We’re headed Down Under for this month’s Reader Case Study to chat with Sam and Keith who live in Brisbane Queensland, Australia. Today we’re going to help them figure out how to pay down their debt and save up for their future!

Case Studies are financial and life dilemmas that a reader of Frugalwoods sends to me requesting that Frugalwoods nation weigh in. Then, Frugalwoods nation (that’s you!), reads through their situation and provides advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study.

I also provide updates from our Case Study subjects at the bottom of each Case Study several weeks/months after their story is featured. To see what past Case Study participants have decided to do, check out the Case Study section and scroll to the bottom of the individual posts.

I probably don’t need to say the following because you all are the kindest, most polite commenters on the internet, but, please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not to condemn.

With that I’ll let Sam, this month’s case study subject, take it from here!

Sam’s Story

Sam & Keith’s family by the beach

Hello Frugalwoods nation! I’m Sam, I’m 40 years old and my husband Keith is 43. We have a blended family with his, my, and our children and they have all lived with us at one point or another. Keith’s daughter Summer is 20 and my daughter Clodagh is 19. Our son Luke is 10. Only Luke lives at home now as our two older chickens have flown the nest. We also have a dog named Gus.

We live in Brisbane Queensland in Australia. Keith and I met in 2006, got married in 2008, and moved our family interstate from my hometown in Western Australia 10 weeks later!

Sam and Keith’s Careers

Keith has a job in the Defence Force, where he has served for over 15 years, which requires him (and us) to move semi-frequently (every 3-5 years), often interstate. Additionally, his position requires frequent travel and he’s gone approximately 6 months of each year sporadically. After having my daughter, I worked part-time as a customer service officer in the state government until having my son. The last 10 years since having my son, I’ve worked for 5 years part-time as a customer service manager and 5 years as a stay-at-home mum. I’ve recently obtained a part-time position in insurance claims with a very reputable member-owned insurance company that’s extremely involved in community works. I view this as a foot in the door.

I am currently studying at university to be a counsellor. I have tried several times over the last 18 years to get a degree and have never finished it. My goal is to work in rehabilitation counselling for people who have suffered injury or disability. I never really intended to go back to work as I was happy being a stay at home mum (maybe this is why I never completed university), but financially we have reached a point where I felt I needed to contribute. After I complete my degree, I should be able to obtain a part-time position that pays approximately $40,000 (before taxes) per year. I currently make $32,500 (before taxes), which is for 25 hours per week including evening shift and weekend work for which I’m paid extra.


For fun, we enjoy camping and kayaking and often go on weekend camping trips in national parks, or to some of the dams and lakes within an hour’s drive from our house. We go for longer camping trips to the beach on holidays. Because we move around with Keith’s job and so do his workmates, we have an ever-changing social circle which can sometimes be hard to break into. I am a very social person and since our mobile lifestyle can often be a bit lonely and friendship-scarce for me, I hate to say no to an invite to anything.

Sam & Keith love to camp!

We love to entertain at our place by hosting a BBQ, or by going to other’s houses. But in the last few years our BBQ entertainment has begun to blow out the budget with gourmet meats, snacks and side dishes instead of the basics we used to serve. Also, we find that many–maybe 80%–of our social invites consist of going out to dinner or drinks. Additionally, any invites that include Luke, even the mum and kids invites I get from the mothers of his schoolmates, seem to be at paid places such as water parks or play centres.

We also frequently go out for dinner as a family and like to go out for a drink as a couple or with friends. We find that despite our best intentions, Luke is a bit addicted to technology when we are at home, and we spend quite a bit of money on iPad and Xbox games for him, and updating this technology.

My hobby is cooking, and I am always forcing my family to try out new recipes I’ve made. Keith loves to play golf. Luke plays cricket in the summer for his school team, soccer in the winter also for the school team, and does drama classes throughout the year outside of school. We would love to grow our own fruit and vegetables but have never seen the point since we rent. We live near lots of beautiful lakes and scenic walks and almost every day we enjoy walking the dog as a family.

I undertake regular volunteer work at Luke’s school and serve on several committees there. Keith does community work through his workplace. Additionally, my new job is very active in community work in Queensland and I’ll be running my first fun run shortly, which I have fundraised for.

The Conundrum

We feel like we have lived a champagne life on a beer budget and now we are paying for it. We fritter away our income on nothing and never seem to achieve any of our real, longterm goals. We are both becoming frustrated with the way we live but find it extremely difficult to change our patterns of behaviour. We have tried to stop spending before and we are able to for a period but then go back to our old patterns and increasing debt. I read blogs like the Frugalwoods longingly but never seem to be able to put the ideas into practice in real life.

Where the Sam and Keith Want To Be In Ten Years:


  • Either own a house and have substantially paid off the mortgage, or, be well on our way to having enough money either saved or in superannuation to buy a house outright upon Keith’s retirement at age 60. Houses in our area cost approximately $350,000 to $550,000 and our price range would be somewhere in between.
  • Have 3 months of income in the bank. 6 months would be ideal, but I’d settle for 3.
  • Have no debt other than a mortgage (if that).
  • Have enough spare income to visit my family in Western Australia a few times a year, which costs $500 per person return flight. If we are interstate from our children by this point, we would want enough spare income to visit them often.
  • Be supporting Luke through university or other tertiary education. This would be living expenses only as fees are paid for under a government interest-free loan scheme in Australia that he would pay back when he earned over $51,000 per annum.

Lifestyle and Career:

  • All our children will be adults by this point and we will very likely have grandchildren, so we would like to be spending plenty of time with them. This would be the main place lifestyle-wise we would like to find ourselves in.
  • We would continue to camp but maybe by this point would have been able to invest in a caravan and continue to holiday within Australia, as we have always done.
  • We would like to continue to entertain at home, maybe with the very occasional meal or drinks out with friends, but mostly at home.
  • We would absolutely love to be growing our own fruits and vegetables.
  • We would still have dogs and be spending plenty of time with them.
  • At this point in my life, I would like to be involved in volunteer work in the disability sector.


