My First Visit to Costco

I've been meaning to check out Costco for a while now and have a few friends who absolutely love it.
So today I took myself and the kids off for a morning adventure to see what all the fuss is about.

Firstly, there's a $60 annual membership and you can't even walk in the door without one. Crazy no? My initial thought it a shop that makes you pay to shop there is basically ripping you off. But they offer a money back guarantee so I figured I could always get my money back if I wasn't impressed.

Secondly, it took me about 30 minutes to get there and I was there for about 1.5 hours even though I only did a very quick trip around the edges of the warehouse. It is massive to say the least and a lot of  my time there was spent manoeuvring around all the other people with my MASSIVE trolley that had fixed back wheels. And it is Monday today - supposedly one of the less busy days there. I can only imagine what a weekend would be like. I'm going to have to make some pretty big savings to make the effort worthwhile.

Thirdly, I have complete baby brain and forgot to take my price book with me so I couldn't compare prices before I bought. I did remember my list. I also have a weekly grocery budget of $150.00. I needed to get anything from Costco plus everything else on my list for the week and not go over budget.

So here is what I bought:

 

Item	Price at Costco	Current Price at Coles	My Savings
Tomatos - 12 x 400g cans	$7.29 (60c ea)	$1.58	$0.98/can - $11.76 total
Lemons - 1.36kg about 10 in the packet	$3.99 (40c ea)	$2.98/pkt6 (49c ea)	9c ea - $0.90 total
Greek Yoghurt - 2kg	$5.49 ($1.37/500g)	$5.87/kg ($2.93/500g)	$1.56/500g - $6.24 total
Lamb Rack - 0.668kg	$19.16 ($28.69/kg)	$37.99/kg)	$9.30/kg - $6.21 total
Deli Ham - 500g	$5.99 ($11.98/kg)	$16.50/kg	$4.52/kg - $2.26 total
Proscuitto - 150g	$5.39 ($35.93/kg)	$6.50/100g ($65.00/kg)	$29.07/kg - $4.36 total
Ricotta Cheese - 1kg	$5.69 ($1.42/kg)	$5.74/500g ($11.48/kg)	$10.06/kg - $10.06 total
Lebanese Pita Breads - 2 packets of 7 pieces	$1.89 (13.5c ea piece)	$3.90/pkt6 (65c ea piece)	51.5c/ea - $7.21 total
Whole Almonds - 1.36kg	$13.79 ($10.14/kg)	$10.84/500g ($21.68/kg)	$11.54/kg - $15.70 total
Rice Vermicelli - 4 x 375g packs	$4.79 ($3.19/kg)	$2.12/125g ($16.96/kg)	$13.77/kg - $20.65 total
Fresh Strawberries - 1.4kg	$9.49 ($1.69/250g)	$2.00/250g punnet	31c/250g - $1.73 total
Tuna in Springwater - 12 x 95g cans	$12.49 ($1.04/can)	90c/can	14c/can - $1.68 total

My Total Savings $88.76

Ok, so I am a bit shocked by the amount I've saved. I really didn't think it would be that much. So I have already made my annual fee back.

A couple of points though

• Some of these quantities are huge and I think we may have to work at eating it all. For example the yoghurt may go off before we finish it. Same goes for the ricotta.
• We don't eat that much tuna and I probably shouldn't have bought it there. Considering I haven't saved that much I would have been better buying it at Coles and not having to store the extra cans.
• The fresh food is in such large packs that most would end up going to the chooks. We might finish off a pack of apples but not 2kg of tomatos.
• I need to find out more about the meat. It didn't have free range or grass fed all over it. I did notice they had Lilydale whole chooks.

With a bit of planning and restraint I think going to Costco a couple of times a year could be worthwhile.

BTW - of I have made a gross error in my calculations please tell me. My brain hurts after all that.

Spend-Free Days

Yes, it has been a long long time since I posted last. I have no excuses for being so slack (again) and I am not sure 'losing my blogging mojo' is the reason either. I have been very busy though, working on the house and garden.

Which brings me to the topic of today's post. I have dipped into our savings a bit too much lately and I need to rein in my spending. As you can imagine after buying the house, moving in, making repairs, laying turf, making the back garden and the odd furniture purchase, our savings are at a bare minimum. This makes me nervous. Christmas is just around the corner, the car needs servicing and there is bound to be something else around the house that needs repairing.

