5 steps to our dream cottage (5 ways to save)

It’s comforting to know that I’m not the only one completely baffled by the rising cost of living. Reading through your comments (thank you all so much!) it became apparent that the expense of day-to-day essentials is a universal concern. Regardless of location or family size, we are all affected.

Last week I embarked on a little project to document how I spend my money (more precisely, where does all my money go?). The results were as I expected:

  • Daniel and I spend, on average, $65 a week on coffee (in cafes and takeaway). That’s well over $3000 a year. If we buy a slice of cake, some banana bread or convince ourselves that breakfast/lunch is in order, we can easily spend $100+ a week ($5000+ a year) in cafes.
  • A significant amount of our pay goes on groceries – but I honestly believe that I can reduce our fortnightly bill with more forethought (and possibly shopping online)
  • When we run out of milk or bread the trip to the shops always results in milk, bread and a few non-essential items that happen to be on sale.
  • Bills – the worst kind of mail. Our electricity payment just increased by $50 a fortnight (!) which basically cancels out the reduction on our car insurance and phone/internet bill.

The next step? Creating a realistic budget. Our pay varies greatly from fortnight to fortnight hence it makes sense to work with the absolute minimum income and treat the occasional extra invoice as a savings/spendings bonus. I’ve been perusing the suggestions made by the Barefoot Investor and I really like his approach to saving – ie. put money into your savings account before you pay any bills or spend any cash, even if it’s only $20. He is also a big advocate for living in the now; don’t forgo your daily coffee, a celebratory dinner out or a beautiful bunch of flowers just so you can save – otherwise you’ll just be miserable. One reader mentioned that her daily coffee is like soul food, a little treat that induces happiness. I wholeheartedly agree – saving is important but today should be lived and enjoyed hence Daniel and I are aiming to find a savings/spendings balance. Our savings goals?

  • a little cottage that we can call our own…even if it’s 5-10years away.
  • private high school education (the public high schools in our area leave much to be desired)

And this is our plan:

  1. Buy a coffee machine so we can enjoy a cappuccino at home…but still go out to a cafe a couple of times a week (there’s some great espresso machine and grinder advice in the comments section of this post)
  2. Shop with awareness – meal planning each and every week
  3. Make more food from scratch (I’ll save this lengthy discussion for another post but I’m also mindful that making bread/biscuits/crackers/jams every week is not realistic for me right now, and that’s ok)
  4. Grow food in the garden (currently a work in progress)
  5. Allocate a set amount of ‘spending’ money each week  – and always use cash. Basically, I find it harder to spend cash. Handing over my eftpos card is easy – it’s invisible money. My ‘spending’ cash will go on things like takeaway coffee, flowers, magazines etc

I’m feeling quite inspired about this new take on financial matters and I promise to share my success and failures as I go. I think it’s a good time of year to be mindful of money, as Christmas approaches and the spending mayhem begins. This year I’m sticking to my golden present rule and aiming to buy local and/or handmade. Simple and beautiful is my intention. I’ve also organised a little something for you…three readers will win a truly wonderful children’s gift package that will ensure a very affordable Christmas. Stay tuned.

Finally….a little perspective:
  • If you have food in your fridge, clothes on your back, a roof over your head and a place to sleep…you are richer than 75% of the world
  • If you have money in the bank, your wallet and some spare change, you are among the top 8% of the world’s wealthy – found via 4myearth
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Showing 49 comments
  • Pink Ronnie
    Reply

    Wonderful post, Jodi! Thanks for sharing so honestly with us, as always. I think we are in the same boat as you in terms of where most of our money goes. Groceries and coffee/food at cafes. Going to cafes and enjoying time out as a couple/family is so important to us, that I don't think it's something I would cut out either. I've found that giving ourselves a realistic spending monthly allowance really helps – nothing extravagant but not overly stingy either. I also think cash is the way to go. Starting next month, I'm going to start taking out cash every week rather than handing over the EFTPOS card like you said!

    And yes, we are so much richer than so many people. We have lots to be thankful for…

    Ronnie xo

  • Tania
    Reply

    I really enjoyed this post. Coffee and magazines are a weekly (or twice weekly) indulgence for me, and I agree that the happiness resulting from them makes the sacrifice of the cost worth it. I have many areas to work on to save. Some I am doing already. But I also need to invest more time in the garden and also do a proper budget (which is a little harder when your weekly income varies, but it can still be done). Look forward to hearing more updates x

  • Pink Ronnie
    Reply

    p.s. I also do a monthly cashflow every month which doubles as our budget. I think one of your other readers mentioned this as well, but so much of it is managing cashflow especially when you're self-employed/freelancing. While Rick was at college for four years, we lived on my freelancing income and I would do weekly cashflow budgets, which I would almost update every day if I became aware of any changes to our upcoming incoming and outgoing cashflows. I just did this in Excel, and I remember having it synced to my phone as well so that I could update/check it on the go!

