It is currently being edited by the talented @designbymckenzie and will be ready in a few short weeks! If you wish to be notified as soon as its available, sign up to my blog and you’ll be the first to know. My eBook is all about our pathway to financial freedom, including a step by step detailed process of how we got there including checklists along the way. I’m very excited and proud to offer this to you all and if I help one person achieve financial freedom, I’ve completed by goal.
I am pleased to announce that you can now purchase my specialised ‘zero based budget’ which has been one of the keys to our success on our debt free journey. This monthly budget is run through Excel and calculates your monthly income, expenses and lets you know the surplus/deficit of your budget for the month. Just key in all your figures for the month and it does all the hard work for you, even confirming the percentages of your expenses. If you want to succeed on your budget, don’t delay and buy one today. A bargain at $5.00 each.
I had the amazing opportunity of meeting Ruth from “thehappysaver.com” in October last year. She has an amazing Blog sharing all different aspects of finance, investing and saving. She also has a podcast channel and I proudly featured on one of her first podcasts sharing my journey about becoming debt free. She has become a financial savvy sounding board that I have shared my ideas and dreams with her and also to check we are on the right track. She has released another podcast today with an update of my progress and attached is a link to this podcast for you to listen to – hope you enjoy it 🙂
So after many requests, I have set up an option for you to purchase an individualised mortgage or loan spreadsheet setting out every payment, interest and balance including your debt free date!!
Once you hit the ‘buy now’ button I will email you for the information I require to prepare your spreadsheet and this will be delivered within 24 hours of purchase.
Don’t delay, purchase today for NZD $19.95!!!
I have had many queries about how we meal plan and keep our food budget to $600 a month. We use to spend around $1200 a month (if not more) and have managed to shave this in half. It has taken a lot of organisation and a couple of kids to move out to be able to do achieve this (lol) but here are some of our tips to save on groceries each week.
I love baking and on the weekends I usually make banana chocolate chip muffins for the freezer (great for lunches), a banana cake and biscuits. My husband is a great cook and usually makes the dinners every night. There is only 3 of us now, however we have our whole family (7 adults) every Sunday night so this is usually a special meal that we prepare. There a six steps to winning with grocery shopping and it looks something like this:
Do an audit of all your cupboards, pantry, fridge and freezer. Yes I mean write down everything you have in your cupboards, pantry, fridge and freezer. Most often you can shop from your pantry without having to do any shopping. I bet you will be surprised ! When we did this initially we didn’t have to buy any meat for a week!
Write down all the meals your family eats for breakfast, lunch and dinner.
Eg. Breakfast – Weetbix, Milk, Sugar, Toast, Butter and Jam.
Work out what you eat for lunch and all your favourite meals for dinner.
Have a calendar in front of you and write down a dinner meal for the week ahead – Monday through to Sunday, remember you don’t have to eat like kings everynight. We quite often have eggs on Toast or Toasted sandwiches one night each week. We have a white board in our pantry (see image) and so everyone knows whats for dinner during the week. My kids sometime plan when they’ll visit depending on whats on the menu haha.
Write a list of all ingredients you need to have 7 breakfasts, 7 lunches and 7 dinners for the amount of people in your family and remember to take off what you already have in your pantry. Nothing less, nothing more. If you haven’t guessed this means making your lunch everyday – no more buying your lunch!
Surf the internet and check any specials on at Countdown and other places like the Warehouse. I sometimes, use the online shopping of Countdown and work out how much our groceries are going to cost at Countdown and I know when I go to Pak’n’Save I can usually beat this price by at least $10-$20.
Go shopping with your list – this is essential! Do not buy any extras – only get what is on your list! We also take out $150 in cash and go shopping with this – it makes you buy less because you do not want to go over this amount. Also it has been proven that when you shop with cash you spend less than you do if you have your card, as it is harder to hand over your hard earned cash than it is to swipe your card! Try it !! Also when shopping look at price per size. We buy 18 toilet rolls at once as they are usually much cheaper than say buying four. Try homebrands and look carefully at all the shelves – note they put the dearest items on the middle shelf (eye level) make sure you look at the top and bottom !!
Heres an example of our weekly meal plan:
Breakfast Options: Porridge, Brown Sugar, Blueberries, Bananas, English Muffins, Jam, Green Tea, Tea, Coffee, Milk.
