Cheap breakfast cereal and a free cricket cap

Coles currently has 750g packets of weet-bix on special for $2.09. I checked the unit price (28c per 100g) and it really is a lot cheaper than the regular price, even compared to the bigger 1.3kg packs (around 55c per 100g). I bought four packs as there is also a special offer from Sanitarium for a "free" baggy green cricket cap at the moment. The first 20,000 people to complete an online entry with four codes (printed inside each box lid) receive a cricket cap at no cost. After I entered the codes and filled in the online application I received an immediate confirmation that I would be sent a cap (well, DS1 will end up getting it to wear), so they can't have reached the 20,000 cap limit yet ;)

DS1 should like the cap, as he has previously expressed an interest in playing cricket (he tried out for the school cricket team last year, but didn't get selected as he's never actually played any cricket!). Maybe he'll put it on and actually practice a bit with the bat and stump set I bought he last year ;)

Subscribe to Enough Wealth. Copyright 2006-2010

Planes, Trains or Automobiles

We'll be travelling from Sydney to Inverell (in the far north of the state) to stay at my parents' farm over the Christmas/New Year period - a distance of 621 km. The cheapest option would be to drive up in our 10-year-old Festiva, but the car is a bit too cramped for long distance journeys. The drive would take about 6.5 hours each way (longer if we take a lunch break on the way), and cost around $200 or so in petrol for the round trip. A bit should be added on for wear-and-tear on the tyres, car servicing costs etc., but there's effectively no depreciation cost for using the car as it's already more than a decade old and has over 115,000 km on the clock (one careful driver ;). Next year when we visit my parents at their other farm at Forster each school holiday we'll probably trade in the old jalopy for a near-new (1 yo) Hyundai ix35 Highlander (about $41,500 new).


An economy-class return train fare for a family of four costs $356.44 (the adults cost $172.22 each, while the kids are only charged $6.00 each!), and the kids enjoy travelling on the train for a change. The train takes about the same amount of time overall (we have to catch a City train to Hornsby before changing onto the countrylink train). DW is insisting we take the train rather than drive, which is easy for her to stipulate since she won't be paying for the train fares (I can't really complain, since staying a week with her in-laws isn't her ideal vacation!). I don't really mind paying the extra $150 to take the train, since I'll be able to sleep, watch a DVD or read a book during the 6 hour train trip, rather than stare at the road! The train doesn't actually pass through Inverell, so we'll have to get off at the closest station (about an hour drive) and be collected by my parents.

My parents had also asked about us taking a plane, but the cost is exhorbitant. It would cost $1025 for the family - nearly triple the cost of travelling via train. The flight time from Sydney to Armidale is just over an hour, but it would take around an hour to get to Sydney airport from home, plus another hour or so to get from Armidale to Inverell. So the total travel time would be around half via plane rather than train or car. The one-way airfare is $144 per person, so it would be worthwhile for adults (a 60% premium compared to economy train fare, or about the same price as first class train travel), but there isn't any discount available for children.

Subscribe to Enough Wealth. Copyright 2006-2010

The frugal joy of 'lagging edge' computer software and hardware

It's a well known fact that keeping up with the techno-Joneses by buying the latest cool techo-toys can be a wee bit expensive (do you want an iPad with your iPhone?), not to mention the 'joys' of living on the "bleeding edge" of technology and being one of the first to uncover that exciting new 'undocumented feature' (no, no, you're just holding your iPhone 4 the wrong way you klutz - there's nothing wrong with it!).


So it's a lot cheaper to take a few steps back from those money black-holes and cultivating a mind-set of 'discovering' that latest and best games and hardware a few years after everyone else. I do this by a) hanging on to my old games (Kings Quest 4 anyone?) and old hardware as long a possible, and then b) only looking on the discount table of EB Games to find out 'what's the 'latest', cool new game). Provided I don't go near the current gaming mags or try impressing anyone else, I'm perfectly happy with living on the 'lagging edge'. I still get to buy shiny new toys, but don't pay much more than I would for a used copy of the latest releases.

Hence, last week I bought a copy of Microsoft Combat Flight Simulator 3 for $14, and proceeded to replace my old serial port joystick with a brand-new Logitech Attack 3 USB joystick for $25 (on clearance sale, used to be around $35). I'm amazed by how great the graphics look when playing on my Dell Inspiron Laptop, and although the software first came out in 2002 it runs perfectly well under Vista.

Another benefit of buying games well after they were first released is that any bugs have probably been fixed - from what I read on the 'net, when CFS3 first came out you had to manually hack the config file to get the Logitech joystick to work under Vista. I had no problems at all, so it seems that Microsoft eventually got around to fixing that bug.





