Budgeting | Online Personal Finance Blog for NZ - heaps!

Designer clothes up for grabs, giveaways, and free wine – you’d expect this mix to result in a stampeding, chaotic mess.

But on Sunday, there was none of that at the St James Theatre where the Big Shwop was happening. Instead, most participants went home with a brand new wardrobe and a guilt-free conscience.

(From left) Inga Boyd, Sarah Hopkins, and Christine McGonigal are the masterminds behind the event, and their vision behind the shwop is simple: fashion without sacrificing the environment. This brilliant idea has the added benefit of being extremely gentle on the wallet. Here’s how it works:

Shwoppers bring along unwanted articles of clothing in like-new condition and receive a voucher for each piece accepted. Volunteers then spend a couple hours sorting the garments onto racks (donated by Icebreaker) while participants enjoy a free glass of organic wine, compliments of Momo. Representatives from Kowtow and Trilogy are in attendance to give talks about the benefits of fair-trade and organic products. When the shwopping begins, everyone’s on their own to find pieces of clothing they like and fit, and participants can redeem one article of clothing per voucher. The idea is that everyone adds something new to their wardrobe without having to spend anything on it, and it’s good for the environment because no resources are being used to create new products!

Fashion on a budget

The entrance fee to the event was $20, so no, it wasn’t entirely free. However, the giveaways alone were worth more than $20. Women received a Trilogy Everything Balm (RRP $22), men received a Trilogy Aftershave Balm (RRP $32), and everyone received a free glass of Momo wine or Tuatara beer, a bar of Ecostore soap (RRP $4), and a choice of Trilogy face cleanser (up to a $32 value) if they brought an old used cleanser to swap in. That’s more than $60 in free goods before we even talk about the clothes!

Since you had to bring clothes in order to get clothes, it was a good opportunity for me to clean out my wardrobe and get rid of those I-rarely-wear-but-don’t-want-to-part-with-because-they’re-so-new items. This event seemed like a worthy cause and a worth-it cause because I’d be getting something back in exchange (a bit selfish, but that’s the budget-brain talking). I brought four items, and they accepted all four (the max was 20, but I couldn’t find nearly that amount in like-new condition). So armed with my vouchers, I waited anxiously for the volunteers to raise the ribbon barring the staircase to the first floor where the racks of clothes were waiting.

I expected a scene comparable to the piranha feeding frenzies you see on National Geographic, and I had my elbows out ready to box out and stand my ground, but it was quickly evident that there was no need for that. As soon as the volunteers gave the go, the herd of participants (women of all shapes spanning at least 3 generations) filed civilly up the stairs to browse the racks. I headed for the row of tops first, since this was what was most lacking in my wardrobe, and my friend beelined for the dresses. (We strategised ahead of time and agreed that splitting up while keeping an eye out for items for the other person would be the most efficient way to tackle this shwop.) Soon, we had heaps of new threads to try on!

The fitting area was well-operated, limiting participants to 5 items per try. Going with a friend made it easy because we took turns holding and trying on. After making some tough decisions, I narrowed my picks down to 4 items and a pile of maybes. In the end, my friend didn’t find enough clothes that suited her, so I benefitted from her extra vouchers. (You’re the best, girlie!)

This was the first time the Big Shwop had a he-shwop section, but sadly, that demographic was poorly represented. Another friend’s partner was the only possessor of a Y chromosome in sight, and it took him 5 seconds to scan the scant gents’ racks to decide there was nothing there for him. I know it’s not really a guy-thing to swap clothes, but it’s such a resourceful way of updating your wardrobe! Come on, guys!

Staying in the green (budget-wise and environmentally)

So was it worth the $20 entrance fee? Yes, in a heartbeat. One of the items I scored at the shwop was a $300-something pair of wool trousers by New Zealand designer Zana Feuchs. The items I brought combined probably didn’t even total that. Of course, I’m sure there were other participants who were less lucky and might not have found items that were worth their while. So I’ve thought of a few things that might increase your chances of a successful shwop experience:

Make sure that the clothes you bring are ones that you mean to get rid of anyway (and they do have to be well-made). Even with the strict quality clothing requirements, it can be a bit hit-and-miss, and there isn’t a guarantee that you’ll find truckloads of things that suit you, so you don’t want to leave feeling bitter about the items you donated.
Have in mind ideas of what you’d like to get so that you’re not overwhelmed and flustered. Focus, perhaps, on a particular color, style, or garment type to narrow down your choices.
If you didn’t end up using all your vouchers, don’t worry! You’ll get credit for those at the next shwop you attend.

