I recently did a make over for a young family of four (two young children) where they needed to rein in their expenses, or have the mother go back to work early. Their goals were to have their children in private schools for secondary school. They also wanted to possibly move closer to water.
Below is a list of ideas we came up with for them after going over their income and expenses. These ideas many other people might also want to consider.
1. Do tax return now
I suggested they do their tax return now and use baby bonus and other tax refund to pay off their credit card and put excess cash into redraw on home loan to use for emergencies/savings.
2. Centrepay
I suggested they join centrepay- this is where centrelink pays your payment A into your utilities/bills directly and pays you the rest( no fees for this). This is not just for low income households it’s for anyone who receives payment A.
3. Add wife to insurance
I asked the husband to possibly consider joining his wife to his health cover as it often does not cost much more (especially as the kids were already on his cover).
4. Pay cash for a month
I suggested for their whole budget to only pay cash for a month until you they were used to new spending patterns( 2-3 weeks pain max)- and to remember saving can be as addictive as spending so be careful not to go crazy!
5. One car
I also asked them to consider using one car, or one car a lot less.- only buy petrol on Tuesdays, don’t overload car etc to make it cheaper.
6. Groceries-plan meals
I suggested for groceries- to always plan meals first before going shopping. No more bulk buying for now. ( as she was addicted to bulk shopping)Consider not buying brands. I suggested that after the trial cash month is over then if she could share cost with others and it is within her budget to only bulk buy if it’s something that ends up cheaper.
7. One sport per child
I also suggested to just have one kids sport program for each child not two. The father also agreed to take the children running, swimming and bike riding daily.
8. Join a babysitting club
Another suggestion they were quite taken with was for them to join a babysitting club where you can earn points and get babysitters for free.
9. Scholarships
Another possibility for them was to maybe look into scholarships that might be available for the kids. Also to consider the wife working in a private school as employees often get discounts off education. ( She was working in a school already)
10. Move to the central coast
I also told them they could move now to Central Coast if want to be near water as prices are currently comparable to where they were currently. Maybe even move near a private school where the wife can work! See if his job is also available there! They have looked into this I think.
Bonus extra
I also worked out if they could save 500 a month that’s 6000 over 7 years that’s 42000 nearly enough for all three to go to private schools if we save in a high interest account then more than enough. So the family have two choices; they can keep going as they are and just cut out the kids sport cost and be even, or they can cut groceries, going out, entertainment etc, or just stay living on same budget when mum goes back to work and save 500 a month starting in a year. It all adds up.
The family were greatly relived when they realized all the choices they had. Some of these ideas might even give you some more choices. Happy budgeting!
Your say: Do you have any other budgeting ideas? How many of these do you adopt at home? Email us on [email protected]
