We all dream of a sea change, occasionally. But as I write this, sitting in a sunny spot overlooking the ocean at Robe, South Australia, thoughts of a sea change take on a serious, if not desperate tone. People move to the ocean or to the mountains for a multitude of reasons- cities become too expensive or too crowded, they want their kids to grow up in a a smaller town or they want to retire somewhere quiet. Here are some thoughts on finding and setting up your new spot, cheaply.

Reconnoitre

If moving home is a nightmare generally, moving away has to be thought of as a battle. And you would head into no battle without adequate preparation. For instance, you’ll be likely to waste a lot of money if you find yourself in the dream destination only to discover you miss your friends or the ready availability of a good cappuccino. Save yourself money by a bit of reconnoissance; find a monthly rental and see how you go in the new spot. It’ll give you a chance to set yourself up slowly and find out if you genuinely could live in the spot. I found out very quickly that I couldn’t live happily in Sydney and it took a couple of years to extricate myself, so ensure that you are fully aware when making the decision.

Planning

Part of the necessary preparation is undertaking a full evaluation about whether or not the location offers everything you need, as a human and as a worker. This will differ from person to person, but you will need to be able to set up a budget knowing what may cost you more (or less) in your new location and there is no way of doing this without thorough preparation. For instance, did you know that you can’t get the same-day Sydney Morning Herald in Broken Hill? Are you prepared for the opening hours of gyms in rural towns? What’s the internet connection like? They might seem minor, but assuming that every where runs in a similar way to the city is going to make life very frustrating. And then there is work- the ideal would be to be able to maintain some work throughout your transition, but that isn’t always possible. In that instance, lining up a job before you emigrate is a good idea as some towns will have nothing on offer, and no inclination to give it to a newcomer over a tried-and-tue local should something come up. There are unexpected costs incurred when living out of the major centers, not least because of the sheer massive task of logistics when it comes to Australia. Telecommunications, fresh produce depending where you are and, obviously, transport are just a few. You’ll need to budget for all of these, and if it looks as if the change could hamper you significantly in the long-term, you’ll need to consider the implications of that.

Rent, Not Buy

It will take some discussions with your financial advisor to work out the merits of selling your property back home and investing in your dream sea change location. With the cost of selling of a home, duties, taxes and the rest, it could be a sound financial decision to rent for a while until you know whether you’ll be there for a long time. It’s quite feasible you could commit to a sea change for a couple of years and then go home, fully satiated with your out-of-town experience. If you do commit to buying, you’ll need to be completely prepared, especially if trying to purchase from another location. You’ll need some good local advice about what kind of properties work best in the area, and you might also want to be aware of any reselling problems in the area. Locals will tell you up from down pretty quickly, and they could be your best way of avoiding unnecessary hiccups and unnecessary expenditure.

I’ve been on the road for the past couple of weeks, and there has been one thing of obvious note as the miles ticked away. Grey Nomads is the trend of our day and age. Clicking along in their burly vehicles, covering the little known roads and having a grand old time in the process, being a Grey Nomad seems to be a popular way to spend your retirement. Here’s how to do it and remain financially stable.

Permanent Versus Transient

There are a couple of different schools in the world of Grey Nomad thought. Some people I’ve met maintain their family home and have bought their caravan or camper van with savings. They haven’t uprooted entirely and may even return to part-time work for the parts of the year that they are at home. Another group of Grey Nomads have taken the big plunge and sold their family home- sometimes just to hit the road and see where it takes them, and one couple I met had been on the road for three years, others take to
the road and pick up work where they can find it.

Planning

Whatever scenario suits you is obviously a worthwhile approach to your new nomadic existence. It would be wise, however, to make a choice depending on the long-term effects on your financial security. It’s a wonderful thing- to fully enjoy your retirement years and make such great use of the money you have spent a lifetime earning. It is simultaneously important to ensure that you have prepared for your twilight years, while making the most of the years beforehand. Discuss your plans for care with your spouse and loved ones, and ensure that your will, power of attorney and guardianship are all up to date.. Set aside the money you will require for a full-time carer or nursing home, especially if you are selling your home now and will
have no assets to sell when the time comes.