Lunch Options: Omelette, Microwave Pies, Chicken Salads, Eggs on Toast, Vege Bowls, Pizza.
Dinner Options: Sausages, Mash & Beans, Nachos, Lasagne, Spaghetti Bolognese, Home-made Subway, Home-made Pizza, Meat Loaf, Home-made Burgers & Chips, Chicken Fried Rice, Roast Chicken with Roasties & Veges, Frittata, Toasted Sandwiches, Eggs on Toast, Vege Bowl.
Snacks: Fruit, Home-made Banana Chocolate chip muffins, Home-made Biscuits, Home-made Banana cake, Chips, Popcorn, Rice cakes, Nutella, Noodles, Peanut Butter, Walnuts, Almonds, Dark Chocolate.
Good Luck and happy shopping,
Warm regards, Bradie 🙂
As the year draws to a close, I thought it would be interesting to look back and see how we performed in 2017.
We started the year with gusto and a mortgage balance of $164,383.51.
In January, we managed to sell items on trade me and made some extra cash. We also kept our groceries to a minimum. I kept away from the shops and instead enjoyed organizing and cleaning our house. However, I had a broken tooth and had a visit to the Dentist. It was still a good month and we saved $1,000.00.
In February, I made my own home-made Plum jam for the first time and hit 500 followers on my Instagram page. I was still enjoying cleaning and organizing our house and staying gazelle intense with $50 a month spending money. We had another good month and saved another $1000.00.
March and April rolled around and we were on fire. Great months and we saved an extraordinary amount of $3844 for two months.
May was a super three-pay month and with a payrise in the mix it turned out to be the best income earning month of the year. I hit 1000 on my insta page and had made some wonderful connections in the debt free community. We hit a milestone of going under $150k on our mortgage. To celebrate we took the family out ten-pin bowling with pizza and drinks. We had such a fun night. This month we paid 67% of our income towards debt. However, we were hit with hefty power bills of $568, Doctor and Dentist visits of $270. Despite Winter hitting hard, we still managed to save $1,693.00.
June came around and we began a ‘no spend June’. I talked a few of my colleagues into joining me and we had charts by our desks to follow our progress. On Queen’s Birthday weekend, we treated ourselves to a lovely walk in the Redwoods in Rotorua followed by a picnic by the lake with my sister and her husband. We had friends stay for the weekend and we stayed in, entertained and dined on a budget (check out those home made burgers!). Winter was still hitting hard so we splashed out and brought thermal curtains for our bedroom. We did okay and still saved $892 for the month.
Now onto July and we had a big event to organize which was our son’s 21st. We managed to stay under budget and had a memorable night. We also received our tax refunds which was a nice surprise of $361.00. Despite being hit with HUGE power bills of $971, we saved another $1,000.00.
August – my birthday month, and we were watching the power usage like a hawk. We spent a night away for my Birthday, at the Hilton in Taupo. We had a budget for our weekend of $160. We spent every cent but not a cent more . This month, I met one of my Mentor’s Martin Hawes and saved on cable by cutting back on extras, we saved $70 a month. My son paid off his student loan and I finished Chris Hogan’s Book, Retired Inspired. We saved $850, but the biggest high of the year, was that our savings account balance had finally hit $10k and we made a lump sum repayment onto our mortgage bringing our balance down to $127,000.00 – what a glorious feeling!
September was here and we were excited for the Spring weather to arrive. We decided to be more gazelle intense with our groceries and planned to only spend $650 for a month. This was hard work for a family of 4 adults in NZ, but with a lot of planning, somehow we managed to do it and kept our groceries to $564.00! Good news this month with a payrise and Mr Frugal had the opportunity to cover extra shifts. I also had the chance to work at the local election and make some extra income on the weekend. We had a superb month and saved $1,433.00.
Now its October and we were still waiting for the good weather to arrive. Murphy struck us this month and our Dishwasher finally died. We struggled with the decision to buy another one as we knew it was a want and not a need. We decided to pay cash and replace it directly with manufacturer. We still managed to saved $245.00 for the month.
