might be the basic hospital, I can't remember.

[englyn]

ING do have a slightly higher interest rate but i would need to move at least $1000 a month into the account to make it worthwhile which is slightly out of my budget at this point.

Nah, it's $1000 a month into the attached Orange Everyday account, eg., your pay, which you can then withdraw all of if you wanted. It's really handy so I use that for my everyday banking. But yeah, changing your whole everyday banking across for an extra couple of % interest seems more trouble than it's worth, when hopefully you won't have large $ amounts sitting around in cash accounts for long anyway.

[nick69]

Sorry for the delay, I've been pretty busy.  I went through my transaction history for the past couple months and it seems to be about:

• $50-100 a month on Games - from what I can tell once a month I'll buy 1 expensive game or maybe a few cheaper ones.
• $50-100 a month on Clothes
• $50 a week on books.
• $30 a week on uber.
• $10 a week on lotto ($2 work syndicate + $8 personal ticket).
• $25 a week on coffee.
• $50-100 a week on booze depending on pay week.
• $50-100 a week on eating out.
• remainder - cash out - so misc shopping etc. I cant remember any major purchases so it must be lots of minor ones...

I kinda figured this was where most of my cash went based off the rough estimates in my head.  So I've decided to impose spending limits cut into 2 sections: cash and card. 

I'll give myself $100 a week in cash and $40 on my card to bring me up to my $140 p/w budgeted total of Fun Money which should keep me <$140p/w and within budget:

• Games - Card - I purchase most of my games online (it's far cheaper). I'll have to budget any future purchases to be within my limit.
  
• Clothes - I've made my clothing budget $30 a fortnight using some of the $ i wont be spending on groceries.  It wont be included in my "fun Money"
• Books - Card - wow, I didn't realise I was spending so much on books on my kindle...  $5-10 a book seems cheap but they add up quick... I'll read less, go to the library more or go the free ebook route.
• Uber - Card - I need it to get around but I'll try and limit when use it by walking, taking public transport etc.
  
• Lotto - Cash - i'll keep the work ticket and ditch the personal one.  While my syndicate will probably never win big, $2 p/w is a small price to pay knowing that if by some miracle we do win I wont be the only poor bastard left in the office while the rest of my co-workers retire early thanks to that million dollar jackpot.
• Coffee - Cash - I cant bring myself to drink the instant coffee supplied free by work so I'll restrict myself to coffee's I make myself. Given that I already have a coffee filter & Aero-press I just need to buy beans which should cut the price to ~$5 a week.
• Booze - Cash - I've decided to go out and drink far less, aiming for ~$50 a fortnight, probably a round of TGIF drinks every second Friday or maybe a cheap bottle of wine a week so that I can have a glass with dinner every now and then.
• Eating out - Cash - Capped at 1 lunch/1 dinner a week.  This should still let me go out with friends etc but the rest of the time I'm eating the groceries I bought ... unlike before where my groceries expired pretty much exactly like  this - http://theoatmeal.com/comics/fruit

So far I've spent $30 of my card limit but i still have $80 left in cash.  I'm hopeful that I'm on track but i see myself having to regularly re-check all my transactions balances to see if I'm actually following it properly. Oh well, at least I'm bothering to think about it now rather than getting to the end of the month and wondering where all the $$ went.

Welcome!

Step 1: Head over to the meetups section and come to our next meetup :)
Step 2: start tracking every single time you spend anything. I recommend a pencil and paper or a simple excel spreadsheet to start with. You have so much money going to "misc/fun" right now that I bet is hiding some other regular expenses plus a lot of wasted money.

We spend anywhere from $550 to $850 each month on groceries for two adults with a lot of waste, and we've managed $650 for several months now. You're feeding one person on that, so $400 should be a nice achievable goal to start with.

We spend $300 on Christmas. I'm stingy with presents and we don't have nieces or nephews to buy for yet.