Budget, And Stick To It

At this point in your life, you have limited working years or opportunities left, so budgets take on a whole new level of importance. Your budget will be the difference, especially for the last couple of years on the road. Estimate how long you will be on the road, and work out how much you will need to cover it comfortably. Fuel costs and car costs will be a major expenditure, and can greatly increase unexpectedly, so you will need a bit of financial fat to pad that out. Tips for saving money on the road are fairly simple; buy at supermarkets and directly from the supplier. One of the great thrills of traversing the country is that you will be driving through places from whence all our produce comes, so you will be able to pick it up cheaply (and super fresh). If you’re going through money very quickly, find a spot you like and put down your anchor. Offer to do odd jobs for a reduced rate, or hunt out some freelance work. You never know what openings there might be in a local town. And, just from judging the speed limit of the ol’ GN, drive ten kilometers below the speed limit, and you’ll save yourself a pretty penny. Save travels!

Income

Finding a sustainable way to make money is obviously crucial to your financial security. Hopefully, it will be relatively secure. Most importantly, you need to get your income to a point where it covers your living expenses plus some. Whether that’s through improving your hourly wage or cutting back on your expenditure, living within your means is crucial to financial security. Reducing your dependence on debt comes under this category as well. Consumer debt is a bad way of supplementing your income, and can obscure your income to expenditure ratio, so start paying off the debt to improve your flexibility and decrease your exposure.

Reserves

Income is of course imperative to financial security, but it is not necessarily 100% secure in and of itself. Things happen, businesses close. You need to take guessing out of the equation so you’re not left out on a limb, financially speaking. Setting up sustainable savings throughout your life, on top of retirement savings, will solidify your financial security. The level of savings is debated- a lot of models suggest 20% of your take-home income. Whatever you can manage on a long-term basis is optimum, for an emergency fund, flexibility should good financial opportunities come your way or a slush fund to tide you over should your assets depreciate in a down period. Retirement savings obviously come into this category, and are imperative for your long-term financial stability.

Insurance

A strange inclusion in the four pillars, but an important one nonetheless. Insurance is frustrating- money you could be using for so many other things. But look at it this way- getting insurance is a gamble, and you want to lose it. So much better to spend a little extra money and have no need for insurance, than to lose a home or a loved one or a job. 

Diversity

The last pillar- diversification. This is commonly viewed as solely being about your assets, and obviously it is important that they are spread across a wide field. Having all your money in shares, for instance, is obviously not the grandest of schemes. Keeping it all in a term deposit might be low risk, but it will lose value against inflation if that is your only investment outlay. Diversification can also be thought about in other ways- for instance, your income. Maybe you don’t need to have more than one job, but it could be a sound financial decision to maintain your skill set outside of your employment so you are readily adaptable. Or you could look at ways of commodifying your hobbies so they could tide you over should anything happen. Financial security is a case of being disciplined, living within your means, able to adapt to the unexpected and remain relatively unexposed when things change. A juggling act to be sure, but a worthwhile one.

Exercise Equipment

We want to lose summer fat. Or we’ve made a New Year’s Resolution and figure the ‘surest’ way to stay with it. So we spend money we don’t have and buy exercise equipment. And for a couple of weeks, or a couple of months of pounding the treadmill as hard as humanely possible, you start using it as a storage unit. The best way to approach the purchase? Why not get a gym membership instead. You might argue it’s a more financially sound decision to buy something upfront, like home equipment, but in the long run, you might be better off to pay a certain amount a month that you can cancel once it outlives its usefulness. Or you might find yourself getting into the fitness classes, or more motivated if other people are there. You’ll be less financially exposed and potentially keep at your goals longer.

Swimming Pools

Heat can make us do crazy things, and what crazier decision could we make than getting a swimming pool. There is, of course, a flipside. I have amazing memories of summer at my grandparents, where we would be in their backyard pool for hours on end. But it needs to be a decision you make with the reality of your situation in mind. If you’ve got little kids, live in a hot climate, have a big extended group of friends and family- this might be an amazing investment for you, and could do wonders for your health. But you need to be realistic- if you don’t have those things, chances are you’ll end up just looking at your pool, not swimming in it.

Wine Cellars

Oddly, I know a couple of people with wine cellars. That’s not something I ever thought would be the case. It’s a great investment if you are 100% serious about wine, and over a long period of time. Frankly, how many of us can afford to spend all that time controlling the temperature and dish pairing? For most of us, we enjoy good wine, can afford to invest in some bottles and would like to store it. Appreciate the level of your interest. if you are more than usually serious, why not make a smaller outlay on a temperature controlled fridge before you really commit.