Subscribe to Enough Wealth. Copyright 2006-2010

Petrol discounts

our two large supermarket chains, Coles and Woolworths both run petrol discount schemes whereby you get a 4c/L discount voucher if you buy $30 or more of groceries in one transaction. While there is some criticism that the cost of the fuel discount is simply passed on to shoppers via increased grocery bills, I doubt that there is really much impact on grocery prices. For one thing, I'm sure a lot more vouchers get issued than are ever presented - I always have lots of vouchers in my wallet that don't get used before they expire after one month. The other reason is that the full cost of the discount won't be passed on from the petrol outlet to the grocery chain since the vouchers are a marketing tool to attract extra customers to the petrol station.

Woolworths recently replaced the printed shopping vouchers with a credit-card style rewards card. Each time you spend more than $30 in the supermarket you simply have the card scanned and a 4c/L discount is credited to the card. You then present the card at the petrol station to obtain the discount. The card is an improvement over the vouchers for several reasons:

• You don't have to clip vouchers off your shopping dockets and keep them in your wallet
  
• The card system automatically uses the highest value discount available, and then the oldest one. This ensures you get the best value from the available discounts.
  
• If you go online to register your details for the card, you get a one-off 10c/L discount.

I got one discount card for myself and one for DW. I've already registered my card and used the 10c/L discount when I filled up last week. I'll now register the wife's card online and use that card to get a 10c/L discount next time I get fuel. After both 10c discount offers have been redeemed I'll "link" the two cards together - up to five cards can be linked, which means that a discount obtained using any of the cards is pooled with the others, and when any of the discount cards is presented when paying for fuel, the oldest of the discounts will be used up. My parents have also got the Woolworths discount cards, even though they do most of their grocery shopping at Coles. After they've used up the initial 10c discount from registering each card, we'll link all four cards together. That way they'll always be able to get a fuel discount even if they haven't been shopping at Woolworths for a while.

Subscribe to Enough Wealth. Copyright 2006-2008

I want to Lose weight and Gain income

A recent meta-study confirmed what many overweight and obese workers probably suspect - that they are discriminated against in the workplace. The meta-analysis of 25 studies showed that obesity could lower a woman's annual earnings by as much as 6.2% and a man's by as much as 2.3% - and that's if you manage to get past the job interview. However, the statistics also show that employers have good reason to be wary of employing obese workers. One study showed that between 1997 and 2004, obese workers filed twice the number of workers' compensation claims, had seven times the medical costs and lost 13 times the days of work from work injury or illness compared with other employees. And the study of 11,000 Duke University employees found that the average medical-claims costs per 100 employees amounted to $US51,019 for the obese, compared with $US7,503 for the non-obese. That's an extra $435.16 in medical costs per obese worker. So in one sense the lower annual earnings for obese workers are largely offset by extra medical benefits from being employed.

Even if being overweight doesn't directly reduce your income, the extra calories required to maintain a higher BMI cost considerable amounts of money. For example, when I last changed jobs nearly ten years ago I had been eating a healthy diet and regularly going to the gym for a couple of years. My BMI was around 24 - probably the best it had been since High School. Since then my weight gradually crept back up until my BMI was back into the obese range (around 31) the past couple of years. And although I'd stopped going to the gym since changing jobs (it was no longer conveniently located on the way home from work, and I had less time available once we started our family), I think most of this weight gain was simply due to eating too much junk food. The core of my diet is still the same as when my BMI was under 25, but I'd started snacking on confectionery in the afternoons and eating ice cream for dessert almost every day. This year I'm attempting to stick to my basic, healthy diet plan and get some regular exercises - but I quite regularly lapse into eating some extra junk food. For example, the confectionery and ice cream I ate yesterday cost around $8.80 and added an extra unwanted 1,200 calories. If I did this every day for a year it would cost me over $3,200 and add around 65 kg to my weight! Fortunately today I've avoided ANY junk food (so far), and went for a 45-minute walk at lunchtime. One day down, 364 to go (again)...

Subscribe to Enough Wealth. Copyright 2006-2008

How I plan on saving 50% of investment trailing fees

I'd seen a couple of services advertised that will rebate you part of the trailing fees that many investment products pay to financial planners, insurance and loan brokers. So I recently visited YourShare.com.au and joined up. The service offers an annual rebate of 50% of the trailing fees they get paid if you nominate them as your "fund broker" (70% for trails above $4000pa). I sent in completed nomination forms for my income protection insurance, three margin lending accounts, and various fund investments. I got a confirmation email acknowledging receipt and processing of my forms a few days later, and was advised that a few of the investments didn't actually pay any trail (Timbercorp and Rewards agribusiness investments). Also, Commonwealth Securities doesn't pay a trail on margin loan balances, although the form will still be processed so I receive a 100% rebate of the entry fee on any mutual fund investments I make via Comsec.

This means I should be getting a rebate on the trailing fee paid on my "loss of income" insurance premiums (probably 1%-2% of the amount paid), plus I'll get a around 0.25% of the value of my margin loans with Leveraged Equities and St George Margin lending. The rebate cheque is due each anniversary after joining the service, and will cover all trailing fees received during the year.