On health insurance - we spend too much on it as well. That said, consider how comfortable you feel on this one. Once our stash is larger I might feel more comfortable self-insuring, but then I get about $300 per person per year in physio that I have maxed out at least 3 years so far. If you get ambulance cover I think that means you don't pay the Medicare surcharge, or it might be the basic hospital, I can't remember.

Step 1 - I'll keep an eye on the thread and see if I can make it. - is it like a Monthly gathering?
Step 2 - yep doing that too, got that pocket book app as i find it easier to just update my phone.
$400 is my starting point, i see room for improvement but it will be hard as i love my food.

x-mas - yeah I spend about $250 generally,  the balance is so high because i didn't spend it all last year.
Health insurance - shopping around now for something cheaper.  Not willing to go without it as I do use it semi-regularly.

[deborah]

Books - your library will have ebooks to borrow as well as paper books - they have a subscription service to a large supplier, so you should be able to ditch paying for them completely.

[vagon]

Good work Nick, seems like you're targeting all the right areas.

One thing I'll say is that is a deceptively large amount of change so dont stress too much if you fall short.
Depending on how you adapt to change it might even be worth setting some ridiculously small incremental goals first rather than going all out.
Maybe coffee free Fridays, or 3 Fridays a month after work drinks for example.

[Anatidae V]

Good work Nick, seems like you're targeting all the right areas.

One thing I'll say is that is a deceptively large amount of change so dont stress too much if you fall short.
Depending on how you adapt to change it might even be worth setting some ridiculously small incremental goals first rather than going all out.
Maybe coffee free Fridays, or 3 Fridays a month after work drinks for example.

Vagon has a good point, you might not want tochange everything at once because it's quite stressful!

Still, you probably have a lot of backlog in books and games to keep you busy, have you read/played all the ones you currently own?

And yes, we meet up about once a month, so if you can't make it to this one then we'll have another the month after.

[HappierAtHome]

Books - your library will have ebooks to borrow as well as paper books - they have a subscription service to a large supplier, so you should be able to ditch paying for them completely.

If you work in the city, the City of Perth lending library (level one, 140 William) is very decent and you don't need to live in the city to become a member.

[nick69]

Good work Nick, seems like you're targeting all the right areas.

One thing I'll say is that is a deceptively large amount of change so dont stress too much if you fall short.
Depending on how you adapt to change it might even be worth setting some ridiculously small incremental goals first rather than going all out.
Maybe coffee free Fridays, or 3 Fridays a month after work drinks for example.

Vagon has a good point, you might not want tochange everything at once because it's quite stressful!

Still, you probably have a lot of backlog in books and games to keep you busy, have you read/played all the ones you currently own?

And yes, we meet up about once a month, so if you can't make it to this one then we'll have another the month after.

Yep, it's a lot to change overnight but I'm confident I can get near my target even if I don't see myself hitting the bullseye yet. 

At this point I want to see if I can go a month aiming for that $400 p/w savings,  $140p/w fun money spending.  I probably won't get it at first but I'm not going to get overly worried about it just yet.  There is wiggle room in the budget if what I've chosen it's too stringent.

I do have a bit of a backlog with my books/games but not that much. 

[nick69]

Bit of an update as its been ~1 pay period since I started growing a moustache and while it didn't go quite as planned I think I did alright.

On the down side I spent more than I'd planned to spend due to some things appointments/bills I'd forgotten to include in my budget.  But on the upside I did save my planned amount of $820 and didn't dip into it.  Luckily I had some wriggle room in my budget...

Added expenses:
$125 bill from accountant for doing my tax return.
$75 extra on my ISP bill for changing my plans (cost $75 upfront but I now pay ~$25 less a month)
$12 Bill for Spotify service which I'd forgotten about.
$30 on a birthday present.
$50 spent at birthday part in addition to my regular spending $. 
$30 on a trip to Bunnings - had to buy replacement light bulbs after we lost a couple in a power outage.  Not something I wanted to buy, but I did get bulk so I should be all good for a while.

Going to spend some time this weekend re-jiggering my budget to work in the changes.