Onto November and we were feeling a little battle weary. This was going to be our second best month for Income as it was another magical ‘three pay cheque’ month. There were extra shifts to be had for Mr Frugal and our beautiful daughter Mckenzie turned 18. We celebrated with a special dinner out at Madam Woo in Hamilton. It was also our 27th Wedding Anniversary and we shouted ourselves to Movies and Thai Takeaways lol. It was our best month of the year for savings and we saved a whopping $3,000.00.
Finally, we made it to December. We had been saving hard all year to cashflow Christmas – my favourite time of the year. Online shopping was thoroughly enjoyed for the first time, buying presents for my nearest and dearest. The travel specials for 2018 were rampant and we decided to pay cash for a week in sunny Queensland in August 2018, our first overseas holiday since 2013. Accommodation will be with friends and AirBnB. We paid cash for our flights. Something to look forward to and get us through the New Zealand Winter. Groceries were kept to a minimum and we did well, finishing off strong and saving $1340.00.
So now let’s get down to the figures.
Mortgage balance 1st January 2017 $ 164,383
Mortgage balance 31st December 2017 $ 112,354
Debt repaid $ 52,029
Average Savings per Month $ 1,360
Net worth increase for 2017 $ 97,219
Merry Christmas everyone and Happy New Year. I wish you all a wonderful healthy and prosperous 2018. xxx
Many people have asked me during our debt free journey – what plan are you following? So I thought I would explain our financial plan.
We found Dave Ramsey on Youtube by accident in January 2016. I think I was googling ‘how to be debt free’ and his feed came up. I then read his book ‘Total Money Makeover’ and also subscribed to his Youtube channel. I somehow convinced my husband to listen to his audio book on Youtube. Once he did this he was on board and we were hooked into the ‘Dave Ray’ way. His advice is easy to understand, and he has a no-nonsense approach to finance. He was also made bankrupt at 25 and had to start again from nothing and is now a multi-millionaire. One of my favourite parts of his radio show are the ‘debt free screams’ where people visit his studio in Nashville, Tennessee and explain their debt free journey finishing with a ‘We’re debt free’ scream. They are so good to watch and highly motivating!. We plan to visit Dave’s radio show in 2020 to do our ‘debt free scream’ – watch out for us !
So back to the plan – this plan has been proven to work if you follow it without adding your own steps to the mix. or changing TOO much. There are seven steps and you need to finish the first three completely before moving on to the next one. Let me explain:
BABY STEP 1; This is called the Baby Emergency fund. You must save $1,000.00 as fast as you can, like your hair is on fire!. This helps by stopping murphy visiting and is only to be used for emergencies! A holiday or shopping is NOT an emergency. I’m talking about the oven element breaking, the car engine seizing, or the roof leaking. You must always have a balance of $1,000.00 in an account that you can get to quickly for an emergency but that is separate to your day to day account. This account must be reimbursed if used before you proceed onto another step. Right, now you’ve got that step sorted, onto the next one.
BABY STEP 2: This is most probably one of the hardest/longest steps for most people. This is repaying ALL consumer debt. eg. All your credit cards, Student Loans, Car loans and any Hire Purchases. This doesn’t include your family home mortgage. You list these debts smallest to largest and pay all your extra money (in your monthly budget) to the smallest debt first, while continuing minimum payments on the other debts. Once the smallest debt is paid off, then you go onto the next one, and the next one and so on and so on until they are all paid off. During this period of being on Baby Step 2 you should be at your most GAZELLE INTENSE and most frugal. You need to be budgeting every dollar in your budget, working extra jobs, selling stuff and doing everything you can to clear this debt as fast as possible. While you are on this step, holidays, going out for dinner or excessive shopping are on HOLD. You should aim to get this step completed in under two years. A side note – the interest rates of your debts do not matter. It’s the balance that does. This step uses quick wins to keep you motivated as getting out of debt is more a behavior thing than a numbers issue. Go hard on this step.
BABY STEP 3. Fully funded emergency fund. Now that you have repaid all your consumer debt. You can go back to your baby emergency fund of $1,000.00 and increase it to 3-6 months of expenses. This figure will be different for everyone, but must be completed before you move onto the next step. This money should not be invested but in an account where it can be accessed if required. Dave call’s this fund Insurance not an investment. This fund gives you financial peace like you won’t believe.