    Ronnie xo

  • Joanna
    Reply

    Thanks for this Jodi. We recently wrote down all our expenses and it was an excellent exercise, albeit rather frightening. But just the act of documenting it all made me spend less! And yes, you're right – we're all very fortunate to even be in the position of eating out or buying coffees and it's good to put it all in perspective. Thanks as always for your lovely posts. xx joanna

  • Jocee
    Reply

    i was going to write a paper on this for my english class, but sadly, there really weren't many editorials or anything on it, and i needed database sources, so not this time. however, this is a very interesting and captivating subject, and i love it! thanks for this. i don't drink coffee, but if my future spouse does, i'll have him buy a coffeemaker! 🙂

  • Jodi
    Reply

    Yes, apparently coffee/food is quite expensive in Australia. You can expect to pay between $3-$5 for a coffee here. But our rate of pay is rather good so I think it all evens out in the end. Best of luck with your cabin dreams x

  • Mother Down Under
    Reply

    Thank you for sharing Jodi.
    We are in the same boat…our main goal is private high school and our main weakness is cafes.
    I think we do recognise that in the grand scheme of things we are lucky…we live in a beautiful part of the world, in a house (that while not even close to paid for) we love, surrounded by the most lovely friends and family…we are happy.

  • Katrina (capturing moments)
    Reply

    Sounds like you have a solid plan, make your own coffees & your cottage might be purchased sooner than you think! All the best Jodi x

  • Victoria
    Reply

    Aldi has a cheap coffee machine, you buy pods for it & stuff.
    A couple of people I know have them & love them.

  • Coryann
    Reply

    Thank you for this post! Finances are a difficult subject to tackle but, you handled it with so much grace. This post made me realize to be a better steward with our money and treat it with care : )

  • Mrs Smith
    Reply

    That's great. Its a really rock solid and simple plan of action, the best kind.

  • Reply

    Thank you Jodi! Such a timely post for us.
    I think the idea of having spending money in cash is such a brilliant one. I also hand over my eftpos card too easily. I think this would really help me to save a bit more. It's far too easy to spend $20 here or $30 there.
    Our goals are exactly the same – our own home and a private high school education for our children.
    I look forward to reading about your progress. xx

  • Miss-B
    Reply

    I imagine this would have been a hard post to write, thank you so much for your honesty! Our 'play' money as we like to call it also goes on eating out. I've found the way to be more ok with that is to drink coffee at a cafe or eat a meal out with consciousness … ie, not grabbing it on the go and not savouring it but really turning your mind to it being an indulgence and soaking up the mouthfuls.

    I so hope your cottage dreams come true!

    • Jodi
      Reply

      Not the easiest post to write, no…but I'm glad I did x

  • laluuu
    Reply

    Great, honest post Jodi.

    We are about to move into our first home (in our 30s) and I can't wait. We have definitely had to tighten our belts in the lead up as we're building from scratch and currently paying rent and our mortgage all on 1.5 wages.

    Some days I find it really depressing to have to wonder if I can afford another lunch out, but then I remember how in a few weeks I'll have a place to really call my own (and hang as much art as I want) and it's all ok!

    Good luck with your dream. Luna Uzu. x

  • Radostin
    Reply

    I dont know how you make your coffee when at home now, if at all, but have you considered a stovetop espresso jug to save on that initial outlay of the machine, too? You can even buy a little milk frother if you consider the froth of great importance.

  • Sophie Wijnberg
    Reply

    Great post. We decided too that it was time to start saving for some land to build a home for our little family. The first step was to create a budget and WOW….how life-changing it can be to track what you spend. In the 6 months we've been watching our pennies we've not only saved plenty but our energy has shifted. We feel moments of abundance as our savings account grows and this reflects in real life money flowing our way – unexpected bonuses, savings on day to day things, great deals on loads of things.
    And what simple joy you can get from saving a few dollars at the supermarket or making that perfect coffee at home!

    We're only a few thousand away from our deposit and our little home in Byron Bay.

