My no-spend-on-books month

I’ve done a no-spend month once before, years and years ago, when I joined Beth for her no-spend month.

That was a really great experience because it broke my Exclusive Books habit of spending hundreds of rands on books every month .

This time, I had an idea that my book-buying habit was getting a bit out of control because I was buying a title from Modern Mrs Darcy‘s list almost daily.

Even $2 – $5 Kindle deals add up… and fast.

Amazon also sends those almost-daily emails with their recommendations based on the titles you’ve viewed.

One day I looked and I had 31 unread titles on my Kindle – real books, not samples. And I’ve been reading on average 10 books a month.

I then decided this book-buying thing was getting out of hand and I decided March would be a no-spend month on books.

What did I do differently?

I unsubscribed from MMD’s list. It’s the same way I don’t ever take a catalogue or brochure from a store – if I don’t see it, I don’t want it. I will subscribe again when I feel more caught up with my current reading and I have told my book club to let me know if Small Great Things goes on sale 🙂

How did I do?

I’ve been waiting for Alec Baldwin’s memoir, Nevertheless, for over 6 months so the minute that became available on Audible, I pre-ordered it with a credit I had.

I somehow forgot about my no-spend March when I went to shop for the 2017 Library project and I picked up some books. It honestly didn’t even occur to me that I was buying books because in my head I had DIGITAL books as my goal. Aside from the 4 books for the library, I bought 1 for a friend and about 5 for me (!).

So I was successful with Kindle and Audible purchases; not with physical books 🙂

What now?

I’m back on the no-spend wagon. We have a mini-break coming up and I wanted some books for lazing at the pool so I bought some books on Amazon last week. Coming to an instagram feed near you 🙂

I do think I’m set for at least another 3 months so let’s see if I can keep up the no-spending challenge for books for at least another 2 months.

How about you?

Have you ever declared a no-spend challenge on buying books? Or make-up? Or clothes?

Speaking of which, I haven’t bought a watch since December 2012 and I now have only 3 working watches left. I’m going to treat myself for my birthday though (4 months away) or sooner if I see something I really want.

How I paid off my bond in 5 years and how you can too – part 4

Here’s part 1 which lays the foundation and mindset stuff, here’s part 2 which is the start of all the practical steps, and here’s part 3 with some more steps and one which may be too woo-woo for you 🙂

And now for the numbers. I’ll promise to keep this short just in case you feel like stabbing yourself in the eyes round about now 🙂

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  1. Paying the bond

If you look at amortisation calculators on any of the banks’ or mortgage originators’ sites, you’ll be able to see that you’re basically paying off interest for much of those 20 years. Only a tiny amount of each of your repayments goes toward the capital while most of it pays interest.

I did a quick calculation. On R1 million, your monthly repayment is R9983 (at 10.5% interest). The majority of that payment only swings towards your capital in month 162 (13 and a half years into paying off your bond of 20 years).

Scary stuff.

So the quicker you can start paying off that interest, the better.

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How to do this

The minute your bond is registered, make a payment. Preferably the entire bond amount but any amount will do.

Our bond was registered on 5 July. I had some problems with them linking the new account to my profile but it was finally linked a week later and we paid the entire bond payment immediately even though the bank only required the first payment on 1 August. Those two weeks meant that the payment was applied mostly to interest.

If you’re paying off your existing bond, do your best to put aside as much money as you can and pay it on the 14th of every month. Right now things are a bit…. tight…. but we could afford a small extra payment (due to rounding up) so I put a scheduled transfer on my bank account for the 14th of every month for that amount.

If we do nothing else but this tiny extra payment, we cut 4 years off our bond.

Did you get that?

If we do nothing else but this tiny extra payment, we cut 4 years off our bond.

If we get to the point where we have half a bond payment extra every month, we reduce the term to 8 years, and if we work up to doubling our payment, we pay it off in 5 years.

I can’t wait for my next salary increase to increase that payment 🙂 🙂

This is the slow and steady way but that’s not really my style. I’m believing for much bigger results, like I shared in the last point of this post.

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If you’ve been paying only exactly what your bank requires, then here’s what you need to do:

Diarise to get a statement at least every 3 months.

If you do your main banking with the same bank who granted your loan, then make sure your profile is linked, and actually look at your statement at least every 3 months, and if you’re now obsessed because of my posts, then make it a part of your monthly review.

Here’s something else that is small but practical to do.

If your bond is R5678 (random number), make a quality decision to find R322 in your budget so that your total payment to X Bank is now R6000 per month. All I did was round up.

