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Thread: Guide to low-cost living?

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    Default Guide to low-cost living?

    [b:b25b01290e]The insider's guide to low-cost happiness[/b:b25b01290e]
    20 November 2005

    In a nation obsessed with consuming, where the average person spends more than they earn, five Kiwis are exercising their saving power and living well for less. They tell ROB STOCK how.

    'Society is conditioning us to think some things are needs when they are actually wants, like the latest fashion clothes and wide-screen TVs, or a car that's less than five years old," says Kara Dawson from Hamilton. Kara is The Warehouse's national bargain-hunting champion, and like the other four finalists of the competition -Moana Kerr from Hokitika, David Graham from Te Awamutu, Leanne Brooks from Christchurch and Diane Davidson from Auckland - she has firm views on why people find it so hard to live within their means.

    Kiwis' habit of spending 12% or so more than they earn each year, which has earned a stern rebuke from Reserve Bank governor Alan Bollard, is anathema to the five. All are family people and all have two things in common - they hold true to what can appear to be old-fashioned values on money, and they derive more happiness from their families than from spending like there's no tomorrow.

    For Kara and husband Chris, happiness is living the good life on their section in Hamilton where they have planted 50 fruit trees, grow vegetables and raise their children. Kara says: "We belong to the Church of Jesus Christ of Latter-Day Saints and our church has always advocated living within your means and avoiding all consumer and household debt, also having a vegetable garden, teaching children to be wise with money, giving the first tenth of our income, saving, and eating healthy foods."

    For Diane, an avid competition entrant, family is also the No1 reason money should not be frittered. A child of a poor single parent who drew a basic wage from the Papakura freezing works, she's not only raised her own kids, she's raising her grandchildren David, eight, and Jacob, four. "It's so much better to be careful with your money because it's so hard to earn it," says the part-time Glen Innes librarian. She also warns against mortgaging the family's future for luxuries bought with consumer debt. "You can see hard times ahead for people. Too many people are just three steps away from calamity," she says.

    Leanne says: "As a society, we are very materialistic and expect to start out where our parents finished up." But like all her fellow finalists, Leanne -mum to Hannah - is a firm believer that with a bit of creativity and effort, even families without big incomes can live better for less. Here are the finalists' views on:

    Living carefully does not mean total self-denial

    Although Diane is an enemy of waste (and expensive, fatty takeaways), she says: "Without a few luxuries life would be so dismally grim." But to manage guilt-free luxuries means sticking to a budget. "Needs must when the Devil drives," Diane says. But for Moana budgeting is no chore. It brings the family together as a unit, she says.

    Not giving give up on generosity

    "There's a difference between being frugal and being mean," says Leanne. All five finalists are big givers.

    Diane is using some of her $5000 to buy a TV for someone who really needs it. Kara tithes 10% of her income to her church. "Some of my biggest bargains, I have given away," she adds.

    Replacing costs with something that is free and fun

    Moana, her partner Tony, and their young children Ernest and Jacob spent some wonderful days collecting pine cones last year - outings which provided them with enough fuel for the fire for almost the whole winter as well as beautiful picnics between West Coast downpours. "We've only bought one load of firewood since we came to Hokitika, which has saved us hundreds of dollars," she says. Moana also recalls spending a New Year's Eve climbing Ruapehu to wait for the dawn with Tony, with a couple of bottles stashed in the rucksacks. Cheaper than a night out - and much more romantic. Fruit-picking, vegetable-gathering, jam-making and pickling are all part of the Dawson family year. It brings the family together, slashes $15-$20 from the grocery bill each week, makes for a healthier family, and fewer doctor's bills.

    Seeking out what's free

    Moana says there's a lot for free in the community to enrich family life. Moana and her children borrow free videos from the library, and she saves the $9 cost of many glossy magazines by picking up used ones there. Leanne says there are plenty of free community events, and tests herself to find "five free things a month".

    Doing it yourself

    Kara watches tradespeople like a hawk to pick up tips because once she's seen a plasterer in action, she knows she's handy enough to save a couple of thousand dollars plastering her own house. If you don't have a particular skill, says Diane, you can barter with friends, swapping a little baby-sitting for hair cuts, for example.

    Being smart with financial services

    Moana sings the praises of petrol station charge cards, which save her 10% on fuel, equating to a free tankful every few months. Moana's also smart with her credit card. "We really only use it to book cheaper flights online." But she loads the card with cash beforehand, collecting interest instead of paying it. She also much prefers to pay with cash when possible, to save on Eftpos charges.

    Kara is a bank's worst nightmare. She refuses to pay one cent more than necessary in charges, and believes more than $2 a month is excessive. A fan of Hamilton's Moneywise, a not-for-profit organisation promoting financial literacy and living free of debt, she also can't believe people carry over credit card debt and don't do everything they can to get free of their mortgage, let alone drawing on equity to buy luxuries. "If you are not careful, your expenses increase with your income. When you get an increase we try to increase our mortgage payments," she says.

    Shop-watching

    Leanne keeps an annual diary of sales, which tend to come up at the same time each year in different stores, and plans her shopping around them. "I have already finished my Christmas shopping," she says. "I buy presents in the sales."