  • We would both like to be working part-time at this point and spending time on family and travel. Keith would like to be part-time, but says it isn’t essential.

Sam and Keith’s Finances


Item Amount Notes
Keith $5,497 After taxes and superannuation (retirement) contributions
Sam $2,512 After taxes and superannuation (retirement) contributions
Monthly Total: $8,009  
Annual Total: $96,108

Monthly Expenses

Item Amount Notes
Rent $1,134.00 This includes water. Rent in the area where we live is $2,166; our rent is subsidized by Keith’s work.
Keith’s discretionary spending money $1,084.00 Keith withdraws this monthly for travel costs of approximately $500 per month (this is above and beyond what his work reimburses him for) and the remaining $584 is his to spend on what he chooses (usually entertainment, alcohol, and dining out). He says that his withdrawal of this amount is non-negotiable and that he won’t consider a lesser amount.
Loan repayment $892.67 To Sam’s mum and dad.
Private school fees and school purchases for Luke $650.00 Luke used to attend a public school, which only cost us $32.50 a month. However, we found out he was more than 2 years behind in his education, and additionally was unhappy at the school. This school is a much better fit for him and he has already improved dramatically in the few months of being there. We would make any sacrifice for his future.
Credit card repayments $650.00 This is how much I pay on the credit card debt we owe.
Food shopping $520.00 This is for 2 adults and 1 child. I try to shop frugally but time gets the better of me and I end up shopping at more expensive supermarkets. We do most of our cooking from scratch and don’t buy any convenience food.
Keith’s personal superannuation contribution $352.00
Interest free loan repayment $260.00 To Keith’s work; this is the minimum amount required.
Tolls for Sam driving to work $238.42 This is how much it costs me for the privilege of driving to work and back 5 days a week. If I took roads that don’t charge a toll, it would take me 3 hours a day in travel time for a 5 hour/day job! This way it takes me 2 hours a day in travel time. I can’t take the 3 hours a day travel option or it would double Luke’s before and after school care fees.
Petrol for Sam’s car $216.00
Sam’s discretionary spending money $216.00 I don’t really know what I spend this on!
Airfare $209.00 This is for us to visit my family twice a year, and for Luke to stay with his grandparents on 2 of his school holiday periods (he has 4 school holiday periods a year)
Before and after-school care for Luke $164.65 This is child care for Luke when he isn’t at school
Gifts $125.00 This is for family and friends and when Luke attends birthday parties
Utilities: Electricity $117.00
Car insurance $116.57 We have a joint policy. We used to have cheapo car insurance, but since Keith’s car needed repairs in a major way, and it cost us $7,000 (and months without his car), we have opted for a much better and more expensive policy. This has an excess of $650 for each car. It includes a hire car option and a free windscreen replacement each year.
Savings account for Luke’s car $109.00 We are saving this money to buy Luke a car when he gets his licence and for the cost of driving lessons. Current balance is $2,000.
Sam’s lunches and dinners out with friends $108.00 I use this money for lunches and dinners out with friends and the occasional drinks.
Holiday care for Luke $93.34  This is child care for Luke when he is on school holidays. His school is on holidays for approximately 14 weeks per year. We also utilise family as much as possible, although that is difficult since we don’t live in the same place.
Internet $90.00 This is for unlimited data. Luke and Keith like to game and the Pay TV uses a significant amount of data
Clothes $84.00 This is for all 3 of us
Contents insurance $81.00 This is our insurance for our household contents. We have added jewellry, 2 laptops, and Luke’s iPad for school as well as home items that will be covered on this policy. This has no excess.
Utilities: Gas $70.00  This heats our water and powers our stove top.
Sam’s car registration $62.20 We pay this every year, it is mandatory in Australia
Keith’s car registration $62.20 We pay this every year, it is mandatory in Australia
Mobile phones with Moose Mobile $53.00 This is the best deal we could find. Keith likes lots of data and we both make lots of phone calls and texts to family and friends who live in other states so we like to have unlimited calls and texts. This is for 2 phones per month. No contract.
Sam’s gym membership $52.00
Luke pocket money $43.00
Household supplies $40.00 I try to make as many of my own cleaning products as time permits.
University expenses for Sam $40.00 I’m lucky that I don’t have any fees or tuition expenses for university that I need to pay right now. I will start paying them at the rate of 2% per year of my pre-tax income when I start earning over $51,000 per year. This amount is for textbooks and stationery. I source my textbooks online or as an e-book, whichever is cheaper.
Foxtel TV $27.00 This is Pay TV. We pay this for 8 months of the year as Keith watches Aussie Rules football and avidly follows a team that he can only get the games where we live on Foxtel.
Pet care $20.00 We are lucky that Keith works with dogs in his career and knows a lot about injuries and how to treat them, so he is able to do some things we would otherwise pay for. This amount covers our dog’s annual vet visit, vaccinations,  food and worming and flea treatments that I buy online.
Books for Sam’s kindle $20.00 I love to read and I can’t borrow books for my kindle in Australia from the library so I buy them.
Netflix $4.67 For the other 4 months of the year, we use Netflix.
Monthly Total: $8,004.72  
Annual Total: $96,056.64


Item Amount Notes
Keith’s superannuation for retirement $263,000 Retirement is the one area we have no worries as we are already on track for a good retirement. No changes needed here. By the time Keith is 60, and able to access his superannuation, he will receive $60,000-$70,000 per annum.
Sam’s superannuation for retirement $21,386.27 My low amount is due to my stay-at-home mum status for much of my adult life
Savings accounts $0 Yes, that is correct! We save nothing, zilch, nada
Total: $284,386


Car Valued At Notes
Keith’s car $6,000 2001 Nissan Navada Ute, no loan
Sam’s car $6,000 2013 Holden Barina Spark, no loan


Item Amount Notes
Credit card $10,000.00 Owe $10,000 at 18% interest rate. Minimum repayment is $220 per month.
Loan from Sam’s mum and dad $7,004.00 6% interest rate. We took this loan after Keith’s car broke down majorly in November 2017. Minimum repayment is $892.67 per month.
Loan from Keith’s workplace $1,567.54 0% interest rate. Minimum repayment is $260 per month.
Total: $18,571.54

Sam’s Questions For You:

  1. Where oh where can we realistically cut back in our spending to achieve our goals and get rid of our debt? We know this is going to be the big question for us as we like to spend on what we like with no thought to the future!
  2. Should we buy a house or continue renting and invest our money to buy a house upon Keith’s retirement? Which would be better financially?
  3. How can we be social and make new friends each time we move, without spending tons of money?
  4. Are our goals even achievable at this stage in our lives? Please help!

