Wednesday, 17 June 2015

Afford Anything's 1% Challenge

Hi, I'm Scrooge McDuck,

And since I'm thiiiiiis close to not being able to pay my bills this month, I'm also starting to really resent being called that.

I don't understand this philosophy where having a diversified portfolio of shoes and dresses you never wear is okay, but saving money for stocks, bonds, a new hot water system and knowing that I don't have to panic if my contract isn't renewed is not okay.

Despite what people seem to think I do actually spend money, just on things that matter. Rather than new shoes I'll never wear, and $5 a day coffee addictions, I have traveled interstate three times in six months, bought a brand new hot water system without having to panic about how to pay for it, and we drink the expensive ethical milk in my house.

This blog is (vaguely) about Afford Anything's 1% challenge. There's two points in that title, first, Afford Anything is a finance blog with a concept I can really get behind. You can Afford Anything, but you can't afford everything. So prioritise, then ruthlessly cut out what doesn't matter to you (pedicures, new shoes, getting mah hair did) so you can spend on what matters to you (travelling for roller derby, financial independence, home improvments/repairs).

The 1% Challenge is a pretty cool idea. In a nutshell, work out what you make in a month. Move the decimal place two spots to the left. That give you 1% of your income. Now put that 1% into savings. Next month put 2% over. Next month 3%. Save an extra 1% a month.

At the start this was pretty damn easy, I had a massively overpriced home insurance policy. When I moved to Budget Direct I saved the equivalent of 1.2% per month. I committed to selling my car (I can count on one hand the numbers of times I have driven a car this year, yay bike!) and put the money straight into my mortgage. Combining the savings on my mortgage, insurance, rego, petrol, services, etc. I saved another 1.6% of my income per month. I picked up some remote contract work (I ghost-write for a not-for-profit, that's why I barely blog anymore) and put all my income from that into savings, which became another 5% even counting the increase in my income.

I also did little things like switching to LEDs (my electricity bill was $1 p/day cheaper, that will cover the cost of bulbs within a year) replacing the old HWS (conservative estimate is $5p/week more efficient, plus the old one was leaking) and dropped my phone bill $5 p/month.

My point? None of these things have made me feel miserly, or like I'm 'missing out' by being Scrooge. They're all pretty damn reasonable.

Oh, and half the money from selling my car actually funded me flying to Queensland for a weekend to represent my league at a roller derby tournament.

Cut out the things that mean nothing to you. Spend money on things that matter to you. Don't cave in to pointless luxuries, luxury does not equal priority. And if I end up rolling in cash and able to retire early, then that's a bonus.


  1. Good advice :)
    Glad to see the blog hasn't completely died ;)

  2. There's a lot of half written blogs in the back :p

    1. Attach two halfs together and wheel them out?
      So like nerf guns and money advice.


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