Oily Rag Budget 2014

Last week the Government released its Budget, so we thought this week we would deliver our Oily Rag Budget!

While the number of zeros attached to the numbers is not up to the size of government, the principles are the same: spend less than you earn so you have money left over at the end of each year for times of need.

Unlike the government, earning more is not as easy as increasing taxes. Most of us do not have a captive population that can be squeezed a little harder as the need for more money arises. We have to work more hours or work smarter. Here are three big oily rag ideas about earning more.

Big Oily Rag money making idea #1. Make better use of “down time”. According to Statistics NZ every person watches around 14 hours of television a week. That’s equivalent to about 2 days working, or $230 a week for a person on a minimum wage. How about using that down-time for casual work, or on money saving activities like growing your own vegetables - and selling or swapping the surplus! Multiply the benefits by two in a two-person household.

Big Oily Rag money making idea #2. Clean out the garage and cupboards. Although the amount of money tied up in household items may not appear large, most families accumulate various “bits and pieces” that are no longer of any use. It needs to be admitted up front, that oily raggers are known to be hoarders, so they usually have lots of stuff they could turn into cash. Surplus assets typically include: a second car, sports gear, boats, books, caravans, clothing, well-loved furniture, and so on. When sold, these can add up to serious money that could be used to knock a dent in a family’s mortgage, or converted into something else that could bring pleasure.

Big Oily Rag money making idea #3. Never go past something that’s free. Everything is worth something to someone. One oily ragger recalls being offered a piece of old machinery that was cluttering up shed space. The oily ragger jumped at the chance. He made quite a bit of money selling the workable parts through an online auction site and the other bits to a scrap dealer.

That’s the income taken care of. On the other side of the ledger is spending – so here are three Big Oily Rag ideas to spend less.

Big Oily Rag money saving idea #1. When supermarket shopping, only buy house brand products or items on special. That will save the average family about $50 a week. By doing this and using that sedentary time wasted in front of the television to grow your own fruit and vegetables you will eat better and healthier food and save thousands of dollars a year.

Big Oily Rag money saving idea #2. Repay all consumer debt - including your mortgage - as quickly as you can. Over the lifetime of a 25 year mortgage the borrower will pay more in interest than the value of the loan itself! Repaying your mortgage is the best risk-free investment you could make - with the exception of KiwiSaver, if you receive a dollar for dollar subsidy from your employer, plus the annual government tax credit.

Big Oily Rag money saving idea #3. Be sensible about the vehicle you buy and the way you drive. Buying a good second hand vehicle (one that you can afford to buy without debt) will mean you will take less of a hit when it comes to resale. Slowing down from 110 km to 100 km will result in a 15% fuel saving, it will cut down on wear and tear, and you will receive fewer speeding tickets!

We love hearing your favourite money-saving tips, so please send them to us by visiting www.oilyrag.co.nz or by writing to Living Off the Smell of an Oily Rag, PO Box 984, Whangarei and we will share them with everyone else!

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 on-line at www.oilyrag.co.nz. The book is available from bookstores and online at www.oilyrag.co.nz.

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