I was reading an article today about ridiculous rules for employees set by stupid bosses and came across one I thought was worth sharing:

“At my first job, you weren’t allowed to eat at your desk and you couldn’t have lunch before 2:30. Homemade lunches were banned for being “negative” (it was a financial services sales operation, the idea being you were doing so well selling pensions you could afford to buy your lunch everyday) so if you bought in homemade sandwiches, you would have to sneak off somewhere private to eat them, or colleagues would take them off you and you wouldn’t have any lunch.”

This speaks volumes about a few things.

Firstly, some bosses must eat big breakfasts to not need lunch before half past two.

Secondly, there are plenty of wankers around who think that “doing well” means things like you buy your lunch and show wealth in obvious ways, when in reality it only gives people the impression that you’ve got cash to splash around. There are so many stories about flashy people who don’t actually own the expensive car they drive and multi-million dollar house they live in, and who in fact have very little in the way of savings.

Thirdly, financial services are way too often about selling a product and showing a façade, and not about looking after customers’ best interests. Or their employees.

Whenever I see someone eating leftovers from last night’s roast, or sandwiches made around breakfast time I think to myself that person is on the right track.

In fact I have just learnt that a co-worker and mate of mine is about to leave the job he has been in for over 20 years to work for himself. When I asked about what sort of buffer he has in place he mentioned that he’d paid off his mortgage quite quickly by saving his arse off, helped, in part, by taking a leaf from my book and bringing in sandwiches for lunch.

I was proud as punch!

I had a haircut today and as I sat admiring the skill of the hairdresser I asked her how many haircuts she would do a day. “Anything from 10 to about 25 on a busy day,” she replied. “I reckon I must’ve met a million people in my time,” she joked, explaining that she had been in the game for 18 years. She then said that she wished she had a dollar for all those haircuts as it would make her a millionaire. With the price that some people (especially women) pay for a haircut, I’m surprised there are not more harbourside mansions owned by hairdressers, although your friendly barber probably couldn’t afford one.

My hairdresser went on to say that she used to keep the tips she earned in a piggy bank, which she cracked open after two years to find there was enough to buy her wedding dress. I asked if she still used the same saving technique but she told me that having a son had changed all that (but that he had a piggy bank himself).

It’s funny how we can be good at something, like playing an instrument, running fast or even putting spare coins aside, then one day we find that we just don’t do it anymore. Life gets in the way. It can be easier to look back with regret and say “If only” than it is to look forward and say “I will start today so that I won’t look back again in the future and wish I’d started way back when.” What I’m saying is that it’s never too late to get your act together when it comes to saving.

And yes, I gave her a tip.

A great way to save money – don’t ever go overseas with young children, get your overseas relatives to come to your house. The money you will save on airfares and psychologist’s bills to get over the long haul flights with jetlagged infants will run into many thousands.

If you decide to ignore that advice, another great way to save money when travelling overseas is with the money itself. Unless you are going to Christmas Island, the only value your Aussie dollars will have overseas is in entertaining people with the little windows on our polymer notes.

When you go overseas you will need to get yourself some local currency and there are a number of ways of going about this. Probably the most convenient way to get cash is at an ATM at the airport you land at (assuming you arrive at a major destination in a developed country). You will be hit with a fee from your bank as well as probably a currency conversion fee. Expect the same sort of thing if you purchase stuff overseas with a credit or debit card.

Travellers cheques are handy if you happen to purchase something in the handful of locations that still accept them, but they are not free.

Having a few local dollars/pesos/pounds/yen on you before you arrive will involve a visit to your bank or a currency exchange place before you set sail. Doing this at the airport is probably the most expensive way of buying a foreign currency or converting your overseas money back into Aussie dollars on your return.

Prepaid travel money cards are becoming a popular way to access your money overseas as they are relatively inexpensive and can hold multiple currencies like $US, Euros and Sterling. There are a bunch of them around and may be good value depending on whether they have conditions like an expiry date on the money held on the card.

How much money you end up with is dependant on the exchange rate. Even the most economically challenged among us would be able to tell you that the Australian dollar is strong at the moment. One Aussie dollar will buy you around $1.05 in the US. In theory. In reality the exchange rate used by banks, and in particular currency exchange places, is crap. Your $1 here would be lucky to purchase one US dollar, with the five cents difference going to the company exchanging the currency. Five cents doesn’t sound like much but it certainly adds up over the total cost of a holiday.

