Author Topic: Yearly budget in Australia  (Read 7967 times)

omni

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Yearly budget in Australia
« on: May 30, 2013, 06:05:27 AM »
It has been a recurring theme that I keep seeing yearly retirement expenditure budget on threads where the numbers look dramatically less than mine. Living costs do seem higher than a lot of other places (like USA...), but I'd like to do a sanity check on how my budget compare against other Aussie budgets.

I am living in Sydney, Australia at the moment, that is ranked #12 on Numbeo http://www.numbeo.com/cost-of-living/rankings_current.jsp for cost of living. It has a 'CPI' of 125, which I believe makes it 25% more expensive than New York. My yearly ER budget is as follows:

Basic
Food   14900
Land tax/council/water   2600
Internet/phone      1150
Electricity and gas   2100
Entertainment      500
Shopping/gifts   2600
Repairs and maintenance (housing)   2600
Health insurance   2600
Life insurance (via super)    3100
Trauma insurance    2400
Total basic  34550

Luxury
Food   7000
Flights   5200
Holiday expenses (other than flights)   5200
Car   7800
Total luxury   25200

Misc (add 10%)   5975

Total   65725

The above assumes that I have a fully paid off home. Other notes:
* I don't own a car at the moment, but might want to have the luxury of owning one eventually. I am not 100% certain whether 7800 is as sensible yearly budget.
* Flights are expensive, as I have family in Canada that I would like to visit yearly.
* My wife and I like eating out, but these are definitely luxury spends, so I've split it up into 2.
* I kept life insurance in the basics, as if I pass away, I'd like to provide my wife and future kids with more comfort for income potentially forgone that would have made her life easier. Tough one as it could be classified as luxury spend too.
* Misc is in there for unforeseen expenses.

What do other Aussies think? Am I missing anything? Too extravagant a budget?

marty998

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Re: Yearly budget in Australia
« Reply #1 on: May 30, 2013, 06:31:53 AM »
Food...for just you and your wife? $14900 is on the high side. You should be able to get it under $10k at least. $7k on top for "luxury"? My god, your total food spend is twice my total yearly expenditure ex housing.

Internet/phone...ditch your landline. I'm on a prepaid phone and prepaid wireless broadband. Total $260/year

Life insurance seems a bit high. Should be much lower through super. I'm not against having it, but its always cheaper through super, never go through a financial planner for it.

omni

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Re: Yearly budget in Australia
« Reply #2 on: May 30, 2013, 07:02:23 AM »
Out of interest, what is your food budget? I should probably have elaborated, the food budget is for 4, my wife and I, and we expect to have 2 kids. I am staying in the cbd at the moment, where food prices (restaurants) are more expensive from what I can see. I am using that as my benchmark to cater for inflation that I might reasonably be able to expect when I pull the plug. I've set a budget of $40/day (hence approx $14900 a year), broken up into $5 for breakfast, $10 for lunch, and $25 for dinner. Dinner can vary a bit, when we eat at home it is typically $10-15 depending on what we have, and when we eat out it is easy to get to $30. The extra $7k for 'luxury' is where we go for certain restaurants - e.g. Korean food can be very expensive in the city..

With internet, I am with TPG at the moment for $60/month with the home phone + internet plan. I don't mind spending that, as that is where we get a lot of our entertainment from. Our current annual entertainment spend is actually more like $100 as a result, but I've budgeted for $500 for flexibility. We also have 2 Woolworth prepaid mobile at $17/month which suits our habit.

I made the mistake of going through a financial planner for life insurance. When I did look at it on super, it looks to be $1200/year for 2, but it increases the older we get at a pretty quick rate. I inflated it deliberately as a result. I might have over compensated for it though, will have another look.

nktokyo

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Re: Yearly budget in Australia
« Reply #3 on: May 30, 2013, 07:16:32 AM »
What do you get for putting $5K into Life Insurance and Trauma Insurance per year?

If you earn $200K per year your budget is fine. Not so if you earn $75K


limeandpepper

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Re: Yearly budget in Australia
« Reply #4 on: May 30, 2013, 07:19:17 AM »
I have a colleague who is the sole income earner in his household, paying off a mortgage and supporting a wife and two kids with his after-tax take-home pay of about $40k. Now it seems that you are a high-income earner and therefore can afford more luxuries than he does, but still, it shows how much fat you can still trim off that budget, if you want to.

happy

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Re: Yearly budget in Australia
« Reply #5 on: May 30, 2013, 07:28:26 AM »
I agree with Marty.
Your basic food bill looks like my total food bill did before I got serious, except mine is for 1 adult and 2 hungry teenagers. Now my total food and grocery bill is 10k for the 3 of us. No takeaway and almost no eating out. We actually eat quite well on that with some organics, grass fed meat etc, so if I were "hard core" I 'm sure it could go lower.