Now go to your bank’s website and set up a scheduled transfer/ payment to your bond for that amount on the 14th of every month (or 14 days from your scheduled debit order).

If you’re thinking, “how is this possibly going to make a difference?” let me tell you it will.

You’re developing the right mindset of single-minded focus.

You’re taking action in small steps now but those steps will grow soon.

These days we’re so fortunate to have technology (all the heart eye emojis); when I was obsessed with paying off our first home in the late 90’s, I’d walk to the bank in the CBD every 3 months and get an actual paper bank statement to encourage me in my efforts. Now I just log into the app and I can easily see the reducing balance.

How is all of this resonating with you? Does it feel like too much hard work? Do you feel overwhelmed? Let’s talk.

This is the final of the official posts. I so hope this was valuable to some of you out there. Please let me know to encourage me too.

Next time up I’m answering questions so let me have them.

How I paid off my bond in 5 years and how you can too – part 3

Are you enjoying this series so far? Remember to let me know if you have any questions in the comments and if they require long answers, I will write a separate post at the end of the series.

Here’s part 1 which lays the foundation and mindset stuff, and here’s part 2 which is the start of all the practical steps.

Let’s move onto the next couple of steps:

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  1. Don’t subscribe to “I deserve it” thinking

I hear this so often – I work hard and I deserve to have a nice car, or whatever.

Let’s be honest – there are many people who work much harder than some of us but due to circumstances they were born into don’t have as much in the way of material possessions.

So I’m of the opinion that while we all deserve things, that doesn’t actually fly with justifying your desires for all the latest material possessions – cars, gadgets, clothes, etc. you want.

I like to say, “I deserve to have my bond paid off quickly because I’m working hard on that goal” 🙂

Yes, by all means, treat yourself, but make it an appropriate treat. You can’t spend such a lot and still want to pay off a bond quickly. Unless you earn a fortune. In which case, this post won’t interest you at all.

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  1. Have no sacred cows

Dr Phil used to say (he might still say this – I haven’t watched his show since the twins were born), “you can’t have any sacred cows”. What that means is that nothing in your budget is untouchable.

“You can trim the grocery bill but I’m not giving up my big car”

The truth is if you want to make a big impact, then look at big expenses like cars, schooling (in some instances), holidays, and so on.

Sadly, one of our biggest line items on our budget in the last 6 months was water and electricity. How crazy is that?!

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  1. Step out in faith

With the last house we paid off, I remember going to work in the first week of January after about three weeks off from work. My boss, who knows all about my goal-setting behaviour, asked me if I’d set any interesting/ fun goals for the year ahead.

I took a deep breath because it was a big, scary goal, and said, “well, funny you should ask, but this year I plan to pay off that bond”.

It was way out of reach by normal standards but I had a sense that this was a stretch goal we could do.

Long story short but that’s exactly what happened.

Some hard saving from us, some unexpected monies here, a bonus there, a tax refund from SARS and it was done. In other words, a lot of smaller things helping us towards our goal.

It’s not magic, but there is something special with putting your intention out there, and believing (and receiving) answers from God as to how these big dreams will come to fruition. And let’s face it – had we not had this big goal we were working towards, those extra monies could very easily have been frittered away, or paid for holidays, furniture upgrades, newer cars, etc.

I have more to say on this subject but someone asked a great question which is now going into part 5 and will address a little bit more here.

Did point 7 feel too woo-woo for you?

What are your sacred cows? We all have them so don’t feel shy to share. Maybe it’s food, eating out, cars, gadgets, clothes…

If you’d like some coaching around these issues or for me to give you some customised ideas for your situation, email me for a confidential 30/ 60-minute session.

How I paid off my bond in 5 years and how you can too – part 2

If you missed part 1, you can catch up on reading it here.

Don’t worry; we’ll wait for you to finish reading that first part.

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  1. Keep your living standards small

Usually, when people get salary increases and/ or bonuses, the immediate reaction is to spend spend spend. We don’t. We do celebrate a little bit (after we tithe, of course!) usually by going out to a nice lunch. Last year I bought my gorgeous brown leather handbag.

But then, after adjusting the tithe in our budget, we increase our bond payment.

Bonuses are dealt with in exactly the same manner. Tithe and usually a good chunk is put into the bond. These days, now that I’m a bit older, I put a good chunk into my unit trusts too. But let’s ignore that for now because it’s a recent thing since I turned 40, and we’ve been paying off houses for years before that.