No matter what the currency you are converting or the strength of the currencies being exchanged, you will never be offered the actual official exchange rate, unless it involves some hefty fees. The only way to get the official rate is by setting up an exchange yourself, if not before you go, at least when you get back. Whack a status update up asking if anyone is about to head off overseas and would like to exchange the currency you have leftover. Offer it at the official exchange rate on the day of your exchange and you will get the absolute best saving possible – for you and the person you swap the money with.

I attended a reunion on the weekend, not with former schoolmates, but with people I used to work with. It had been 13 years since I had seen most of my old colleagues and the department we were in closed down in 2001. When it closed around 40 people lost their jobs without any warning in one of those meetings that every worker dreads. People came to work that morning, went about their normal jobs, then were called to an out of the blue meeting around morning tea. By lunch everyone was unemployed.

I have been lucky enough to have never been at the receiving end when the axe has fallen. Somehow I have managed to avoid it by leaving an organisation before cutbacks, or joining after the situation has turned around and hiring has begun again.

From talking to those who have experienced it, redundancy is something that certainly leaves its mark. The feelings of anger towards the bosses can take years to subside and the joy of working in an environment where you love the job you are doing and those you do it with may be difficult to replicate with a new employer. On the other hand, some people thrive after losing their jobs and look back at the incident as something that spurred them on to better things.

In a normal career (if there is still such a thing these days) you start at the bottom and slowly work your way up. Every year your skills, experience and complexity of your job increases, along with responsibilities and usually a pay rise. It is natural to picture the final years of your working life as the ones where you will be earning the most. And looking back at what you were paid in the early years of your career inevitably raises the question “How did I get by on such a small amount of money?!”

Sitting around the table at the reunion, the topic of what we were all paid came up. There were no huge surprises to discover that the people we all thought were on decent wickets reported earning the highest amounts of money. I was the second lowest wage earner present, on between $25,000 – 27,000 over the three years I spent there. The guy we all knew was earning the most didn’t actually reveal his salary but he did say that it was a lot more then than he earns now. In fact he said that he earned more money at a commercial radio station in the 80’s than at any other time in his life.

It’s a story that emphasises just how important saving is. If, by way of good fortune or hard work, you find yourself suddenly earning more money than you thought was possible at that stage in your life, don’t piss it up the wall. Rather than moving to a bigger house with a better view (and bigger mortgage), rather than upgrading your wardrobe, car and appliances, rather than holidaying in five star resorts, just picture yourself in ten years earning a fraction of your current income.

Would future you look back with regret for wasting an opportunity or be glad you had set yourself up for the unknown road ahead?

Disclosure: I wrote this blog with significant input from my wife Claudia! Anyone who knows my knowledge of the kitchen could tell you I can mix cereal with milk, turn the dishwasher on and, um, well that’s about the extent of my cooking abilities.

Cooking at home can be a great way to save money when compared to eating out or buying takeaway, but there are even cheaper ways of doing it.

There are a few websites out there that encourage doing big cook ups, say, once a week or even once a month. It’s a great idea and can be taken one step further to make it even more efficient. Most ovens can fit a fair bit of food in them, and if you have the space, do all your oven cooking at the same time. So much energy is used up each time you need to preheat your oven that if you were to do a month’s worth of baking all at once, you would save yourself a decent amount of energy and money. It all adds up and you can squeeze a few more savings if you are able to do your big cook ups during off peak or shoulder electricity times.

Leave the food for freezing out on the bench until it has cooled to almost room temp otherwise you will just heat up your freezer. It can be a balancing act between going into the freezer too early and spending too much time on the bench beforehand – the last thing you want is food poisoning. But if the food is cooked right through and reheated properly when you eat it you should be safe.

If it’s really cold in your house in winter and you normally need the heater on, try to time the start of your big bake up to when you would have to get your home warm. Many ovens, especially fan forced ones, spit out a lot of warm air doing the job of a small gas furnace and warming the room as they cook.

