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Tuesday, April 3, 2012

Saving for the big jobs

I've just had a wood heater installed in my house.  My ancient windows and doors which wouldn't close properly and have never been locked have also been changed to lovely sliding doors and windows.  It's been a project which I had on the cards for a while but it became suddenly urgent when I fell pregnant and realised that my baby would be born this winter.

It is surprising what can be achieved when a deadline is set.  If you have something that you want, and you want it bad enough, the world seems to align to get it done.  Creative ideas flow and you figure it out.

Here's how I saved the money:  

I have a regular income from which I pay all of my regular bills.  Out of this I also put aside 10% of my money for investing and 10% for reducing my investment loans (as I have no other debt).  I spend the rest, so no money for building projects there.  

Instead of trying to reduce my expenses (because there's not much more I can do there), I have been focussed on increasing my income.  It's a really simple formula actually.  When I get extra money in, I don't add this to my bill paying or living standards money.  I don't go out and blow it on new clothes or Christmas presents or stuff for my kids or let it be eaten up in any of the ordinary ways.  All extra money goes into a separate bank account and this is what I use to pay my builder or buy those big ticket items.  

"But where did the extra money come from?" I hear you ask.  That's the easy one to answer.  Tax returns, baby bonus, family tax benefit and income from contract work or part time jobs.  This year I delivered census forms which contributed nicely.  I'm also working on a business where I tutor people about how to get the most out of their money and I'm looking forward to getting some income from that.  Of course, I'm not going to take money from people unless I can help them to save/find/earn much more than I'm charging.  No point in helping someone save $100 if I take it straight from them.  That would completely defeat the purpose.

So there you have it.  How to get what you want in the time frame in which you want it.  Lets recap
Step 1 - Decide what you want
Step 2 - Decide when you want it
Step 3 - Keep your finances under control so you don't need extra for ordinary stuff
Step 4 - Make some extra cash
Step 5 - Buy the thing you want

Any questions?

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