Some reasons for my spending lately - vintage school chairs picked up at Cobbitty Markets.

Ideally, I would like six months of essential living expenses in savings and we will slowly work back up to this. At a minimum, I feel comfortable with three months - as this is the waiting period for our income protection.

So, to get me in the spirit of reducing my spending, I am going to have two spend free days per week.

Another equally valid reason - My new toy shelf. Hopefully my lounge room will remain tidy for a bit longer.

Why spend free days?

I first heard of this idea from Frugal Trenches and I find it an excellent way to reinforce healthy finance habits.

• Firstly, you have to plan your spending. You have to anticipate when you will run out of milk and plan to buy some on a spend day.


• It also minimises impulse buys. If you want something and it is a spend free day you have to wait at least til the next day to buy it. Often you realise you don't really want/need the item and don't buy it.


• I seem to spend a lot less over the week with a couple of spend free days. When ever I go to the supermarket I always end up spending $30-$50 on a handful of items. By reducing the amount of times I go to the supermarket, I am buying less products and therefore spending less.


• It also helps you to remember your goals. I find that doing when I do the budget for the month it takes about 3-4 days after that for the motivation to wane and I forget about the budget and begin to increase my spending. By spacing out spend-free days, I am continually reminded to stay on budget and I remain motivated.

So, if you are trying to keep to your budget but are finding it hard, why not have a go at one spend free day a week?

A New Oven

So, it turns out our oven is broken and cannot be repaired. The exact phrase was:

"It's over 10 years old so the parts aren't made anymore".

What?

It is stainless steel - it can't be that old. But no, apparently 10 years is over the hill in oven years (perhaps they age similar to dogs).

The current oven is gas, but I think I want an electric one. I have checked out CHOICE and read their reports on ovens and apparently gas is no longer all it's cracked up to be. Electric ovens have improved over the years and an electric oven can have so many cooking options that they can be much more versatile than a gas oven.

Here is my wish list for my oven:

• Non marking stainless steel (for grubby little finger marks)
• External Grill (or super duper internal grill that won't splash fat through the entire oven)
• At least three shelf positions
• Cooking options like fan or different elements on or off
• Self cleaning - but will heating the oven to high temps damage my timber kitchen?
• A side opening door sounds really nice but not at the expense of other things on my list
• A door with a large window so I can see the food without having to open the door during cooking
• Shelves that won't tip when they are half pulled out and have safety stoppers so they won't come all the way out by accident.
• A smokeless grill tray (especially if we go for an internal grill)
• A non-tilting grill tray with stoppers like the oven shelves as well as a grill tray that comes out far enough to reach food at the back of the tray.
• A shield on the front of the grill element to stop burnt fingers

Other things to check:

• The inside dimensions
• Energy Efficiency
• How easy it is to get to the bulb
• Ease of removing shelves for cleaning plus lack of nooks and crannies on the inside of the oven.
• The warranty length
• Service times etc.

So that's my check list for today. Hopefully by the weekend we will have purchased one. I had no idea how much I rely on using an oven.

We'll Keep on Looking - and Saving

We didn't get the house.


We decided that it would be too risky for us at the moment to buy at auction. One bank (one of the big 4) has still yet to look at our application for a pre-approval - it has taken them 4 weeks so far. With the banks taking so long at the moment to give pre-approvals we had absolutely no confidence in them getting the loan organised in time for settlement. The house sold for $20,000.00 more than our upper limit anyway, so even if we had our finance sorted out we wouldn't have won the auction.


I do feel empowered in the decisions we made during this exercise. Even though I loved the house (it was perfect) we (or should I say I) was able to make rational decisions about the price we were willing to pay, the loan options we wanted as well as the ultimate decision about risk concerning the auction. I understand some people will pay anything and take any loan they can get in order to buy a particular house. That then leaves them with a lovely house, but with huge debt that they really can't afford to repay. I have heard stories of people living off their credit cards because their mortgage repayments are so high. They then roll the credit card debt into their mortgage as the house increases in value so they can start the cycle again.


This was exactly the situation we do not want to get into. Last year we made the decision to live off one income so we could give Miss Berry what we believe is the most important thing - time and attention that comes from having one parent stay at home. This means that we not only have to rent for longer whilst we save for a deposit, but also that we need a bigger deposit so that our mortgage repayments are low enough to maintain our current lifestyle on one income.