BABY STEP 3B. This is an interim step if you are saving for your first home. In this step you should be saving 20% deposit for your house. If you haven’t done the previous three baby steps you are not ready to buy a house. Your mortgage should be for a term of 15 years. If you already have your own home, you can obviously skip this step.
BABY STEP 4. Save 15% of your gross income towards retirement. This can be in your Kiwisaver/Retirement Savings or other means of investing. Dave recommends investing in a good mutual funds where you get the ‘dollar cost averaging’ of your investment each month.
BABY STEP 5. Save for your children’s college education. Speaks for itself really. Not sure how many parents in New Zealand pay for their children’s University fees, personally we haven’t as we helped our children in other ways. But in America they do have large student loans so this step is to help the younger generation to start out their adult life not burdened with student loan debt.
BABY STEP 6. Pay off your Mortgage. Dave recommends to have a 15 year term and try and pay off in 7. He recommends paying everything you have left after investing 15% of your income. We are currently on this step and are completely obsessed with paying off our mortgage. We are hoping to be done in 21 months.
NOTE: BABY STEPS 4, 5 and 6 are done at the same time.
BABY STEP 7. Invest in your wealth and give. Once you have made this step you are financially free. You can give and live like no one else. You do not have any payments and can do whatever you want to do – welcome to financial freedom!!
We have followed the Baby steps 1, 2 and 3 to a “T”. We sold our car and our rental property in baby step 2 to repay our credit cards and our rental investment mortgage. We also had enough left over to fully fund our emergency fund in Baby step 3.
We are currently on Baby steps 4 and 6 and have skipped Baby step 5 as previously explained.
The one baby step we have not fully committed to is baby step 4. We are currently only investing 9.5% of our gross incomes and not the recommended 15% as we are trying to repay our mortgage as quickly as possible. Our reasoning for this is that we are planning to be debt free within 21 months. Once we are mortgage free we will then go back to Baby step four and invest at least 15% of our income but probably more likely to be 20% of our income. Dave has mentioned on his Radio Show that this slight variation is okay if you are FAST in paying off your mortgage.
Once we are on baby step 7 – I am looking forward to being able to give more time to sharing our debt free journey and finding a charity that we can invest in and help change someone’s life. I am also looking forward to investing our money and researching lots of mutual funds to find the best ones.
I hope this has explained our financial plan and I must say that I have always loved saving money, but never had a plan to follow that’s worked. This plan is like a ‘road map’ to financial freedom and I recommend it to anyone who asks. Its simple, easy to follow and worth looking into. I also recommend reading ‘Total Money Makeover’ if you wish to know more. Good luck on your road to financial peace.
Warm regards, Bradie
In January 2016 we had a staggering mortgage debt of $563,000.00! This was fixed until August 2016, with interest only payments so we were not paying $1.00 towards the principle amount. Our reasoning behind this was that our rental property was going to double in value in seven years and would clear our debt. This never happened and instead we were left with the debt to repay together with various top ups we had made along the way, eg. new concrete driveway, new car – you know things we needed lol!
Luckily at this time, we came to the realization that we were not making good financial decisions with our money and began our journey to pay off our mortgage and become debt free as soon as possible.
I wanted to share some ideas that helped us along the way.
1. Get on the same page with your Partner/Spouse. I have put this as number 1 on my list as I believe if you are not on the same page or have the same goals about paying off your mortgage as your partner/spouse , this will be very difficult for you to do on your own. Convince your partner to have a budget meeting every month and discuss your goals and your finances. Even if one person does the majority of setting up the budget, have your budget meeting together and discuss your goals/finances/wins/struggles everyday. This will keep you motivated to keep going.
2. Set up a written budget specific for the month ahead. Do your budget for the month before the month begins with every dollar you are going to receive and every dollar you are going to spend. In other words, make your money work for you and tell it what to do and where to go!
3. Work extra, find a side hustle, sell things, meal plan, cashflow your spending, make your lunches, have coffees at home or work, watch Netflix, stay away from shopping centres and every spare dollar you save, throw it at the mortgage.
4. Have a debt free chart where you will see it every day. We have a mortgage free chart on the inside of our pantry so we see it several times a day! It is the highlight of my day to colour off another line closer to our goal of being debt free.
5. Find like-minded people to be around. Find you tribe. You are the people you surround yourself with. Become part of the debt free community on Instagram and find people that think like you do and encourage your journey.
