5 ways to save money this Christmas

Christmas is an expensive time of year for a huge number of reasons: you have to buy presents for family and friends, you need to book new years events and there are dinners to attend (or to host yourself) as well as work functions and whole heap of other things to do.

I love Christmas and everything that comes at this time of the year but it does get expensive.  Here are 5 simple ways that you can save money this Christmas (I'm doing all of these this year).

1. Set a budget for gift giving (per person) and then stick to that budget

Christmas gifts can get incredibly expensive especially if you have a lot of close family and friends.  It is easy to see an item and think "oh my mum would love that" and then pick it up only to realise far too late how much you've actually spent cumulatively.

I recommend setting a budget for each person you are giving a gift to and then stick to that budget.  I normally have a budget of $150 for each of my close family members however this year I'm dropping it to $75 because I have some incredibly large expenses coming up (and they got some pretty cool gifts from me when I got back from South America)

If you have to give presents to a large number of extended family consider reducing the amount you spend per person because even $30 - $50 per person can add up very quickly.

2. If you have a large extended family consider instituting a Kris Kringle or Secret Santa

Large and close extended families are awesome however they can be a real problem around Christmas time because gifts cost so much.  It can get especially painful if there are lots of kids involved because there is no way you can get away with a $10 box of chocolates or skimp out.

What you can do is to have a chat about this with your family and institute a Kris Kringle or Secret Santa program.  These programs work for multiple reasons - it saves you time and money and people actually get better and more thoughtful gifts and they can be pretty fun around a Christmas tree if you have a large family gathering.

It is generally pretty easy to institute one of these systems:

• Meet up a month in advance - everyone's name gets put into a hat and you draw out a name for yourself and for each of your kids (if you have more kids you have to fund more presents)
• Set a maximum amount that you are allowed to spend per gift - this is crucial. 
• In my family this is generally around the $50 mark - it's not too expensive and as a receiver you are getting a pretty decent gift
• You can have different caps for children and adults if you like (so that kids get nicer gifts)

3. Do your shopping early OR after Christmas

You can save a great deal of money by timing your shopping.  You either need to:

My Updated Wedding Savings Plan

Around Valentines Day this year I set out my plan to save for a ring and ultimately marriage.  I had heard how much marriage costs and I didn't want to have any sort of bill shock when the inevitable expenses actually came around so I decided to spread some of the expenditure associated with marriage.

My original plan called for $60,000 in total savings:

• $10,000 for the engagement ring and proposal
• $30,000 for the wedding itself
• $20,000 for the honeymoon

I'm glad to say that the first part is done and dusted.  I bought the engagement ring (for $10,000), got the GST back on the ring when I went overseas (-$909) and then spent about $1,500 on the proposal itself.  I was about $600 over budget but in the grand scheme of things I'm not too worried about that.

However, being proposed and being able to talk about the wedding with my fiancée has helped clarify what we want to spend and how much we're probably going to need for the wedding.

The new budget is $10,000 higher than the old budget...and the timeline is shorter

Spreading expenses over a particular time requires you to know 2 variables:

1. How much are you going to spend?
2. When are you going to need to spend it?

I had originally forecast $30,000 for an August wedding in 2015 however once my fiancée and I sat down and did the numbers we realised that we would probably need to spend more and save it in less time.

The wedding is going to be ~$10,000 more than I originally forecast...

The wedding is going to be more expensive than I originally forecast for 2 reasons

1. I under-estimated how many people we had to invite.
• I originally did the calculations on a wedding for ~120 people however when we actually listed how many people we wanted to invite the list turned out to be more like 150
2. There are some significant costs I didn't originally think about
• When I first budgeted for the wedding I thought about the costs that most people incur such as the reception, outfits, church, flowers etc. etc. and I gained these lists of expenses from online forums and calculators
• However there are some costs which you will incur that are specific to your wedding.  In our case we are going to have to pay for the flights and accommodation of some very close family members that we want to be at the wedding but who genuinely can't afford to be there if we didn't help them out.  I am more than happy to spend this money but it does add up very quickly

...and is also likely to be a month earlier than forecast

I had originally forecast an August wedding and had set my savings plan up accordingly.  However when we worked out when we actually wanted to get married we realised that we were actually looking at early July (due to my work commitments in August).

This effectively reduced our time to save for the wedding by 2 months.  This may not seem like a bit reduction however a few factors meant that it has having a far larger impact than I first imagined:

• I had originally structured my savings plan so that I was paying more the closer I got to the wedding
• Originally I was paying

Is there a right way to combine finances with your partner?

Over the weekend I proposed to my girlfriend and we are now engaged to be married which is incredibly exciting.  I have been talking about doing it for so long on this blog that it a little surreal that the event has finally come and gone (although now a whole set of new planning starts).

A few months ago I wrote a post about money and relationships which encouraged readers to communicate with their partner to avoid misunderstandings, but also to make sure you are on the same page when it comes to finances.  For once I have been taking my own advice and my girlfriend fiancée and I have had some great discussions about our goals and objectives.

