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September 02 newsletter

Looking to travel overseas? Then the advice is simple: don't leave home without it. Travel insurance that is. We hope you find it useful and of course bon voyage. Sorry, topic now deleted from site.

Thank you to those people who have voted for the Shape of Money as the Best Finance Site in the Netguide awards. We appreciate your support and hope you win one of the cool prizes on offer.

Welcome to the Shape of Money's step-by-step programme to the secrets of wealth.

This is the last look at the "tempest" (see June 02 and August 02 newsletters) the fourth secret to wealth.

The "tempest" works quite simply: try to save 10% on each of your expenses. Some you won't be able to change in the short term, such as rent but on others you may be able to save more than 10%. The Zolas were surprised, for example, to work out that giving up takeaways will save them over $5,000 over the next four years. With other costs, you may be able to save 10% by careful planning and focus.

Because the Zolas are doing their budget on a weekly basis, they not only know exactly where their money is going, they're also in a very good position to determine which expenses they can reduce.

Importantly, they've been able to differentiate between necessary expenses and those which can be realistically reduced, or cut completely.

By going through each expense, they've been to be able to save $22,500 of the required $30,000 over the next four years. In some cases, they've completely done away with what they consider to be unnecessary expenses, such as takeaway food. In other cases, they've agreed to work as a family to try to reduce necessary expenses, such as power. Additional money is freed up after outstanding debt is repaid.

This what they hope to achieve. Note, that there is also increased expenditure where required, for example, the Zolas have arranged additional life insurance.

Food $12.50 x 208 weeks $2,600
Takeaways $25.00 x 208 weeks $5,200
Power $3.00 x 208 weeks $624
Clothes $3.50 x 208 weeks $728
Car $20.00 x 104 weeks $2,080
Life insurance $10.00 x 208 weeks ($2,080)
Phone $2.00 x 208 weeks $416
Credit card $15 x 156 weeks $2,340
Family presents $1.50 x 208 weeks $312
Family outings $5.00 x 208 weeks $1,040
Sky $5.00 x 208 weeks $1,040
Personal $5.00 x 208 weeks $1,040
Hire purchase $46.00 x 156 weeks $7,176

The Zolas can now update their financial plan. They'll need to commit to the amounts in their new budget. This may involve keeping an eye out for resources which can help them cut costs, such as their power bill, with as little pain as possible.

Next month, we look at the fifth secret to wealth: earning more.

Tune your internal thinking machine with tip number 5: If you think that you're not achieving your goals, take some time out to re-focus them.