Mrs. Frugalwoods’ Recommendations

I’m so excited to feature Sam and Keith today! A hearty congratulations to Sam for pulling together all of their financial information as that is no easy task. The first step to making ANY sort of plan regarding your money is compiling a comprehensive breakdown of your spending, your net (that means after-tax) income, your assets, and your debts with interest rates.

Without this holistic picture, there’s no way to set goals or identify your net worth or have any idea what might be possible for you. I unfortunately receive WAY more requests to participate in Case Studies than I’m able to accommodate and so I want to offer this advice to anyone seeking help with their finances: pull this info together–exactly as Sam did above–and go from there. Follow along with each Case Study and analyze your own situation in the same way that we do here as a group. And, by the way, DO NOT estimate your monthly spending. You need to actually track and record every dollar you spend in order to do this exercise correctly. I use and recommend the free expense tracker from Personal Capital. If you’d like to know more about how Personal Capital works, check out my full review.

Savings Accounts Side Note

One of the easiest ways to optimize your money is to keep it in a high-interest savings account. With these accounts, interest works in YOUR favor (as opposed to the interest rates on debt, which work against you). Having money in a no (or low) interest savings account is a waste of resources because your money is sitting there doing nothing. Don’t let your money be lazy! Make it work for you! And now, enjoy some explanatory math:

  • Let’s say you have $5,000 in a savings account that earns 0% interest. In a year’s time, your $5,000 will still be… $5,000.
  • Let’s say you instead put that $5,000 into an American Express Personal Savings account that–as of this writing–earns 1.70% in interest. In one year, your $5,000 will have increased to $5,085.67. That means you earned $85.67 just by having your money in a high-interest account.

And you didn’t have to do anything! I’m a big fan of earning money while doing nothing. I mean, is anybody not a fan of that? Apparently so, because anyone who uses a low (or no) interest savings account is NOT making money while doing nothing. Don’t be that person. Be the person who earns money while sleeping. Rack up the interest and prosper. More about high-interest savings accounts, as well as the ones I recommend, here: The Best High Interest Rate Online Savings Accounts.

Ok back to our subject at hand…

Goal Setting and Focus

A champagne life on a beer budget

Sam is very insightful about their current financial situation and she absolutely hit the nail on the head when she wrote the following:

We feel like we have lived a champagne life on a beer budget and now we are paying for it. We fritter away our income on nothing and never seem to achieve any of our real, longterm goals. We are both becoming frustrated with the way we live but find it extremely difficult to change our patterns of behaviour. We have tried to stop spending before and we are able to for a period but then go back to our old patterns and increasing debt. I read blogs like the Frugalwoods longingly but never seem to be able to put the ideas into practice in real life.

This level of insight is remarkable and I commend her for recognizing this about how she and Keith have been spending their money. I often hope that through a Case Study folks will come to this realization. It’s extremely impressive that Sam is already there! In many way, the hard work is already done because knowing this about yourself is a prerequisite to moving forward.

I agree with Sam’s assessment and I think it’s going to be imperative for her and her husband to come to an agreement over how badly they want to achieve the goals they’ve outlined in this Case Study. Because it’s going to take a lot of changes for them to get there. But, the good news is that they can do it! They’re just going to need to focus and set priorities. I wrote this post last month about financial questions to discuss with your partner and I think it would be a useful exercise for Sam and Keith to go through them together.

Priorities #1 and #2 for Sam

In reviewing Sam and Keith’s finances, my two major concerns are:

  1. Their debt. Particularly, their high-interest debt.
  2. Their lack of emergency fund or any form of savings outside of retirement.

#1: Let’s start with their debt.

I am not a fan of debt, but, I don’t care very much about 0% interest rate debt as it’s not actively working against you every month. Debt with a 0% interest rate is a hassle and needs to be paid off, but it’s important to remember that the truly insidious, awful thing about debt is the interest rate. This is why I have Case Study subjects include interest rates with their debt–it’s the most important part! If you’re assessing your full financial picture and creating a debt repayment plan, focus on the interest rate(s) associated with your debt(s).

Sam & Keith’s dog on a walk

Given this, you can guess that my biggest concern is with Sam and Keith’s credit card debt, which comes with a whopping 18% interest rate. In case you’re wondering, this is what we would call high interest rate debt and, unfortunately, it’s the worst kind of debt. In light of this–and the compounding amounts of money they’re losing on this every month–I highly recommend Sam and Keith buckle down and pay this off in its entirely as fast as humanly possible.

Next on the debt repayment chopping block should be the debt to Sam’s parents with an interest rate of 6%. Much lower than the aforementioned 18%, but still higher than you want.

I commend Sam and Keith for paying off these debts every month, but I also strongly encourage them to start saving at a much higher rate in order to throw more money at these debts. With their current income level, they should be able to wipe out both of these debts in short order (we’ll get to how in just a minute!).

For the 0% interest rate debt from Keith’s work, they should continue to pay the minimum amount every month until it is paid off. I would not recommend accelerating payments on this debt since, again, the interest rate is zero.