Finding a 'system' for finances is important...

However it is something that I have absolutely no experience in.  Most of my posts on this blog go through things I have settled on or decided but this question leaves me floundering.  I have absolutely no experience in sharing finances with someone else...

I have taken a poll of my married friends and friends that are in long term relationships and the number of systems are as varied as the number of relationships.  

Some people work on a strict system...

Some couples have a

Life lesson: Always put buffers into your budget

Having a tight budget this year and trying to achieve a lot with it has had some interesting (and unforeseen consequences) which I only really realised when I looked at myself in the mirror this morning and this was the thought that came to mind:

"I look like I am struggling to make ends meet"

My shirt is frayed, my suit hasn't been dry cleaned in far too long and my tie looks like it has been run over by several cars.  I really wish I was exaggerating but I really do look down on my luck which is crazy...

It's also not great for my career.  The way you dress and carry yourself is incredibly important to how you are perceived and this is definitely not the look I want to be going for.

So how did this come about?

I'm going to blame it on my budget and more accurately my focus on my budget this year.  In prior years I have had a fair bit of flexibility in my budget and when I have run over on some areas it hasn't really affected any other areas.

The big change this year is that I have accounted for almost every dollar I am going to earn and I have some pretty aggressive targets for what I want to achieve including:

1. Buying an engagement ring
2. Buying a sports car
3. Saving for a wedding
4. Going on a big overseas holiday

If I have budgeted for all of this...what's the problem?

We all need to withdraw money from savings...but make sure you put it back!

If you have ever set yourself a budget you will know that things don't always go to plan.  Sometimes there are unexpected expenses and sometimes you just spend more than you wanted to on a night out.

If you have budgeted for almost all of your income this means that one of two things will happen in those months where things don't go to plan:

1. You will not save as much as you intended to in the month; or
2. If things really get out of hand you will need to dip into savings

Don't write off the bad month...

One thing I realised since I started tracking my expenses fairly religiously was that if you 'write off' a month as bad you will never really catch up again.  You need that bad month to be made up by a good month later down the track.

Writing off the month mentally makes you reset to zero and you go back to trying to make your budget in following months.  I think this is a bad way of approaching it.  Bad months need to be compensated for.  You need to replace that amount you have taken out of your savings account or actually contribute that amount you didn't contribute in a previous month.

So how do you do this?

What you need is a way of tracking your unexpected withdrawals from savings...

If you have a way of tracking your unexpected withdrawals from savings then you can keep track of how much you 'owe your savings account' on a real time basis.  Not only does this motivate you to save more or be more wary of your expenses, it also reminds you that when you are having a good month that you may need to contribute a little bit extra to your savings account.

If you want a way of tracking the deviations from your budget I recommend the following method.  I have been using it for a few months and have found it quite effective.

1. Have an excel file which tracks what you do with your money when you get paid.  I call mine my 'wage day' file

This is a super simple spreadsheet which every month tracks what you do with your cash.  It is not a budget of any sort but it interacts with your budget.  For example I get paid monthly so my Wage Day file is updated monthly 

Below is an example of a month where your income doesn't quite cover all the expenses and savings plans that you had for the month

Let's work through this tracker:

• Income
• In this (fictitious) example

Going on holiday? Get some tax back using the Tourist Refund Scheme

If you're an Australian like me and travel overseas you have probably noticed that the immigration form on the way home has a question about whether you are importing anything in the country with a value over $900.  Did you realise that there was a way that you could save money even if you don't buy something overseas?

What is the Tourist Refund Scheme?

The Tourist Refund Scheme (TRS) is an initiative by the Australian government to encourage people to buy goods and services in Australia.  It allows you to get back the tax you paid on the item when you leave the country with that item.  For most items this will be the Goods and Services Tax (10%) that you paid although for some items it may be even higher (e.g. wine gets 14.5% back).

What are the eligibility requirements?

The eligibility requirements are actually rather simple.  The goods need to be

• Purchased in the 60

The single easiest way to get ahead financially when you are young...

If you are finishing up your college or university degree or have just started working you may be looking at ways to invest your new hard earned cash so that you can get ahead financially and can afford the nicer things in life.  There are a million options and as many tips out there on how to do this.

Well I think there is one thing that you can do which will make more of a difference than almost anything else and it is incredibly easy to do.  So what is this wonder solution?  It's really simple:

Stay at home for as long as you can...

Staying at home for longer is the best single financial decision that you can make when you are starting out on your wealth building path.  There are many reasons for this including

1. You avoid the high costs of rent

Rent is a massive expense and even if you share can really eat into the amount of money that you can save.  Now I'm not advocating mooching off your parents.  Pay them some sort of rent every month if they will take it or contribute to

How To Buy a Diamond Ring (Part 1)

Buying a diamond ring is an interesting process.  I'm going to make a few generalisations here but as men who are about to propose we are in an interesting situation:

1. We know that we have to propose with a diamond ring 
2. We know very little about jewellery of any sort 
3. We care very little about jewellery so the process is quite tedious
4. If we are about to spend thousands of dollars we want to the best ring for the price that we can get

I am going through the same process that you're all going through and I know how painful it is so I have put together a guide.  It turned out to be far longer than I originally planned so I have split it over two posts.  The second post will come later this week.

