Sunday, July 3, 2011

Invest. Save. Live. How we save money.

Around the blog spaces that I read, more and more people are discussing money, times being a bit tighter than before, some are worried about renting or have had to sell the house or are worrying about hard times they have fallen on.

Many are asking, what are your tips? What can you share that gets you through bad times or keeps you out of them?

I have been hesitant to write too much, after all we are not driving around in new cars, we have a big mortgage, our kids are not too special to not be wearing hand me downs.

This process works for us, if things are tight for you right now you probably think you can't do it, but you really can. At least you can set up the accounts and organise the direct debits to occur.

It may not make you rich and certainly won't make you famous, but it should provide you with more control of your money, allow for better financial independence and prevent sleepless nights worrying about unexpected bills.

Whatever you earn, it gets split like this:

Invest 10%
Save 10%
Live on the rest.

As your income improves, make the percentage in save and invest a little bit higher. If you are in a really tough time, drop it to a couple of dollars, just to keep/begin the habit.

Rules for Invest:
This is easy. Set up an online savings account and have 10% of your take home salary/allowance automatically put into this account.

This can include superannuation or making additional payments on your home loan, but remember you can't get your super out and your mortgage may have fees to access some funds.

Never touch it.


Unless it is going towards an investment purchase such as a house, shares, etc. A car is not, ever, an investment.

Do not have easy access to this account, eg, make it one without an ATM card.


This is another online savings account that you open and have 10% put into. This account is left to accumulate over time. When the fridge blows up, you can get at it. If the health insurance is causing you grief, dip in. But mainly, use it for saving for things. For instance, if you want a weekend away, save up to $500 and when you reach it then book your trip. If you need new tyres for the car, you can access savings. Regular bills like power and groceries are not paid from savings.

If you can trust yourself, you can be like Mr H and have envelopes. He writes the object he wants on the outside and puts his money in til he has enough, then off he goes to Bunnings or JB HIFI.


We live on 80% of what we earn. This goes up and down a lot, especially as I have never returned to work full time since Popps was born. I have had two full years with no income and received no maternity leave pay and Mr H is a shift worker so his pay changes depending on the fortnight. If we can't live on this amount than we are living beyond our means. When we are struggling to pay the bills it means we have bought too much that fortnight. Usually on going out, food, wine, magazines or something not really 'essential' (though fun)!

Get Started:

No matter where you are at, just get started. When I was on mat leave we had an account that just got $1 a week, but it kept the system going.

If your living financially with Invest, Save, Live (which is my own little concoction and not a tested system by anyone other than our household) there are a couple of other things to know.

Buy now and pay later schemes are gifts directly from the devil. Only people already wealthy gain from these. If you think you can afford it, than put it in the savings account.

Your credit card should be a debit card if you are using it for online shopping.

Time is the best thing to help you save money. Just get started, get the accounts set up, get the habit going, once you start you hardly notice the money going, especially if it leaves before you even see it in your account.


  1. Great tips. I totally agree about having bank accOunts you can't touch.

    Sometimes..we eat too much sushi and we have to limit our sushi to one bog splurge per fortnight.

  2. Great tips!

    I have just started the 10% savings again... it is kinda working

  3. I couldn't agree more - saving up to buy things is such a simple thing, yet most people don't seem to do it.

  4. great tips, thanks. we over-pay on our mortgage so that we have a buffer should anything crop up but i like your idea of splitting savings and investing. x

  5. We are really struggling cos we didn't do as you suggest above when we could have. We're resolved to do better & get rid of those debts first & move to a less stressful existence, including shelving plans for an extension. They are great tips & like all good tips simple. Xx

  6. @Sandra, if you have an offset option on your home loan you can sometimes still get the interest saving on your mortgage and also have a savings account.

    @Amy, great to hear you are back saving, starting ismhe hardest bit.

    @Cat, sorry to hear you have hit a rough patch, and yes getting rid of debt is always most important. We are hopeless at paying off debt so ensure we never have a high limit. Banks are just so happy to give you more and more.

  7. Love it Clairey! We are tight, tight, tight here too. But we definitely don't save 10%. But I might just talk to hubby about this, this week.

    We have only one credit card and we pay it off in full every month.

    But what I wouldn't give to be able to save more... Thanks so much for sharing this.


  8. Clairey your tips are great. I like your percentage system and the differentiation between 'save' and 'invest'. I am going to check our budget against your system and make some adjustmensts - just in time for the new fin year! Thanks matie x

  9. Clairey ,
    love your tips and yep i am gonna start to do this wow! Thanks so much we always start savings then dip in and just stop? So we will tighten it again and see how we go ;-)

  10. I relate totally to the too much sushi comment. We don't do a lot of fine dining with three kids but some time ago it struck me we were just gobbling up the cash on little treats.
    Hot chocolates, Slurpees, lattes. gelati, muffins, sushi and similar little treats that don't seem very significant by themselves but by the end of the week can total $50 or $60. Over a year that money could go towards a nice getaway.

  11. Belts are totally tightened here at WoogsWorld at the moment. Was great to go to Coles last night with Mr Woog who had a heart attack at the price of ingrediants to make last nights meal. And my best friend VISA has gone! WHHAAAA

  12. Great tips, such good advice!! Our "rough guide" is Give away 10%, Save 10% and live on 80% though we don't always do it exactly like that, we do find it a really useful guide.

  13. Great advice... especially the bit about realising when you are living beyond your means. When we first went from two income no mortgage (ah the days when we lived in a tiny house that we owned outright!) to one income biggish mortgage it took us a while to figure out what our 'means' was. Once we wrapped our head around that the rest of was easy... well easier! LOL

  14. we used to put everything on a credit card. We suck at credit cards. Since having kids we have saved for things we want and it has been awesome. we now live better on one income than we ever did on two.

  15. Great advice. Only thing I don't necessarily agree with is the interest free buy now pay later schemes. My husband and I have used them to our advantage on several occasions, but I can see how people can get rorted in those. If you don't pay it you're screwed. But we have always paid it off before the end of the interest free period and it's worked for us.

  16. @aroha paying off the interest free deal is vital. If you do that it might work for you, however rarely do you get a good deal on the item.

    The finance firm offering the 'deal' gets a commission on the deal too, the buyer has to cover this in the price of the goods.

    Cash can usually get you an item cheaper.

    @louisa, wonderful to add in 10% to give away too.

  17. Love how simple you system is, and it makes such good sense. Thank you for sharing :)

  18. Very sound advice I think Claire. I love that principle of 10% and then live off and enjoy the other 80%.

  19. Great advice Clairey!

    Visiting from the Rewind.

  20. Clever Clairey! The classic 80/20 rule applied to moulah.

    Always knew you were a clever bunny x

  21. Very inspiring post Clairey! I am absolutely crapola when it comes to money. This is a really practical system I think I could start implementing. Thanks for the tips!

  22. I loved this post. So glad it is getting another airing with the Weekend Rewind. x

  23. Great tip. It's interesting that 'investing' and 'saving' are different things here. x

  24. Yep I learned the hard way when I was young to save for stuff first, it works!

  25. Im so grateful ive seen this, (wish id see it a year ago!) as im just about to embark on trying radical stuff in these parts! Love that you have different savings and investing accounts. It makes such simple sense. Thanks for sharing this again, :)


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