We have discretionary income in our budgets and for years and years we didn’t give ourselves increases because the money was enough for the odds and ends. Currently, I’m on the same “allowance” for about 2 – 3 years. Basically, we don’t increase our living standards unless absolutely necessary.

Everything goes into the bond. You were living on the smaller amount before the increase; continue living on that same amount.

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  1. Have a single-minded mindset

There’s nothing wrong with upgrading cars and such, but not if your goal is to pay off your bond early. Dion drives a 2008 car (that we bought in 2009) and my one is 11 years old this year (also bought when it was one year old).

Occasionally I have twitches when I think I might want a newer car but then I think of how lovely it is to not have a car payment 🙂

When we bought our cars, we took shorter payment plans – mine was just two years.

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  1. Don’t buy too expensive a house

Estate agents will always try to sell you on the biggest house possible. I am a person who likes to eat well and go on holidays so we really don’t like to buy on the upper end of the range we qualify for. That also helps when the Reserve Bank increases the lending rate because then you can still afford your home comfortably, and you’re not panicking.

Ask yourself questions like this while you’re house-hunting:

  • is it worth that extra R10 000 or R20 000 a month in the bond payment for an extra room? I asked and answered this question no many times when I’d have an inkling to “upgrade”.
  • is a pool/ bigger entertainment area worth the extra R____________? Maybe/ maybe not.
  • is it really worth paying for an extra room/ garage to store things I don’t even care about? Often people tell me we have too many things so we need a bigger house. Hypothetically, if you were to sell all the kids’ toys/ your junk, would you even get R5000 for it? I’m saying probably not. So why go into more debt to pay for that stuff on a continual basis (20 – 30 years)?

Only you can answer that. But be brutally honest about your reasons for buying that house.

(I know thinking like this is not popular but then again, your different mindset is going to get your house paid off sooner than other people!)

Our newest house is only worth the extra R_______ because it answers yes to all but 1 question (which was easily fixable) on our Dream House list. Of course I had a list 🙂 One day I’ll write a post about that.

Another reason to not buy at the very top of what you qualify for is transfer and bond costs. Also, your insurance, water and electricity will definitely increase. These are expenses we sometimes forget to take into account.

By the way, it is cheaper to take out underwritten life cover (through a proper insurer) than to take the bank’s credit life offering. The bank offered us credit life at 70% more expensive than the life cover we took through a traditional life insurer. Yes, it was a big schlep to phone around (I hate call centres!) but all that money saved is going into our bond!

What was the most surprising thing you learnt in today’s post?

Did I ruffle your feathers a bit? Be honest.

How I paid off my bond in 5 years and how you can too – part 1

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I’ve been promising to write this post for a few months, so if you’ve been waiting, thanks for your patience.

None of the things I’m about to share is so-called “rocket science” but I do believe that all of it added together is bond magic.

A little bit of background:

D and I have been married for 21 years. During that time we’ve lived in 5 places, 4 of them owned.

It’s also worth mentioning that we went house-hunting after two years of married life, discovered to our shock and horror that you needed a lot more money than we had saved, so we continued renting for another year to save up some more money and eventually bought after 3.5 years.

Interesting aside – that first move was done with the help of friends and D said then that in future we need to pay for professional movers because if we can’t afford to do that, we can’t afford to move 🙂 So that’s what we’ve done ever since.

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On debt

Supposedly there’s good debt and bad debt. I say no debt is good debt but some debt is a tiny bit better than others.

In a nutshell, I hate having debt. I even hate owing a colleague R6 if they bought me a packet of chips at the vending machine. So when I see lots of zeros on a bank statement, I go into action and devise a plan to pay that off as quickly as possible.

Our plan is always to pay off a home comfortably in 8 years (we take bonds of 20 years), but my not-so-secret stretch plan is 5 years. We’ve done it twice, and we will do it again with this house.

Let’s get to it, shall we?

41 things

  1. Tithe on every bit of income

We are tithers and tithe 10% off the gross of every single bit of income. Salaries, bonuses, gifts from family for birthdays, proceeds from house sales, when I sell stuff around the house, everything. We’ve tithed for nearly 23 years and we will never not tithe.

I believe that when you give God the firstfruits of all your income, He blesses the rest and stretches it.

As with almost everything else, I like to be very intentional about my tithe. Once my salary hits my bank account, I don’t spend any money until I’ve paid my tithe (except for my one retirement annuity that takes their premium even before I’ve been paid some months…). I’ve automated payments to the nanny, the kids’ school, etc. but not my tithe because I want to physically go into my bank account, see my “abundance”, feel grateful to God, and consciously and intentionally tithe. Most months I tithe from the banking app on my phone so this doesn’t take much time at all but it is still very intentional and conscious.

