Justifying the buying of unnecessary things is a big issue for many people.

I've failed. It would appear that personal finance journalists' budgets are a bit like builders' houses. Never quite sorted out.

The ASB asked me to take a 30-day challenge based on advice videos on its YouTube channel. The reality was that I did a whole lot of soul searching for the month, but didn't actually save much money.

It was timely. It's "no buy November". The videos had good advice. For example, every time you want something, note it on the calendar. If you still want it at the end of a week or a month, buy it.

Part of the reason for my failure is I'm pretty good at not spending money on unnecessary things anyway. I posted anonymously on a forum to discuss my spending - including two complete weeks of itemised supermarket spending. Instead of jumping on me to accuse me of ridiculous money-wasting, the forum posters told me I should cut myself some slack.


Middle New Zealand's biggest problem with spending - and mine as well - is justifying the unnecessary. I could give you a long list of items I bought in the 30 days that were wants dressed up as needs.

For example, I bought a hand-held steam-cleaner ($20 from Kmart) for cleaning my windows and a cordless leaf blower. Both are labour-saving devices. But are they needs? No. Needs are things required for basic survival. The things we think we want really do add up to a plague of ostentation.

I budget fairly rigorously. That doesn't mean I actually analyse every month whether or not XYZ item in my electronics category was necessary spending.

The challenge made me pore over my spending with a fine-tooth comb.

It's the everyday stuff that adds up when it comes to budgeting. A few bucks here and there comes to a lot. Over the past month I agonised over those small purchases.

Day four of the challenge saw the order of a mouth guard and shoelaces via AliExpress.com. Were these spur-of-the-moment purchases? They wouldn't make my life better.

But the laces in my son's soccer boots have lost their ends. I could wind tape around them. But I'm afraid I spent US$1.69 ($2.19) on having a replacement pair sent from China. Could he have used the black or the white ones I saved from an old pair? Probably, but am I that poor that I can't afford fluorescent yellow laces?

The real black hole in my budget is the money spent on gratuitous coffees in cafes, snacks out when I've been too slack to take food with me and the money spent giving my children after-school activities.


The cafe visits recorded on my bank statement translates into flushing cash down the toilet. Having said that, it was only 2 per cent of my overall spending for the past 12 months. Since returning from a very expensive trip to Brazil mid-year, I've set a limit of two cafe visits a week, and have stuck to it.

As for after-school activities, these are wants, not needs, although a want that I value. I'm well aware that some families can't afford to send their kids to sports camps, National Youth Theatre Company productions, singing lessons and school trips.

I did a calculation of the "kids" category of my budget and we spent more than $2500 on after-school sports and cultural teams or lessons in the past year. That's not including the sports gear. I nearly died when I discovered that Westlake Girls' High School water polo togs cost $95.

I found myself wondering where I should draw the line with the needs versus wants argument. Every day during my failed "challenge" there seemed to be an another essential item, such as the crown on my tooth. Not too keen to contribute to my regular dentist's private fees, I waited until a $699 deal came up on GrabOne.

I'm happy with the results and the $600 saving. I suspect, however, that the difference in price between having a tooth pulled and replacing it with a crown is vanity. But it's a vanity I'm not willing to let go of.

Budgeting tools are great for doing a macro analysis of what you are spending, and for looking at the details. The main New Zealand-based software is PocketSmith, WhoStoleMyMoney and Heaps.co.nz. I also use YNAB.com and have been trying WaveApps.com.

For this exercise I used the ASB's Track My Spending app on its website. For smartphone apps read an earlier article here: tinyurl.com/budgetapps

The ASB's Track My Spending is a bit one-size-fits-all for my liking. But it's good for anyone with straightforward finances.

Analysing the spending was, as usual, fascinating. On average I spent $173 a week on groceries for a family of four. That's not bad I suppose. Scratch the surface of the bills and there were plenty of "wants" in there such as salmon and Pic's peanut butter.

There is an argument that it's not a good idea to get hung up on the level of detail I do. Instead, split the budget into three: needs, wants and savings. The Balanced Money Formula recommends splitting this into 50 per cent needs, 30 per cent wants and 20 per cent savings.

Sub-categories of needs could be rent/mortgage, utilities and transport costs and sub-categories of wants could be clothing, alcohol and entertainment. This division works well for many people.

The Balanced Money Formula would leave me splitting hairs over whether paying rent/mortgage on a four-bedroom home was a necessity when three would do.

It's easy to replace a "need" such as a pair of trousers that you could buy at The Warehouse with an expensive pair from Max or Working Style that is a "want". Likewise, not all the petrol I use is a need.

Of course this only really matters if you either want to save more or are in debt.

The ASB has a Save The Change service. Customers can set up their banking so loose change is swept from their current account when they spend and deposited into a named account such as: "Fiji holiday", "21st birthday" or "new car". The idea is that you won't miss the extra cents, if you're rounding up to the next dollar, or dollars if you're rounding up to the next $10.

This only works, however, if you have a budget, and don't ever go into the red. If you're putting money aside with Save The Change while paying credit card, personal loan, HP or other debt on the other, then you're getting yourself more into debt and fooling yourself at the same time.

There are regular items that the ASB videos referred to and people like me harp on about. Utilities bills and insurance need to be reviewed annually. I do it and I'm merciless.

My power supplier is ready for the push, for example, for having ramped up the bill sneakily with a card-processing fee.

At the end of the day, as the Prime Minister would say, this all takes a bit of effort. But it's worth it.

Hopefully readers don't do as much navel gazing as do.

Those who do can discuss it on NZHerald.co.nz.