#2: The Danger of Having No Savings

The peril of not having any savings (outside of retirement) or an emergency fund is that you’re in constant danger of going into greater debt. This is the #1 reason why I recommend building up an emergency fund of three to six months’ worth of expenses. Sam and Keith have already experienced the negative impact of not having an emergency fund when Keith’s car broke down and they had to take out a loan from Sam’s parents with a 6% interest rate.

This is a perfect example of why you always want to have savings on hand. Things happen in life–cars break down, jobs lay people off unexpectedly, kids/pets get sick–and you want to be able to pay for these unforeseen, yet entirely predictable, events WITHOUT incurring any debt. Parallel to paying down their debt, I want to encourage Sam and Keith to get serious about building up a robust emergency fund so that they can avoid going deeper into debt.

I know that a lot of folks find themselves in the position of needing to simultaneously pay down debt and build up an emergency fund, so we’re going to talk through how to achieve this two-part goal in just a moment.

Retirement Savings

I want to give a shout out to Sam and Keith for having money socked away in their retirement accounts–way to go!! Retirement savings are one element of a financially responsible life and they’re doing great in this department.

What I do want to highlight, however, is that Sam said Keith’s superannuation will provide the couple with $60K-$70K annually; however, at present, they are spending over $96K annually. With inflation, they’d be spending even more, which makes for a pretty large gap between income and expenses. It’s also important to remember that retirement savings are but one element of a fully developed financial portfolio. And so, everything we’ve discussed up to this point comes down to…

Reducing Their Spending

Sam & Keith fishing

Sam asked for our advice on how to cut back on their spending and I am so glad she did because this is the area where she and Keith have a lot of opportunities to win! They can–and should–view this as a competition over who can figure out more cost cutting measures. I highly recommend that Sam and Keith take my free 31-day Uber Frugal Month Challenge together as that’ll help them assess their needs vs. their wants and bring home the reasons why they’re saving more money.

Something I noticed as I read through Sam and Keith’s expenses is that there seem to be a lot of “sacred cows” that they feel they cannot eliminate. While I encourage people to identify their highest and best priorities and spend in service of those priorities, everything cannot be a priority.

Sam and Keith need to do the hard work of acknowledging that they desperately need to cut back on their spending and that they’ll need to collaborate on where to save. They are currently spending almost every single dollar they earn–the epitome of living paycheck-to-paycheck–and Sam readily acknowledged that it’s not getting them where they want to be in life. This will not change until they make changes to their spending and their lifestyle.

I created the below spreadsheet for Sam of all the line items I recommend she and Keith eliminate entirely, at least while they’re paying down their debts and building up their emergency fund:

Item Amount To Save Mrs. FW’s Notes
Keith’s discretionary spending money $1,084.00 Keith wrote that his withdrawal of this amount is non-negotiable and that he won’t consider a lesser amount. However. Folks. This is an ASTRONOMICAL amount of discretionary money every month! Honestly, this outstrips many people’s ENTIRE non-rent/mortgage monthly budgets!! I’m not trying to harsh on Keith here, but there is no other option than for this to be eliminated or drastically reduced. If Sam and Keith had no debt, a healthy savings account, and NO major financial goals, then this would be OK, but in light of their current situation, this is truly shocking. This is one of those situations where I think some tough love is in order and Sam’s going to need to have a very frank conversation about this dollar amount with Keith.
Sam’s discretionary spending money $216.00 Sam’s discretionary spending, while much lower than Keith’s, is still incredibly high. Sam said she’s not sure what this gets spent on, so I encourage her to try and itemize these expenses and find a way to eliminate them all. Identify frugal substitutions, see what she can do without, and prioritize the expenses that need to remain.
Gifts $125.00 It’s time to embrace the ethos of frugal gift-giving! Sam and Keith are simply not in a financial position to spend $1,500 per year on gifts. Here are several posts for inspiration:

Reader Suggestions Of Frugal, Fun, Inexpensive, and Festive Holiday Gifts

How To Give Frugal Gifts With Joy And Generosity

Holiday Gifts For Frugal Weirdos To Give And Receive

A Frugal Valentine’s Day: Do Instead Of Buy

Savings account for Luke’s car $109.00 I strongly recommend this be ceased. See below for my rationale.
Sam’s lunches and dinners out with friends $108.00 Whoa buddy! More discretionary spending! I advise Sam to find frugal ways to socialize or, at the very least, start spending much, much less when she goes out. See below for more ideas on frugal socializing.
Food shopping $100.00 Try to reduce by $100/month, to bring their total grocery spending to $420. Posts for inspiration:

Our Complete Guide To Frugal, Healthy Eating

What Does A Frugal Person Eat?

The Dirty Secret Behind How We Cook At Home

Clothes $84.00 Time to embrace a clothes-buying ban! I realize this isn’t always possible with kids, but at the very least, Sam and Keith should stop buying new clothes. And, if they’re not already, Luke’s clothes should be sourced as hand-me-downs or from thrift stores/garage sales.
Sam’s gym membership $52.00  There are lots of ways to exercise for free and I encourage Sam to explore what works for her. A few ideas: hikes/walks outside (yes, year-round), biking (also year-round!), exercise classes/yoga for free on YouTube and other websites (I really like the free classes offered on doyogawithme.com), volunteering at a gym/studio in exchange for free workouts (here’s how I did that at my yoga studio in Cambridge), and so much more! Get creative and eliminate this expense.
Luke pocket money $43.00  This will need to be a wholesale, whole-family frugality experience and a great opportunity to start teaching Luke about money management.
Foxtel TV $27.00 Yet another sacred cow on their expenses list. Again, Sam and Keith will need to decide what matters most to them and how determined they are to stop living paycheck-to-paycheck and start working towards future dreams and goals. Here’s how Mr. FW and I watch TV for free.
Books for Sam’s kindle $20.00 I recommend Sam check out actual books from the library and hold off on buying new ones for her Kindle. This is one of those opportunities for finding a totally free and fun frugal analogue!
Netflix $4.67
Total To Save: $1,972.67

I fully recognize that these cuts will be hard to make, but Sam and Keith are in a precarious financial position right now with debt, no savings, and a desire to do more with their lives. If Sam and Keith are able to eliminate all of this spending, they’d stand to save a gigantic $1,972.67 per month!