If you haven’t taken the leap to purchase your first home yet, make sure when your Bank gives you a finance approval that you don’t overcommit and borrow as much as they offer. My advice would be only borrow what you need, look for a reasonable sized home in a good location that is sturdy and safe for your family.
Shop around for the best rate – you will be surprised what 0.5% can make to the amount of interest you pay back. Also don’t automatically take the 30 year term. If you can afford a 15 year term with your current finances, lock and load it.
Keep some of your mortgage floating and fixed or if you are very committed to this journey set up a mortgage offset account facility. Pay fortnightly payments.
I hope this have given you some food for thought. I wish you the best of luck in paying off your mortgage quickly. If you want to follow my journey to being mortgage free (hopefully by August 2019), follow me on my Instagram account @kiwigirlonabudget.
Thank you for taking time to read my blog,
While being on this debt free journey, I have come to learn that Debt is not a tool, it’s a trap. This post is not for the faint hearted and may offend some people. I am sharing my views and my story in the hope that I may help some people find financial peace.
Before my weird days of being debt averse (prior 2016), I was normal and did think that debt was part of our life and we needed it to succeed. I thought it was so normal, that we risked our family home by borrowing ‘interest only’ investment loans using our house as security, in the hope that the investment properties would double their value in seven years and make us a fortune. It never happened.
Instead we were left with a whopping amount of debt ($566,000 to be precise) and a whole lot of mess to clean up.
This began my journey into how debt became normal and where it came from. How did visa, American express get into our homes? How did they become an ‘emergency fund’ that we found hard to let go?
The Diners Club was the first credit card issued in 1950 by Frank McNamara in New York. He forgot his wallet while out for dinner and got out of paying for the bill by ‘signing’ for it and promising to pay the restaurant back. Do you find it incredible that this was less than 70 years ago and now credit is such a HUGE part of our life?
In the early years, if you had any debt to your land, it was seen as a hindrance, have you heard the quote ‘borrower is slave to the lender’? Did you know the meaning of ‘Mortgage’ in Latin is a ‘Death contract’!
Have you watched TV lately? Have you been on social media today? Nearly every single ad is trying to sell you something. They are actively marketing a bigger, better and happier life by having a new car, or a trip overseas, new clothes, jewellery, or by buying some new appliances or furniture. Everywhere you look there is some marketing to try and trap you into spending your money or going into debt!
Debt traps you into working pay cheque to cheque, working longer hours, looking for that higher paying job, working until you are 65 (or longer). In my view, debt creates enough risk to offset any possible advantage.
Some lies that people justify about keeping credit cards and debt:
- They’re so easy to use compared to cash – okay may be slightly easier, but also very easy to overspend. Did you know its been proven that you spend 12-18% more with a credit card than if you had cash ! Now that’s worth not having a credit card on its own!
- They’re great in the case of an emergency! This was one of my reasons to keep a credit card – however its not such a good idea as you may think. Suddenly a birthday present becomes an emergency, and then Christmas and then before you know it you have reached your limit
- They give us rewards, points, miles or cash back ! Your risk of debt is increased by having a credit card – no one ever got rich off a rewards program!
- I pay them off each month! Maybe you do, but you have to be very disciplined for this to work and really why not just stand in your truth and pay for it straight away. What I found was that your spending increases each month and before you know it – you can’t pay off the balance each month!
- They make our dreams a reality – Overspending often signals a deeper problem of discontentment and materialism. True joy comes from contentment.
- YOLO – this is my favourite! You only live once. I hear this all the time. Do you really want to live your life wondering how you are going to pay your visa bill at the end of each month? Or living pay cheque to pay cheque? I know I don’t!
- I work hard I deserve it. Most people work hard – you don’t deserve it until you can pay cash for it. If you can’t pay cash for it , you can’t afford it. A sense of entitlement will get you nowhere fast.
If you have a credit card, my advice would be cut it up today, pay it off and close the account! You won’t EVER regret it. And as a side note – you watch how uncomfortable your Bank will be about you closing it haha!!!
I want to leave you with a closing statement that may offend some, but speaks the truth to others.
‘Normal is getting dressed in clothes that you buy for work, and driving through traffic in a car that you are still paying for, in order to get to the job you need, to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.’
Be debt averse people, live well x