Outdoor Kitchens

The day of the humble BBQ seem to be in a far off distant land. Back in the day, you just grilled things. These days, apparently, you can have built-in coolers, smokers and entire outdoor dinner sets. Full on. And not necessarily something you will ever use enough to justify the investment. The solution isn’t that tricky either. Just buy something less expensive, but still a solid investment. After all, it’s more about your mates and a beer in the long run.

Movement

The logistics of getting to work are not only annoying, they can be a massive drain on your income. Say I have a gig in Sydney, a 2 hour drive away from where I live. It’s not enough to look at the $200 worth of income and think of it as profit- I need to deduct traveling costs from that. And it’s the same for us all- a weekly pass on public transport, a much more financially viable option than driving- is still going to put a big ding in your wallet over the course of a year. And with petrol prices, driving to work has become a pretty costly business. The solution? Talk to your boss about it- if they subsidize your cars, then take advantage of it. If you would still prefer to take public transportation, then it’s not fair you should financially suffer because of it. Negotiate transport costs as a deal on top of your salary.

Child Care

The cost of childcare is not only significant, it’s also now often a reality of our working lives. The dual shift from one to two-income families and increasingly nuclear families has meant that people are now facing a previously unknown cost in their working lives. There’s no easy solution. Does one parent bow out of the workforce in order to look after the children, or at least reduce their hours? Maybe think about working in with other parents working part-time- if they have your kids a couple of days a week, you can return the favour when they work. Or ask your extended family to help out. Ask your workplace if they would consider you ‘telecommuting’ one day a week- it won’t cost them any money, and it’ll save you a lot. Even reducing your child care costs by one day a week could make a massive difference to your overall finances.

Wardrobe

Uniforms at retail outlets are frustrating enough. Working at a clothing store, and being forced to have to spend your hard-earned dollars on their over-priced items would make me want to tear my hair out. And, at the office, you have to look the part. It can all dent your income significantly. The only solution is invest in good staple items that you can adapt across a variety of settings, and will last. Try and buy clothes that will endure over a couple of years and accessorize them with cheaper options. There’s a tax deduction for uniforms and make sure you deduct any clothes you’ve had to buy because you work in the store.

Chomping In

It’s not just the store-bought lunch that can damage your wallet. At the end of a long day, it’s hard enough to spell your own name, let alone think of something you could be bothered cooking. And if you are the social type, the after-work beer can chow into your savings very quickly, even if you happen to be restrained and really only go for one. The solution? Organise all your meals at the weekend, and make sure you have all the ingredients. You’ll take all the thought out of the process, making it much easier. Take lunch four days a week and buy out only on one.

Life As A Teacher

A recurring ability in those that have achieved financial and career success is an ability to continue learning new things. Those with a flexible mind will see opportunities as a chance to learn new things, while those with a more stolid way of thinking are probably pretty happy with the way things are and unlikely to learn anything new from a situation or a threatened by ways of thinking that challenge their own. People who are successful, research would show, are those that “approach new situations for their possibilities” according to Yahoo Finance. They believe in opportunities to grow- whether it’s a new job or career or even financial venture.

Life As Risk

This is never to say that life should be approached as all risk and no rationality. Successful people don’t just accept every harebrained scheme that comes their way, because it might be risky. People who are successful are excited by risk. They consider the possibilities, and if the worst that could happen is a risk they can live with, they jump for the opportunity. It’s about the mindset- are you open to new possibilities, or consistently reminding yourself of your own limitations? And could there possibly be a link between your mindset and your perception that opportunities only ever happen to other people? Let’s be honest- if you love your routine, are happy in your job, I say congrats for working out what you want and getting it. But if you are unhappy or would like something different, you need to look at shaking up your mindset to achieve it.

Life As Failure

Yes, life can involve failure. But only if you view it as such. Sure, there are plenty of experiences we would all have rather done without. Say, high school. Lots of people wish they had never been there, never had to endure class after class of boredom. But think about the friends that you made. Could you really write off the entire experience as a bust? The same goes with everything. Failure is temporary like everything else, and if you have growth mindset, you’ll learn to bounce back and over it as just another part of life’s experiences. Knowing that you play the most important part in shaping your future is liberating.

Life As Adaptable

There are some things you might want to hold onto. Your integrity, your work ethic, the people whom you love and who love you back. These is your essential base, so is there anything else you really need to cling to? If the process you are trying isn’t working, try a different one. If the job you are doing makes you hate weekdays, make some changes in it or find a new one. Sometimes the fact that it is tough and requires a bit of fortitude is a good indicator it’s worth doing.