For 2 people I think the electricity/gas is high, but probably depends on the size of your place, and what sort of appliances etc.

I'm not sure what the car $7800 represents. I have a bit of a gas guzzler and spend $70 a week on petrol which takes me about 18000km a year. Servicing and maintenance around $500-$1000 a year. CPI and rego just set me back about $450 each and then theres insurance. So I spend about 5-6k to run the thing, but if you had a smaller cheaper car you could save on lower petrol costs and lower insurance ( probably around 2k less). Of course it depends how much you drive it as well.

For the sake of comparison my budget for 3 is 59k, which I regard as quite unmustachian. I have a few entanglements from pre-mmm days (like nongovernment school fees) which will work their way out in the next 2 years or so.  Other Aussies here can get lower...and I think for 2 people , no kids, that this is a very generous budget - see Marty's comment that your food spend is twice his total yearly expenditure without housing.  BTW that makes his expenditure around 10-11k a year ex housing, whereas your basic budget for 2 is 30k ex housing...and then you add 10% for misc down the bottom ie 33k .

omni

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Re: Yearly budget in Australia
« Reply #6 on: May 30, 2013, 07:33:03 AM »
Life - $1.5mil on death.
Trauma - thinking behind this is if my wife or I become disabled, we'd probably have ongoing costs related to that disability. Covers us for $400k each. This is what the financial planner we met recommended. Didn't do a check myself yet.

In fact while typing the above I get a feeling that I am probably using info from the planner too readily. I'll probably have to rethink insurance. If we have enough already for retirement, some life insurance makes sense but $1.5mil is probably outrageous. Not too sure about trauma.

My wife and I am lucky with our situation. We take home 13k together every month. Do agree that there is a lot of fat that can be trimmed..

limeandpepper

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Re: Yearly budget in Australia
« Reply #7 on: May 30, 2013, 07:46:50 AM »
That's an awesome combined take home salary.

I just noticed education is missing, if you're having kids in the calculations? I don't know much about education in Australia (I moved here as an adult) but I just asked my boyfriend and he says there are still costs if you send them to public school, though obviously way cheaper than private.

omni

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Re: Yearly budget in Australia
« Reply #8 on: May 30, 2013, 07:53:28 AM »
Thanks happy, cleared up a couple things for me.

A decent chunk of our food bill is definitely from eating out. I was trying to budget for 4 though (no kids yet but ER budget should cater for the 2 more we expect) with some eating out. Over down years we will definitely have to trim the 'luxury' budgets. Perhaps the short cut I took to calculate the budget was too loose. Will keep receipts for a month to get a cleaner indication of our food expenses. Am definitely getting the message that we will need to tighten up our food spending though.

Electricity didn't seem extravagant to me. No dryers, no A/C, or heater 360 days of the year. We do turn on heating or A/C when it is a little too much to handle but it's a handful of days. I do use halogen lights which probably isn't the best, but am not so keen on changing them yet as I'd like to move to a suburb in the coming year or two. I spend $130 a month at present, and expect that it will increase when I move to a new place, from a 2 bed to 3 bed place.

Thanks for the car budget. I'll have to trim back the $7800. I assumed that it would cost $150 a week to arrive at $7800. In the medium term the plan is to stay somewhere close enough to public transport, and car share service, so during the initial ER years this shouldn't even come into play. In its place though we'd have public transport costs which I need to work out (I walk to work at the moment).

omni

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Re: Yearly budget in Australia
« Reply #9 on: May 30, 2013, 08:04:23 AM »
That's an awesome combined take home salary.

I just noticed education is missing, if you're having kids in the calculations? I don't know much about education in Australia (I moved here as an adult) but I just asked my boyfriend and he says there are still costs if you send them to public school, though obviously way cheaper than private.
Nice pick up, completely forgot about schooling. Need to look into it. I was under the impression that it is about $1k per year per child to make up $2k for public schools. Will need to verify. The everything else (uniforms, books, excursions...) will probably add up to be quite a bit more than expected.

nktokyo

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Re: Yearly budget in Australia
« Reply #10 on: May 30, 2013, 06:47:32 PM »
With your incomes why not just save like madmen for a few years, don't eat out, invest your money... you'll have a million dollars.