When boiling on the stove, turn your hot plate off about 30 seconds to a minute before you need to pull the pot off. The heat retained in the stove will continue to cook your rice/pasta/2 minute noodles ‘til they are ready (obviously this won’t work with gas). Ok, so you won’t buy yourself a return airfare to Paris with the savings from this tip, but it does lessen your chances of forgetting to turn the hotplate off. To give you an idea of my level of culinary skill, I once left a hotplate on overnight. At my sister’s place. She never asked me to housesit for her again.

Most amateurs know that black bananas can be turned into a cake, but there are a few other tips for avoiding food wastage. When you’re cooking pavlova, don’t chuck out your egg yolks. Throw them into a pan with a couple of whole eggs for a yellower-than-normal but still tasty omlette. Rather than throwing them in the compost, leave the ends from your bread loaves out to dry and crush them up to make great breadcrumbs (I believe they are made from the same ingredients).

If you have a bunch of ingredients in your fridge that don’t go together to make up a normal meal, make an abnormal meal. You might be surprised how good random bits and pieces can taste when thrown together.

I was on the phone yesterday talking to my 17-year-old nephew about the super fund I am helping him to set up, and a colleague in his late 40’s was overhearing the conversation. When I got off the phone he asked who I was talking to and I replied it was my 14-month-old daughter. When I fessed up, I explained that I was aiming to teach my nephew the power of compound interest at a young age. The colleague replied that he wished someone had sat down with him and explained the basics at such a young age and I could hear the regret in his voice. Most people learn their financial skills from the family they grew up in, and in the case of my colleague, they hadn’t experienced nurturing from someone with good financial skills.

I learned about money from my parents, my father learned about money from his. On that side of the family nobody was rich but they wouldn’t see themselves as poor either, and they passed that knowledge down through the generations (I posted a blog about the lessons I learned about money from Grandma Haggarty just after she passed away last year).

My mother, on the other hand, must have got her financial skills from outside her family. Her parents, my Gran and Pa, rented their home in Sydney under a scheme that saw rents kept low after the Second World War. For years they lived in the suburb of Willoughby (quite close to the CBD), ignoring the advice of my dad to save for a home of their own (dad reckoned the cheap rent wouldn’t last forever). One day in the early 1980’s the inevitable happened – the scheme ended and Gran and Pa were forced to move out. They couldn’t afford the rent anywhere in Sydney, let alone in Willoughby, and were facing the prospect of having to leave the city they had lived in most of their lives.

Then my parents stepped in and bought a house for Gran and Pa to live in. The only place mum and dad could afford was as far north as you could go and still be in Sydney. My parents did it tough to pay that place off, and my grandparents were very grateful for the assistance they had from them.

Years later, after Pa had died, Gran realised she could no longer live in the house and decided to move out. With the help of my aunt and uncle, some savings of her own and the First Home Owner Grant, Gran bought her first home. Aged 87. We reckon she must’ve been one of the oldest recipients of the grant. The new place was a simple unit in a retirement village, 30 kms south of Newcastle, and she absolutely loved it. Gran loved what it represented – she loved the fact that it was hers.

When Gran passed away I was reminded at her funeral just how proud I was of her when she bought her unit – a place, after so many years of renting, that she could finally say was her own.

Next time you think that you are too old to start saving for your first home or sorting out your finances, unless you’re in your 90s, think again.

So many Aussies have been hit by floods over recent weeks, and due to the nature of insurance companies, if you live in a flood prone area you have bugger all chance of getting cover.  In the ideal world you would have yourself insured up to the eyeballs to cover every foreseeable event, but there are a few things that you just can’t cover yourself for. We discovered one of those things recently.

A couple of months after buying our house, Claudia and I got a kitchen company in to replace the baby blue monstrosity, that I’m sure was never in fashion, with a new kitchen. Claudia was so excited that on the morning work started she couldn’t even eat breakfast. Just after the old kitchen had been gutted and the new cabinets were brought inside, Greg the kitchen man was trying to find a stud in the wall to attach them to. Five minutes later he informed us that we had termites.

Strangely enough Claudia’s appetite didn’t suddenly come back and I tried to find a word in my head that didn’t start with the letter f.

Greg started work on the wall opposite. Moments later he told us we had lots of termites, no good studs and that he had to down tools.