    • Jodi
      Reply

      such an inspiring story Sophie….thank you! x

  • Steph
    Reply

    Thanks so much for sharing Jodi! We too are examining our expenses and the ever present internal argument of "do I need that?" is shouting loudly at the moment. With one wage coming in and little people who hoover down food it really can be tricky to stick to your ideals such as organic fruit and veg, dairy, Australian made….We always seem to be battling our ethics. I've come to the conclusion that "most of the time" is good enough. No, not good enough….brilliant! Most of the time I'll cook from scratch, most of the time I'll buy organic, most of the time I'll put that magazine down and go home for a coffee..most of the time 😉 Wishing you all the success in the world as you save for your beloved cottage. Steph 🙂 x
    P.S. We made a collage of favourite houses from the real estate section and put it on the fridge while we were saving with the words, "Just kep swimming…just keep swimming" from Finding Nemo. It always kept us on track when things got tough x

  • Vicki @ dover and madden
    Reply

    Great post Jodi, I'm now living by the theory that you pay yourself first. Every amount of income that comes my way, whether that be my wages from my casual job, or hat money as I refer to it from my little handmade business….I make sure I take 10% of it out straight away and it goes into a savings account….I have been stunned how quickly my savings have accumulated and 10% you don't really miss!! I'll be following your progress with great interest x

  • Gypsy Lou
    Reply

    This is just excellent Jodi!
    I've just posted about a fortnightly menu plan which saves us in the meal planning, shop-grazing areas!
    http://gypsylalou.blogspot.com.au/2012/10/fortnightly-menus.html

  • Edwina
    Reply

    It's just staggering, where the money goes. We do own our home (well, half of it – the bank owns the rest) and it's been a long haul to get here. And we live in a CHEAP part of town. I often stop and wonder who lives in all those big, nice houses in the nice suburbs. How does anyone afford them?

  • Squiggly Rainbow
    Reply

    Wow! One outing to a cafe each week could be a special 'date' day? Just an idea! Groceries are so expensive… completely agree… I am so excited we are beginning our self-sufficiency plan… our spinach and lettuce is ready for harvesting – no more buying them! Now to conquer all the other bits and pieces! xx

  • Fsn
    Reply

    This is such a relevant post to me right now!
    I've just started doing the cash thing recently as I was finding that I was using my card so much to pay for things that I was forgetting the lunches out and the odd top up shop at the supermarket etc. then 2 1/2 weeks into the month I was wondering where all my money had gone!
    We have a safe in our house and I don't know the code for it, I only take out a weekly 'budget' in cash which I keep in my purse and then I ask my boyfriend to pop my debit card in the safe, then If I need more money I have to ask for my card, which may seem strange but it really makes me think about what I'm spending and wether I need to.
    I'm also trying to be really strict with meal plans, I didn't do a 'supermarket' shop last week and we ended up eating out EVERY night that week – I was mortified when I realised, such a waste of money.
    I'm a definate believer that being strict with money doesnt always mean you have to go without. If I have some left over at the end of the week I'll make sure I treat myself.
    Great post Jode, thanks for sharing!

    x

  • Donna
    Reply

    Great post Jodi! I am a big believer in menu planning. I am totally with you with private high schools. I have one in year 12 and another in year 10. I have done what it takes to send them to their private high school and it has been completely worth it, as for saving money on coffee …. the Aldi pod machine is gold. x

  • Rebecca
    Reply

    What a lovely post, Jodi! This hits home with me. My husband budget and attempt to be mindful of where our money goes. Sometimes it's hard, but I like what you said about being in the present. I've heard a saying before that goes "You can't take it with you," meaning you can't take your "riches" with you when you die. I remind myself of this when I feel 'guilty' of spending a little extra on something.

  • Ethaney
    Reply

    really great post…it resonated with me deeply! my fiance and i are currently saving to move back to my home state of california. it's a struggle to not spend whenever i'd like but the end goal is always so motivating. and i definitely agree on the little splurges that keep you happy!

  • emma
    Reply

    good luck with your budget jodi, I can't wait to see your little dream home when it happens. A lot of our money currently goes on fuel, one of the downsides of living in the sticks is having to drive everywhere. Add that to feeding three hungry boys (and a girl who isn't costing too much yet) and there's not much left!! Maybe you could incorporate homegrown flowers in with your homegrown veggies, to save a bit more of that spending money, not to mention making the garden look lovely??!!

  • Margaret
    Reply

    A good way to keep yourself motivated is to start a personal saving log, to keep track of what you save by personal effort.

    $2 for 10 litres of homemde Laundry liquid,$ 80 for 10 ltrs Dynamo…..saving $ 78
    $14 for 3 dozen, choc,nut,berry muffins, $144 for 36@ $4 at Cafe…..saving $130
    (Muffins freeze well)cook 3 doz in fan forced oven to save energy.

    You get the idea… this is like bringing income into the budget, because your effort has freed up this amount to savings or bills etc.