[happy]

You're doing really well Nick.
I just wanted to second those who said your grocery budget could be cut. I legendarily struggle with mine, but I've never gone over $1200/month for 3 people ( i.e. $400 per month per person) and usually manage somewhere between $300- 330 per person per month. In the last month or so I've managed $60 pw per person i.e. about $240 per month per person.

On health insurance… you can go without health insurance without penalty until you are 30. After that if you decide to join up, you pay 2% a year extra i.e. if you join  at 40 you pay 20% more than someone who joined at 30.  So if you were ever going to do without, now is the time: for 3 years until you are 30. If you have chronic healthcare issues, or can already foresee that you will need to claim in the near future, it might be worth thinking it through to stay in. I find an admission to a private hospital for a few days wipes out the  cost of the cover. If you decide to cut it, then set up a self insurance scheme i.e. invest the amount you would have paid each year…if you are in good health you will come out ahead, and get a nice nest egg to use if you ever do need to go private.  Public health services are by and large adequate ( but I wouldn't say good), but it may depend where you live. In NSW where I am, health budgets are tight and there are definitely places I would personally would not wish to utilise the public services. It seems to be getting worse not better, and with the ageing population who are high users of health services, its hard to sustain a case that it will improve.

[vagon]

On the down side I spent more than I'd planned to spend due to some things appointments/bills I'd forgotten to include in my budget.  But on the upside I did save my planned amount of $820 and didn't dip into it.  Luckily I had some wriggle room in my budget...

Nice work mate, keep it up!

[Astatine]

Well done for focusing on your finances and getting them sorted out sooner rather than later. Regarding groceries, I find the cheapest prices to be at small ethnic-type grocery stores, and then we get other stuff like toilet paper etc from Aldi. Not sure if that is an option for you but I've generally found Woolies and Coles to be significantly more expensive for the stuff that we buy.

On health insurance… you can go without health insurance without penalty until you are 30. After that if you decide to join up, you pay 2% a year extra i.e. if you join  at 40 you pay 20% more than someone who joined at 30.  So if you were ever going to do without, now is the time: for 3 years until you are 30. If you have chronic healthcare issues, or can already foresee that you will need to claim in the near future, it might be worth thinking it through to stay in. I find an admission to a private hospital for a few days wipes out the  cost of the cover. If you decide to cut it, then set up a self insurance scheme i.e. invest the amount you would have paid each year…if you are in good health you will come out ahead, and get a nice nest egg to use if you ever do need to go private.  Public health services are by and large adequate ( but I wouldn't say good), but it may depend where you live. In NSW where I am, health budgets are tight and there are definitely places I would personally would not wish to utilise the public services. It seems to be getting worse not better, and with the ageing population who are high users of health services, its hard to sustain a case that it will improve.

What happy said. I have top hospital cover, no extras (I will do the maths again on extras cover to see if it makes sense to get it now - in the past, there's no way I would have broke even on costs vs benefit). While you might think you're in good health now, random shit can happen at any time. I'm very grateful that my private health insurance enable me to have surgery to remove a malignant tumour within 3 weeks of diagnosis last week, vs a friend's brother going through the public health system for his diagnosis and treatment.

Also, there is the Medicare surcharge levy if you don't have private hospital cover. Not sure how much the surcharge is on your income, but for me, it definitely made $$ sense to keep my private health insurance instead of paying the surcharge.

[alsoknownasDean]

Also, there is the Medicare surcharge levy if you don't have private hospital cover. Not sure how much the surcharge is on your income, but for me, it definitely made $$ sense to keep my private health insurance instead of paying the surcharge.

The MLS starts at $90K, so it won't affect the OP.

https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/Income-for-Medicare-levy-surcharge,-thresholds-and-rates/

[stripey]

Hi! And welcome! (Another Perthie here)

I don't know the exact name of it but I know CUA has an online savings account with a baseline interest rate and then a bonus interest rate if there is $200/month deposited and no withdrawals. Don't know the exact interest rate but it's >$2%. Some of my family use CUA for every day banking and are happy with their service.