Business Now, Emotions Later

I can imagine this would have to be close to impossible- after sharing a whole life together, you’re expected to take it apart financially without letting your emotions get in the way. Now is the time to get selfish, but selfish in a smart way. You care about your financial future? The smartest thing you can do would be to check your emotions when dealing with the finances of divorce.

Changed Landscape

Divorce can also mean a drastically different landscape financially. Maybe you get depressed or find it hard to work as effectively, leaving you looking for another job. Maybe you were not the main breadwinner, and now have to shoulder the burden or a single income. Whatever the instance, you’ll be living separately and supporting two households which costs money and you’ll have the cost of the divorce itself. If you have children, things get particularly tricky. There’s child support for the primary caregiver, and the desire to maintain the children’s lives with as few changes as possible. In this instance, it’s best to be strategic. Can you afford to keep the family home, or would it be better for their wellbeing to find a new place you can actually afford? What processes can be set up so there are no child support arguments with your partner? They’re hard questions, but necessary.

Why It Costs

According to an article in New York Life, divorce costs such huge amounts of money for four main reasons. Anger, leading to a vitriolic approach to assets. Revenge is the name of the game and hence very little money is left at the end of the process. Ignorance can lead to “expensive mistakes”. Rushing the process can mean little thought and too much haste leads to poorly-made decisions. Finally, delegating the entire process to lawyers can spiral your costs. Let’s be honest, keeping your account low is probably not the reason divorce lawyers got into the biz.

What To Do

There are ways to minimise the cost and long-term financial damage a divorce can wreak. Of course, the last thing you want to do is one last compromise with your partner, but this one could make or break your financial future. Try and reach an agreement and let the attorneys simply implement it. Put everything in writing. A million times over, even if it seems inconsequential. You’ll save a lot of heartache if you can just provide in-depth documentation to show what decisions were reached and when. Review everything- your will, your joint accounts, your credit cards and your debts, your insurance and your superannuation. Leaving it undone is going to cause far greater acrimony several years down the track than a brief spat of awkwardness now.

Economists are predicting it will be a turbulent year ahead and a steady learning curve for many people in how to manage finances into the future.

Let’s look at how to survive a recession by trimming the fat from our financial obligations so that together we can all come out on top at the end of the financial storm.

Pay off your high interest debts

If you have debts that are getting charged daily with high interest – prioritise them as your number one concern. High interest charges will take you a few steps backward each day until they are paid off, so try and tackle things like Store Cards, High interest credit cards, short term loans and other debts that utilise high interest charges before doing anything else.

If you were to not have employment, these debts would be crippling so the sooner you pay off your high interest liabilities the more secure you can feel for riding out the storm.

Mortgage Payments & Home Loans

Pay over the required amount towards your mortgage each month. You want to try and create a buffer for your largest asset that is most likely to be affected by the potential recession. Once again, imagine if you lost your job – you will need this buffer to drawn down on your mortgage should you need extra cash flow or you are unable to meet repayments for a few months while finding work.

Consolidate those credit cards

If you have a number of different credit cards, odds are they are all at different interest rates. As times get tougher, the credit card companies will increase their interest rates to handle the pressure they themselves are getting from the global credit issue.

Get all of your cards and consolidate them onto one easy to manage debt with a locked in interest rate.

Personally I took advantage of a Citibank credit card that offered 2.9% interest for 18months on balance transfer. Doing this allowed me to have a VERY low interest rate and 18months to really attack the debt and get rid of it. I am now making significant payments each fortnight that are far over the required minimum. Doing this I hope to have the debt reduce to a couple thousand or nothing come the end of 18months.

Fixed Rate VS Variable Interest Mortgages

Interest rates are continually dropping as a result of the Reserve Bank of Australia trying to lower the impact of the pending recession.

Stick with, or get yourself a variable rate mortgage to take advantage of lowering interest rates. Remember that they can potentially go back up again in the near future, so weight these odds up and like all advice given – consult with a financial planner.

Clear your house of unwanted items

That’s right, get rid of EVERYTHING in your house that you no longer need. Try and sell all items and get cash in exchange for them.

You can eBay things, hold a garage sale and sell things via the Trading Post. Make those useless items in your house into cash – remember that one persons junk is another persons treasure!