Overall, the Big Shwop is a well-organised, ethically and environmentally-minded, budget-conscious event. Fifteen percent of the proceeds go to the Fair Trade Association, and all the clothes that remain are donated to charity. You can hardly feel bad about the $20 you pay to attend, and if you consider that as part of your budget for clothes shopping, chances are high that you’ll be getting much more than that amount back in quality new clothes.

In the past, the Big Shwop has been held in Wellington and Auckland, so keep an eye out on their blog for the next one!

Hold your own swap party

If you’re not in Wellington or Auckland (and even if you are), it’s really easy to hold your own swap with a group of friends. I’m part of a regular one, and it’s a great, inexpensive way to update your wardrobe while spending a pleasant afternoon catching up. Your swap doesn’t have to have an entrance fee or quality criteria like the Big Shwop, and there won’t be a huge crowd to compete with either. If you hold them regularly, you can have a constantly evolving wardrobe without ever needing to buy new clothes! Great for the budget and great for the environment!

What are some other ways of staying on budget while still keeping an interesting wardrobe? For the guys, how could a clothes swap be modified so that you would want to attend?

Deciding to budget to achieve our financial goals can often feel like joining a gym to achieve our fitness and weight loss goals. We’re all motivated it begin with, enthusiastic of making a positive changes to our life, but then are disheartened to discover habits are difficult to break, motivation is hard to find, and we end up blowing it all by eating an entire chocolate cake…or in this case, spending it all on an extravagant purchase. Although difficult at times, both financial and fitness goals are so important to our well-being and incredibly rewarding. So why not achieve both simultaneously?

Australian health coach Andrew Cate has published a book called The Tight Arse Diet that compares effective effective weight loss techniques with getting control of your spending. Here are some scenarios that can apply to both your budget and your diet:

Weight Loss and Budget Tips

1. Don’t be disheartened
With both budgeting and weight loss, it is important to remember that you are making healthy changes for life, not sacrificing your enjoyment of life. There are still plenty of ways you can enjoy life with less spending. In both cases, these changes are for the better, so stick to them! And yes, sometimes we get off track but that doesn’t mean we can’t get back on it. Your goals are achievable!

2. Clear away temptation
Just as you should clear away tempting junk food in your kitchen to stop unhealthy snacking, don’t tempt yourself into spending money by shopping for leisure and browsing. Buy only what you need.

3. Bring your own lunch
Taking your lunch to work not only saves you money (usually around $70 a week) but lets you make healthy low calorie meals.

4. Plan your meals
Planning your meals not only stops impulse snacking but also impulse buying! Look what you have in your kitchen and plan simple meals based on what you already have. Time to get creative!

5. Stick to the list
In both cases, write a shopping list and stick to it! This will help you save money and calories!

6. Plan ahead
Spend Sunday afternoon preparing meals for the week, so its readily available and you are not tempted with less healthy options, or expensive meals!

7. Keep track
Just like trainers suggest keeping a food diary to keep yourself on track, keep a budget that tracks everything you spend. Using a budget tool like heaps! makes this easier.

Andrew Cate also suggests areas where you can save both money and kilos:

* Consume one less alcoholic drinks a day to save over $700 a year as well as lose 3kg
* Find an exercise partner and save around $1,000 on gym fees and lose at least 2kg
* Drink one less soft drink or juice a day, save around $180 and lose a kilo
* Eat slowly and reduce what you need to feel full, saving $300 on food and lose 2kg
* Keep a food diary to reduce portion sizes and breakouts. You could bank $450 and lose 3kg

Set and modify your budget:

To set a budget that works for you, check out our budgeting page.

Fun Budgeting

How many of you have seen countless tips on how to budget? I don’t know about everyone else, but every time I think about budgeting or tracking expenses, I get bored. Why does budgeting have to be so tedious and time-consuming?

Maybe if we make budgeting a little more fun, as hard as it may be, people will actually start to save money instead of just talking about it. Honestly, how many times have you said to yourself that you would start saving more money tomorrow, next week, in the following month? And how many times have you sat yourself down and planned a budget and started to track your expenses only to find yourself abandoning it three weeks later?

Listen to Others

For me, I particularly like listening to other people’s financial stories as it helps me with my budget. And when I listen to others, it motivates me to get my act into gear. Setting a goal especially helps me save money because then I actually have a good incentive to keep on top of my money.

A lot of people tend to follow in others footsteps. Which is why it is indeed a good idea listening to how others budget. Similar to how people talk about how awesome their new expensive shiny car is, and you have the strongest urge to go out there and buy an even bigger and more expensive car. Why can’t budgeting be like that? You should go out there and show off how much you are saving just by knowing where your money is going.

