Oily rag: Best budget The cash-in-bank one

By Frank, Muriel Newman

Last week was Budget week for the Government. This year, politicians in Wellington have recognised the electoral dangers of using the "austerity" word, opting instead for the much brighter connotations of "fiscal responsibility" - which really means living off the smell of an oily rag! Changing the language does not change the fact that, for most, financial success comes at a price or an inconvenience, so we have come up with our own Oily Rag Budget.

Inconvenience is not something many families welcome so we imagine this Oily Rag Budget statement will not be greeted by foot-stomping applause by some, or many.

The principle theme behind the Oily Rag Budget 2012 is this simple reality: if you want to save more you have to either spend less or earn more.

Earning more means spending less time in front of the TV and more time on income-earning activities - a second or third job, or turning a hobby into an income stream. Even an extra $100 a year can create a massive financial gain when that money is used to repay your mortgage. Yes, we appreciate spending more time working and less time on the couch may be inconvenient, but you have to learn to live with it or, even better, start enjoying work - if you want the benefits.

In other words, get stuck in.

Spending less means not spending money you don't have. The easiest budget is the cash-in-the-bank budget. Whatever is in your bank is the maximum you have available to spend. The "hitch" is that before your money ends up in the bank you need to take care of the basics: mortgage repayments or rent, and savings (such as KiwiSaver, but it could also be a bank savings account).

Those who don't save will always live on Struggle Street and will have to depend on others to survive. The alternative is to save - this is where the website oilyrag.co.nz comes in. It has literally hundreds of ways for people to become "fiscally responsible" without compromising their lifestyle. Here are some examples from the site.

Ali from Nelson says, "Interest rates are the lowest they have been in decades. Use the money you are saving on interest to repay the debt principal. You do this by telling your bank to keep the repayments the same."

Here's a money laundering(!) tip from a motel owner in Whakatane. "Buy baking soda from Binn Inn and add it to your wash with laundry powder. You can also reduce the amount of laundry powder by about a fifth as baking soda is also a cleaner. I use equal amounts of baking soda and laundry powder."

Beat GST on vegetables by starting your own garden. You'll have a constant supply of veges for free.

Beat the tobacco tax! Stop smoking if you haven't already.

Buying unbranded products at your supermarket.

Buying a second-hand car instead of a new vehicle will save you thousands of dollars on depreciation alone.

And from the Oily Rag International Desk, LAJ from Sydney has this tip, "A few drops of tea tree oil in your wash will make it smell fresh and lovely, and have the added benefit of being antibacterial."

The final sentence from the Oily Rag Budget 2012: "Ask not what the Government can do for you, ask what you can do for yourself" (to paraphrase a famous US president).

Frank and Muriel Newman are the authors of Living Off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips at www.oilyrag.co.nz.

- Hamilton News

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