The FA industry does my head in...

Ozstache

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Re: Yearly budget in Australia
« Reply #11 on: May 30, 2013, 09:05:15 PM »
Seems a bit extravagant to me.

For comparison, my wife, 22 yr old son and I live in the Canberra area (ie. $$$ living costs too) and our yearly budget is $45K. This is broken down roughly as:

Amenities $6000 - water, phone, mobiles, gas (ducted heating) and electricity (country NSW rates)
Major purchases $2000 - replace household furniture/appliances but only if worn out/broken
Dogs $1500 - best bang for buck out of the entire budget!
Holidays $7000 - splurged on a months worth of motorcycle travel to Tassie and Cairns
House $4000 - rates, projects and maintenance, insurance
Medical/dental $2500 - PAYG, medicare FTW!
Presents $2500
Food & sundries $12000
Spending $5000 - alcohol, clothes, entertainment, takeaways, manchester, misc
Vehicles $7000 - two frugal cars and one not so frugal motorbike
Son's housekeeping contribution -$5000 - covers 1/3 share food, sundries and utilities 

Notably missing is rent/mortgage, but I notice that you own outright too.
« Last Edit: May 30, 2013, 09:08:39 PM by Ozstache »

englyn

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Re: Yearly budget in Australia
« Reply #12 on: May 30, 2013, 10:45:37 PM »
I don't understand about the life and trauma insurance. For life insurance if you are FI at that point then you don't have to insure your future income potential as the income from investments will already more than provide for your funeral and wife & children's living expenses. For trauma, you already have your own living expenses covered; you would likely not need to pay for ongoing care if your wife doesn't have to work; you could insure for costs of converting your house and medical equipment, but considering the likelihood of this happening you may prefer to self-insure (aka invest that amount you are handing over to the insurers and build a little extra onto stash).

Also, I just got enough life insurance to cover my remaining mortgage and enough TPD cover to provide an entire ER stash and enough income protection cover to replace nearly your whole ER budget... for less than $5/wk total through AustralianSuper. You are paying too much.

Nudelkopf

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Re: Yearly budget in Australia
« Reply #13 on: May 31, 2013, 12:07:44 AM »
Basic
Food   14900
Internet/phone   1150
Entertainment   500
Shopping/gifts   2600

Luxury
Food   7000
Is that $7000 for luxury food included in the $14900 basic food? Because that $14900 is my entire expenditure for one year including housing (one person). Because holy crap batman. My budget (for 1 person) for groceries/toiletries/household/dining-out is $3000. (I'm in Brisbane). Even for 4 people, assuming I'd shop the same for 4 of me, that'd only be $12k for everything. Far below your $22k.

My phone comes to $180/year (for comparison). And my entertainment+shopping is $2300 (again, for comparison) (so yours is pretty much on par with mine).

gooki

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Re: Yearly budget in Australia
« Reply #14 on: May 31, 2013, 01:24:46 AM »
If you take the two unnecessary insurances out of your basic budget, a total of $29,000 for a family of four looks good.

happy

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Re: Yearly budget in Australia
« Reply #15 on: May 31, 2013, 03:23:23 AM »
Sorry Omni I didn't get that you were projecting into the future for a family. Apart from schooling, you need to think about the before school years.  This means childcare$$$ unless only one of you works or you both work part-time or you have family who will help out. How you manage this phase is a either major expense or a major reduction in income.

For public school it does depend on the school and parental expectations within the school. You need School uniforms - maybe $1-200  on average ( some years might be more, and some less depending how long stuff lasts)if bought new, but often you can get secondhand clothing. No "fees" but our local public school asked for a  ahem "voluntary" contribution and kept track of whether you had paid up and sent reminders! Another $50-100/kid. Beginning of the year books/pens stationary up to $50. And endless bits and pieces such as visiting educational programs/excursions/extra materials  that all cost a few dollars here and there i.e. could easily add up to $50 a term.  So for a public primary school 1k a year per child should cover it. All day childcare will drop out, but now you need before and afterschool care if you are both working.

Kids may also cost with things like dental checks, eye checks, orthotics, etc etc. I notice you have private health insurance...but I find that it never covers the whole cost. If you have a child with perfect eyes, teeth, feet, speech etc etc then it won't be much.

marty998

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Re: Yearly budget in Australia
« Reply #16 on: May 31, 2013, 04:06:57 AM »
Out of interest, what is your food budget?