Although it will take longer to get our own house, I am happy with our decision. It has made it a lot easier to stay on budget and i think it's because the decision was ours. If we had been forced into this it would be a lot harder.

So we will keep on saving and I will keep on looking. I am sure the right house will come at the right time. There are after all, a lot of houses in our area. Surely some of them will be perfect?

House Hunting

I have mentioned previously (I think) that we are renting whilst saving a deposit for a house in the suburbs of Sydney. Our aim is to have a very manageable mortgage on a single wage so that I can remain a full-time Mum. Not an easy task considering Sydney prices.

Well, we have reached the very tip of our goal and I have found a house. It is up for auction soon and I am trying to get everything organised with the bank in time for the auction.

Let me say that I am unbelievably stressed and am beginning to think we should just rent forever.

It seems with the financial crisis, the banks are not only tightening up their lending criteria (as they should) but they are also taking an insane amount of time to even look at applications. It has been almost three weeks since we put in the application for pre-approval and they still haven't looked at it. Why? Because they give precedence to people that have actually got a house to buy.

But we are going to auction I tell James (no last name of course) from the bank. There will be no backing out if we win the auction so we need pre-approval before auction day. His solution was to sign the contract subject to finance approval. But it's an auction I tell him. There is no backing out or conditions when buying at an auction. His reply - oh, well don't buy at an auction.

Aaagh. Does this man even live in Sydney. 95% of properties in our area go to auction (not sure why that is either). The sellers for the house we are looking at won't even consider selling before auction unless we waive the cooling off period which puts us in the same situation.

On top of all that any pre-approval will be subject to a bank valuation of the property which I was told is usually about 20% less than market value. And the banks will only lend up to that amount.

Now this bit stumps me. Firstly, market value seems to be very subjective so I assume bank value will be the same. We have our limit on this particular house and we think it is a fair value, but what if the bank disagrees? Secondly, if they value the property so much lower than the market value, why will they consider lending us 90% of the purchase price, which is of course more than the so called bank value of 80% of the market price?

So, we have 3 options:

1. Not even consider signing a contract until our pre-approval is water tight.
2. Go ahead on a very shaking and somewhat vague conditional pre-approval.
3. Decide we are invincible and sign a contract without any pre-approval (possibly also using our own blood for the signatures).

So, you can see where the stress comes from.

On top of all of this, it is possible that everything will fall into place the day before the auction anyway and this worry is all for nothing and what I should be worrying about is whether someone will out bid us. In this case I will also have the added worry that I have been worrying about the wrong thing.

As I said, I think we should rent forever.

I Hope Our Budget Had a Nice Holiday

All of our bills from Christmas are in and we were able to sit down and look at how our budget fared over Christmas. Our budget must have gone on holidays early because it obviously was nowhere to be during Christmas.

Is anyone else in this situation? We are generally pretty good with our budgeting. We use a cash based system which I have talked about here. Over Christmas though, the credit cards came out and the cash was forgotten about.

We spent an afternoon going through our bills and working out a plan to get ourselves back to living frugally.

1. Stop spending, put the credit cards away and go back to using your budget. This seems like an obvious step but I know I can get into a spending frenzy so this is an important step.

2. Sit down and work out how much damage you have done and where you spent the extra money. Finding out what you spent your money on can help you to identify when the situation will arise again. Surprisingly, our extra spending wasn’t on Christmas pressies, it was on all the holiday things we did and because we were at home - all the things we did around the house and garden.

3. If you can, use your emergency fund to pay off the credit cards and get the balance down to zero again. Doing this straight away would be ideal as it would avoid any interest charges on the credit cards. If you don’t have an emergency fund or you have just started one and it isn’t big enough to pay off the credit card, then put the money you would usually put into your emergency fund onto the credit card until it is paid off. You can then go back to building your emergency fund.

4. Go back to monitoring your spending by writing down everything you buy each day. This can help you get back on track. It can be hard to start again if you have really gone off budget so going back to basics can reinforce the good habits you were developing.Don’t beat yourself up about it. Wallowing in self pity and complaining about how bad you are because you have ‘failed’ is not going to help things and it certainly won’t encourage you to go back to frugal living. Firstly, you haven’t failed. If you have got to this step you have realised that you went off track and have taken steps to improve things and I think you should

Bare Bones Budgeting

I started writing this blog about budgeting last night and realized it was getting longer and longer – it’s no wonder a lot of people think budgets are too hard!

