another day another dollar...

Another day another dollar is a cliche that most people use to describe another boring day at their job. I have found another, more exciting, meaning to this phrase. It can be found in the book by Ashley Ormond, "How to give your kids $1 million each".

I have heard about this book before and only got the chance to read it recently. It has some very relevant hints to Australian families trying to build wealth from their children's future, and that is what I really like about this book. It does not build wealth for you, it builds wealth for your children. For me, that is very important.

The book discusses various strategy to build a financially secure platform for you children. Lets take at look three of simple and extremely effective ideas.

1. Use the magic of compounding interest. The idea is to put some money away for you child in a frequent manner and let the compound interest work its magic. If you say start with $1 per day until your child reaches 10 years old, you have saved about $4700 (assuming a conservative interest rate of 5%). If that $1 was $5, the saving would be about $23,600!
2. Financial Education. This does not mean sending your child to do an stock broking course! It just simply means making sure that your child understands the basic financial facts such as good saving habits, banking by having a bank account in the child's name and repaying loans in the correct time frame.
   
3. Tax minimisation. Tax minimisation needs to start from the word go, so ensure that the correct structure is in place to help with this.

This book is a gem with some solid advice and practical guidance to help build your children's financial future.

I also like the way Ashley is also donating 10% of the royalty from this book to the "Smith's Family Learning for Life Program".

The book is published by Wrightbooks, ISBN: 0 7314 0538 2

Choosing a real estate agency...

So we have appointed an real estate agency to handle the selling of our house after a series of 'interviews' with several real estate agencies in the area. You think that the real estate agencies would give similar appraisal, especially if they are from the local area. We found quite a significant differences in house prices that the agencies has estimated.

So what was it that gave this agency the edge over the other real estate agencies. Let see...

1. The real estate agent give a no-bullshit appraisal. The information that we went through were not dressed up so that we would list our property with them. The real estate agent went through out objectives and it mapped out a strategy that would meet our objectives.
   
2. The director of the real estate agency came to the appraisal. For us, it shows that the real estate agent is serious about selling our house. This does no mean that the other agency isn't serious, but it certainly gave us the right impression!
3. The director offered to send some prospective buyers without getting stuck in red tape. The director, bypassed any bureaucratic red tape, and offered to send some prospective buyers the next day. That is the real sealer for us. He really showed us that he has some prospective buyers in his books!

The bottom line, choosing the right real estate agent, will not really save you any money, but it may get you a better price for your property. With current housing market in Melbourne, it would be advantageous to do everything to boost the sale price of your house.

Shopping for a house...

Today, the family and I went to look for a new house. Not a new house as different house from where we are living, but a brand new house as in the we will be the first people to live in it.

That is a big process from many perspectives, emotionally, financially, logistically, everything has to be done right.

Let's take a look one some aspects of this process and how we can save money. Any advices from the readers would also be welcome..

To save a little bit on logistic problems, we are going to sell up before buying. This make financial sense.

1. More money available when borrowing. We are going to have to borrow money for the new house, however as we have just sold the old house, there will be a big wad of cash sitting in the bank that we can use as a deposit on the new house.
2. Save on mortgage insurance. This would be dependent upon how much cash you have. A good rule of thumb is to avoid mortgage insurance, you will need at least 20% of purchase price of the house in cash. Banks are really nasty on this as the insurance is really for them in case you default on your mortgage repayments.
3. Less pressure on synchronising settlement dates. If the two properties settlement dates are not in sync, you may have a logistical nightmare. One of our friends' settlement date was out of synch by about 1 week, so he had to put all of his furniture into storage and live in a hotel for 1 week while his new property is being settled.
4. The financial aspects are better managed. With a big wad of cash in the bank, you will be able to gain a better appreciation on what you can borrow from the bank.

We have just selected an agent for the sale of the house. I wonder if there are ways of minimising the cost of the sale...

Cloth for baby....

Our son is fast approaching his 18 mth anniversary. It is almost a blur, there is just some much stuff to do for the little fella! When he first arrived into our life, we were really conscious of our finances for him, after a quick look, there are many ways of saving money on him.