Although I'd always known that margin loan interest rates are around 1% higher than variable rate home loans, I hadn't realised that most margin lenders are paying 0.25%-0.35% trail to financial planners! As with most investments, if you invest directly in these products (without going through a financial planner or broker) you don't normally get any of this fee rebated (the investment manager simply pockets the trailing fee). Since I have investment loans of around $220,000 through LE and St George, assigning YourShare as my "broker" for these accounts should generate an annual trailing fee rebate of around $550. Not bad for a few minutes work.

There is at least one other similar trailing fee rebate service available, but although it rebates a larger percentage of trailing fees it also charges an annual fee. This makes it better for investors with a large portfolio, but would be similar (or slightly worse) in my case. Anyhow, once I get the first annual fee rebate cheque I'll be able to tell if the other service would provide a larger rebate, and can change broker nomination on my investments if that is the case.

Subscribe to Enough Wealth. Copyright 2006-2008

Building our Square Foot Garden

I bought more materials today for constructing DS1's vegetable garden. It's loosely based on Mel Bartholomew's "Square Foot Gardening" concept, but I may end up compromising on the soil composition. The official "Mel's Mix" is supposed to be 1/3 compost, 1/3 peat moss, and 1/3 vermiculite. I had 1 cubic meter of "vegetable soil" delivered last Wednesday (which is around 75% compost), so today I wanted to purchase some peat moss and vermiculite to make up the required mix. It turned out that peat moss is not readily available, so the closest I could get was Cocopeat, which has very similar properties to peat moss, but is produced sustainably from coconut husks rather than strip mining peat bogs. Although I could only buy it in small packages (a brick that makes up 15L of peat when rehydrated), this isn't too expensive at $1.81 per pack (around $120 per cubic meter).

The vermiculite was another story. Although it's available (in small packs), the cost is very high at $7.51 per 5L bag. That works out the $1,500 per cubic meter, which is ridiculous. I bought three packs, but unless I can source vermiculite in bulk for lower cost I'll have to use around 5% rather than 35% vermiculite in my soil mix.

I'm building two 5' x 3' wood boxes for the vegetable garden, which will fit nicely into the available courtyard outside DS1's bedroom window. I happen to have a few nice 88x44cm granite slabs (benchtops that someone was throwing out when remodelling a kitchen) that will make a nice access path between the garden boxes. Each box has a volume of 1/3 cubic meter and will provide 24 square "plots" for planting a variety of DS1's favourite vegetables.

I also bought a timer tap and a simple sprinkler, so DS1 can just turn on the timer each morning before school to give the vegetable garden a good watering a few days a week. On the days when watering by hose isn't permitted he can keep the plants moist using his new watering can.

Tommorrow I'll cut and assemble the pine garden boxes and give them a coat of marine varnish spray. The boxes will be sitting on a layer of leaf mulch and be lined with a damp course (to make the wood box last a bit longer). Since the varnish takes 8 hours to dry we probably won't be able to fill them with soil and start planting seedlings and seeds until next weekend. We're starting with a selection of carrots, onions, brocolli, cauliflower, corn and chinese cabbage. I'll have to buy a few potatoes with lots of eyes at the supermarket and leave them in the sun to see if any sprout and can be planted.

This vegetable patch looks like it will end up costing a few hundred dollars altogether in materials (it could be built much cheaper using second hand lumber etc) and take several hours work putting it together. It should provide lots of fun for DS1 (and some educational value), but I'll be interested to see how much produce we get from this small area, and will track the quantities and calculate their value (based on the local supermarket prices).



I'll post some before and after shots of the couryard and assembled garden boxes, then some photos of whatever produce we get by springtime.

Copyright Enough Wealth 2008

Is water frugality worth the effort?

There are many places on earth where water is a precious, finite resource. Sydney isn't one of them. Yes, Sydney recently had an extended drought - one of the worst in a hundred years - but our overall water storage never dropped below about 35%. Although this seemed very alarming at the time (the State government signed contracts to build a large desalination plant just before the last election, which is now being building but will probably never really be needed), it's actually a pretty good figure for the lowest point in storage. After all, if the low point was never less than say, 60%, you'd obviously have too much storage capacity.



Which brings up the obvious solution to Sydney's variable rainfall - more storage capacity. Our main dam (Warragamba) was originally planned in 1845, but construction was deferred until the severe 1934-42 drought got things moving. The dam was built in 1948-60, and it's capacity was actually reduced late last century when a new, lower spillway was constructed to guard against a "1-in-100-year" FLOOD!

Since Sydney has adequate, but highly variable, rainfall, there were plans for a second large dam to supply Sydney. Unfortunately the previous State Premier was a firm friend of the anti-dam green lobby, and declared part of the new dam site a national park in order to prevent a second dam being built.