I’m a big tithing enthusiast because I’ve firsthand seen the benefits over the years and there is nobody who can convince me otherwise.

Coaching challenge for the comments

Do you tithe?

On a scale of 1 – 10, how badly do you “hate” debt? 1 is “not much”; 10 is “I hate it as much as you do, Marcia”

I’m not intentionally making you wait for the whole series, but the whole thing was over 2000 words long, so I’m breaking it up into 4 posts, one on each Thursday for the rest of the month.

Getting kids interested in money

We use star charts to reward the kind of behaviour we value at home and usually the kids choose a small treat when they complete a chart of 35 stars.

TIP – the star chart itself is simply an old calendar page. They usually have a grid with 5 rows and 7 columns. #reuse #recycle #repurpose 🙂

A treat is a small something in the region of R30, very occasionally R40. In the past, Kendra has chosen a pair of earrings, Connor has chosen stationery, but they have mostly settled on getting taken on a date with a parent for a milkshake, muffin and tea, or a breakfast.

Savings accounts for kids | www.OrganisingQueen.com

It’s very important to me to train the kids to be responsible financially.

They already tithe on any money they receive, and saving was the next step so this year I had a good idea to encourage them to save. I told them they could either have a treat, or they could have R50 in their savings account (which we had yet to open).

Both kids decided to bank 3 star charts’ worth of treats that I owed them.

TIP – keep track of when they start and complete a start chart, and when/ how it was redeemed. You might not have this situation but I have a boy who negotiates so hard that I’m left wondering if he is actually correct and I still owe him more treats!

Savings accounts for kids | www.OrganisingQueen.com

So off we went to my bank and I opened the accounts. That very afternoon, I transferred the R150 each plus whatever they had in their wallets. Let me just say, I think I have a natural saver/ hoarder of money and a spender 🙂

Hopefully this is the start of really good financial habits for my kids.

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In other news, I’m about 15% into Smart Money, Smart Kids, a book Dave Ramsey (The Total Money Makeover) wrote with his daughter, Rachel Cruze.

Who knows? I might abandon my star charts in favour of his commission system soon 🙂

How are you teaching your kids about money?

Share your tips!

{Intentional living} saving money on cleaning materials

I am a marketer’s dream. I could walk down that cleaning aisle and buy everything just to try out new products.

I LOVE A CLEAN HOUSE!!!!

Here are the things we do buy:

  1. the stuff in the photo (except the Mr Muscle and the Handy Andy bottle – I’m working through my “stash” of cleaning things).
  2. bleach
  3. toilet cleaner – the gel
  4. washing powder
  5. white vinegar – for fabric softener
  6. stuff in the photos below

TIPS!

  1. I buy one Mr Muscle kitchen cleaner that lasts us forever because I dilute it 1 part: 3 parts water… and yes, it’s still strong enough to do its thing on my kitchen counters. My current one is from Oct last year and we still have to use the last bit in the original bottle. That’ll be about 9 months of using 1 bottle of kitchen cleaner.
  2. I use white vinegar instead of fabric softener. No, it doesn’t make your clothes smell. Your clothes just smell… clean. I use 1/4 cup per load.
  3. I use these products. My goal is to transition to just a few essential cleaning products so I don’t need a bathroom cleaner, shower cleaner, kitchen cleaner, etc.

You use just 5 ml in a 750 ml bottle of water. Shake it all up and go clean.

We’ve been using this stuff over a year and my original bottles are still mostly full. They cost about R75 initially (for both) but look how long they last.

(it’s also kid-friendly and kind to the environment, etc. if you’re concerned about those kinds of things. I am slightly hippy so I am)

Initially I bought these products at a work expo but South Africans, PnP sells them too so they’re easy to get.

I use the fabric and carpet cleaner for the sweat marks on my t-shirts (I know none of you have those!) and other fabric stains before we need to do laundry.

And that’s it.

Compared to other families, I know that we save a lot of money with this kind of thing. R200 a month might not sound like a big saving but roll that up and ask yourself what you could do with R2400…

Years ago I used to buy multi-purpose cleaner, the gel for bathrooms, stuff for our clothes, stuff for the carpets, stuff for the windows, etc. Now I have TWO bottles to take care of it all.

Once I finish those two on the top.