Hang on a minute, I am not talking about skimping on the good stuff for our son. We still want him to have the best. It is more of using it smartly rather than just using it. Lets take a look at one of the things that can save money.

1. Cloth nappies. We started out using disposable nappies. Mainly because we were so tired at his early months, but as our stamina grew, we switched over to cloth nappies. We tested our son on about ten different brands of disposable nappies, and the only nappy that would suit him is the huggies nappies, the most expensive ones! Around here, a box of nappies ranges from about $32 to $51. Our run of cloth nappies was for a period of about 5 months, until he physically grew out of them. He grew too fast! The way he is pooing, we were using about a box of nappies a week. So that was a saving of about $1000 dollars over the 5 month period.
   

More on saving for kids on later posts...

Uhmm...What do I do for lunch?

For me lunch is one of the meals that should be almost a full meal, but is more than just a snack. So from a money perspective what should I do? Well, when I used to work in Prahran, I was really tempted to buy lunch as my office was about 10mins walk from Chapel street. The amount of cafes, sandwich bars and restaurants were numerous.

Now that I am working in Seaford, there is only a take away food store across the road, and one further down the road.

To save money, instead of buying lunch from the local food store, buy the ingredients from the grocery store and make your lunch. Do the maths. For each day that lunch is bought, it will cost about $5.00, for a year, it will cost $1300. $1300 for lunch!!!

I reckon we could make lunch for about $1.00 per day, probably $1.50 per day. That would cost $390 for a year. That is a saving of $910 each year. Imagine what you do with $910.

Lets see

• invest it in good investment like a good internet bank account like bankwest.
• buy some very nice clothes for your children
• nice holiday to the beach over the summer months.

Food...

Food is one of those necessary evils, like sleep; if you don't get enough of it, your body will start to deteriorate. Eventually, it will break down and will end up cost you more than ever in medical fees in repairing your body. Just as well we enjoy eating!!

So how do we save money with food. One of the things we are starting to do at home is to eat all that is in the fridge. In the past, we would do our food shopping once a week, sometimes twice a week. A few days later on, we had to do throw about 10% to 15% of the food in the bin as it has gone rotten. That is like throwing 10% to 15% of the cash you used for your grocery straight into the bin!

To save some money, we are doing a few things.

1. Eat what is in the fridge or pantry. Otherwise, it just stays there, gets past its use-by date in a few days time and then thrown out.
   
2. Don't buy so much at the next grocery trip. This reduces the amount of the food just sitting around getting rotten.
3. Plan your meals for the next few days and stick to it. This will help to decide what to buy at the next grocery trip and reduce impulse on buying.

So far, it has been working out well. The planning of meals also gives a better choice of meals as well. Delicious for the taste buds as we only choose meals that are appealing to us and more spare money for our the hip-pockets!

Freebies on the net

You can't get any cheaper than free, but in the world of the internet, small quantities can be obtained for free. I mean, as an individual, small quantity of some things is still very usable. Every now and then, a pen get send out from Stablio or some new soap gets delivered. It all gets used up, saves me buying it in the future.

After a quick search on the net, I found many websites promising a free plasma TV or a obligatory iPod. As they said there is not such thing as a free lunch, well a free banquet anyway. The guys giving away the TV or iPod requires you to recommend 10 other email addresses, and also for you to sign up on at least one service like a credit card or DVD rental service. No thanks!

Here are my top 2 places where I found the most reliable information on free stuff on the net.

1. The Freebies Blog - An Australian blog on what's free
   
2. A Whirlpool thread on freebie.

The whirlpool thread is a surprise as the wealth of information on just from a thread.

Of course, you could also try google to find some of the freebies on the net, good luck on shifting through which one is the real freebie.

First Post

Well, this blog is a way of documenting some of the things that I am going to try to do so that money can be saved. I have read many other wonderful blogs such as Get Rich Slowly, and Dumb Little Man (which is not strictly a money blog, but some of the tips are quite good), but it does not have an Australian focus.

So I thought I will try to start a money saving blog with Australian spin.

Let see how I go over the next posts.