They currently have $17,004 in high-interest debt and, with that level of savings, it would taken them less than 9 months to pay it all off!!! Nine months is not long at all! How wonderful would it be to eliminate all of that debt in under a year!! It would be fabulous, I tell you. Then, Sam and Keith could immediately start working towards financial goals beyond simply the monthly slog of paying bills and paying for things they’ve already bought (which is what debt is, after all).

Don’t Buy Your Kid A Car (even if you can afford to)

Looks like Luke already has a great work ethic!

I want to raise the question of why they’re saving up to buy Luke his own car. Sam and Keith are currently putting quite a bit of money towards this goal and I’m unclear on why. I completely understand their desire to pay for Luke’s private schooling and also their hopes to help Luke with his university fees, but the car savings plan threatens to derail those other two goals. In my humble opinion, I would advise taking the $2,000 they’ve already saved towards this goal and instead use it to pay off their debt.

I personally bought my own first car when I turned 16 using money I’d saved up from working as a receptionist at my church and babysitting. I bought a used, 1990 Toyota Camry station wagon for cash, which I drove until I graduated from college, at which time I passed the car along to my brother since I was moving to NYC and no longer needed a vehicle. I think saving up to buy one’s own first car is an excellent first financial milestone and a fabulous way to teach kids about how to earn, manage, and deploy their own financial resources. In short, I’d stop saving up for this car, use the money to pay off debt, and if Luke wants a car, he can work and save up to buy one himself.

If Sam and Keith combine the $2,000 they already have in Luke’s car account with the above savings I recommend, they could pay off ALL of their high-interest debt in just over 7 months! Seven measly months! Hooray!

The other side of the equation here, of course, is to increase their income. Sam is working on her university degree (hooray, Sam!!) and projects she’ll earn a higher salary after completing this degree. That is fantastic and I laud her for pursuing a career she’s passionate about. That being said, Sam and Keith should discuss in advance how they want to utilize this increase in income. Based on what Sam said, it sounds like in the past, salary increases have gone towards inflating their lifestyle and not towards longterm goals. I encourage Sam and Keith to outline a plan in advance for how they want to utilize this money.

Debt Avalanche

I recommend that Sam and Keith employ what’s termed the “debt avalanche” approach to paying off their debts. According to this methodology, you should pay off your debts in order of interest rate. The reason I HIGHLY recommend this method is that it’s the most mathematically sound and will save you the most money. Based on the debt avalanche approach, Sam and Keith should pay off their debts in this order:

  1. $10,000 credit card debt with an 18% interest rate
  2. $7,004 debt to Sam’s mum and dad with a 6% interest rate
  3. $1,567.54 debt to Keith’s workplace with a 0% interest rate

The other common debt repayment program–the debt snowball–advocates for paying debts off according to the size of the debt itself, irrespective of the interest rate. The idea is that you’ll get a psychological boost from paying off smaller debts first and be more motivated to then pay off your larger debts. The problem with this approach is that you could be paying tons in interest every month by not focusing on your highest interest debt. Everyone has to carve out a debt repayment program that works for them, but there’s no denying that the debt avalanche approach is the most mathematically sound. Since Sam and Keith are already on top of paying their debts down every month, I think they’ll do great with a debt avalanche.

Don’t Forget About The Emergency Fund!

I just outlined an aggressive path for Sam and Keith to pay off all of their high-interest debt, but as we discussed above, it’s important that they simultaneously build up an emergency fund since it’s incredibly dangerous to skate by paycheck-to-paycheck with no buffer. In light of that, I advise that if Sam and Keith adopt all of the above recommended savings, they should take a portion of the $1,972.67 they save every month and put it into their emergency fund. The remainder should be used to pay off their high-interest debt.

These are competing and equally important goals, which is why I advise they tackle both at once. An emergency fund is typically three to six months’ worth of your expenses. At their current rate of spending, that would be $24,014.16 – $48,028.32. However, if they decrease their monthly spending by $1,972.67, they should target an emergency fund in the range of $18,096.15 – $36,192.30. The less you spend, the less you need to save.

I also want to point out that a lot of Sam and Keith’s monthly spending is currently monopolized by their debt repayments. Once they knock out those two high-interest loans, they’ll save a whopping $1,542.67 per month!!!!!

Let’s do some more math:

Current monthly spending: $8,004.72
Amount to save through frugality: – $1,972.67
Amount to save after high-interest debt repayments are done: – $1,542.67
New Monthly Spending: $4,489.38

That’s almost half of what they currently spend! Sam and Keith’s monthly take-home pay is $8,009, and if they only spent $4,489.38 per month, they’d be on track to save a massive $3,519.62 per month. Now THAT is when Sam and Keith can start thinking about their future plans. In just ONE YEAR, they’d bank $42,235.44, which is a fabulous start towards either their goal of buying a home or investing or traveling or simply living a much more stable, fulfilling financial life. However, it does mean that they need to embrace all of the expense reductions I outlined and also stay on track with first paying off their two high-interest loans and building up their emergency fund.

As you can see, through extreme frugality, it’s entirely possible for them to dig out of their debt and set themselves on a fantastic trajectory. To answer Sam’s fourth question about whether or not their goals are achievable, yes, they absolutely are but only if she and Keith are willing to make these major lifestyle shifts in their spending. Since Sam came to me with this Case Study, I have to imagine she is motivated to make these changes, which means she will succeed! Go Sam go!

Buying A House?

A lake near Sam & Keith’s home

Sam articulated that one of their main financial goals is to buy a home, and perhaps be mortgage-free, in the next ten years. If Sam and Keith earnestly want to do this, they will have to buckle down and incorporate all of the spending cuts I outlined above in order to save up a downpayment. Sam said their price range would be somewhere between $350K-$500K, so let’s run a few numbers on a home that costs $425K:

  • A 20% downpayment would be $85,000
  • A 10% downpayment would be $42,500

On top of that, they’ll need to have enough money for closing costs, moving expenses, their monthly mortgage payment, property tax, homeowner’s insurance, mortgage insurance, maintence/repairs, and all of the other sundry expenses that invariably crop up when you own a home.