So, we're stuck with an expensive desalination plant that will only be able to provide relatively small quantities of very expensive potable water during a severe drought. It also needs to be kept running the rest of the time (using expensive and environmentally unfriendly fossil-fuel generated power) in order to remain in working order. If we had a second dam of similar size to Warragamba our overall water storage would not have dropped below about 63% at it's low point, and we'd now be sitting at 80% of maximum capacity. A side benefit would have been some hydro-electric power generation to feed into the grid during times of high rainfall, when storage went above 90%.

Aside from the desalination plant, the government's main solution to solving Sydney's water problem during droughts is for consumers to "conserve" water. However, aside from the propaganda and peer-pressure value of small fines for "banned" water usage (eg. watering the garden on the wrong day of the week), there is actually little or no pricing signal used to encourage water conservation. For example, out last water bill was for average daily usage of 879 kL (down from 931 last quarter, and 934 the same time last year). However, out of the total $213.70, only $96.74 was "usage charge" - the remainder was for the general water service and sewerage service fees.

Therefore, in the past year we have reduced our water consumption by almost 6%, yet this would only reduce the bill by 2.7% (if water price and fees remain constant). The water bill was accompanied by a leaflet showing average daily water use targets for families of different sizes. For our household the target is around 750 kL/day. (They don't mention what the actual average figures are, or how an older house is expected to meet a target that is based on a modern house that uses all the latest water-efficiency devices!). If we somehow managed to reduce our water consumption by almost 15% to meet this target, our water bill would only go down by $14.66 (or less than 18c per day), or 6.9%! In reality, they are about to raise the water service pricing (to pay for the desalination plant!), so even if we cut our usage to the target figure we'll probably be paying more for our water bill this time next year.

Another example of government red-tape and ineffective incentives is the "incentive" offered to install rain water tanks for use as "grey water" (ie. flushing toilets, watering gardens etc.). Although quite large amounts are paid out by the government for installing a new rainwater tank, it's only available if you buy a brand new tank and get it installed by a licensed plumber. This means that you still end up with an "out of pocket" cost for installing a rainwater tank, and will take many years to recoup the cost through any water savings. Since the tank water can't be connected to the normal water reticulation system (as it isn't considered "potable" and isn't treated - some houses have dead birds, possums etc. on their roofs - yuk!), I can't see why a plumber is needed to stick a tank between your roof down pipe and the garden hose. I may install a small (preferably used) tank in our front garden to provide water for DS1's new vegetable garden, but it won't be eligible for the government subsidy.

Copyright Enough Wealth 2008

What to buy the 8-year old that has everything?

DS1 turned 8 today, so we've been watching out for suitable gifts the past couple of months. I don't go too frugal when it comes to presents for the family, but I also don't want to waste money on expensive plastic toys that get broken or discarded after a few days. He already has plenty of "father-and-son" things from previous birthdays, so this year I concentrated on items he can enjoy by himself with minimal supervision or assistance.

He'd received a small digital camera from my parents last Christmas, and had a lot of fun taking pictures at the zoo and other family outings. Unfortunately he'd dropped it one too many times, so it now has the bad habit of erasing all the photos from memory at random intervals. I spotted a more up-market digital camera (5 megapixel, 3x optical zoom, LCD screen, SD-card memory) on sale at Aldi recently, so we decided to buy it for his birthday as a "shared" birthday gift from his parents and grandparents. $159 split between four adults seemed quite reasonable. DW and I will make sure we handle the transport of this new camera, and just hand it to DS1 when he wants to take a photo!

He also likes gardening, although our previous attempt to grow some carrots in our rather poor garden soil wasn't a success. Last weekend I pulled out a couple of straggly plants from the flower bed in the alcove outside his bedroom window, and moved the edging to create a small vegetable patch (2.8m x 1.7m). I ordered a cubic meter of 'vegetable soil' (50% mushroom compost, 50% sand, soil, cow manure and ash) from the local garden centre ($77 delivered) which was delivered onto our driveway this morning for his birthday. I enjoyed telling him he was getting a pile of dirt for his birthday ;)

While searching for information about what vegetables are best suited for a child try cultivating, I came across the interesting site squarefootgardening.com which provides information on grid-based, raised-bed gardens which looks promising. The main benefit of this system is that is doesn't require any digging to try to "improve" your existing soil, and has been used for school gardening projects with great success. In order to mimic the special "Mel's Mix" (1/3 compost, 1/3 peat, 1/3 vermiculite) for this type of garden I'll need to add some bags of peat and vermiculite to the "vegetable soil" - a project for this weekend. I'll also need to finish preparing the vegetable patch by clearing the remaining grass, putting down a layer of leaf mulch, and using some boards to create a couple of 6'x4' garden boxes with an access path down the centre.