So we at heaps! decided that we would talk to some people about how they feel about budgeting and tracking their expenses. We hope you enjoy the video and that you are more motivated to be aware of where your money is going and to really understand your finances. Maybe it will provide a little boost to budget, and help you save. After all, that is what we are here for.

Personal Finance in Social Media

Yes it may sound odd, but it’s only for a good cause. Think of it as a Facebook, Twitter or Youtube for budgeting. It should be a very social thing. With everything pushed very quickly because of the internet, and communication being more convenient than ever, budgeting and tracking expenses should be pushed out there just like all the social media channels.

I really don’t think promoting budgeting out into the social world is very strange. Just think of it, if saving money was so much talked about, then you would start being motivated to do the same. So instead of wanting to beat your neighbours in how brand new your new phone is, how about showing off how stable your checking account is. And how your savings account is only growing.

The more mature generations should breed a new generation of youngsters who want to save. Considering the amount of debt we are all in, and debt being continuously spread (not just for individuals but for entire nations), let’s educate our children (more importantly, ourselves) so we can lead lives that are just a bit more stress free.

Small Start, Big Dreams, Bigger Savings

The video that we have is a small start no doubt, but it is a start nonetheless. When you watch this video, don’t think of it as another site pushing budget tips into everyone, but more of a video to help you get inspired to budget. Now that I’m about to stop rambling, go out there and strike up a conversation with your neighbour, friend, relative, bus buddy, and spread the joy of saving a few dollars. What have you got to lose?

Dare I ask, but how often do you share your financial life with anyone? Let me know if you think we’ve gone crazy. I mean how often do you come across anyone who wants budgeting to be the “in” thing?

Happy Budgeting!
-the heaps! team

Understanding how much you spend on a daily basis is key to making positive changes to your finances. Setting (and sticking to!) a budget is essential when saving money as it will make you aware of where your money is going, find your money leaks, and help you change your habits so that you can achieve your financial goals. But how to start? When setting a budget, here are a few tips when dividing your income:

1. Pay yourself first

One of the most important things you can do for your financial well-being is to develop a habit of putting money into a savings account. It’s not so much how much money you put aside, as long as you do it on a regular basis. Savings accounts also allow you to earn interest (a percentage of money) off of your money so it will slowly grow, especially if you keep adding to it. Those in debt are also encouraged to put money into savings, as well as regularly paying off their debt.

After the tax department has taken their share, move at least 10% of your monthly earnings into savings before you can do other things with it. Many workplaces make it easy to move a portion of your income directly into your savings account. Ideally, you should put another 10% into your super fund (on top of your employer’s contributions). No matter how far off retirement seems right now, it is wise to start preparing for it now, especially since the cost of living has been known to double every 15 years. Total: 15-20%

2. Set aside money for your essential expenses

Only allow 60% of your salary for essential expenses like rent, bills and groceries. Consider getting a checking account for these day-to-day payments and keeping your saving account for long-term savings (emergencies, big purchases and holidays.) Look out for tips on how you can cut back on your daily spendings and reduce bills with cheap deals.

Total: 60%

3. Extras

The rest of your income goes to luxuries like entertainment and holidays. If you are overspending, this is the area where you will need to make cuts. By tracking your spending you can find where those ‘money leaks’ are: is it the daily bus fare or buying your lunch during the week? How can you cut back and save money in these areas? Finding these leaks in your budget makes you more aware of your spending and allows you to fill the money leaks without too much disruption. Total: 20-25%

Do this in heaps!

Heaps! categorises most of your transactions for you so you can see exactly how much of your income is being spent on various categories. You can also re-categorize your transactions to suit your lifestyle. Heaps! will then look at both your regular payments and daily spending to work out your total spending for that week, month or fortnight. Once it has calculated your surplus, or debt if that is the case, you can work with heaps! to create a budget that will suit your lifestyle and help you save money.

The debate about whether money can lead to happiness is never-ending. Researchers, consumers, and citizens can never seem to agree, yet there are quite valid arguments on both sides. Let us take a look at some of these issues.

Money Gives You a Social Life

Humans are very social creatures – perhaps the most social species on this planet. Therefore, we do whatever we can to be in the company of others. Whether it is to go to a friend’s place just to relax, go out to town to watch a movie or have a couple drinks with friends, we will try to find something to do just so that we can be with other people. Many will agree that we can only participate in social activities with money, making us happy or at least content. In this regard, money does lead to happiness.