More crucially, Sam mentioned that Keith’s job requires them to move every three to five years, which reduces the likelihood that buying a home will make financial sense. It’s usually not possible to even come close to recouping home-buying costs if you’re moving and selling every 3-5 years. My advice is that until Keith retires, or his job no longer requires them to move frequently, it doesn’t make financial sense to purchase a home.

Furthermore, Sam and Keith’s rent is currently subsidized and it sounds like their mortgage would not be. This will further inflate the difference between what they currently pay in rent and what they would pay in a monthly mortgage. As their present spending is nearly equal to their monthly income, there’s no way they could afford higher living costs, unless they dramatically reduce their spending, increase their income or, ideally, do both.

How to Be Social Without Spending Money

One of Sam’s questions was how to make and maintain friendships without spending lots of money–a topic I love as I am a very social person who spends very little on socializing! Going out for dinner and drinks is just one way to socialize, but it is by no means the only option.

Sam & Keith bushwhacking at a national park

Sam mentioned that she and Keith enjoy camping and outdoorsy things, which are great ways to spend time with friends, often for very little money. Additionally, she mentioned that their at-home parties have grown more lavish over the years, so now’s the time to rein those back in and focus on making tasty food that’s not overly expensive. Also, encourage potlucks! Provide one dish and have everyone bring a side dish or dessert or drinks to share. No reason for the host to feel obliged to serve an entire five-course meal. Spread the cooking duties around :)!

Since this is such an evergreen topic that comes up quite a bit here in Frugalwoods-land, I want to refer Sam to my posts on how to socialize for free (or cheap):

In summary, I advise Sam and Keith to do the following:

  1. Have a very frank conversation about their future plans and determine how committed they both are to making those dreams happen. Taking the Uber Frugal Month Challenge together would be a great first step.
  2. Decide what expenses they want to eliminate from their budget and then commit to saving that money.
  3. Pay off their high-interest debt at an accelerated rate, while simultaneously building an emergency fund, using the savings from step #2.
  4. After their debt is paid off and their emergency fund fully stocked, Sam and Keith can start projecting what they’d like to achieve with their newfound savings. If they’re able to permanently reduce their spending–and ideally also increase their income–they will be able to either buy a home, or invest, or travel extensively to visit family. If not, then they will continue this paycheck-to-paycheck slog that’s not going to allow them to achieve any of these goals.
  5. Be confident that they can do this!! As I outlined above, Sam and Keith have the income to knock out their debt in a fairly short timeframe. They should feel great about this wonderful opportunity they have to radically transform how they manage their money and, ultimately, their future. Good luck, Sam and Keith! We are rooting for you!

Ok Frugalwoods nation, what advice would you give to Sam? She and I will both reply to comments, so please feel free to ask any clarifying questions!

Would you like your own case study to appear here on Frugalwoods? Email me (mrs@frugalwoods.com) your brief story and we’ll talk.

P.S. I wrote a book, which published March 6th! If you’ve already read the book, I would really appreciate it if you’d consider leaving a review on Amazon! Many thanks for your support.

Updates from Sam on August 7, 2018:

First I would just like to say how difficult it was to swallow our pride, and reach out to the Frugalwoods community for advice, especially when all of our friends live the same way we do, attempting to choose a contrary lifestyle was pretty scary.

We consolidated our debts onto a 0% interest credit card for 16 months, cut up the card, set up a direct debit plan and cut our living expenses back to the bare essentials. We recently put a tax return straight on that credit card, and I am so proud to say that we are now debt free for the first time in our adult lives!!!!!!! As an added bonus, when we spoke to friends about not wanting to go out and spend money on entertaining, they were so relieved as they too had been feeling the financial pressure.

Amazingly, our social life is better than it has ever been and costs about $10 a week on average. We are now setting up to invest the extra money we aren’t using to pay off debt, to make extra payments into our superannuation accounts for retirement, and also our new goal is to have 6 months worth of income in the bank. We have cancelled the credit card as it is too much of a temptation to use.

Thank you so much! Your fabulous and fantastic Frugalwoods group has completely changed our lives, we are so much happier, and we have so much more enjoyable quality time as a family together, without spending. The stress of being in debt is now non-existent in our lives.


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  1. Great case study! You guys make great money combined, and it will definitely be easy to start cutting back and saving.

    One thing I’d recommend is really evaluate if going back to college is worth it! You wouldn’t receive that much of a pay increase, and insurance jobs pay well! You could always climb up, and use that experience to spring board to something else. 🙂 In the states, a college degree is sooo expensive, and time intensive.

    1. I wondered about this, too. There’s definitely something to be said for doing work you live (I’m a social worker) but given their financial goals, it might not be a good fit. If you plan to only be working part time within 10 years, is it worth it?

      1. Hi, thank you, this is a really valid point and worth thinking about. I think I need to weigh up the cost and time to study compared to perhaps increasing my hours at my current job.

        1. I also wonder if the new job with higher payrate will increase your tax tier?

          It would be awful if you went to the effort and expense to get a degree with a higher paying job, simply to have your increase taken away by higher taxes…

          1. In Australia the loans for university degree are the same as inflation, they can be more affordable than other countries

  2. Very interesting to read an Australian case study! As background for readers from other countries, in Australia your employer is required to pay 9% of your income to your superannuation (and I would imagine it’s higher for Defence Force jobs). Also groceries are insanely expensive due to the fact that we only have two major supermarkets – I know it varies between states and cities in the US, but generally when I see frugal shopping lists from the US I just laugh hollowly.

    I would suggest that Luke keeps his pocket money but has to pay for his own games and technology (which I couldn’t see listed in the budget but Sam mentions spending on). This is what my parents did for me and my siblings and I think it’s a good way to learn the value of money.

