So what does the average Australian spend on alcohol?

According to a source from News Ltd, the average Aussie spends $31 per week on alcohol with men spending slightly more than women on drinks.

$31 a week is the average figure, meaning there is likely some much higher spenders out there – you know who you are! At $31 per week, that is an average of $1612 per Australian per year. Using my rough maths, that is around $35 billion a year.

People in NSW consume more alcohol per week ($39) than any other state with South Australia coming in last at $23.

What could your $1612 do for you instead?

Well if you added $1612 to your home loan each year in a lump sum, you would likely shave off a couple of years of your loan. That means a few more years you might not have to work.

You could even put the money in your early twenties towards the cost of your future kids education – this might mean less of a daily struggle come parenthood.

In saying this, it doesn’t mean you should necessarily cut out alcohol completely in order to save money – though what would happen if you perhaps reduced the amount you spent per week by $10? That is a cool $520 per year and will leave you much healthier than the next person.

Pretty interesting to see where our money goes if you ask me – I definitely have some plans to cut down my expenditure per week towards the end of this year on alcohol. Could really do with that extra cash.

Shop Assistants Are Not Your Friends

They are there to sell you something. They don’t necessarily feel the need to tell you the entire truth when making the sale. They can and are legally obliged to ensure that they have answered your questions (which you should always ask) about the length and conditions of the warranty. What is the repair procedure during the warranty and after it has expired. Be sure to know the refund policy if the item is faulty, and be even more wary when dealing with a private citizen as opposed to someone working in a shop. Just because they advertise in the local paper, doesn’t mean they’re community minded.

Today, And Today Only

How often in life does a deal come along that genuinely only lasts one day. Rarely. Of course, there are occasions where I am sure it is the case but often when a sales rep is telling you the deal is only for today, or that you’ll never get such a good deal again, he or she is trying to heavy you. It is, after all, their job. And your job is take to your time. It’s easy to get worked up in the frenzy of spending, but it’s your hard-earned dollars and no one can tell you where’s best to be putting it. At the end of the day, that is your call and yours alone. There will be plenty of ‘once in a lifetime’ offers next week.

Door-Knocking

Companies continue to door knock for a reason, it works. People catch us off-guard and in a place where we are less likely to bolt. SMH suggests watching out for the following techniques that might lead you astray; sob stories about how the sales rep needs the money, a series of questions that inevitably answer ‘yes’ though you still don’t want or need the product. Other examples include- the sales pitch that goes on for so long you need a cup of tea afterwards and end up buying something because you feel as if you’ve wasted their time. Or the social shame tactic- “I couldn’t help but notice your paint is peeling”. Make sure you have validated that the sales rep is from the actual company, and get their card as opposed to committing right away. Once you’ve had some independent advice about what the rep suggested, you might go for it. But you will do as a savvy consumer.

Lay-By

The ultimate in delayed gratification- you make a deposit on the item, and regularly pay it off until you pay off the entirety and get the item. There can be occasional sticking points- if you don’t pay off a scheduled repayment, the company could cancel your lay-by, so long as they ensure they notify you that such a measure is about to take place.

More Common Than You Think

Lots of people are addicted to buying things. The difference is emotional- people can buy something because they really want tit or because they have some spare cash to buy something nice. People with an addiction are spending money they don’t have on things they don’t really need purely to fulfill (whether acknowledged or not) an emotional need. And it’s a fairly common problem. Purchases are made, often on credit, in order for a brief moment of happiness or the illusion that said happiness will hang around as long as you own the item.

Credit Surviving The Downturn

Much has been made of the change in our saving patterns. Lots of Australians in particular are using extra money that comes their way- like bonuses or the payouts from the government- to pay down their debt. But that doesn’t mean we’re living without our credit cards. According to an American survey, about 40% of Americans say they are living beyond their means, a gap that is often filled on credit. Too often, it’s not only luxuries that the credit card is bolstering. An alarming amount of people need their credit cards to get them through the end of the month.

The Hit

Buying things can give you a buzz. And sometimes I think it’s worthwhile. I bought a jacket for an amount I would never usually spend, and everytime I put it on, it gives me a thrill. I think that was a worthwhile purchase, but expecting a purchase to bring you long-lasting happiness is a path to certain disappointment. It also enables the ol’ vicious cycle- when the item disappoints, the likely response is to go out and buy something else to fill the void.