Sorry I'm a little late replying. My food budget is about $2k for the year. But I'm a single guy who can't cook (very well) so its all pretty basic. One day I'll learn how to.


For public school it does depend on the school and parental expectations within the school. You need School uniforms - maybe $1-200  on average ( some years might be more, and some less depending how long stuff lasts)if bought new, but often you can get secondhand clothing. No "fees" but our local public school asked for a  ahem "voluntary" contribution and kept track of whether you had paid up and sent reminders! Another $50-100/kid. Beginning of the year books/pens stationary up to $50. And endless bits and pieces such as visiting educational programs/excursions/extra materials  that all cost a few dollars here and there i.e. could easily add up to $50 a term.  So for a public primary school 1k a year per child should cover it. All day childcare will drop out, but now you need before and afterschool care if you are both working.

Kids may also cost with things like dental checks, eye checks, orthotics, etc etc. I notice you have private health insurance...but I find that it never covers the whole cost. If you have a child with perfect eyes, teeth, feet, speech etc etc then it won't be much.

Take note. All true & very scary. Kids grow through $100 school shoes every 9 months. Oh and even if they do have perfect teeth (like mine) how do you think they got that way? A 6 monthly dental check and fluoride treatment when young is vital for good teeth.

pom

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Re: Yearly budget in Australia
« Reply #17 on: May 31, 2013, 06:51:21 AM »
I would personally only buy insurance to make sure that my family is not destitute. That is, after all, the purpose of insurance, no?

1.5 million seems more like playing the lottery to me.

omni

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Re: Yearly budget in Australia
« Reply #18 on: May 31, 2013, 07:39:24 AM »
Hmm sounds like I deserve some heavy duty face punches :O.

Really appreciate everyone's response. The comparisons are invaluable for me.

The good news is we had/have a reasonably tight budgets before/currently that we used to aggressively pay down our home loan. We are about 10 months away from paying it off. I have also been fortunate to have a living arrangement that is mutually beneficial with my sibling, who is essentially paying the interest for my home loan.

What about the following budget? Do need to flex some of MMM's like muscles to get there no doubt. I trimmed the food budget some, but it definitely isn't a hardcore level scale back. In its place though I added kids expenses which I missed out before. I am assuming 2 kids that we are planning for. Is 5500 an addition reasonable for school, and other kids related expenses? I have little familiarity with it at the moment.

I left out childcare expenses below, because this is meant to be our ER budget. If we take up work we'll make sure childcare is covered by whatever pay we receive prior to taking up work. It will affect our ER age.

Basic   
Food    (30/day for 6 days a week, and 50 for the 7th day)   12000
Public school fees   2000
School misc   1500
Kids misc   2000
Land tax/council/water/insurance *   3000
Internet/phone   1150
Electricity and gas   2100
Entertainment   500
Shopping/gifts   2600
Repairs and maintenance (housing)   2600
Health insurance    2600
Life insurance (via super)**   1050
Trauma insurance ***   0
Total basic    33100
   
Luxury   
Food   5000
Flights   5200
Holiday expenses (other than flights)   5200
Car   5500
Total luxury   20900
   
Misc (add 10%)****   5400
   
Total    59400



Notes and questions for the new budget
* 1) I left out home insurance before. Am currently paying $35/month with Allianz
** 2)  Took a third of life insurance budget before. As said before I'd like to leave some breathing space for wife and kids. Reduced from $1.5mil to $500k cover. Quite loose calculation, for my wife and my age, it is currently $360 for the year, but I multiplied it by 3 as I expect it to cost more when we get older.
*** 3) What might be a reasonable amount for self insurance in case of trauma insurance? I had 2400 previously, which at a fairly conservative 5% interest implies a principal of $48000 equivalent (e.g. 2400/0.05 = $48000). Is this on the low side?
**** 4) I left misc in here for 'anything else'. E.g. I left out education before. Also just noticed I didn't include sundries (toiletries etc)
5) Bit of a random question. Do you guys shop at places other than Coles/Woolworth? I have Paddy's market nearby that I am not using enough, which we will have to do over the weekend at least. I  am delightfully surprised that cost can be as low as 3k per person though. What might I be missing?
6) Part of why I split it up into basic and luxury is because I'd like to have a conservative SWR for 'basic', and a less conservative but comfortable SWR for the total. I have in mind a 2.5% SWR for the basic budget, and 4% SWR for the basic + luxury budget. The 4% SWR for basic + luxury budget should have my wife and I ER by mid 30's.

