Note from the Editor:
This article was kindly written for the SDC by member Pete M.

My recent ‘Look at Life’ story entitled CONTROL has raised a number of issues by SDC members.

Briefly, the story pointed out how easy it is today to purchase anything you want when you want it. The actual cost of the item often escalates depending on credit card fees, interest rates and other charges.

My concern was that the difference between what our real needs are as against our wants has become deliberately hazy, and our use of self-control in relation to our spending can be strengthened by deliberately saying NO to ourselves occasionally.

The responses by the members were all positive. One member stated, ‘If I want something, I pay cash. Otherwise, I go without.’ The member proceeded to outline a situation where a family member had overspent on luxury items, trying to outdo their friends. They had come to grief when their financial situation did a sharp downturn and they had to seriously reassess their situation.

Are you confident budgeting money? Image Credit: Shutterstock

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[mylittletibbies]

I have budgeted now for many years
Every year I work out my expenses for the next year, including birthday presents, housekeeping
etc as well as the usual insurances, rates, electricity and such.
I divide this amount by 26 to give me my fortnightly expenses and make sure I put this amount aside before spending on anything else.
I never have bills I can't pay.
I keep a book divided into columns, in, out, bills, keycard, total. The first thing I do on pension day is transfer the bills money into that column and that money is not touched for anything except to cover the items on my budget. I withdraw cash for my housekeeping. I find it is much easier to keep track of than tapping my card willynilly.
I can then see the amount left in the keycard column is all I can spend on incidentals. I write down every item I spend, each day. It doesn't take that long and I always have full control of my finances and financial peace of mind.
I also make sure I bank something every week.
I own my own home, car, etc and have a comfortable bank account. Some people tell me I'm lucky but it hasn't had anything to do with luck.Its all about control. Learning to control your finances, not the other way around.

 

[PattiB]

When my boy was about 6 or 7 he would observe me writing cheques (remember them) or going to the bank to withdraw cash & assumed that’s how you got the money for whatever you wanted. We had to have a serious discussion the day he wanted something & suggested I wrote in my special book (cheque book) to pay for it. I explained to him about the bills we had to pay as well as buying food, clothes, things for school etc. His little brain was understandably shocked but after that he would save his money for things he really wanted, usually Matchbox cars. It made him aware of how you work for money & only buy what you need and can afford. He still watches his budget even though he has a high paying job & doesn’t go without much & is very generous with his dad & I often gifting us the much maligned Apple products. He says it’s payback for everything we provided for him. We are very lucky to have him.

 

[Reet]

We were taught as kids that if you want something badly enough you can save up until you have enough money to pay for it. Otherwise you can go without.

 

[upmack]

When my boy was about 6 or 7 he would observe me writing cheques (remember them) or going to the bank to withdraw cash & assumed that’s how you got the money for whatever you wanted. We had to have a serious discussion the day he wanted something & suggested I wrote in my special book (cheque book) to pay for it. I explained to him about the bills we had to pay as well as buying food, clothes, things for school etc. His little brain was understandably shocked but after that he would save his money for things he really wanted, usually Matchbox cars. It made him aware of how you work for money & only buy what you need and can afford. He still watches his budget even though he has a high paying job & doesn’t go without much & is very generous with his dad & I often gifting us the much maligned Apple products. He says it’s payback for everything we provided for him. We are very lucky to have him.

What an inspiring story Patti B. It obviously shows how important it is to teach our kids about money and saving from a young age. In your case it has paid off handsomely. Pete M.

 

[upmack]

We were taught as kids that if you want something badly enough you can save up until you have enough money to pay for it. Otherwise you can go without.

Reet, sadly this type of instruction doesn't seem to be so popular today. Pete M.

 

[upmack]

I have budgeted now for many years
Every year I work out my expenses for the next year, including birthday presents, housekeeping
etc as well as the usual insurances, rates, electricity and such.
I divide this amount by 26 to give me my fortnightly expenses and make sure I put this amount aside before spending on anything else.
I never have bills I can't pay.
I keep a book divided into columns, in, out, bills, keycard, total. The first thing I do on pension day is transfer the bills money into that column and that money is not touched for anything except to cover the items on my budget. I withdraw cash for my housekeeping. I find it is much easier to keep track of than tapping my card willynilly.
I can then see the amount left in the keycard column is all I can spend on incidentals. I write down every item I spend, each day. It doesn't take that long and I always have full control of my finances and financial peace of mind.
I also make sure I bank something every week.
I own my own home, car, etc and have a comfortable bank account. Some people tell me I'm lucky but it hasn't had anything to do with luck.Its all about control. Learning to control your finances, not the other way around.

