Can't work out where the $ leak is (part vent)

Deep in the throes of a financial restructure & debt consolidation at the moment, and am keen to get a good grip on the $$ and where they are actually going. We have next to no disposable income at the moment, which makes no sense because I returned to work 6 months ago, and even after hefty increase in childcare fees, and fall in FTB, there should be at least a couple of hundred floating about at the end of the fortnight.

I found out that the banks now have a set amount that they say a 4-person family needs to live on...a it's different for each of the banks, but roughly around 2500/month. That's all the essentials outside of rent/mortgage/debt commitments. So I look at that figure and think...where's all the rest of the money going???

???

We eat cheap meat and go veggo several nights a week, scrimp on the groceries, we don't have a shoe/handbag/clothing fetish, we don't smoke or go to the pub or gamble, we stopped buying books/magazines/CDs eons ago, the dog mostly eats scraps, we all take packed lunches, I take the bus to work (no parking fees), our one real indulgence is the cleaning lady for $61 once per fortnight (which buys a whole lot of domestic harmony).

So where has the rest of my wealth gone?

I would love to hear from any of you who have identified leaky parts of your budgets (ie insurance? electricity? phone plan?) and how you went about cutting those expenses down.

MD - let me know when you find it as I am sure we have money going to the black hole too. Now I am just curious why is your cleaning lady $61....why not $60? Whats the extra $1 for? hee hee just satisfy my wondering mind!!

I find our money leaks away in little drips - $5 here, $7 there, drip, drip, drip. Just popping into the shop for extra milk, getting a round of ice-creams etc seems to stack up.

What we did to analyse the budget was to draw out in actual cash the budgeted amount for a week of spending money, petrol and food and see how it lasted. It turned out we were making internet purchases that were not being counted in any budget and then we were coming up short at the end of the month (paid monthly). The other thing was hitting the supermarket mid-week for one or two things and spending an extra $50.

My only tip (because we struggle with this) is to have cash in hand. It is too easy to swipe everything away on EFTPOS but seeing the actual cash seems to make spending more real and makes the budget very clear - when the money jar is getting low you are running out of cash!

I agree with Artechim - our money disappears in drips too. We have started budgeting and writing down whenever we spend anything. We were amazed to find that extra trips to the store each week for bread, milk, extra fruit, nappies was adding up to as much as $200 a week :o (not always that much but some weeks it was). We thought we were living really well on $250 a week on groceries but it turns out we were spending a whole lot extra and it was a shock. We have found that we can't avoid going shopping for some items midweek entirely because we simply can't keep enough bread and milk in our house (we don't have the fridge and freezer space) but we have started writing out a list for things to get from the grocery store when we go and not buying anything extra. It does make a HUGE difference. We were doing so much impulse buying without even realising it and throwing so much away.

I have also found avoiding shops and online shopping altogether unless I am looking for something specific and have budgetted for it. I get sucked into good sales and even though something is a real bargain for $5 it is still just eating away at our money.

Everybody would be different in what their money drips away on, but it might be worth itemising every time you spend money for a month and having a look at where you think you are overspending that way. Listing it out for us was a real eye opener (also considering everytime we use EFTPOS it was costing us more money - only an extra $5 to $10 a month but it all adds up).

I would recommend downloading your last 3 months of account history and categorising them, it will give you a very clear idea about your $$$. My black hole was DF's ATM transactions, he was taking out $60-$80 every 2-3 days just so he could have money in his wallet, then because it was there he was spending it! Nothing sinister, but a couple of coffee's at work, a takeaway lunch, stop to pick up a few beers on the way home or some extra groceries that he thought we might need and all of sudden its gone and he needs more cash... Aaargghh! He spends more than our annual childcare bill from when we were both working full time!

If anyone has any idea how to get him to stop this i would love to hear them! I am hoping when we swap roles and he is at home that this ends for a bit!

I'm horrible at spending money, I can never account for it. Doesn't matter if its cash or EFTPOS - the only difference is, with EFTPOS I can go back through the listings and figure out what I bought :doh:

Something we did was buy Mortgage Watchdog software. You can use it for all your bank accounts, credit cards, mortgages; then you just do some basic data entry when you get your statements, and it uses the same interest calculating formula that the banks use, to figure out if you're being overcharged. We haven't got heaps back, maybe $500 over everything, but it makes a difference y'know?

I know this will sound painful but when we first got together my husband and I we catergorised everything in a notebook

even if it was a 50c freddo frog, every cent was written down on the day we spent it, then at the end of the week we added up what we spent food, bills etc

then end of month worked out how much we were spending versu how much was comign in, its a real eye opener...we also do it now if we go on extended holidays...so we can keep track of how much we have spent etc

after a few months you will see where those leaks are coming from

I hate doing the writing everything down, but mostly because then I have to be accountable for all the dribs and drabs. It does work though.