Again appreciate everyone's input!

happy

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Re: Yearly budget in Australia
« Reply #19 on: May 31, 2013, 08:59:45 AM »
I think 5500 sounds reasonable for the kids. Kids cost as much as you let them....that amount should cover all essentials with a bit of wriggle room. Its a bit unpredictable... both mine needed orthodontics...still ongoing :(

To get the food/grocery cost down what I do is be strict about no waste. I try to cook from scratch at home. You'd be surprised how many "home cooked" meals contain prepared foods  e.g. bottles of pasta sauce: these convenience items all cost extra.  I do batch cooking ie buy 2kg mince and make up a large pot of pasta sauce then freeze into meal size portions.  I am eating Primal this year so I don't bulk out my food with cheap carbs (if I did I'd get the price lower), although the teenagers still like some. I shop at Bilo (coles), the local butcher and the local vege shop. The butcher's prices are about twice that of Coles, but its real meat. I buy say, half a grass fed lamb, which he butchers to my specifications and then freeze what I can't use fresh.  I render the fat. I make stock from the bones. I buy whatever the butcher has on special and go for seasonal fruit/vege. I bake my own bread in a breadmaker. In the supermarket I stockpile items on super special if they are not perishable and I am certain we will use them.  I have a buy price ( like with shares): it has to be really good then I get a lot. There seems to be a lot of heavy discounting at present. I also use Groceryrun.com.au. Again carefully selecting extreme specials. There is a lot of junk on there we would never eat, but good deals on nuts, dried fruit and a few other things at times. Toiletries are included in this budget BTW.

Once you get close to FI, review your life and trauma insurance. I'm not really sure what trauma insurance is, so obviously I've never had it.  I did find with my life insurance,  that I probably paid it for too long.... I figured out one day that my kids would be financially well covered by my stash/assets and in fact if I died early  they would do pretty well since  I no longer needed to fund my retirement.

Aussie

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Re: Yearly budget in Australia
« Reply #20 on: June 04, 2013, 08:05:36 PM »
As an American,

I think Australia offers some of the greatest opportunities for Mustachians.  Salaries are very high... but everything is overpriced.  Therefore, you have amazing savings opportunities if you don't all fall for all of the traps.  Take out food is everywhere and it is so marked up and often uninspired.  Personally, I feel that Australia's best assets are free things - great whether, tremendous outdoor activities.  Also, once you have kids... avoid restaurant food almost entirely.  Even potentially healthy items such as scrambled eggs or chicken breast are often loaded with butter/salt at restaurants.  Plus, it doesn't take much extra time to cook for 4 people than it does for 2.  I would spend some quality time becoming a good/efficient cook in these years because you will be too stressed out when the kids come.

In terms of shopping... I would advise against buying any clothing at any Australian store that costs > $5, it can all be bought ~ half price from the US/UK.

Also, be very very weary of the financial services sector in Australia.  You would not expect it based on the country's reputation, but it has the most bloated financial system in the world.  Financial planners were just recently forced to work in their clients best interest.  Before, you were paying them a fee to have them sell you a product that they earn a very high commission on.

I would also be weary of the private health system.  Are you sure you need it?  Just make sure you know exactly what you are getting for your money, and you were not scared into buying it.  Public hospitals are also very good (although sometimes crowded).  You will not die because you don't have insurance.

Do you really need a car in the CBD?  You can get anywhere by train/bus and marking must be a nightmare.  Rego in Victoria is $700 a year even if the car isn't worth anything.

nktokyo

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Re: Yearly budget in Australia
« Reply #21 on: June 05, 2013, 03:46:09 AM »
Great points. I live in Japan, where wages are high also but there are terrific opportunities to arbitrage and live cheaply.

We don't own a car, every time I need a car I rent one, with gas and everything I don't get much change out of $100, but for the 2-3x I really need a car each year it's totally worth that. I know if I had one I would just use the damn thing, as it stands I do 12-15,000 steps per normal day.

NumberJohnny5

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Re: Yearly budget in Australia
« Reply #22 on: June 05, 2013, 07:06:39 AM »
I have a problem with words...and the excessive use thereof. So, sorry for the overly long post.

We're living in Ballarat, just west of Melbourne. Family of four, one kid in Primary School and another in Kinder. Wife works part-time, I'm a stay at home dad. I'm sure our numbers and commentary won't be an exact fit for your situation, but maybe it'll help some nonetheless.

