Around here - More on financing and investing, paying off debt and budgeting

We are now into February and I have already failed on my food budget for the month of January.  You only have to visit the supermarket 4 extra times in a month and spend $50 a visit [which isn't hard by the way] and you'll be over budget by $200.  It was school holidays so February should be easier however I will have to make a bigger effort this month because food is a big cost.  Given the recent drought, fires and some flooding the cost of produce is only going to increase in the coming months.

I recently wrote a blog post that linked to some great blogs about FIRE [Financially Independent Retire Early] and today I came across an Australian lady Tracey Edwards who has some great videos on budgeting, dividend investing as she is "FI" Financially Independent.  The "Retire Early" part of FIRE mostly means that you have the choice to work or not to work.  Once people become FIRE if they are in a job they don't like, they can quit, or they can choose to work part time 2-3 days a week out of enjoyment for the social connection and job satisfaction because they are not in a cubicle doing a job they don't like for 40+ hours a week to pay the bills.  What FIRE does gives you is choices. I have spoken about Frugalwoods blog  before.  Here's a 7 minute video about their journey.

Going back to Tracey Edwards she has written several books on investing in the share market, no spending and her Youtube channel has lots of videos on her monthly budget, how to pay off your credit cards or pay down debts etc including her share strategy which are great.

Here is a simple video on if you pay only the minimum monthly payment on a $5,000 credit card it would take you 33 years to pay it off which is more than most home loans.  We, as adults probably know this already however if there any young high school leavers who think getting a $1,000 credit card is a good idea show them this 11 minute video.

Having worked for an Accounting firm for over 12 years early in my career I learnt a lot about shares, property, negative gearing, interest rates [back in the day my first home loan of $100,000 was 14.4% interest and I was so excited because it had come down from 17%] - yes....who could afford a home loan these days with those sorts of interest rates however through the years no matter what the interest rate is people still buy houses.

From watching Oprah I learnt about Dave Ramsay and Suzie Olman along with Australian Scott Pape of The Barefoot Investor there are loads of great information about managing money which is one thing I want to pass on to my kids.   Everything I wished I knew when I was there age.  Soon they will have part time jobs while at high school and even more so when they have full time jobs after University.  Their first big purchase they will buy will be a car and after that, I will be encouraging them to start an "investing fund"  and "an emergency fund".  Good people get retrenched all the time and usually unexpectedly or if they are in a job they don't like they need to have 6 months of money saved for rent, petrol, groceries, car insurance, electricity, phone etc.  When you first move out of home, it's only then you realize how much "living at home" saves you.  Free internet at home for one, free electricity, free food etc. There are lots of expenses when you share a house with other young adults and no one likes to wash the dishes, clean the toilets or mop the floors.....

I will teach them about the share market and investing long term even with $1,000 savings like "The $1,000 project book.  I want them to have a better understanding of money than I did as a young adult.  We have a board game called Megabucks which is actually about the sharemarket and we have played it a few times and the difference in your stock when you have to buy high or sell low is a good visual thing for them to see.  Investing for them as young adults should be for the long term and not the short term.  You can still buy this game second hand and I can highly recommend it for family entertainment.  Think Monolopy however you are buying a "chair/seat on the board" of companies instead of houses and property.  It's a great game and my sisters and I have been playing it for years.

Tracey Edwards shows you in this video how to pay off 3 credit cards using 3 different methods the the benefits of each in time to pay them off and interest charged.  As she says the method is a personal one and if you are tackling debt what would get you most excited about.  ie paying off the smallest balance to get rid of a card and feel like an achievement or pay off the highest credit card interest rate.  Whilst the video is about credit card debt it could relate to any debt.  This video is 13 minutes long.

Tracey has monthly budget videos which she lists her income and expenses each month however I prefer to do mine a little different and I don't have $7,000 worth of dividend income however she shows you how easy budgeting can be.  I also don't know how her petrol is only $60 per month given it can be up to $1.71 per litre in Queensland although I have just filled up while it was $1.27 a litre.  She works from home however I would never have a $60 a month fuel bill and I don't do a lot of driving.  The point is she does a monthly budget with her income and expenses and if a $360 electricity bill is that month she includes it that month.  Personally I have found the best way to budget for the bills is annually [I have a spreadsheet with my bills listed down the side and the months across the top] and all the bills go into this spreadsheet and it's totaled up and then the figure is divided by 12 so that amount of money needs to be put into the bills budget every month.

I recommend you check out Tracey's videos as I'm sure you will learn something.  They are short videos so you can grab a cuppa and watch 1-2 videos at a time.