My parents have bought a small "greenhouse" for propagating cuttings and seedlings, and will be getting him some small gardening tools. I'll be shopping for seed packets with him next weekend. With any luck we may end up getting fresh, organic vegetables from DS1's garden later this year. As an added incentive I may get DS1 to weigh out his "produce" and I'll pay him the going rate for his vegetables (based on current supermarket prices). The SFG website also mentions selling organic produce as a hobby business, so he may add this sideline to his busking "business".



Copyright Enough Wealth 2008

Pinching pennies

Apparently the commodity boom has spread from oil, gold and other 'hard' commodities to 'soft' commodities such as corn and rice. Like most commodities, the local price of rice is affected by global supply and demand, so it seems likely that the price of rice in our local supermarket will go up more than inflation in the next few months. Since we had almost used up the 10kg bag of rice we had at home, I decided to stock up a bit. Usually the cheapest we can get good quality long grain rice is around $10 for a 10kg bag, so I bought 4x5kg bags for $5.02 each. I'm tempted to buy a few more bags, as a price rise seems a near certainty, but it doesn't pay to overstock and risk spoilage. While rice stores well, it does a have a shelf life of 24+ months.

While I was rice shopping I also had a look at the price of the same rice in smaller packs. A 250g bag was 'on special' for $1.50. This means that buying rice in 250g bags costs 6x as much as in 5kg packs!

Copyright Enough Wealth 2008

Are you a super saver?

Can I Get Rich on a Salary posted about the story of Shawn Larsen who is 47 years old and planning to retire in a couple of years at age 50. He has accumulated assets of $300K in his retirement fund, $680K in mutual funds, plus he has some equity in his home (although it doesn't say how much, just that he's still paying off a mortgage. The average house price in the US would suggest he may have $200,000 or so in home equity). He also will get a $30Kpa pension, which is equivalent to having another $750,000 in retirement funds (assuming a conservative 4%pa withdrawal rate). So, his total deemed NW might be around $2m, which is pretty impressive for a 47 year old wage earner.

The Money article and Can I Get Rich appear to think that saving 50% of a $180,000pa salary is an amazing feat, but I don't think it's that much of an achievement for someone on a relatively generous salary - especially for a single guy with no dependents. It may indeed be extraordinary (after all, a lot of US and Australian citizens his age would have a negative or negligible net worth, and have a negative savings rate due to consumer debt burdens), but it isn't all that hard to achieve if your maintain a modest, but comfortable, lifestyle.

For example, I currently save $30Kpa out of my salary (35% of gross), or if you include the 9% compulsory employer retirement contribution (SGL) that we have in Australia, 40% of gross. And I'm supporting a family and paying off a mortgage on that salary. As my salary has increased over the years I've slowly increased the proportion I save, and we live comfortably enough now that any future raises above inflation could be added straight onto my savings.

DW currently works 2 days per week, and is saving 53% of her pre-tax salary into her retirement account, and another 35% goes towards our home loan repayments (which we split 50:50). That doesn't leave her with much "play" money, but since I pay the utilities, food, kids school expenses etc. she can still afford the odd indulgence.

So, if I was earning an extra $90,000+ on top of my current salary (like Mr Larsen) I'd be adding it all to our investments. It's very hard to save and invest if you're in a low paid job, but it shouldn't be a stretch for anyone earning above the average wage.

Copyright Enough Wealth 2008

How I cut my phone bill by 90%

We're pretty frugal when it comes to telecommunications. DW uses a prepaid "calling card" to make overseas calls - she just calls a local phone number and enters her account number and pin to connect overseas for very cheap rates (a few cents per minute). And we have a pair of "his and hers" matching mobile phones I bought a couple of years ago - they were "free" when we signed up for the $14 per month plan for each phone (which includes $10 of included calls). The benefit of having matching phones is that we have two chargers, so we can have one at work (we both work in the same office) and the other at home - saves on lugging the charger around with us. The two $14 plans also pool the included call value, so we can make up to $20 worth of calls each month without paying any more than the basic plan fee.

We also have a landline phone (I've had the same phone number for 40 years and kept it when I moved house), but it doesn't get much use - last month the line rental cost $32, but we only made $1.80 worth of phone calls all month!. Because the landline is from my ISP it does entitle me to a $10 monthly discount off my monthly internet bill, but that isn't enough to make it worth keeping the landline. So today I called the phone company to arrange for disconnection. After explaining why I wanted to close our phone account, I was offered a monthly $20 discount for the next six months. Combined with the $10 internet discount this means that our phone line is now effectively going to cost $2 a month rather than $22. A saving of 90% just by making one simple phone call.

Copyright Enough Wealth 2008

Frugal gift ideas: Personalised wall calendars

Vistaprint is offering Wall calendars for sale. I got some free business cards for my parents alpaca farm business as a sample from the US Vistaprint several years ago, and found them to be good quality. If they'd ever sold enough animals to require more business cards I'd have been happy to order them from Vistaprint! I haven't tried out the Australian Vistaprint service yet, but the custom photo desk calendars look interesting as a gift idea for next Christmas. They are only $10.99 each (plus a one-off image upload fee of $7.99, which seems a bit much). Since you can have a different photo image on each month, it would be a nice present to send to my relatives overseas. Being a calendar it's more likely to be useful than sending a personalised mouse pad or mug! You can also add personalised text to individual calendar dates, so I could insert reminders of the kids and other relatives birthdates, anniversaries and so on.