Indeed, your financial control is certainly not about luck. Well done mylittletibbies. With the increased costs and charges we are experiencing today I find I have had to review my annual budget regularly to ensure it remains practical. Pete M.

 

[mylittletibbies]

Indeed, your financial control is certainly not about luck. Well done mylittletibbies. With the increased costs and charges we are experiencing today I find I have had to review my annual budget regularly to ensure it remains practical. Pete M.

Yes, you're right. I found I needed to do a new one after getting a substantial increase on car insurance, despite the fact that the car is worth less this year than last and I had made no claims.
House insurance went up 50%despite the fact that there is Buckley's chance of floods in the wheatbelt.
Tried quotes from several insurers but wasn't able to get any cheaper.

 

[upmack]

Yes, you're right. I found I needed to do a new one after getting a substantial increase on car insurance, despite the fact that the car is worth less this year than last and I had made no claims.
House insurance went up 50%despite the fact that there is Buckley's chance of floods in the wheatbelt.
Tried quotes from several insurers but wasn't able to get any cheaper.

Because of the heat and high humidity over the past few months the use of a ducted air con system skyrockets the electricity bill. Pete M

 

[mylittletibbies]

Because of the heat and high humidity over the past few months the use of a ducted air con system skyrockets the electricity bill. Pete M

Luckily I invested in a 6.6kw solar system so my bills aren't too high.
Thank goodness as the aircon has been working overtime. 43 here yesterday, 44 today.

 

[MariaG]

I have budgeted now for many years
Every year I work out my expenses for the next year, including birthday presents, housekeeping
etc as well as the usual insurances, rates, electricity and such.
I divide this amount by 26 to give me my fortnightly expenses and make sure I put this amount aside before spending on anything else.
I never have bills I can't pay.
I keep a book divided into columns, in, out, bills, keycard, total. The first thing I do on pension day is transfer the bills money into that column and that money is not touched for anything except to cover the items on my budget. I withdraw cash for my housekeeping. I find it is much easier to keep track of than tapping my card willynilly.
I can then see the amount left in the keycard column is all I can spend on incidentals. I write down every item I spend, each day. It doesn't take that long and I always have full control of my finances and financial peace of mind.
I also make sure I bank something every week.
I own my own home, car, etc and have a comfortable bank account. Some people tell me I'm lucky but it hasn't had anything to do with luck.Its all about control. Learning to control your finances, not the other way around.

A person after my own heart.
I am a budgeter as well. I, however, love spread sheets. Excel is used for lots of things in my house.
I even keep track of groceries daily costs and fuel daily cost over each calendar year. It's amazing how you can choose to change behaviour based on the writing being on the wall, or in this case, the spread sheet.
I also like lists.
Apart from the mandatory grocery list, I always do lists, even for menial errands. Doing this seems to be a mental dam against impulse buying.
Whatever way we do it, I find I lose control if I don't give myself a chance to see it all on paper.
It's good to feel in control.

 

[PattiB]

Luckily I invested in a 6.6kw solar system so my bills aren't too high.
Thank goodness as the aircon has been working overtime. 43 here yesterday, 44 today.

Was just speaking to my son who lives in Perth & he said it’s been so hot with hot nights which he dislikes. I’m sure everyone’s aircons have been working overtime. We were laughing that you’re cooling down to 31 tomorrow when most Tasmanians would freak out at facing such a high temperature.

 

[Reet]

When my boy was about 6 or 7 he would observe me writing cheques (remember them) or going to the bank to withdraw cash & assumed that’s how you got the money for whatever you wanted. We had to have a serious discussion the day he wanted something & suggested I wrote in my special book (cheque book) to pay for it. I explained to him about the bills we had to pay as well as buying food, clothes, things for school etc. His little brain was understandably shocked but after that he would save his money for things he really wanted, usually Matchbox cars. It made him aware of how you work for money & only buy what you need and can afford. He still watches his budget even though he has a high paying job & doesn’t go without much & is very generous with his dad & I often gifting us the much maligned Apple products. He says it’s payback for everything we provided for him. We are very lucky to have him.