I will still have separate toilet cleaner (see clean bathroom obsession above) but that’s the aim.

Any tips you can share with me?

How much do you spend on cleaning stuff in a month?

(I don’t know how much we spend but probably if I had to average it out, I’d say R125- R150 a month. We go through 2 bags of 9 toilet rolls once a month.)

{Marcia on money} 10 – remember your priorities

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This is the last post in this series and I’ve loved writing it.

I wanted to end off with a post to really challenge your thinking. I could write about tips and tricks to stretch your money … which a lot of the personal finance bloggers already do very well… but at the end of the day I want to leave you with two thoughts:

  1. the point of managing your money well is to support YOUR definition of financial freedom, or YOUR financial goals
  2. Therefore, each person’s how-to will look very different because each of our priorities are different

Just as I do with all my coaching, I want to encourage you to find your specific style.

What are the things that bring you joy and make life worth living? Spend on those things.

At work the other day someone mentioned having spent an unbudgeted amount at a friend’s book launch. You could come at this from two angles:

  1. you’re not supposed to veer from the budget AT ALL, or
  2. spend on the book launch because the friend matters to you and save somewhere else (she brings her own lunch and snacks to work every single day)

I manage my cell phone bill verrry tightly, buy a few new items of clothing maybe 3 times a year and drive an old 2005 car but my savings account is healthy and I’m always happy to spend on travel 🙂

Can you think of your financial priorities like this?

Stop comparing your situation to those of your friends or colleagues.

Firstly, you don’t know exactly what’s going on in other people’s business and secondly, it’s just not healthy! Live your own life according to your values.

What are some of the things you prioritise over others?

PS 10 steps to your financial freedom will be on sale for the next 24 hours only. Get your copy now 🙂

{Marcia on money} 9 – keep your lifestyle constant

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This is, undoubtedly, one of my “secret tips” with regards to money and finances. Something I started doing when we first bought property – I think we were married 3 years so that’s about 15 years ago.

Keep your lifestyle constant even when your salary increases.

I’ve always worked for companies where we received annual increases and at most of them, even an annual bonus.

What people typically do is increase their spending when their salary increases.

Can I share a confession?

I’ve only given myself 3 or 4 increases over those 15 years.

Let me explain.

Every time my salary increases, I pretend nothing’s changed.

I increase my tithe and my savings by the exact amount of the increase (so if 6%, then 6% all round), and the rest used to go into our bond (our house has been paid off for about 2 years now – that was a big, hairy goal in 2011). That’s mostly how we paid off our houses lickety-split. Our plan was always at most 8 years per house but we aim for even earlier.

Dion and I both have discretionary income – that means we have an amount of money that doesn’t need to be explained anywhere. So I can buy handbags and he can buy books and CDs 😉

It’s this amount that I very rarely increase. I increased the amount a few months ago after about 3 years, the previous amount was constant for about 3 years too, and before that, I was on the same number seemingly forever. But it’s worth it because I have my big goal in mind at all times.

So tell me…

Do you have a set amount for discretionary income? How often do you increase it?

What’s your secret vice?

PS This is the last week the 10 steps to your financial freedom e-course will be on sale. Get your copy now 🙂

{Marcia on money} 8 – Pay yourself first or second

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Now and again in conversation the topic of savings comes up.

A lot of people still think that it’s a good idea to wait for the end of the month or just before you get paid, see what’s left of your salary and then transfer what’s left to a savings account.

I tried that for a few months about 16 – 17 years ago and it never seemed to work. There was just no money left… ever.

Either I wasn’t earning very much (that’s certainly true) or that behaviour didn’t work for me. Probably both 🙂

I then switched things around.

When I got paid, I paid my tithe first before I did any other spending. I like God to get the first of my money.

And then the next transaction is to transfer another amount to my savings account.

After those two transactions, the rest falls into place, but those two are sacred.

I’ve been doing that every month for the last 16 – 17 years. Tithing for 19.5 years though.

And I love love LOVE seeing my savings account grow.

I do have some investments but after reading Lois Frankel’s book, I need to do more.

We don’t have a good savings culture in South Africa (I just did a quick google and I see 67% of us don’t save) so don’t feel bad if you’re not saving. The point is, don’t be content with that situation. Start small but take that money off the top.

Way back when (in the olden days :)) I think I started with R50 a month and these days I save…. a whole lot more than that 🙂 The thing is I got addicted to seeing my savings account grow and that’s when it became easy for me.

Do you save?

Is it easy for you? When did it become easier?

 

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