I did this recently and eBayed a whole bunch of stuff to make extra money for a car payment, within 2 weeks I had made $500 from selling old DVDs and Baby clothes.

Look for things to cut back on

Find the added extras in your life that you currently pay for. Find out what are important and what you can live without.

Here is a list of examples that you may want to look at:

• Lowering your mobile plan.
• Canceling your gym membership.
• Stop drinking bought coffee’s at work.
• Cancel your wireless internet plan.
• Lower your broadband plan.
• Eat out only once a month.

Re-think your savings plan

As much as we encourage and promote saving money for emergency funds and rainy day accounts – it is sometimes better to use that money to create the buffers required for potential looming recessions by paying extra on your mortgage or removing those high interest debts.

Slow down your spending

Economists for the Government would be upset to hear me say this as the looming recession is depenedent on consumer spending and slow down rates, but if a recession were to come about – try and buckle down and slow down your novelty spending so that you have more money for the core elements of your finances like home loans and debt reduction.

Employment during a recession

During a recession or pending financial meltdown, companies look at cutting back costs to help reduce the running costs of a business. This means that a lot of the time companies are quick to lay people off in an attempt to recover salaries as a way of paying off debt and reducing overheads.

Here are three important tips regarding employment in such a time:

Protect and own your job
This means that you should work hard, add value and show your employer that you are an asset to the company you work for. Put in the extra hours, the extra step and show that you are truly adding a monetary value to the business. Looking for a job when unemployment rates are at 5-10% can be very hard, so keeping your original job is even more important.

Be prepared for getting laid off
If the worst happens and you lose your job, be prepared. Have your CV updated and ready to go with a list of contacts you could potentially network with to try and get another job.

Earn money wherever possible
Try starting a side business, an internet business, an eBay business – any extra cash that comes in goes straight to your bottom line and create immediate help.

How do you plan to come out on top?

Share with us your strategy to come out on top of this financial slow down!

Welcome to the very first Savings Guide Newsletter!
Designed specifically to offer you the latest tips to help you save money and get your finances working for you, not against you.

Newsletter Contents:

• Tip of the week
• Win $20 for writing an article, $200 to give away!
• Top 5 must read articles
• Special Offer of the Month
• Updates to Savings Guide Australia

Now onto our very first Newsletter!

1. Tip of the week

Making your lunch at home can save you nearly $10 per day, combine that with not buying coffee over the course of the day and that is a saving of around $20 per day. This could potentially save you $5000 over the course of a year! Imagine what you could do with $5000!

2. Win $20 for writing an article, $200 to give away!

Now for the exciting news! Fancy yourself a bit of a knowledgeable money saver? Why not write a few articles to help others!

Savings Guide is offering $200 worth of cash for for the top 10 articles submitted. That is $20 per article, with entries set to unlimited. This means that if you were to write the top 10 best articles, you could pocket the $200 cash all to yourself!

More information below;

• Articles must be 400 words in length minimum.
• Articles must be on Saving Money and have a specific topic. Eg; How you save money on petrol, cleaning products, baby costs etc.
• The contest will be drawn on the 10th December and entries will be assessed.
• Cash will be sent via Australia Post directly into your pocket.
• Articles once submitted are the property of Savings Guide Australia and will be posted on the website pending editorial guidelines.

3. Top 5 must read articles

1. How to Save Money on CTP Greenslips.
2. Voluntary Superannuation Contributions to help you save money for your retirement.
3. How ANZ’s new Money Saving Platform can help you control your finances.
4. First Home Savers Guide to buying a house.
5. What is the best way to Save Cash?

4. Special Offer of the Month

Macquarie Bank are offering a great high interest savings account to help you reach your financial goals, they have a competitive interest rate and will help you earn high interest on your nest egg! View this offer here

5. Updates to Savings Guide Australia

The team at Savings Guide are very excited to announce that the SavingsGuide.com.au website will be going under a redesign very shortly with one of Australia’s top web design companies – making a more accessible and easy to use Money Saving website, which as always will continue to be 100% free. We will also be upgrading this newsletter to a stylish and more frequent send, allowing you to get more out of each issue!

Thanks for signing up to our new little newsletter, we hope this first issue gives you some good tips and look forward to hearing from you if you have any suggestions or thoughts on the newsletter and Savings Guide as a whole.

Until next time,

Savings Guide Australia

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