Basic   
Food    (30/day for 6 days a week, and 50 for the 7th day)   12000

We were spending $150/wk on food, with way too much waste. We brought that down to $100/wk easy, then $90, $80, and experimented a couple weeks at $70. $80/wk seems to be the current sweet spot. The main necessities (milk, bread, butter, flour, sugar, etc.) are bought at Aldi. We (mostly my wife) keep an eye on the flyers each week. When something like Kraft peanut butter goes on sale for about the price of generic (or sometimes even less), we stock up like crazy (I've bought $80 of peanut butter in one go, virtually wiping out our grocery budget for the week). Most of my wife's shopping is at Coles and Safeway (Woolworth's), frequent visits to NQR, and occasionally IGA (can't forget The Reject Shop, I think they often get leftovers from USAFoods, found the impossible-to-find Marshmallow fluff there last year!). Anyways, at $80/wk, that's about $4,160/yr.

Public school fees   2000

Have you checked any of the local schools and asked what the "voluntary" fees are? I can't remember off the top of my head, but our local primary school charged $200-something. If you got the EMA (Education Maintenance Allowance) worth around $160, and signed it over to the school, they counted that as paid in full. I think the only requirement to get EMA is to have a Health Care Card (for the non-Aussies...it's not related to Health Insurance, it's a concession card for low-income people/families; I may disagree, but we're considered low income, so there ya go). I love how it's one price, and that's IT. No needing to supply ANY school supplies (pencils, notebooks, class books, fees for excursions...ok they do ask you to provide an art smock and would appreciate boxes of tissues, but that's all). So, cost between $0 and $200-something.

School misc   1500

Wait...$2,000 in fees plus more? How? I'm guessing maybe camps, sports fees, stuff like that? I think most of that is for later grades (the grades 5-6 seem to do several camps throughout the year; I haven't kept track of the costs, but I don't remember seeing a price over $200). Am a bit curious about this. Perhaps our school just doesn't charge for a lot of things that other schools do? Or maybe you're including things like eating lunch at school (which I would include in the grocery budget)?

Kids misc   2000

What's going under this kids misc section? If you've already accounted for the kids' cost in the school, grocery, entertainment, gifts, etc. categories...what's left? Clothing and dental costs? Kids don't need $1,000 each in clothing and dental work (ok, maybe in EXTREME cases they actually NEED braces...but in general no). During school they'll (probably) be wearing school uniforms, which I assume you included in the school categories (if not...good gosh why are those so high?). Keep an eye out for good quality pants/shorts in the required school color (ours is navy blue) throughout the year at the op-shops. For the shirts, I've seen them brand-new for $2 in January. For outside of school, I'd buy everything I could at op-shops (except for underwear).

Oh, our expenses...dunno for sure. We give them an allowance of approximately $1 per year of age (I currently give a raise every third year, so at ages 4-5-6 they get $5/wk, 7-8-9 they'd get $8/wk, etc.). Divided up 40% spend, 30% save, 20% invest, 10% donate. They get to spend on virtually anything they want (I don't get the appeal on $7 trashies...but neither do they get the appeal of a gym membership...different priorities). Spend maybe $10-$20 on each for birthdays and Christmas presents. Giving the oldest a $5/mo clothing allowance once he turns 7. All up (clothing, allowances, presents) my rough calculations show under $1,000 for both kids combined. Of course this number will likely go up as they get older...by the time it would go up exponentially, they'll probably have part-time jobs, so it won't actually be that bad.

Internet/phone   1150

Ours is about $63/mo, though it can be a couple dollars over on occasion (if I had to make some calls that month). Through Dodo, unmetered (I've checked how much we use...good gosh it's a good thing we have unmetered, I blame judicial use of Netflix). Under $800/yr.

Wait, are we including mobile phones? We spend maybe $12/mo total ($5/mo for each of us for data, then whatever few calls are made on top of that), so add $144/yr to that. Unless the costs of the phones go here instead of under shopping in which case...my head hurts.

Electricity and gas   2100

I think you may have us beat on this. I'm trying to do better (last year I ran the heat during really cold nights...now we just suffer through the cold nights with our electric blankets and I turn the heat full-blast in the mornings). Low rent and no insulation = high heating/cooling bills (we still make out better financially than if we had a better insulated, and more expensive, place). Very rough estimate = $2,000/yr (as I said, very rough estimate, it could end up being $2,500 and I wouldn't be surprised).

Entertainment   500

We budget $50/mo, but tend to not spend it. I mainly count screen-time (tv, movie theatre) in this category. We may occasionally spend $60 for the whole family to watch a movie at the theatre...but as long as we're under budget, it helps keep me from hyperventilating at the FREAKIN' $10 FOR A SODA AND STALE POPCORN??!!