Our new house was being eaten by termites not detected by 2 pest inspectors in the previous 9 months, and we had no kitchen a fortnight before we were due to host Christmas for my family. The stress over the following weeks was pretty extreme as we watched thousands of flying termites swarm out of the wall, worried that the roof would come crashing down at any second and tried to work out what we were going to do.

Two and a half months and several thousand dollars later we have had the house treated and badly damaged areas repaired.

Like floods for people in flood prone areas, termites are not something you can insure against. When they strike, you are left to fend for yourself, and if you don’t have emergency funds available you’re screwed. Without money for emergencies you either have to beg, borrow or go under.

How much money you should have set aside will vary depending on your individual circumstances and whose advice you listen to. Some money people will say you should have 6 months of living expenses saved to draw upon at a moment’s notice but it’s a pretty tough target to make. I reckon you need to have about $2,000 per family member as a bare minimum so that you don’t need to give the credit card a big hit when the shit hits the fan.

“She’ll be ‘right!” is an easy alternative to having emergency funds at the ready. But it’s not what you will say when you discover a small white insect and 10 million of it’s closest relatives have found the timber in your house is rather yummy.

Today I pay tribute to the greatest saver I’ve ever known, Joyce – a lady who never, ever wasted anything.

Joyce was born in Sydney in 1913, and the great depression and Second World War largely shaped her attitude towards money. She was lucky enough to be supported by her husband Herb and family over these years, and didn’t spend time in the jobless queues herself.

In the early 1930’s, and newly married, the couple were given a block of land in Sydney which they built on for a cost of $500. In 1939 she said goodbye to work and hello to twin girls, and within 18 months they had a third child.

Joyce and Herb stayed in the house they’d built until well after the 3 children had grown up and left. Then one day, in mid conversation with Joyce, Herb dropped to the floor and died instantly from a stroke. Despite being the state manager of an insurance company, Herb had no life insurance.

Suddenly alone and without a husband to support her, Joyce needed to draw on all her resources and strength to get by on a government pension. It didn’t help when the house was broken into twice in quick succession, so she made the decision to move to a unit on the 4^th floor of a block of flats that had no elevator. Joyce figured that by the time any thieves were to make it up the stairs, they’d be too buggered to rob her.

Joyce did not waste one scrap of food or single cent over the 1970’s, 80’s or 90’s, allowing her to regularly visit family in country NSW and even go on holidays to destinations such as central Australia and Fiji.

In her later years she was able to save $100 a week from her pension by doing things like recycling the wrapping paper from presents she’d received and using it to wrap gifts she gave to others.

Now that she’s passed away, you won’t find her name on a list of heroes or Order of Australia recipients. She will simply be remembered by those who knew her as a kind, generous, loving lady.

I’ll remember her as my Grandma.

RIP Joyce Haggarty 1913 – 2011

One thing people who have logged on to this website would’ve quickly noticed is how heavy an emphasis there is on eliminating your debts. If you are in debt it may take anything from a couple of weeks to a number of years before you can pay it off (but I reckon if you follow the information in the website you will have any debt paid off faster than what you could ever have thought possible).

No matter how long it takes – one day or five years, and no matter how large or small the debt is, celebrate it. You don’t have to go to Disneyland once your $500 Myer card is gone, but you do need to acknowledge it and reward yourself, even if only by buying yourself an ice-cream and a movie ticket. And when the big debts are paid off, celebrate them big time.

Otherwise you risk becoming boring – too focused on the goal rather than on the achievement.

When you receive your payment summary from your employer this year, make a note of the total money you earned (if you are self employed you should have a bookkeeping system that will show what you have made). Subtract the tax you have paid and you are left with the amount that was put into your bank account over the year. Now go and dig out your old payment summaries from previous years (they used to be called group certificates) and do the same with these.

What’s your grand total? You might be surprised how much you have made over the years. You might be even more surprised when you compare this figure with how much you have in savings and investments, and the value of your net worth. Your net worth is a simple figure you can work out be subtracting the total of all your debts from the total value of all your assets. If the amount you have saved, or the amount of your net worth, is close to zero you might be feeling pretty ordinary. Particularly if the money you have made over the years is significant. Don’t panic. Don’t think it’s too late or too hard to change your situation.

Realising you need to make a few changes is the first step to making a positive change. The worst thing you can do, is nothing.