Step 1: Know your girlfriend

Before you even think about looking at diamonds you need to know the girl you are about to propose to.  Here are some things that you will need to know at a minimum before you even think about starting to look for a ring.

A. Does she actually want a diamond ring?

For most guys this will be a resounding 'yes' (it certainly is for me), but there are some girls who think that the whole concept is a bit silly and actually prefer something simpler, cheaper and more meaningful.  If you have one of these girls your life just got a whole lot easier (and cheaper).

So how do you find out.  The easiest way is to just start a conversation about engagements and proposals generally.  This is much easier if you are in the age group where everyone is getting engaged.  Ask what she thinks about her friends rings, and when she meets people who have just gotten engaged does she want to see the ring?

B. What is important to her?

Different girls will care about different things in a ring.  Given that you can't buy 'the perfect ring' and don't want to spend hundreds of thousands of dollars you need to work out what is important to her in a ring.  For example

• Does she care about the brand?  Some women care about brands far more than others.  If she doesn't really care then avoid something like Tiffany - you're paying for the name...not for the actual ring itself
• Does size matter? Size and

5 ways to make your suits last longer

If you work in a corporate environment you will know how important your image is.  We are not only assessed on our abilities and our work output but are also assessed on our image - how we look and conduct ourselves.  

If you are male (and often if you are female as well) and work in a corporate environment, the chances are that you will need to wear a suit to work.  The problem is that:

1. Suits are expensive
2. There is a difference between cheap suits and fully tailored suits
3. Suits wear out and you need to replace them.

I have addressed the second problem on this blog before.  I outlined a way to get fully tailored, high quality suits made in Asia which looks better than anything that you can get in western countries for a similar price.

However, even if you do get your suits from Asia you are still paying hundreds of dollars per suit...and suits wear out.  This post will cover some ways you can make your suits last longer.  By following the steps below you will need to replace your suits less often, look better for longer and ultimate save a lot of money.

Suits do wear out...

Suits do wear out and there is nothing worse than seeing someone wear a suit that is well past its use by date.  Although this approach may be 'snobbish', if you are working in any sort of corporate environment you are going to be judged on your looks (in addition to your ability) so you need to know when your suits are looking a little worse for wear.

Some common signs your suit is reaching the end of it's life:

1. It's starting to become shiny
• The biggest sign that your suit is starting to reach the end of it's life is that it is starting to get a shine to it.  The shine is caused by the fabric flattening out and starting to reflect light.
• Unless you bought your shiny suit in the first place (which I do not recommend), any sign of shine should be a sign that you should be investing in a new suit
2. It doesn't really fit you any more
• Although your suit may not technically 'look' old, if it isn't really fitting you any more then it is time to get a replacement
• I'm not talking about gaining or losing a few pounds, but if you have lost a lot of weight and your suit like it was made for someone 4 sizes bigger (which it was) then it's time to get a new one
3. It has some tears, holes and stains that can't be hidden
• Stuff happens to suits that we can't avoid.  You catch it on something, you spill something or it's just been over-loved.  Some damage can be hidden (for example some damage to the inside lining of your jacket...but if it is really obvious...it is time to change the suit

...But there are ways you can make your suit last longer

If you are spending a

How to save for your home deposit

Have you thought about buying your own home?  Have you done all your maths and worked out that actually...yes you can afford a home and it is the right time for to buy your first house?  Many people get to this situation and then realise that they are missing one big hurdle...they don't have the deposit they need for a house.

This post will give you some practical tips about how to save your deposit and my views on how much you should save for your deposit.

Saving a deposit for your first home is hard...

I actually think saving a deposit for your first home is one of the hardest savings and investing things that you will ever have to do.  There are so many behavioural and practical factors working against you including:

• It is incredibly hard to be disciplined and not the spend the money on other expenses that come up.  Unexpected expenses almost always arise and when you have a pot of cash sitting there it is incredibly easy to dip into this pot of cash
• The goal seems so far away.  Saving for a deposit is rarely something that you can do in a few months.  It takes serious effort over a few years and it is easy to get disenchanted
• You actually need more than you think...I will cover this below but unfortunately due to transaction costs (such as stamp duty and other costs associated with buying a property) you need more money than just the x% of the property value that you were aiming for

I am currently saving for my first place of residence.  If you follow this blog you will know that I already have an investment property however I have 'ring fenced' my investments (not legally but rather as a personal rule) so I am effectively saving for my first investment property all over again.  

Here is a plan to make saving a deposit for your first home easier...

The 5 step plan below is