Copyright Enough Wealth 2007

Buying New or Buying Used?

Although I can afford to buy new stuff without having to put it on credit, we're not averse to saving money by buying used or freecycled items. For example, we bought a used highchair and child seat when DS2 was born, and I've collected free garden furniture that was being thrown out by neighbours during the quarterly council clean up. (The plastic garden chairs were the same design that we already had, and were in excellent condition, just slightly faded. They're fine for seating extra guests during a BBQ party, and new ones would have looked exactly the same after a few months).

However, sometimes it's worth paying a bit extra to buy new, even if you could save some money buying second hand. For example, DS1 is starting grade three this year, and I want him to develop good studying habits. So far he doesn't get much homework from school, but he has a list of five things to do every day*, which takes him half and hour when he concentrates. This year he will sit the grade three basic skills test (math and English) at school, and in the middle of next year will sit the selection test for entry to opportunity class in grades 5 and 6. At the moment he tries to do his study in the family room, but it is hard for him to concentrate when DW or I are playing with DS2 there at the same time. Therefor we've bought DS1 a Tempo study desk for his bedroom, which I'll assemble tomorrow. It was on special for $299 (normal price is $399), and as it has an in-built filing cabinet and computer shelf it should be suitable for his use throughout high school and even during uni (if he commutes to a Sydney university while living at home).



A second-hand desk would save $100 or $200, but I feel that taking DS1 to the store to select a new desk for him helps show how serious we are about his study, and makes his study time more exciting (we all like getting a new "toy" - even if it is a bit of office furniture!). Getting a second-hand desk with some other kids initials carved in the draws just wouldn't provide the same buzz.

Anyhow, if DS1 does study hard and get into OC for years 5-6, he is more likely to get a full or half scholarship to Sydney Grammar school (one of the better Sydney private schools), which would make it a good investment.

* Read part of a book (currently one of the Hardy Boys series), do 15 minutes music practice (piano, recorder and clarinet), read a few pages of his Macquarie concise dictionary, a few pages of children's encyclopaedia, and do a few pages of "Jump Math" book 3.

Copyright Enough Wealth 2007

Frugal Christmas

In previous years we've gone to my parent's place for Christmas Eve and had a big turkey dinner there, taking the Christmas presents with us for DS1 to open while visiting. This year my folks were planning to travel back to their farm over the Christmas/New Year period so we had planned on having just a simple Christmas at home. My parent's changed their plans at the last moment as they have to stay in Sydney to take their dog to the vet for a knee operation, but we're not going to bother with a big Christmas dinner - just drop by for the kids to visit and get some presents from Grandma and Grandpa (I know that they've bought a large wooden train play table for DS2, which DS1 will also enjoy playing with, and I'm sure they'll have bought a few other toys for the kids). For Christmas Day we may organise a BBQ around the pool, as it's often 40C (100F) or so on Christmas Day in Sydney.

At home we only have a small $20 artificial tree (with fibre optic lighting built in). It's surprisingly attractive and only takes a couple of minutes to unpack and set up. Due to the built-in fibre optic lights it doesn't even need decorating, although DS1 has added a few of the Christmas decorations he's made at School or at the local church's Kids Club. Such a small tree doesn't take up too much room in the lounge room, and serves the purpose of providing a focal point to accumulate all the wrapped Christmas gifts.

I've decorated the house with a few Christmas lights - each year I buy one or two more boxes of lights for $10-$20, so I'm slowly building up a collection. So far I've spent around $100 on Christmas light over the years. I've strung most of them in the tree house outside the front of the house and along the porch railing, which is easy to setup and remove. Across the street one house has set up dozens of light sets around the garden and on the roof of their house. That would be way to much expense and trouble for me. Some people seem to go overboard with lighting - there was one Sydney house on the news recently where a man had spent hundreds of hours and $12,000 setting up a massive light and sound show of Christmas decorations! I really don't think Christmas decorating should be treated as a competitive sport.

As DS1 already has lots of toys from previous years (some of which we haven't even had time to play with - such as his Lego robotics kit), I've been more modest with the Christmas presents this year. I bought a large multi-colour inflatable swimming pool with see-through "portholes" ($50) which I think DS1 can use as a floating "fort" within our backyard swimming pool. I also bought a couple of large "super soaker" water cannons ($10 each) so he and his friends can play "capture the fort" in the swimming pool during the summer school vacation. I also bought him the latest Harry Potter DVD (ex-rental from the local video hire store, $14) and today I bought a twin-engine, rubber-band powered model biplane which should be fun to assemble and fly (no glue required)for $20. Altogether this adds up to around $100 for DS1's Christmas presents, and DW has bought a couple of toys for DS2 (who recently turned one, so will probably get more fun from unwrapping his presents that playing with them!).