Shopping/gifts   2600

Is this just shopping for fun? I try not to do that. Gifts, we don't really do. If my son is invited to a birthday party and wishes to buy a gift...that's what his allowance money is for (and he did choose to purchase a small gift).

Health insurance    2600

We're pretty sure we're sticking with Medicare-only. Just in case though, we did purchase private insurance for 2-3 months then suspended it (we're a special case; had one year after arriving to purchase, can suspend if we're going overseas and back which technically we are; just bought us some time is all). I've found the medical coverage here pretty good, probably better than in the US. Strong disclaimer...no major long-term ailments, can't comment on that.
   
Luxury   
Food   5000

I'm guessing this is your restaurant category? Ours used to be $50/wk, now it's $20/wk. Just enough for a weekly visit to McDonald's or Hungry Jack's.

Flights   5200
Holiday expenses (other than flights)   5200

I am somewhat curious why these two are separated? I look at the total cost of a vacation/holiday; maybe the actual holiday is dirt-cheap but the flights are a bit higher than normal, that's fine. I'm just guessing, but I think you're breaking it down as local holidays $5,200 and trips to Canada $5,200. I can't judge at all here, travel is extremely important to us, and "back home" is in North America. Depending on exactly what you count as a holiday/flight expense, we may be spending a similar amount.

Car   5500

Car...a luxury...good job categorizing that! Again, we spend a bit less...but with the high rego costs here, that doesn't sound too bad (I'm assuming that includes vehicle purchase price and maintenance).

Misc (add 10%)****   5400

I love having a buffer. Because real life always seems to happen when you least expect it.

Quick FYI on our budget, we have some categories you don't, which is probably due to our different ways of viewing spending. Wife and I each get $50/mo misc money to spend however we like. Me, new android tablet. Her, gym membership. We also get $50/wk for dates, so if both kids are at school and she's off work, we can head to a nice restaurant (or to McDonald's) and have a nice meal together (note, we don't come anywhere near spending $50/wk on dates, which is actually a problem; married couples do need time just to themselves, even if it means hiring a babysitter so they can go out to watch a movie every once in a while).

Also just noticed I didn't include sundries (toiletries etc)

Those are included in our grocery budget. Virtually anything bought at the grocery stores count as groceries (toilet paper, toothpaste, laundry detergent, etc.). Notable exceptions would be things like electronics, tools, clothes (I'm looking at you, Aldi), make-up, stuff like that.

6) Part of why I split it up into basic and luxury is because I'd like to have a conservative SWR for 'basic', and a less conservative but comfortable SWR for the total. I have in mind a 2.5% SWR for the basic budget, and 4% SWR for the basic + luxury budget. The 4% SWR for basic + luxury budget should have my wife and I ER by mid 30's.

That's certainly a different way of looking at it. Me, I just have different investment goals (reach X and you can afford the bare necessities, reach Y and you can live a little, reach Z and you're living the good life).

If only I figured this out when you did. Mid-30s, still a ways off from retirement, but it's all good.

Aussie

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Re: Yearly budget in Australia
« Reply #23 on: June 05, 2013, 05:47:14 PM »
About the school fees... my partner and her 2 siblings each went to public school in a largely immigrant neighborhood, and they sent them a bill for a couple of hundred dollars every year and they just paid it.  One year somebody told them that the fees were optional (the government is required to provide free public education for every child in the country) and they didn't pay.  No one followed up and tried to collect it from them.  I can imagine they ask for more money in nicer areas, so be very weary of this.  IMO opinion, government schools have to right to send parents bills as long as the government continues to subsidize religious schools (but let's not get political).

Also, I believe kids can get free dental care in Australia under Medicare, but check into this.

Just one comment on NQR/Reject Shop.  These are great places to buy things like Shampoo or Toothpaste (Colgate is Colgate whether they are packaged for Thailand or Australia).  However, there is about zero nutrition in any food sold at these places.  Cheap candy is a false economy if you end up with 8 cavities.

Good call on Aldi... one great advantage in Australia is that in one shopping centre, you will generally have Coles, Woolworths, Aldi, and fruit and veg shop, a butcher, and a baker.  If you play your cards right, you can get all your groceries for a big discount.  The items the send out in those weekly catalogues are loss-leaders (the company loses money on those sales).  If you see something non-perishable you like (cereal, tuna, trans-fat free peanut butter etc) for 1/2 price, buy ten not one.  And then make sure you don't do all your shopping there just because 3 items are cheap.