    1. I’m from New Zealand and agree about the comparison with the cost of groceries. it’s simply unachievable here on the same s ale!

  3. I love these case studies!

    As usual, Mrs. Frugalwoods advice is spot on. I think that Sam and Keith should take all her advice and just see how it goes. The worst that could happen is that they decide they can’t continue to do all the things she suggests, but I bet they’ll find that you can do a lot more that they think and still be very happy.

    I will add something about the Gym Membership. I’m FIREd and I don’t belong to a Gym and I workout all the time. I walk, run, sprint, stretch and do strength training. Contrary to popular opinion, you don’t need a Gym Membership to do strength training. I have an adjustable set of dumbbells and a chin up bar and I’m able to work out my entire body pretty hard. I suggest Keith look at setting up a home Gym with used equipment. If Keith has the space and interest, he can upgrade and buy a used Power Rack, Olympic Set, and Bench. You can get VERY strong with that equipment.

    Good luck!

    1. Thank you for the suggestion, we have discussed a mini-home gym and have had people offer us equipment for free, so I think this may be a go.

  4. Thank you for sharing your story. I think there are many areas in your budget where you can cut or reduce:
    – Sam discretionary fund, dinners out, Gym
    – Luke’s car fund, pockets money
    – Gifts
    – Cut Pay TV to lower internet
    – Clothes (shop at thrift stores)
    – Get physical copies of books from the library
    – Keith’s discretionary fund (I know you said it’s not negotiable, but maybe Keith will see how much you two can save over 1-10 years and change his mind?)

    I think Sam and Luke are teenagers and do have needs such as socializing, working out, owning a car. However, they can learn how to do that on the cheap or get a job and not rely on the parents for pocket money or meals out with friends. It will also show them the importance of hard work and money.

    All those little things will add up fast over time. Best of luck with your plan! 🙂

    1. Until I saw it written down, I had no idea of how much we could cut from our budget without even missing it. Thank you for your suggestions.

  5. This is my first time posting here but I’ve been reading for ages. I’m also from sunny Brisbane, so hi Sam and Keith.

    Now at 30, I really appreciate that my parents didn’t buy me a car and didn’t give me pocket money, so I agree with those recommendations. My story: I purchased my first car for $1500 just before I was 16 with some money borrowed from my parents (later repaid), but they then turned the trip to and from my nightshift filling job into a driving lesson in my car which obviously included a stop at the petrol station for me to fill up :). It was good that it was a cheap car because I know I marked the plastic rim covers of that car a few times driving solo. I later upgraded to a $4500 car in my first year of uni which I paid for in cash, I thought my second car was amazing with leather seats, electric windows and working A/C, and it was to a 17 year old kid. Without that step up over time I probably wouldn’t appreciate my current car, yes I have a no eating in my car rule. Pocket money/allowance wasn’t a thing in our family, we didn’t just get money for existing, we were always provided for with essentials (and uniforms, Catholic school fees, school excursions, etc) but toys and electronics (outside of Birthday’s and Christmas) came out of money we’d earned or received as gifts, especially by the time we were legally allowed to be employed. I don’t feel like we missed out, we did heaps of stuff as a family even if we didn’t head to Dreamworld or fancy holidays every year like others did. I still remember little things like enjoying heading to the wreckers with Dad on a Saturday morning to climb through cars to get things to fix mine, although I’m now happy to just take my car to the dealer because I appreciate my time is now more valuable. I might have felt a little hard done by in primary school compared to some other kids, but I know my parents were doing what they needed to do to get to where they are today, taught us that once we spent money on something we didn’t have it to spend on something else, and eventually their estate will benefit my siblings and I one final time.

    One big tip I’ve learnt over the last 4 years since becoming more frugal is not to think of the dollar amount but the percent relative to something else, i.e. this will cost me x% of my monthly/yearly income or y% of my net worth, this has really changed my view on more expensive things but even more so on cheaper things that usually have less value to me.

    1. That is a good way of looking at finances, I always think oh, its only $x amount, but looking at the % I think will help.

      1. I think also considering the ‘rule of 25’, or the ‘rule of 33’ (the rule of 33 is probably better for Australians). Look at the cost of something and consider that you would need 33 times that amount in investments to cover the price. If I want to buy a $100 game each year, I would need $3300 in investments to cover that cost. It helps you to realise the true cost of something.

        1. Honestly, the biggest thing that helped me to reduce spending in college, was when I decided to track everything. Every time I wanted to buy something, I realized I would have to write it down (or put it in excel) when I got home. My laziness defeated my impulse spending.

          Another option: Hang up some sheets of paper or a poster board right next to your entryway. (Don’t worry, this is temporary. Use painters tape. It doesn’t need to be pretty.) Leave a jar of pens next to this spot. Every time you or a family member walks in the door with a purchased item, you have to write down what you bought and how much it was. In just a few weeks or a month at most, you will notice your spending more than you used to. Noticing it in the act is how you break the habit.

  6. Thanks for sharing your story, Sam! While I was looking through your list of expenses, I was struck by how much it cost you to work. Your tolls, gas, university fees, before/after school costs for Luke, specials dinners, and gym membership total $1035.07! Given that you only bring in $2512 per month, I would highly recommend that you find a job, maybe at Luke’s private school, where you could make less money, but eliminate your drive, tolls, and gas. Then you’d have more time to exercise outside, invite friends to your house for coffee, and investigate cheaper ways to buy groceries, etc. I would ask yourself some hard questions about continuing at uni and whether your job is worth it?! When we start to add up the total it costs us to be employed, it’s really amazing! 🙂 Best of luck to you and your family! I know you guys can do it!