For DW and my parents I've just wrapped up a $50 gift card for each of them. After 45 years I've already given my parents every affordable present that I thought they would like, and it had gotten to the stage of just buying presents for they sake of having something to give them. In DW's case I gave her some diamond earrings last year with the understanding that future birthday and Christmas gifts would be inexpensive. This also means that DW only has to buy my a small "token" present for my Birthdays and Christmas, which suits me as I really can't think of any presents I'd like to receive.

Since we won't be cooking a massive Christmas dinner or attending any Christmas parties (except maybe the local Christmas "street party") our total Christmas expenses this year will be less than $500 all up.

Copyright Enough Wealth 2007

Looking after the Pennies (Cents)

There's an old saying "Look after the pennies and the pounds will look after themselves" [ref - I find it funny that this is attributed to J.Paul Getty when I'm sure it was a common saying in English way earlier than that.] which is still one of the more useful money truisms. There are many ways to save small amounts day-to-day the overall add up to "fine tune" our investment performance, maximise income and minimise expenses.

We've moved our superannuation from the default provider (BT/Westpac) used by our employed into a self-managed superannuation fund. This should save around 1%pa in administration and management fees over the long term, which is quite a lot now that our combined retirement funds are heading towards $400,000. We were a bit unlucky in the timing of the move from the BT account into our SMSF - it was done during a period of considerable market volatility which resulted in our existing investment being cashed out when the market was down in August, and the funds not being invested until a couple of weeks later, by which time the market had recovered most of it's recent decline. I attempted to minimise the risk of reinvesting during a temporary "bounce" by using dollar cost averaging (DCA) over a couple of months, but the market continued to rise during this period and is now declining again - the worst possible trend when using DCA. We should still end up ahead by using a SMSF in the longer term, but this "timing risk" has reduced the benefit. Not all good ideas work out as planned.

On a smaller scale I recently opened a "Dragon Direct" online savings account which I can use to invest surplus funds from our home loan payment account. The idea is that the monthly rent payments from our tenant are often not needed for the mortgage payments for a couple of weeks, so we can earn some extra interest by transferring the "surplus" funds into the online savings account where it will earn around 6% (the normal savings account used to cover mortgage payments only pays around 1% interest). So far it hasn't worked out as well as I'd hoped - I forgot about an interest payment for my portfolio loan that was due to come on the 8th of the month, so the bank charged us a $38 overdraft fee to cover the interest payment out of the normal savings account. Since I had more than this amount sitting in the Direct Savings account at the time it was most annoying (and won't happen again!). This one fee has cost as much as we'll earn in extra interest using the online savings account for two months.

I will be opening up new BankWest kids savings accounts for the boys (DS1 and DS2) in a couple of weeks (as soon as a new BankWest branch opens nearby). These accounts will pay a whopping 10% interest on the kids savings, provided they deposit between $25-$250 each month and make no withdrawal during the month. Both kids already have money sitting in St George "Happy Dragon" savings account which pays a low interest rate, and DS1 has a "Dragon Direct" account earning 6.5% which holds the proceeds from his paper round earnings. So, moving $250 each month into the new BankWest accounts will earn them at least 3% pa more on the money in the BankWest account. After one year this would be $3,000 for each boy, meaning they're earning an extra $90 pa in interest. Of course there will be a few minutes spent filling in paper work to open the accounts, and setting up automatic transfers of funds between accounts each month, but every little bit extra helps.

And, of course, the usual things like brown-bagging lunch to work, buying petrol on the day of the week when it's usually cheapest, doing the shopping on the way home when I stop to collect mail from the post box, rather than making extra trips in the car, and so on.

ps. Looking up the origin of the idiom I found an interesting list of money expressions.
Copyright Enough Wealth 2007

Raising Frugal Kids

Yesterday we saw an ad for a Cyndi Lauper concert (next Feb/Mar in Sydney) and DW and I were discussing maybe buying tickets for the concert. DS1 asked how much the tickets would cost and I said around $80 each for averaged seats and maybe $200 each for good seats (it turns out the pricing is actually $99 and $135). He straight away asked how much our Cyndi Lauper CDs cost! We had to explain that, yes, it's usually more economical to just buy the CD and listen to it many times rather than buy a concert ticket, but it's OK to treat yourself on occasion, if it's something you really enjoy. There's a fine line between being frugal and being a cheapskate who gets no pleasure out of life and ends up the richest person in the cemetary.

Copyright Enough Wealth 2007

Frugal Living: Save Money with DIY Projects

Although my grandfather was a plumber and did carpentry as a hobby, my dad and I are strictly amateurs when it comes to home repairs and improvements. However, you can a lot of money with DIY projects compared to buying ready-made furniture such as bookcases, or having to pay tradesmen to hang a door or fix a toilet cistern. Do-it-yourself projects can also be a great hobby and stress reliever - but only if you know what you're doing!