Ozstache

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Re: Yearly budget in Australia
« Reply #24 on: June 05, 2013, 08:18:48 PM »
Good call on Aldi... one great advantage in Australia is that in one shopping centre, you will generally have Coles, Woolworths, Aldi, and fruit and veg shop, a butcher, and a baker.  If you play your cards right, you can get all your groceries for a big discount.  The items the send out in those weekly catalogues are loss-leaders (the company loses money on those sales).  If you see something non-perishable you like (cereal, tuna, trans-fat free peanut butter etc) for 1/2 price, buy ten not one.  And then make sure you don't do all your shopping there just because 3 items are cheap.

I do similar by planing my weekly meals around the loss leader perishables, stock up on loss leader non perishables, buy as many of my staples as possible from Aldi and Costco and only buy non-sales items from Woolies and Coles as a last resort. This alone has shaved about 30% off my monthly food/sundries budget.

omni

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Re: Yearly budget in Australia
« Reply #25 on: June 06, 2013, 07:10:54 AM »
Thanks for chiming in everyone. Very helpful for sure.

A fair bit of homework for me to do. Will start off with the biggest ones - our outrageous food budget! I had a chat with my colleague and friends. Supposedly my estimation is fairly close to their own expenses. However, it is certainly excessive. The first step for us is to avoid eating out and taking food away. I think this goes hand in hand with our accommodation - so many choices of food walking distance away! Apart from that, I do notice that the nearby Woolworth and Coles do vary their prices quite a bit. Very sneaky - e.g. $2/kg for red delicious apple one day, $5/kg the next. All while Paddy's market walking distance away at $1.5/kg. Hello Paddy's market on weekend going forward.

One more thing I didn't mention above as well (as I intend to do away with it) is the excessive strata fees I am paying, at $9k/year. This has got to go, yesterday. We started viewing houses - have had enough of big strata schemes, and will be focusing on small strata schemes or houses on torren title. Since focusing on ER budgeting, my take on the 9k/year, at 5% return, to be the equivalent of having to build up a stash of $180k to fund that expense - not something we are keen to do. The flip side is we are able to afford a home that is as much as $180k dearer, and be on an 'equal' footing in terms of how much we need to save for ER.  We are considering suburbs with good government schools. No private schooling for the future kids. University/college is a different story though.

Regarding private health insurance. It is at the moment a financial decision to get them. My wife and  I make enough to go over the Medicare levy surchange threshold, so we have to pay the extra 1% on our income if we don't have private health insurance. When it becomes relevant to consider whether we need it upon ER, I will revisit. The rare occasions when I do have to go to the doctor though, it seems as though plain vanilla medicare is sufficient, without any out of pocket expenses for me.

Regarding our car situation. I intend to delay the 'need' (because that's a bluff!) as much as possible. That and driving isn't an enjoyable experience for me. Have recently been looking at scooters and kick bikes - what wonderful inventions these are for the daily urban commute!

Regarding flights. I split it into two mainly to split flight expenses to Canada out, as it makes up a big chunk of the budget.

garden girl

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Re: Yearly budget in Australia
« Reply #26 on: June 06, 2013, 01:41:23 PM »
I often read this forum, but I don't comment often. There are a few things here that I feel I must add my 2 cents worth.

I have a child in primary school ( public). Our school fees are $50 per year. You can get 2nd hand uniforms through the school, usually about $2 per item.

In response to Aussie - no one gets free dental care. There was a voucher issued by the government a few years ago for low income earners that entitled you to one visit, to a dentist of your choice. This scheme has now finished. There are public dental clinics, with enormous waiting lists. If you need emergency dental care, you need to see a dentist privately and there is no medicare subsidy available on this.

Transport to school is covered by the government if you live more than 1km away from the school. This usually equates to the free bus pass that kids get. You need to fill out a form when they start school, again in yr3 (NSW) and then when they start high school. Kids that catch the train to school can also get free transport.

Aussie

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Re: Yearly budget in Australia
« Reply #27 on: June 06, 2013, 07:01:42 PM »
Quote
We are considering suburbs with good government schools. No private schooling for the future kids. University/college is a different story though.

Australia really doesn't have any private universities (they do but they are not popular or prestigious), so you probably don't have to worry about that.  Australia also has a stay at home for college culture so you also don't need to worry about paying for dorm rooms or meal plans.  I guess the only private colleges they would go to would be in the US/Canada, but that's 20 years in the future and no one knows what higher education will look like so far into the future.