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Archive for August, 2014

Travel Hacks

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I came across a term ‘Travel Hack’ yesterday, and with interest I started reading the internets to see what it’s all about.

I love to travel, but since RichLifeJnr came along, our trips have been limited to visits to the family, short farmstays and weekends at a beach house. My Wanderlust has not gone away though and I’ve been getting itchy feet lately.

Now that we are trying to stick to a budget in preparation for early retirement, does that mean my travel dreams get put on hold indefinitely? No necessarily…I just need to be smarter about how we might travel.

Flights

Getting to and from anywhere when you live in Australia is just downright expensive. However I suddenly remembered that I have membership with both Qantas Frequent Flyer and Virgin Velocity. Out of interest I logged on to my accounts and was pleasantly surprised at the number of points I have.

Qantas

202,797 points. That’s enough to get returns flights to Bangkok for all three of us.

In researching Travel Hacks, I also came across ideas to boost the number of points you have. After a bit of research I discovered that  ANZ is currently offering a credit card with 50,000 bonus Qantas frequent flyer points. I’m going to look into that a bit more seriously, because buying those extra points would cost over $1000.

50,000 extra points would mean all three of us could get return flights to Johannesburg, Tokyo or Honolulu!

Virgin

41,437 points. For that, I can get a return flight to Fiji for one of us or all three of us to Brisbane or Melbourne return.

I haven’t yet been able to find any amazing deals to boost my Velocity points, but realised that I can add my car rental for my upcoming trip. That might add a bit.

Cruises

I’ve never really been that interested in cruising, but after reading a few blogs from Families who are travelling the world in slow time, I might be converted. The idea is that if you have excess time, but limited funds you can actually use cruises to get you between locations, whilst providing accommodation, food and entertainment for a reasonable daily budget.

As an example, VacationsToGo currently has a deal where you can travel London to Boston for AUD$801 per person ($57 per night) or Vancouver to Los Angeles for $181 per person ($31 per night).

I have even seen deals where kids under 17 travel for free. Obviously this type of travel requires extreme flexibility, but I have dreams of being free enough to take advantage of such deals. It might be something we consider when RichLifeJnr is out of nappies and old enough to go to the kids club.

Accommodation

In Australia, I regularly use Stayz to book reasonably priced, self contained apartments or houses. I love that you usually have your own cooking and washing facilities and can live more like a local, without breaking the budget. There are probably better ways to organise longer stays, but I find short breaks have been well accommodated using this website.

AirBnB is another website I’m hearing good things about, but I haven’t used it yet. It seems Australia hasn’t quite embraced it yet, but some of the places in Europe look fantastic. Dreaming of an apartment in Prague for a month!

 

How about you? Have you got any Travel Hacks you care to share?

Photo by: Norma Desmond

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In my last post, I indicated that we need to get our expenses down by 25% if we have a hope of me successfully retiring at 40. By successful, I mean we don’t go broke before we die. Today, I thought I’d spend a bit of time looking at what our expenses consisted of last financial year.

FY13-14 Expenses Ms

Figure 1: MsRichLife FY13-14 Expenses

FY13-14 Expenses Mr_2

Figure 2: MrRichLife FY13-14 Expenses

Savings (50.0%)

Last year we saved 42.3% of my net pay (after tax and rent) and about 65% of MrRichLife’s income. We could have done better than this, but as you’ll see we had some big, one off expenses last year which shouldn’t be repeated this year. It’s not too bad considering we weren’t being particularly conscious of our spending. There is much room for improvement though, and I’ve set the immediate goal of saving at least 50% of my net pay each month from here on.

Income Tax and Investment Expenses (12.0%)

Income taxes (in addition to what is taken from my pay) accounted for 11.7% of my expenses. Ouch! I called the ATO the other day and questioned how much I’m paying to them every three months and told them to go back through my payments to check they are correct. Guess what! I was overcharged $1500 and I can expect a refund soon. I hate how much I send to the Tax office, but there is little I can do to reduce the amount at this point. We are planning on selling one house soon and moving the cash into MrRichLife’s account, so that should help.

Investment Expenses mostly consists of Landlord insurance payments that are not taken care of by my property manager. They have slowly been creeping higher and higher and it’s about time I get some new quotes!

Rent (8.0%)

At the moment we are very happy with our rental arrangements so won’t be making any savings in this category.

Motorbike (6.8%)

MrRichLife bought himself a motorbike last year. Hopefully this one off expense won’t be repeated regularly!

Groceries, Dining Out & Alcohol (6.1%)

This category presents the biggest opportunity to make savings in our budget. These calculations don’t capture all the food and coffees we buy with cash, so in reality we are spending more on this category than indicated. I’d like to work with MrRichLife to work out a plan to reduce this item significantly. I’ll endeavour to write a separate post on what we come up with.

Childcare (4.8%)

In reality we get 50% Child Care Rebate so this expense is not as big as shown here. We could cut back on days, but honestly we think we’ve found the right balance for our family with The Boy in childcare for 2-3 days a week.

Bills (2.9%)

Gas, Electricity, Phone, Internet, Insurance and Medical. I know that our Gas and Electricity usage has crept up this year. We’ve recently had our central heating replaced so hopefully that will be operating more efficiently than the old one.

Holidays (2.0%)

Most of our holiday expenses have been incurred in visiting our families interstate. This also includes flights that I’ve already paid for an upcoming trip to see my family and attend to my high school reunion. We’ve also been away for a couple of weekends as a family.  I love to travel and am prepared to cut other things out of our budget to ensure we can continue to do so. I don’t intend to reduce spending in this category, and actually expect it to rise this year.

Emergency Cash (2.0%)

We keep a bit of cash available in case of emergency, so this isn’t actually an expense. The withdrawal hopefully shouldn’t need to be repeated in future.

Car (1.8%)

We only have one car, and we don’t put a lot of kilometres on it each week. MrRichLife does most of the maintenance himself to save some money. I could ride my bike some of the time to save a bit of fuel and wear and tear, so I’ll revisit that topic in a separate post.

Job Expenses (1.1%)

Most of these expenses are reimbursed or tax deductible, so this category needs no work.

Other (4.3%)

The ‘other’ category captures all the smaller categories, that do add up to a lot. These are things like shopping, clothes, entertainment, hobbies, personal care etc. Given that all these ‘little’ expenses add up to a large chunk of our budget, we probably should see where we can cut down.

Summary

That was an interesting exercise to undertake. The most expenses were incurred through extra income tax payments and investments expenses. This is something I need to spend some time analysing further. There were also quite a lot of one off purchases and withdrawals last year which shouldn’t be repeated this year. The next biggest opportunities for improvement are in the ‘food’ and ‘other’ category. It might be worth setting ourselves some challenges to start bringing these expenses down.

 

 

 

 

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