    Lots of info and recipes and help on a blog called "Down to Earth"

  • kristi
    Reply

    from little things big things grow, so keep doing the little things sweet lady. x

  • Rebecca
    Reply

    We got a coffee machine for Christmas 4 years ago and it has saved us a fortune! We realised we were spending $49 a week, minimum on takeaway coffee- and we were both studying without jobs at the time! Crazy. I have just started doing 6 week menu plans about 3 months ago, which sounds insane, but I have found that it has helped with money and organisation so much. I know exactly what's coming and I don't have to think up a meal on the day, and i can counteract meals that use expensive ingredients with those that don't. And we started buying milk in 3L bottles to avoid those extra trips to the shops, especially with a coffee machine!

    Good luck!! x.

  • Sarah
    Reply

    The thing I find the hardest is sticking to a budget, particularly with groceries. We live pretty frugally because we only have one income but we (or me at thrift shops) can still spend more than we budgeted for. I have leant that I still want to cater for coffee catch ups with girlfriends and buy a magazine or two each month. I save in other areas so I can keep these treats.
    After establishing our budget I find I get the same 'good' feeling as decluttering at home.
    I love the shot of the pansies. Gorgeous and very happy.

  • mavisandfrank
    Reply

    Hi Jodi, thanks for your honest post. This is such a depressing area for me because it seems that on one income, we simply CANNOT live the sort of life we'd like to. There's just more going out than coming in, no matter how much I plan for meals or tinker with the budget. A little hint about the magazine thing. Try the library! I'm sure you do this already, but I find my local library a gold mine for lifestyle magazines and very amenable to the little requests I make (for say, the British Country Living :-)) Magazines are wonderful but they date so fast and soon become burdensome (except for the British Country Living, which I have carefully saved for many years :-))
    Ally

  • Jo
    Reply

    My husband and I are currently full time finishing up in school, living from our savings instead of working so that we can focus on treating our education like our jobs. We feel so fortunate every day to be able to do this. Doing so, though, requires lots of lists–which happen to make me squeal with joy; ahhh, listmaking. (I must admit though that I prefer making lists of books to read and groceries to buy for the week to delegating funds, however.)

    Since we have the luxury of knowing what amount of money we will have to disburse over the whole year, we make a comprehensive budget that spans the whole twelve months. It's divided up into utilities, rent, frivolity, insurance, groceries, fuel, and another section for mandatory "others" …contact lenses, occasional gifts for friends or family, dish liquid, etc. Lots of boldfacing and indentions used to organize. Dignified typography and other word processing things that make my heart flutter.

    We shoot high with things like our utilities (We are budgeted to spend up to $110 a month on electric, but this past month for September our bill was $73). Each month we start over with where we currently are in our spending and how it compares to our original plan…We make sure to keep record of how our actual spending differed from our original estimates to help us prepare for the next two years of finishing up school and working with the same sort of budget. Usually we manage to come out about even… Utilities always seem to cost less than estimated while groceries always end up costing more than we expect during the cooler months, while in the summer utilities are at the high end of our budget and groceries cost much less since we can get most of our produce from our balcony. We garden through all four seasons to help with the grocery expenses.

    With groceries, I make a meal plan each week with breakfasts, lunch, and dinners all lined up and make sure that on cost-effective meals we make double the amount so we can have leftovers for lunch the following day. We go for simple and nutrient dense foods in the morning and then mostly snack like items for lunch like small spinach salads and fruit, then usually a dinner that has a meat. The weekly meal plans help so much with lowering the grocery costs. So does shopping alone! Kyle and I love to shop together at the market but we find that we grab so many more things when we are together and scheming about great meals we'd like to cook. I go when he is in class and that keeps the extra purchases to a minimum.

    One thing we were sure to do was slate about $150 a month for extra things like little dates and fabric, clothing, books. Things that we might find along the way and want to snap up. We knew we would be miserable if we didn't feel that we could treat ourselves occasionally. Staying within those limits is a bit tough, but we do live pretty simply. Our biggest spending sprees are things like books and coffees. We're fortunate enough to live in the mountains which offers a lot of free hiking trips and in close range of a half dozen state parks for kayaking, camping, taking a stroll, etc. to keep us happily entertained for very little money.

    This is a very long comment. Oy.

    I applaud what you're doing! I look forward to updates on this as time goes on.