I wish all parents would bring up their children the same way you obviously did. They might appreciate things better as they grow older.

 

[Staffordshire Whippet]

‘Most people do not know the difference between wants and needs.’

It's also remarkable how many people don't know the difference between Price and Cost, too.
Something bought "cheeeeeeap!" can wind up costing you a bomb.
Caveat emptor.

 

[Catherines]

We started our marriage 56 years ago by budgeting. Yearly, quarterly, monthly, weekly, were all broken down into 26 fortnightly payments as that is how my husband was paid. We put that money aside diligently, only bought our bed, enough linen, some kitchen items and some months later a lounge suite (on HP) and a little later a dining table and chairs (also on HP), hired a B&W TV for years. As our 3 children arrived they got the cot, then a bed but we all sat at the breakfast bar for years until the dining table arrived after saving hard. BUDGET, BUDGET is the way to bring up your children and instil this method in them. Once our children started working, and were still living at home, they had to pay a little towards 'board' - not much, but this was to teach them nothing comes for nothing - everything has a price.

We have paid off our home, own our car and everything single thing in our home, have installed and paid for solar panels which are now paying for our electricity in summer with a refund cheque at the end of every year; one son has paid off his home also but, unfortunately, one has little to show and a daughter is now in the process of a separation. We are looking at ways to house her and her three teenage children until she can find a rental and get what her husband (the perpetrator of infidelity) has to pay her. We are scrambling to make enough room to house them in our home for a while and have told her we will pay her rent for a few weeks or, if necessary, a couple of months until her financial situation with her ??husband?? is settled. All this has been possible through diligent budgeting and not wanting, just needing over 56 years.

 

[Reet]

We started our marriage 56 years ago by budgeting. Yearly, quarterly, monthly, weekly, were all broken down into 26 fortnightly payments as that is how my husband was paid. We put that money aside diligently, only bought our bed, enough linen, some kitchen items and some months later a lounge suite (on HP) and a little later a dining table and chairs (also on HP), hired a B&W TV for years. As our 3 children arrived they got the cot, then a bed but we all sat at the breakfast bar for years until the dining table arrived after saving hard. BUDGET, BUDGET is the way to bring up your children and instil this method in them. Once our children started working, and were still living at home, they had to pay a little towards 'board' - not much, but this was to teach them nothing comes for nothing - everything has a price.

We have paid off our home, own our car and everything single thing in our home, have installed and paid for solar panels which are now paying for our electricity in summer with a refund cheque at the end of every year; one son has paid off his home also but, unfortunately, one has little to show and a daughter is now in the process of a separation. We are looking at ways to house her and her three teenage children until she can find a rental and get what her husband (the perpetrator of infidelity) has to pay her. We are scrambling to make enough room to house them in our home for a while and have told her we will pay her rent for a few weeks or, if necessary, a couple of months until her financial situation with her ??husband?? is settled. All this has been possible through diligent budgeting and not wanting, just needing over 56 years.

i and my siblings were taught to save enough until we could buy the things we really needed. We were encouraged not to buy on HP as it could involve interest which means you end up paying more that the item is worth.

 

[Catherines]

i and my siblings were taught to save enough until we could buy the things we really needed. We were encouraged not to buy on HP as it could involve interest which means you end up paying more that the item is worth.

I do agree with the HP interest payments which meant eventual cost was more. But when we could eventually afford to pay outright, that is how we worked our money. There was, and still is, none of this ‘WANT’ attitude. When we go, hopefully to that home in the sky, our children and grandchildren will have a home with items they know we saved for and needed, so we hope they will appreciate that.

There are now a few other mementos from our travels overseas over the years, but we always saved to buy, probably not ‘needed’ items but things we could afford as reminders of our travels. We don’t have a massive TV that hangs off the wall just two small ones for us to watch our diverse range of programs. I was once asked by my son’s partner when were we going to ‘upgrade’ our TVs to larger ones - my reply, ‘why fix what isn’t broken’, besides the available space for a TV is just so big and no bigger (no large available wall space), and my chair is only 1.5metres away.