The Expectant Hush

The research cited by MSN Money suggests four kinds of transformations expected from purchases, and they’re pretty interesting. Firstly, self-improvement; “I will be happier with myself if I get plastic surgery”. Secondly, improved relations; “She will love me more if I have nicer clothes”. Thirdly, adventure: “Owning a motorbike will probably improve my quality of living”. And finally, effectiveness; “I really need an iPad upgrade in order to work effectively”. None of these beliefs are true, yet all of them are exploited by companies in order to ensure people spend more money than they can afford.

Breaking The Cycle

Spending is an addiction like any other, and breaking the cycle is hard. There is a huge range of actions that can be taken- from understanding what emotions are driving your purchases and addressing them, through to joining up to an organisation like Debtors Anonymous. Understanding what things will genuinely bring you some form of usefulness or a degree of enjoyment, as opposed to those things that are without any long-term benefit, will see you happier and your credit card healthier as a result.

The Research

According to Angela Self from the Globe and Mail, research shows that people will always opt for the free deal even when it makes no financial sense. Researchers at MIT conducted an experiment- you have the choice of two Amazon vouchers- a $10 gift certificate for free of a $20 gift voucher for $7. Unanimously, people chose the free option, even though you had more value ($13 as opposed to $10) with the second option. When actual dollars was attached to that question, the results flipped in the opposite direction.

The Add-on

I can’t tell you how many times I’ve fallen for the free add-on. The gift with purchase that I didn’t really want and was absorbed into the cost of the product anyway. If you think you’re immune to this kind of thinking, then look back on your purchasing past and think if you’ve ever bought a second top you didn’t love because it was two for one. Or you spent $110 on two pairs of jeans instead of just $60 on a pair you were really happy with.

The Sting

Companies wouldn’t offer free things if there wasn’t something in it for them. Unlike good-hearted philanthropic societies, these people are in it to get you into a certain spending behavioural pattern and keep you there. Sounds a little paranoid I know, but think about it. The ‘free’ phone attached to a 24 month marriage, where I continuously overspend my cap and have since paid for the phone a million times over. The fee-free credit card which you get ‘just-in-case’ and end up racking up a huge debt on. Free is a deliberate policy on the behalf of companies to get you involved with their products and ending up paying for them. Look at me with my iPhone. There is no way on this earth that I will let iPhones go until the next big advance in technology, the result of the ‘free’ phone I got with the plan.

Priorities

Negotiating the world- and the knee jerk response- of free is a matter of working out in your head what your priorities are. Have you ever spend several hours at the computer screen, downloading version after version of free software? Whereas if you’d actually just paid the price of software straight up you could have done several hours work and earnt the price of the software several times over? Time is money, and ‘free’ things can suck a lot of it.

When Free Is Good

Free is great if you want to try out several different things without committing financially to any one thing just yet. Free is fantastic if you have tones of time on your hands, and are a bit short of dosh. It’s a winner if you can remember to cancel your free trial and take advantage of all the features without getting your credit card charged. If you can stay organised, trying something out for free can be a great way to do a bit of market research and then spend the money on something you actually know will work.

It’s In The Mail

I cut up my credit card several months ago. Now, I need it to rent a car when I travel to Queensland tomorrow. So did I call my bank several weeks ago and ask them to post it, ordinary post, so it would arrive in plenty of time before I jetted off? Well, no. Three days ago, I rang in a complete tizz and asked them to express post it to me which of course- no shock here- cost me money. A moment of genius, that one. According to Forbes (and the great Angela Self), mailing packages late is a big cost of laziness. Sending it on time costs 60 cents. Sending it a week late will cost you several times that. The only way I have managed to cope with my laziness, other than the credit card fiasco (as I sit here, waiting for it to arrive before boarding a flight tomorrow, I curse my own lack of organisation) is to have postage stocks at home, so I can then just drop them off and get my mail out the door in time.

