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Frugality and forensic accounting; 11 tips to save on transportation costs; Fixing what's broke; What you need to know about sum insurance; Improving processes and systems

Posted in Personal Finance

By Amanda Morrall

1) Frugality and forensics

Being a yogi and financial journalist, I have the most fascinating exchanges with people. They range from the deeply philosophical, for example the nature of self and the battle of mind and ego, to the more prosaic but important matters of insurance plans, retirement savings and investment strategies.

While I struggle at times with the contrasts between these vastly different worlds I inhabit, the insection is where I have my ah-ha moments.

You see, to discuss money in isolation from the other equally important matters of why you need it, how much and where you choose to spend it, you risk overlooking the bigger picture about how it can serve you and not the only way around.

When you know what you want, have an end point in mind and a general sense of what constitutes a meaningful life to you, then you can begin to master the mechanics of saving and spending to achieve your desired goals.

It's a balancing act to be sure and self reflection is equally as important as the financial review. We tend to ignore one at the expense of the other.

If it all seems to esoteric, simply start by reviewing your monthly spending on a regular basis and add it up. Is this where you want your money to go or are their bigger, better things you want out of life than a more extensive collection of x,y,z. 

This piece from thesimpledollar.com illustrates how financially debilitating it can be to one's long-term goals to spend without real consideration of the consequences on stuff that we really can do without. It's frighteningly easy to fritter. 

2) Repair vs replace

To fix or not to fix. This is the dilemma I have been faced with after being gifted (sort of) an espresso maker that turns out to have blown a gasket or some such thing. This is always a tough one for me to assess.

Repairs don't come cheap and there's no guarantee that something else won't break down the next month. What I've been pondering is whether it doesn't make better sense just fork out on a newer model with a longer shelf-life.

I'm not much of a materialist but this one's been nagging at me as I lust after good quality coffee almost as much as Lululemon yoga pants, which incidentally I was also gifted recently thanks for my most awesome gig as a teacher.

In any case, after reading this grounding piece, I'm on the quest for a good coffee machine repairman. If you know of one, please send me their details. Our landfill will thank you as will I.

3) Transportation saving tips

Working from home, I have found myself ironically driving more than ever. Trips across town to teach yoga, trips into town to drum up business, trips back and forth to take the the kids school.

Everytime I get behind the wheel of my Honda Jazz I say a small prayer for its fuel efficiency without which I'd be paying through the nose for petrol. I can hear Mr. Money Moustache telling me to get off my butt and onto my bike more often. I just don't think I'd make it to those meetings in town on time MMM. Is that an excuse?

For the benefit of others, here's 11 ways to save money on transportation via moneycrush.com

4) What you should know about sum insurance

Insurer IAG is the latest to adopt a sum insurance policy with respect to home cover. What does this mean for you? It means that when you take out insurance you are personally responsible for setting the amount and if you miscalculate replacement costs, it's your own damn fault.

IAG has this week launched a massive campaign to educate its customers on the details. The switch will happen over the next 15 months as policies begin to renew.

For more information, please see the IAG's new website www.need2know.org.nz. This is important stuff so ignore it at your own peril folks. The site includes an online calculator to help with estimating rebuild costs based on age, size, location, slope of property etc.

You'll also need to factor in inflation and building costs, which could spiral when the Christchurch rebuild finally gets off the ground. You'll want to get this one right.

5) Systems and processes

Systems and processes aren't just the domain of engineers and geeks. They're crucial to the smooth running of small businesses and even personal finance gods and goddesses such as yourselves. In a recent MYOB business survey, improving systems and processes was identified as the leading priority for small business. Here, via MYOB are 7 steps to boost your business in 2013. 

And to close, some humour for a Wednesday. Thanks to our retail guru CS for drawing my attention to it. 

Like what you've read? Follow me on Twitter @amandamorrall or check out my new blog www.amandamorrall.com or better yet buy my new book Money Matters and start the personal finance revolution from within. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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1 Comments

Good calcuator but it under

Good calcuator but it under estimated by 20% or more although to be fair the house is probably quite a way from standard.
 
A few pitfalls there!