But when you take a closer look, these social interactions happen only because you have money to spend on yourself and perhaps on your friends as well. Then you may begin to ask yourself if they are your friends because they like you or because you have money to spend. This in turn can make you quite depressed, leaving you with the belief that you don’t have any real friends. As cliche as it may sound, it is up to you to see the glass as half empty or half full.

Stress Exists Because Money Exists

A blog about money and happiness by G.E. Miller , illustrates interesting arguments both for and against. Personally, I find money has a lot to do with stress. Having money leads to stress, not having money leads to stress. Basically, the fact that money exists leads to stress! On one side of the argument, having more money leads to greed. If you have just gained access to a rather hefty sum of money (whatever this amount may be for you personally) you will be in search for more money. And so continues the ongoing never-ending cycle of seeking more money. Someone with a large sum of money will always be worried about how to sustain their wealth, keep it safe, and how to obtain more. It is the vicious cycle of wealth, leading to greed, yielding stress.

But if the person is more responsible and can learn to appreciate the amount of money they have, then money can lead to happiness. If someone earns an income that provides them with the very basics – food, clothing, housing, bills – then money will at least lead to a content life. And if that person can deal with their debt (by deal I mean not getting into large sums of debt) then they don’t have that added stress either. Debt, of course, is something huge here in New Zealand and the rest of the developed world. Having the ability to spend borrowed money has led to many problems for individuals and entire nations. Therefore, responsibility is a key factor in whether or not money equals happiness.

You Need Some Money to Live, You Want More Money to Live

An article by David Futrelle in Money Magazine explains this point rather clearly. When families of various income levels were asked whether or not they were very happy, only 22% of families earning less than $20K said yes. This percentage goes up to 30% and 42% when asking families in the $20K-$49.9K and the $50K-$89.9K respectively. Going to the $90K+ bracket, happiness levels only go up to 43%. So according to these numbers, happiness does increase with money to a point where people can at least be comfortable with their lives, covering the basic necessities that I mentioned before. However, increased extraneous wealth does not lead to any additional happiness at all.

Source: U.S. Census Bureau; National Opinion Research Center; University of Chicago; David G. Myers, Hope College

The same article shows the increase in average American family wealth, but no significant increase in levels of happiness. From 1957 to 2004, the average income after tax increased from $10,171 to $27,237, but the percentage of people being happy remained at a stable range of 35%-34% (Source: U.S. Census Bureau; National Opinion Research Center; University of Chicago; David G. Myers, Hope College.)

Happy Countries

Although there may be debate as to what the happiest countries are, Denmark, Bhutan, Sweden, Brunei, Switzerland, Puerto Rico, The Netherlands, Costa Rica, Finland, Canada and Colombia are generally on the list. What is surprising is that these countries have very distinct cultures. Furthermore, nations like Brunei, Costa Rica, Bhutan and Colombia are on these lists despite being less economically stable than their developed Western counterparts. This suggests that money may not necessarily lead to the well-being of a country. The United States, the United Kingdom and Japan are generally considered to be less content than other nations despite them being some of the richest nations in the world.

Therefore, in terms of money, long-term well-being should be the focus, rather than temporary thrills. So what gives you full fulfillment? Make a list of all the things that make you happy in life, and you may find you won’t need to splurge on an item to bring you temporary joy. Appreciate everyone and everything that you have in life and you are likely to be more content.

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Budgeting is so important and we were lucky enough to get some tips from our very own Prime Minister, John Key. Mr. Key chats to us about setting goals, ways to limit spending (especially on a night out), and ways you can save money. Check out the video!

Meet Kyle Bluck, a student at Massey University who uses Heaps! to manage his budget. He’s saving up for a trip overseas, and he talks to us about how Heaps! helps him keep on track.

We chatted to Fraser Kennedy about spending smarter, budgeting, building up regular savings and staying on track to buying a house for the family using heaps!

Posts Tagged ‘budgeting’

Fashion on a budget

Staying in the green (budget-wise and environmentally)

Hold your own swap party

Weight Loss and Budgeting: Save money, save calories!

Show off Your Budget

Fun Budgeting

Listen to Others

Personal Finance in Social Media

Small Start, Big Dreams, Bigger Savings

Saving Money with Budgets: How to Divide Your Income

Money Gives You a Social Life

Stress Exists Because Money Exists

You Need Some Money to Live, You Want More Money to Live

Happy Countries

John Key Talks Budgeting

Traveling Overseas Using Heaps! with Kyle Bluck

Buying a house using heaps! with Fraser Kennedy

Heaps! Video Introduction

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