One Stop Shopping

We have an ALDI and Coles here in the lovely mountain. ALDI is great- cheaper by far. But it doesn’t have everything I need. So that means having to finish up the shop at Coles. And on top of that, I could probably save money if I went to a fruit shop and butcher instead of getting inferior quality ingredients at a higher price in the supermarket But three or four shops seems like a whole lot of hassle, so generally I jus go to Coles. It costs me a pretty big whack of expense, and I get poorer food on top of it. So to save money, and my palate, I’d be better off setting aside a decent amount of time to get the shopping done. I could even afford to have a coffee in the middle of the expedition if I did it that way.

Savings Accounts

A bit of research could end up saving you money when it comes to your savings accounts. There are plenty of online websites that compare the best savings accounts on offer from all the banks. Or if you want to exercise some customer loyalty, call your bank to discuss whether they have an account that would suit your savings needs better. While you’re on the phone, why not setup automatic deductions for all your bills or alerts for when they need to be paid? If you, like me, are inclined to laze, then taking your own legwork (or lack thereof) out of the equation will make your financial existence a much happier and less expensive endeavour, as you will no longer be constantly charged with overdrawing and late fees. You can be as lazy as you like as long as you have set up some processes in the first place that ensure you’re still taking care of business.

Cakes, lollies and deep fried goodies

I don’t really have a sweet tooth anymore. It seems finally after all those years of dieting I may have finally quashed that urge. However on the rare occasion I do feel like something full of nasty calories I make it myself. This way if I can’t be bothered to cook, then I don’t get my treat, which is much better for my waistline in the long-run anyway. A packet of home brand cake mix costs around $1.50 and a bag of icing costs around the same. So I have my whole cake for $3 and get to eat it too! I also recently learned the art of shallow frying, which turns out just as good as a deep fryer at half the cost. Fill a frypan with oil (about ¼ full) and then wait till the bubbles start rising, drop your battered fish/pineapple or potato slices in and cover with a splash cover – takes about 3 mins and tastes too good to be healthy.

Alcohol

Depending on your poison of choice, grog doesn’t have to cost a fortune. If you drink wine – consider switching to cask, the good old goon has improved vastly over the past 10 years and at around $10-$15 for 4 litres, that’s 24 standard drinks (60 cents a glass.) Lucky for me my friends aren’t wine snobs, but if you are concerned about what people will think (good luck being frugal) then alternatively fill a washed ‘brand-labelled’ bottle with the cask wine using a funnel – I doubt anyone will be the wiser.

Stock up in winter

Aussies are well known for their love of beer. Every summer stores promote cases of most beers ‘on sale.’ Last year I did a comparison between winter ‘sales’ and summer ‘sales’and winter won by a long shot. So given most beers have a 12 month best before date – why not stock up on a case or two during the winter? Store them in a cool, dry place and they will see you through to the warmer months. Alternatively why not go halves with a family member/ friend and brew your own?

Cigarettes

To be clear, I am NOT promoting smoking it is a filthy habit, but I am a smoker myself and whilst I am well aware it would be beneficial to my health to quit and save me more money in the long run, it is a personal choice for me and one that I am not willing to give up. So if you are in the same boat here’s a few quick tips on how to save money on this nasty habit. Only buy at supermarkets (petrol stations add at least $1 per pack) and ideally buy in a carton (saves roughly $10). Try switching brands, Coles recently brought in cigarettes from Germany that are around $2.40 cheaper per pack than the cheapest regular brands. Know anyone going overseas? Duty-free cartons can save roughly $15-$20, and lastly you could consider rolling your own (not for me, but can save around $2 for 25 cigarettes.) Best still – quit!

The point of these articles is not to advise you on how to live YOUR life, but to advise on how you can save money in living YOUR life in order to get the most from it.

The more people quit smoking, the more money there will be to pour into other areas of health which also needs attention.

So, smokers, what does this mean for us?

The average cost of a packet of 25 cigarettes now is between $16 and $17, an increase of around 50% in 10 years. If you have been thinking about quitting, but need that final nudge, this is it. You simply cannot afford to smoke anymore.

Average consumption and the cost of smoking

The average Aussie smoker consumes around 20 cigarettes a day. So, based on the above prices, your smoking habit will now cost you around $90 per week, or $180 of your fortnightly income. That’s close to $5K a year you’ll spend (or save) just based on the price of cigarettes. You don’t need us to tell you that a spare $5K a year would significantly impact your savings.