    My best,
    Jo Farmer

    • Jodi
      Reply

      Such a beautiful, inspiring story Jo. I applaud you! x

  • Jo
    Reply

    P.S. Since my husband and I are both pretty young (I'm 23, he's 27) and just starting out in the first year of our marriage, we have found this year to be one with a lot of help from family and friends. There were gifts for our home and checks from friends and family and many meals we have been treated to in celebration of our union, and since we decided to elope my parents gave us a little sum of money that they had been putting aside to help with a wedding ceremony. That nest egg, plus Kyle's schooling being paid for entirely, have been two incredible pillars for this budget and being able to take time off from working. (We both worked full time before this year at jobs we had no interest in–banking is not my calling, and corporate type work is not for him). We put most of that back in savings to help aid us in going back to college for different career paths–teaching at a Montessori for me and engineering for him.

    My best,
    Jo Farmer

  • Smykolandia
    Reply

    I live in the different part of the world. But nonetheless I have the same problem. How to save money? The cost of living is increasing in the contrary to my salary. Have a nice day!

  • James
    Reply

    jodi, please can i share with you the easiest and BEST bread recipe in the world that i swear is as simple as dumping flour, water, salt and yeast in a bowl and retrieving in 24 hours? i've made all our bread since the beginning of the year, and it has saved us heaps of money, and been delicious to boot. http://rosylittlethings.typepad.com/posie_gets_cozy/2012/04/while-the-dough-rises.html . give it a try, i promise, minimal effort, maximum results! xx

    • Jodi
      Reply

      Oh thanks SO much James…I'll let you know how I go 🙂

  • Nikki Fisher
    Reply

    Very inspiring Jodi. Thanks for writing x

  • Kayla
    Reply

    I'm a new follower. Adore your blog. Love the dream of a little cottage. The post really opens your eyes to just how much we could be saving and changing once we stop and take a look.

    Memoirs & Mochas

  • K
    Reply

    Such a great and timely post. Especially the last bit on perspective. With our entire area (NYC and NJ) destroyed by hurricane Sandy, I feel so grateful that we have power and water at the moment as many of our friends and family have no homes at all. In light of that, it's a comfort to know that with the limited budget we do have, we can afford to go to the market and buy extra food and things for our neighbors. Perspective is such a tremendous thing. xx

  • Nic
    Reply

    I'm right there with you on the cottage/private highschool dream. Although we want to buy the house we already live in because we love it! And, having a coffee machine saves us a lot of money, with the bonus of making it with organic milk. Thanks for this post Jodi- it is comforting to know we are all experiencing the same kind of thing.

  • Jude T
    Reply

    All great…except for the private schools…I could never support such a discriminatory system. Work with schools, lobby government and improve the state schools in your area! I've seen it happen, and the effect is amazing. I believe that children get much, much more out of a state school education 🙂

  • Stephanie
    Reply

    Great post! Thank you! Very insightful! xoxo!

  • murphycl1
    Reply

    Love this Jodi. It's so refreshing to hear of your aim of a little cottage. We bought our little cottage a year ago and are always being asked when we are going extend or relocate! BEst of luck with your journey. Claire

  • Kate
    Reply

    That plan sounds awesome. We follow something similar and I have to say planning your meals out for the week has seriously helped us so much.

    A little hint? Save one night in the fortnight for a takeaway or something. AND buy one extra meal because although Tuesday might work out to be chicken alfredo night because all the other meat is in the freezer, its nice to know you also have the ingredients for enchiladas, because wow all of a sudden the chicken alfredo doesn't seem appealing right now. Now that we have a good system going we often buy enough ingredients to make two meals worth for the price of one (like the fish cakes we had last night) which means we have them in the freezer and will save us a bit out of next week's budget. A roast chicken for example is great for one night and then the leftovers are wonderful with some fresh greens from the garden and some wraps.

    Saying all that, my husband is the shopper and hes amazing at it. I would failboat it.

  • Jane
    Reply

    This blog post is so great and so inspiring. I too share concerns over the rising cost of living! And I also left my job back in June really needed to find ways to cut back and budget well. My husband had already started a budgeting plan and tracked where our money was going since we were married (using excel), but the past four months when I wasn't working, we did a lot of the things you mentioned to be a bit more smarter. I was surprised at how making meals from scratch (for us, Korean food especially) slashed our grocery bills. And I wholeheartedly agree with the "enjoying the now". For a little bit we concentrated so much on saving and cutting back that it got a little depressing. We quickly realized that a cup of coffee or yummy doughnut was ok. I start a new job on Monday, but I plan on sticking to meal planning and finding other ways to save so we too can buy our dream home. Thanks for this post and the opportunity to engage in this topic! Have a great weekend!

  • look see
    Reply

    Love this Jodi – we've been having similar discussions in our household lately – we've got plans and we want to get there!

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