So I have included photos of a quilt and an outfit for Miss Berry that I finished over the weekend to help prevent brain overload. I deleted most of my original draft and came up with my bare bones steps of making a budget. Use a spreadsheet program or pen, paper and calculator.

1. Write down everything you spend your money on and sort it into general categories:

Loan Repayments
Rent
Groceries
Utilities
Insurance
Car
Medical
etc, etc, etc

Make sure the totals are for the same period as your pay. If you get paid monthly, divide annual bills by 12, quarterly bills by 3 and so on.

2. Add all the categories up and subtract them from your total income. The figure you get is the amount you have left over. Use this amount to pay off debt or save.

3. At the beginning of each pay period, take the left over amount out of your everyday account and pay off your debt or put it into another savings account – whatever you have decided to do with it.

4. Don’t touch this extra money!

5. At the end of the pay period, take any money in your everyday account and transfer it to debt or a savings account.

6. Don’t spend more than you earn – no exceptions.

That’s it, the very basic, bare bones budget that we are using now. This is by far the easiest and quickest way I have found to budget.

I have been using a personal budget of one kind or another for the last 14 years. Some have been successful and others not so. I have tried numerous tools from hand-written scraps of paper in a diary to a full software program. I have had times when I have been lax, times when the budget has been completely ignored and my spending has been horrific, and times when I have remained on track.

Before you go off thinking I am a saint, let me say that I love spending money! Living simply and frugally is very hard for me and I have times of relapse and spend like I used to. You do not have to be perfectly on track with your budget at all times (although that is the goal). If you have or are thinking about a budget, don't give up just because you might blow it on the first day; it may not ever be easy.

Budgeting is very, very liberating. It is a wonderful feeling knowing how much money you are spending and that you are spending within your means and are in control.

Staying on Track

First a note from my garden....
My first strawberry harvest!

They were absolutely delicious. Even Miss Berry noticed them ripening and every time we went outside she tried to rip them off to eat them. Well, we finally did.


I find it a constant battle to stay on track with my goals. They are not goals I have been forced to make, and I do not resent trying to meet the goals; in fact I enjoy the process. It seems there is always something that is trying to tempt you away from them, especially in a society that screams the opposite of what you are trying to achieve.

Lately my spending has started to slip. I find I am looking at shop windows or ads and thinking ‘I really do need a whizz-bang automatic apple corer and look it’s only $150 – bargain!’ Of course I haven’t actually seen a whizz-bang automatic apple corer but you get the idea. I don’t always continue with the thought and buy something but I have done it a few times too many.

I don’t think falling off track temporarily is a failure. Recognising that you are slipping is something to be proud of in itself but ignoring it won’t get you closer to your goals.

What are my goals?

I have broad goals (long term) and then more detailed goals (short and medium term) that help me to achieve my broad goals. My broad goals are:

• Not have any debt (achieved in July this year).
• Live a simple, frugal life that is environmentally sustainable.
• Save money for a very large deposit and all cost associated with purchasing a family home.
• Purchase a family home that is not a McMansion but has enough space inside to accommodate a growing family and has more yard than house.
• Make sure my family and I are healthy, exercise regularly and are not overweight.
• Be happy and enjoy my life.

My detailed goals are things like our budget and saving plan, the vegie garden or always sourcing second hand items instead of buying brand new things. These are the goals that need constant thought and attention; the broad goals will take care of themselves if I keep my eye on the detailed goals.

I think it is this principle that people (myself included) forget about and then wonder why they are not getting anywhere. It is useless to have goals, record them in a lovely inspiring way, forget about them and then wonder why you haven’t crossed any off a week later. I am going to sound very high and mighty but I think this attitude reflects what we are like as a society now. We want everything immediately without having to put any effort or sacrafice into it. This immediate gratification is one of the reasons for household debt being so high, and why a lot of people are struggling with huge mortgages. As I said earlier, this post is about me getting off track, not other people so I am now stepping down from the aforementioned animal.

Enough talking about not meeting goals – it’s time to do something about it. I hope that this blog will help remind me of my goals. I will also monitor my spending habits more than I usually do and this will begin with recording everything I buy each day. This is an excellent exercise for those trying to budget. By writing everything down you can see exactly where your money goes. Hopefully, these two steps can get things rolling again.