The financial impact of smoking is far, far more wide reaching than the cost of the devils themselves. It goes without saying that smoking significantly increases your risk of developing a smoking related disease. This will mean you’ll have to take time off work to manage your illness, pay for procedures, medication, long term care and, likely, palative care. You’ll also have to retire earlier and be more likely to spend the later years of your life stuggling financially. That’s quite a grim thought.

Other benefits of quitting the smokes

If you quit you’ll pay less for your health insurance and for your life insurance, which adds up over the years. You’ll also save money on cleaning and washing to get the unpleasant tobacco smell out of your clothes, home and car. You’ll even save money by elimenating smoking related damage from your property, like cigarette burns and nicotine stains.
As you can see, over a life time, you stand to lose millions through your habit and you have everything to gain from quitting. There’s never been a better time to do yourself and your bank account a favor by quitting.

Good luck!

Sarah xx

Now think bigger.

Think of everyday items, and then multiply the regular price by a couple of million. According to Yahoo! Finance (source for the following list), in the age of the recession where people cut spending on grocery items and clothes, the prices on diamonds and art don’t seem to have taken much of a beating.

So, how much can people spend on possessions?

Televisions

If you like the idea of a television covered in 18 kilograms of 18-carat rose gold and encrusted with 72 diamonds, the PrestigeHD Supreme Rose Edition TV might be for you. It’s a limited edition, so I would get cracking on it. Oh, and you’ll need to rustle up $2.3 million to pay for it.

Hotel Rooms

While the rest of us are slumming it on a dorm bed in a hostel, or tossing and turning in minimal 2-star comfort, take a minute to think of those hanging their coats up in the 10 room, seven bathroom, mini-palace at the Penthouse Suite at the Hotel President Wilson in Geneva. Apparently there’s also a private fitness area, which is lucky because you’d need to stave off the impending heart attack attached to the $65,000 a night bill.

Motorcycles

If you want to be like James Dean or Marlon Brando, but you want that kind of cool in top-notch class, find yourself a spare $700,000 and the Dodge Tomahawk V10 Superbike will be yours for keeps. Apparently you can go 300 miles per hour on the thing, and can get from zero to 60 in 2.5 seconds, which I understand is impressive.

Mobile Phone

Stuart Hughes (the man responsible for the somewhat overpriced tv, above) is obviously onto something, because he also has a line in iPhones with similar trappings as the television. Indeed, for his latest commissioned iPhone, the main navigation button was a 7.1 single-cut diamond. So, if you would like a special phone, just give him a call (and around $3 million of your hard-earned wages) and he’ll dip the whole thing in gold and throw diamonds at it. Just don’t leave it in a cab at the end of a big night.

Car

The 1954-55 Mercedes Benz was donated to a museum, and then rudely sold on to finance their renovations. Later on, this little engine managed to fetch $24 million when sold to a French industrialist.

House

It is staffed by 600 people. Each level (and there are 27 of them) has its own garden It has a health club, a helipad and a six-floor garage that can hold 168 cars. If that sounds nice to you, then find yourself somewhere between 1 and 2 billion, and beg a Mr. Mukesh Ambani to sell it you.

Yacht

For a cool $1,2 billion, the Eclipse has 2 helipads, 11 guest cabins, three launch boats, a minisubmarine and measures 560 feet in length. It also has an aquarium and two swimming pools, which I would have thought defeated the purpose of actually being on the ocean. Then again, I tend to agree with whoever is holding the 1.2 billion dollars.

Ring

Proposing anytime soon? She might be a tad disappointed with your $500 token considering the most expensive one out there costs $16 million.

What would you spend money on if you were that wealthy?

Although I would never say I shop a lot, I certainly manage to spend a lot of money without much thought. Spending patterns can be accepted as part of our daily routine, but they are just another habit that needs to be kicked.
Here’s a list of 5 steps to take:

Step One: Don’t derail, just desist

This is not the time for financial self-flagellation. Like all extreme diets, total denial is more likely to result in a relapse. Acknowledge that you enjoy shopping, you just can’t afford to it all the time. Cut the time you spend shopping in half, the half again, then half again until you’ve managed to restrict it to a once a month treat, as opposed to a daily necessity.