Although DIY is a potential money-saver, things can easily get off-track if you don't know what you're doing and don't know where to turn for help. My dad has been renovating the family home in preparation for selling it and moving to the country. But what started out as a project that should take 3-6 months to complete has now dragged on for over three years! Some tasks, like finishing a ceiling or laying floor tiles can take forever if you don't know the "tricks of the trade" - knowledge is power!. Just a few secrets can save you hours of wasted effort and materials.

If you are thinking about a home improvement project, check out DoitYourself.com. It's is an open, free community with articles and many active forums on DIY home improvement topics. So, whether you are renovating your own home, starting a project, or even buy resale homes to renovate and resell at a profit, you should visit to DoItYourself.com and consider buying the "DoItYourself" DVD.

Copyright Enough Wealth 2007

Frugal Living: Wet Pet

DS1 was interested in getting a pet, so as a first attempt I decided to get him a small aquarium with one fish to look after. Rather than buy a tank from the pet shop, I simply chose a nice cylindical salad bowl from the discount housewares store. For only $5.00 it was lots cheaper than the smallest perspex tank available in the pet stores, and it looks very stylish. Being microwave and dishwasher safe it should cope with having a small 7.5W immersion aquarium heater. For decoration we simply washed some especially pretty marbles that we already had collected, and put them in the bottom of the "tank".

The trick with beginner aquaiums is too not buy one that is too small - it's a lot easier to keep fish healthy if there is plenty of surface area and not too many fish. As DS1 is seven years old he should be able to care for and feed the fish - it only needs a partial water change once a week with aged (dechlorinated) tap water and twice daily feeds. I bought specialist betta food pellets and some free dried blood worms - a few worms in the morning and 2-3 of the tiny food pellets each evening should keep the fish happy and not overfed. As DS1's favourite colour is green we visited five different pet stores/aquarium shops before finding one that had a nice pale emerald body but red and blue fins. There are much more spectacular green betta splendens bred by hobbyists, but you tend to get mediocre quality fish in the typical pet store. If DS1 manages to keep the fish alive for the next two months I'll think about buying a female betta - siamese fighting fish have quite interesting breeding behaviour with the male blowing a bubble nest and looking after the hatched fry until they become free swimming (at which time he'll often eat them, so you need a some spare compartments to keep the male and female adult fish when breeding bettas). If he's lucky (and carefuly looking after the fish) he may be able to breed some fish and sell them as a hobby.

All up the cost was:

"Tank"     $ 5.00
Heater     $39.95
Fish       $12.00
Fish Food  $15.05
           =======
Total:     $72.00

It paid off to compare the prices for the fish food and heater as we went around looking for a suitable fish - the heater was bought for $39.95 after seeing the same one in other shops for $49.00. Similarly we were able to buy the "bulk" 20g pack of Hikari Betta Biogold food pellets for $15.05 after only seeing the smaller 2g pack in other stores for between $7 and $8. Assuming the fish lives long enough to eat the entire pack it will work out to be good value.



Copyright Enough Wealth 2007

Frugal living: Educational Coaching for Kids

Many parents give their kids education highest priority, and a lot will resort to expensive out-of-school coaching to help them get better marks and/or pass selective school tests. Things were different when I was in primary school - you just sat for the selective ("Opportunity Class") school tests in Year 4, and if you did well on the test you were offered a place. These days many parents spend a lot of money on professional "coaching" classes or computerised study assistance programs. But there isn't much evidence that this is money well spent - in fact some recent reports suggest that having kids spend too much time on repetitive "coaching" sessions after school can get them burned out and perform worse on selective school tests than they would have without any coaching at all!

I think a small amount of preparation for selective tests is probably worthwhile - knowing what sort of questions to expect in the test, practicing the exam format and getting used to the time allowed and exam technique can only help the child relax and do as well as possible "on the day". So, rather than spend a small fortune of coaching classes I've just bought a book of practice material and some sample tests which I'll work through with DS1 over the next couple of years (the exam is in year 4, but DS1 is only in year 2 at the moment).

Another fun activity which will help DS1 academically is spelling bee practice. Although spelling bees aren't nearly as big a deal in Australia as they are in the US, there has been a state-wide "Premier's" Spelling Bee running in NSW for the past couple of years. Entries for this year's competition closed last month - the school DS1 attends wasn't aware of the Spelling Bee until we told them, and was quite pleased to learn about it. DS1 was keen to compete in the yr 3-4 group, so the school decided that he will be able to compete against the kids in years 3-4 for selection to represent his school. The spelling lists used for the early rounds of the competition are available online, so DS1 will be able to practice learning them. A good, cheap, fun activity that will help him academically.

Copyright Enough Wealth 2007