    But the best presents aren't necessarily the ones you find in shops, she says, and she is also a fan of making gifts. A favourite gift from last year was making advent calendars for friends, with 24 little treats inside for the 24 days of Christmas. There are dozens of websites with similarly lovely ideas which parents can work on with their children, she says. She's also a fan of Cappuccino Moments for Mothers, a book with ideas, many free, for mother-children activities. Second-hand shops can produce wonderful bargains, too, says Leanne. An old doll's house bought for $4 needed only a little DIY and restoration to turn it into a des-res for her daughter's dolls.

    Self-defence against destructive habits

    Kara has a three-day rule. If she sees something she wants to buy, she forces herself to wait three days. If she still wants it after that, she goes ahead, though Leanne's rule is "Wait a week". But to really know the real cost of an item, Kara advises: "When making a major purchase, work out how many hours you would have to work to pay for it (after tax). Then ask yourself if it is worth that much to you." She also has a tip for breaking the shopping habit. Have a shop-free day each week, she suggests. "Ours is Sunday, our family day".

    Never pay top dollar

    David recommends shopping around for electricity, phone and internet services. It can save you hundreds of dollars.
    Mother Bear

    Try to bloom wherever you are planted.

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    tottefan is offline Senior Member
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    Default Guide to low-cost living?

    What would Kiwis think of the materialism and debt problem in the UK then?

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    Default Re: Guide to low-cost living?

    [quote:94b6fc53ed="Mother Bear"]In a nation obsessed with consuming, where the average person spends more than they earn......

    Kiwis' habit of spending 12% or so more than they earn each year.....[/quote:94b6fc53ed]

    Reading that article, it sounds like they're already well on the way to catching up with the UK spenders.
    Mother Bear

    Try to bloom wherever you are planted.

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    Default Guide to low-cost living?

    "ah - money is the mother of all sin"

    A quote from someone I can't quite remember who.

    __________
    Julian

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    netchicken is offline Senior Member
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    Default Guide to low-cost living?

    Don't you love the media hysteria over spending.

    Either you are a spending moron spending well above your income, or your some hippie conservationist consumer minimalist.

    Sigh .. guess it sells newspapers.

    I think the vast majority of people have the ability to make a budget and manage their money.

    Maybe the roaring economy, rising wages, and lowest unemployment in the western world are just making people go giddy with the excitment.

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    Default Guide to low-cost living?

    [b:2792f98988]Christmas cheer to cost $900 each [/b:2792f98988]

    22.11.05
    By Claire Trevett

    It is enough to give Reserve Bank Governor Allan Bollard a bad case of indigestion: New Zealanders are expected to spend $900 a head on shopping this Christmas. Mr Bollard has sent strict warnings that if spending is not curbed, New Zealand will be up the proverbial creek. The latest survey on what we will buy for Christmas shows that while there may be no paddle, there will be plenty of nibbles and drinks to live off.

    The research by Galaxy Research and commissioned by MasterCard International surveyed 477 adults about how much they would spend for Christmas and on what. Food and drink has overtaken clothes and shoes as the most popular category of spending since last year's survey. Almost one-third said they would spend more on food and drink, and 24 per cent said they would spend more on clothes and shoes. Spending on toys was also indicated: 23 per cent said they would spend more, especially parents of pre-schoolers. Seventeen per cent said they would spend more on big-ticket items, such as computer equipment, stereos, televisions, and appliances.

    The survey found the average New Zealander would spend more than $900. Those with families expected to spend more than single people, going to about $1050. Full-time workers were the biggest spenders - they expected to spend $1100 - twice as much as the unemployed or retirees. One in five surveyed expected to spend more on Christmas this year, and a similar number said they would spend less. With petrol prices up as much as 12 per cent on last year and basic groceries up, Christmas was not going to be a cheap exercise anyway.

    BNZ chief economist Tony Alexander said more employment, higher wages and good property prices indicated a good spend-up was in order but it was tempered by hikes in interest rates and repeated warnings from Dr Bollard. He said a One News Colmar Brunton poll this week showed 51 per cent - a 23 point jump on the previous poll - were pessimistic about the economy.

    "Until this week I would have said retail sales would be strong. But the poll is the worst on economic confidence since May 1998 when we were in recession. That poll is the first indication of how Bollard's comments have been received."

    He said it could hurt sales, especially if Dr Bollard increased interest rates again on December 8, as expected. Last December was weaker than normal for retail sales. NZ Retailers' Association chief executive John Albertson said he expected spending to be up 5 per cent to 6 per cent from last year.

    "It is a little bit softer than last year, but at the moment the trends are for growth to continue in the short term and soften in the early part of next year. There is no reason to expect Christmas will be hampered [by the interest rate rises] to any great extent." He said a "positive attitude" encouraged people to spend more - the All Blacks winning was always good news for retailers.

    Last year, eftpos firm Paymark said consumers spent $3.2 billion in December, up 9.66 per cent from December 2003. Of this, $170 million was spent on Christmas Eve and $190 million in Boxing Day sales.

    [b:2792f98988]FESTIVE SPEND-UP[/b:2792f98988]

    * Overall: $2.7 billion
    * On average: $900 each
    * Parents: $1150
    * Full-time worker: $1100
    * Retired: $550
    * More than $1 billion will be put on credit cards.
    * 1.7 million adults use credit cards.
    * One-third intend to spend more on food and drink than they did last year.
    * 24 per cent will spend more on clothes and shoes.
    * 23 per cent will spend more on toys, especially for pre-schoolers.
    * 17 per cent plan to spend more on home entertainment, electronics and
    Mother Bear

    Try to bloom wherever you are planted.

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