Everyone needs a little bit of luxury in their lives, no one needs a little bit of luxury every afternoon.

Step Two: Mirror, mirror on the wall

Consciousness, zen and a little bit of chi is all you need to move further in your spiritual journey to not spend as much at the store. So much of our lives is based around quick decisions and little thought. How often have you bought something without thinking, only to realise you didn’t really want it all along. Stand in front of the item for a whole minute. Count it if you need to. If, by the end of the minute, you still think it’s a good purchase, then go for it.

Don’t buy into the purchase urgency suggested by stores- they have something to gain from you making quick, thoughtless decisions. Instead, why not leave the purchase for 24 hours? If you really want it, you’ll come back. It’s a risk, but one worth taking.

Step 3: Invest

Like all investments, shopping purchases should be considered, researched and rational. With all purchases, budget properly so you can items that are quality and will last. Much better to buy a classic coast that you can wear for three winters, than 5 versions of an inferior product in that time. Fashion is just another word for fad, and much better to have a style than to be trendy. Buy things because they are your style, not because they are the latest ten minute trend. The more in control of your spending you are, the more time and resources you’ll have for the occasional, wonderful purchase.

Step 4: Don’t be a victim

The purpose of marketing and advertising is to sell you a product, irregardless of it’s actual worth or value to you. Understanding the power of marketing is an important tool in getting over a spendthrift addiction. We are all being manipulated, most hours of the day, by marketing. Acknowledging it can help break the evil spell.

Step 5: Reward Systems

Now we’ve reached Step 5, we’re allowed to reward ourselves for our valiant efforts. Don’t reward yourself with more shopping, work out what other (cheap) things you now do with your time. If it were me, I’d grab my favourite book, turn off my phone and chase down a lurking red. Who needs to shop when there are so many other things to do?

How do you control your shopping habits?

It only takes one night out a week to truly scupper my budgeting plans. Because as much as I’ve promised to be good, vices don’t come cheap There’s the sheer quantity (and in Australia, we bring a new meaning to binge) and then there’s the holier-than-thou taxes installed by a government who are probably trying to recoup some of the money these vices are costing the health system.

So how much do our vices cost us every year?

Alcohol

Our most common poison, alcohol functions as everything from a social lubricant through to a painkiller. What better way, we ask ourselves, to enjoy Australia’s glorious weather than in one of its glorious beer gardens?
I couldn’t agree more, but unfortunately our habit can cost us anywhere between $3,000 – $4, 500 if we are moderate drinkers. Heaven protect those who need it as a crutch.

Apparently on top of the yearly cost, those of us that indulged in under-age drinking end up earning less over a life time. Now that’s sobering.

Cigarettes

Even thinking about sitting on a back porch and lighting up a cigarette to truly illuminate the sunset makes me crave, so I try and avoid thinking about. The money that I will eventually have to pay on helping me to breathe aside, smoking is not a cheap habit in Australia any more. At $10- 15 a packet, it’s not even close to inexpensive.

If you are pack a day, you’re spending $4000 a year on the spins and a bit of calm. I’m not saying I’m not with you on this one. All I’m saying is that it’s expensive.

Coffee

Ah, the millionaire drink. You know the argument- save on a coffee a day, and you’ll save a million dollars by the end of your life time. That’s dandy, but how am I meant to function at work without a bit of a caffeine buzz?
Well, I guess I could focus on the $1,500 a year it’s costing me to be buzzy. That might help me move on from the habit.

Late afternoon chocolate bar

I’m a sucker for this cure for three-thirtyitis, but it’s a sucker on my wallet. If a standard chocolate bar costs $2 (and I’m being generous here, as I don’t know how many of them are still that cheap), then I am eating away $730 a year. And then I’m spending a couple of hundred dollars on gym memberships to try and exercise away my chocolate bar guilt. That seems a little crazy to me.

Lottery tickets

A tax on the poor, lottery tickets have everything you need from a vice- hope, excitement and the promise of another chance next week. But they can end up costing you $100- $500 a year, and doesn’t take into account Scratchies, pokies and all the other goodies you can get your hands on should you be feeling like a bit of a flutter.

How much does your vice cost you?