The other place we lose $$ is Bunnings atm :) Things like replacing lightbulbs, buying mulch etc. It really adds up. Also we've bought a couple of items that we never budgeted for, like a lawnmower. Repairs, petrol going up, increased utility bills all eat up the extra cash.

We now have a few bank accounts (all free) to separate various things. With the joint accounts, we have 1 for day to day transactions. If the cash runs out we can't spend any more. We also have an account for direct debits to come out of - all the rent, bills etc come out of that. Our phone, electricity and gas is a set amount each month so there's no surprises. We've stoppped using the credit card and once it's paid off we're closing it.

A big tip is the first thing you do is put $ into saving (10% recommended) and work your expenses in with what's left over.

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The other place we lose $$ is Bunnings atm :) Things like replacing lightbulbs, buying mulch etc. It really adds up. Also we've bought a couple of items that we never budgeted for, like a lawnmower.

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ROFL, yep, I have an entire category just called bunnings! Crazy huh?? I think it also ranked 4th or 5th highest in terms of biggest $$$ spent!

I was also going to suggest appletree's suggestion. Every few weeks / once a month I download our online statements into excel. Next to each line I have what the expense was for, then I have created a pivot table (or you can just do a sort by item).

It is surprising how it all adds up so quickly and you will soon see what you top 10 expenses are. Besides our mortage one of our biggest expenses is cash out at ATM's, which I know is just basically just wasted money as we pay all out bills / shopping online or with eftpos.

our little extras were milk/bread/a little fruit or veg every few days. Even things like me getting a can of softdrink at playgroup rather then drinking the tea and coffee or water were adding up.

Is anyone getting a coffee on the way to work? Bottles of water? They all add up to $15ish a week alone if you get 1 every day for 5 days. It's quite often the small change in your purse that takes the cake.

HTH

Some great suggestions here. Tashy I *wish* we were spending it at Bunnings...that's partly my frustration...we have so many projects around the house that are all in the $100-300 range, but we never seem to be able to do any of them because there's never that chunk of money (and if there was we should be saving it, instead of living on the bones of our bare arses all the time). I love your tip of paying ourselves (savings) first and I was doing that for a bit until it all got a bit crazy over the last couple of months and it got spent just meeting the basics (which is the whole point of having savings I suppose). :wall:

The other thing that drives me absolutely *wild* is that DH forgets that stuff needs to be paid for, so I have all the $ allocated, then he'll suddenly pipe up that x amount is need for some forgotten bill or something :wall: so suddenly I'm scrimping and skimming off $ allocated to other things to pay for it.

Joeve, I know the $61 is pretty random, it's through an agency though so I assume the cleaner gets however much per hour and then the agency gets a dollar amount on top of that.

Am wondering the same thing lately! DH is on a good wage but we have nothing by the end of the month, I've got no idea where it's going. We barely go out anywhere, don't smoke, don't buy clothes except for DS, don't even hire DVDs anymore.
I had to wait for my xmas Bunnings voucher to buy a new doorknob after about 6 months of living with a broken one - couldn't afford a $100 dollar new one! It's ridiculous!

Dare I say that $2500 is a tall ask?! By the time things like car rego's services, insurance, communication, power etc. are taken into account each fortnight, our budget is pretty close to that and that isn't even starting to think about groceries and unforseens! I am also asking myself the question of the leaking money...it's kinda like how socks always go missing in the dryer!

I suppose what helps is that we really allocate money to everything...even down to possible dental bills (which are always a doozie and unforseen as everyone may know!). We allocate money for incase we need medication, for hairdresser visits, or if the pool floods and we need to sort it out, for example. I even allocate $20 a week because I know that we will need fresh bread and milk top-ups over and above our weekly grocery spend. I find that doing this eliminates that "oh cr**, the towel rail needs replacing" or "whoops, we have guests coming around and need to buy some extra food" scenario...but in doing so, our fixed costs each month are really high - so I never really feel like we are winning! The upside is that if the unforseen expenses don't become necessary, then that money can be shifted around to other things and/or luxuries on occasion.

The only way that I can control the leaking cash is that DH and I have a deal. DH and I each get $x per month and we can spend it as and on whatever we wish (this would include a treat for DS if we choose, fancy beer for DH, clothing for me etc.). This is in cash. Everything else, if possible, goes on the credit card (so that I can monitor it), which I pay off each month. DH knows that if he has to pick up food or drink (other than during our weekly shop) he HAS to give me the receipt and I add it to our running grocery spend for the week. This is a pain in the bum but i find most of the lost money happens in instances like that!

A good example is that I have really wrecked my back this past week and have required five chiropractic visits. Ordinariy this would just be paid for and it would be disappearing money. Fortunately, because we haven't had any dental issues, the dental money can absorb these costs.

I am rambling and actually boring myself now, but maybe you can glean some tips from our strategies?

we still dont know where our money goes, but i guess its $20 heres and $10 there....it adds up

my hubby does a budget but it never seems to go to plan...