    1. I was struck by that issue too… Plus the time involved! 2-3 hours driving for a 5 hour/day job seems incredibly wasteful of Sam’s time.
      I’m also worried that Sam’s the only one in the frugal boat… Keith has non-negotiable $13k per discretionary budget PLUS his Pay TV and such, while Luke is following in his father’s footsteps with spending money, internet gaming, expensive schooling, and a car fund even though he can’t drive for at least half a decade. I’m worried that without buy-in from the boys, Sam isn’t going to get very far…

      1. What is interesting about the gaming habit is that it doesn’t need to be expensive! There are two video games I enjoy playing that are FREE. You can spend more on some material in the game – but not necessary. Likewise, there is one game I bought on sale that really can be played forever – it isn’t a game you “beat” or “finish.” There are so many ways for Luke to do what he likes while spending less.

        But I agree – they all need to be on the same page!

      2. Jover probably gave the most realistic comment (and great observation Laurie!). These boys are having a lot of fun with their money. That will effect things in the long run. Little things, big impact especially when it comes to money.

        And in a way, it should be ok since they do have a fat retirement savings (except it’s mostly Keith’s which means a power imbalance) and you can see that in other arenas of the budget that Keith is winning out.

        The car fund for Luke is silly. Really really silly.

      3. I second what Jover said. I was also struck by what their son is learning about relationships with one partner issuing so many “non-negotiable” edicts. Kudos to Sam for persevering without much apparent support.

      4. I completely agree with all that Jover said above. Seems as if Sam is the only one wanting to be more frugal to achieve these long-term goals.

      5. I agree with your buy-in comment. One things many of u (like the Frugalwoods) have going for us is that we are on the same financial page with our spouses and partners. My sense from reading Sam’s Letter is that she and Keith aren’t there … yet.

        If I were she I’d have a series of discussions with Keith. I’d avoid the budget issue the first time or two wndtalk about values and goals — what do we value (truly) and where are we going? Unit they’re aligned budget discussions are likely to be about deprivation and sacred cows.

        But if the two of you can align yourvaluesandgoals, the budget becomes easier. Every expenditure will yield to the questions, Does this support or values, and Will this move us along the path to our goals.?

        All the best!

      6. Sam, do you have access to the Barefoot Investor column in your local media (or his books, which you can probably buy at a local bookshop, or maybe even borrow from a local library)? His advice goes very much along the lines of the Frugalwoods, and is always worth reading.
        He suggests having a ‘Barefoot Date Night’ once a month, where you and Keith sit down over a meal (perhaps at the local pub) and discuss money. You both need to be on the same page if you’re going to become more financially secure, and it sounds like you have a way to go yet.
        I agree about Luke’s car. I once worked with a bloke who worked two fulltime jobs so that his kids could start life with (I think) $1 million each. He was killing himself, and I doubt that it would really benefit his kids in the long run. What does benefit them is demonstrating good financial management habits to Luke (and Keith); the Frugalwoods’ example is one to follow. Perhaps you could get both the boys interested in their blog?

      7. The comment about buy in is something I agree with also. I will say, however, that making all the changes with regard to extreme frugality at once might be a shock, and hard to sustain. It is like dieting. Can you go from 3500 calories a day to 1500 calories a day? Sure, but it would be more reasonable, and you would likely be more successful if you went from 3500 to 3000, then to 2500, then to 2000. It will take a little longer to pay off all debt, and to initiate appropriate savings, but you are likely to develop better financial habits that will help you be successful in the long run.

    2. Its not that there is any kind of spending imbalance, it is more that neither of us have much of a financial clue and spend what we want! And once you spend the way we spend, it is incredibly hard to want to change. But we do both want to change, and Keith having seen our finances in black and white has really shocked him and made him want to change things.
      I do agree there is a power imbalance with regard to myself having stayed home with the children and Keith having continued working and therefore having all the retirement savings. I will say that if we divorce (touch wood it doesn’t happen) I am entitled to 50%.
      Retirement savings and having children and staying at home with them is a big issue for females I feel, as females still tend to be the ones who do stay home, although that is slowly changing.

      1. Sam it is possible for Keith to transfer some of his super to your account as a spousal transfer. It makes a better balance for both of you for when you do want to retire. There is also a max balance that Keith can have in his Super account – I know it is a long way off that currently – but it is something you should be doing now as it can only be done on a yearly basis on what is put in for that year. Hopefully he is putting his super contributions in pre tax as a contribution via his employer rather than post tax as it is financially better.

  7. Sam, congratulations on successfully taking the first step toward getting control of your finances. It can be a very difficult thing to face your past spending, so that in itself is a victory. I agree with really focusing on cutting costs and putting your focus on your credit cards and the parent loan. The $1,500/month in payments to loans alone is 2/3 of some of my friends’ salaries now that they are just starting out their careers! I’d advise firmly against purchasing a house until after getting your finances in order. Houses are a huge expense, and you have a lot of other expenses right now. Once Luke leaves the nest, this should also free up monthly income as well for extra savings. I am not a parent, but I question if all the money being spent on him is actually doing him a disservice considering how stressful a financial situation you’ve been in. I am frequently told all children need is your time and undivided attention. I agree with putting the $2,000 toward high interest debt and having him purchase his own car when the time comes. Best of luck with all your budget cuts!! I’m looking forward to hearing about how your debt is gone 🙂

  8. Thank you for writing in, Sam! It’s difficult to take an honest look at your finances and to reach out for outside assessments. I really commend you for that.

    I agree with Mrs. Frugalwoods about maybe cutting back on some of the goals you have for your son. You need to make sure your own oxygen mask is on before you can help others! If your son really wants a car in the next several years, he can save up for that himself or get a job when he’s old enough. You could also consider passing on one of your older cars at that time if you have enough saved up to get a newer car for yourselves. (Once you’ve paid off your debt, etc.) My parents gave me their oldest car when I started driving, and my dad got a new one for himself, which was a great solution. I also think that the $43/month is a bit on the high side in terms of allowance. I would recommend scaling that back to $20/month, especially if you are covering most of his expenses (club dues, clothes, etc.) independent of that. In regards to his technology habits, could you encourage him to look at either renting games or buying them used? My husband does this with his games, and he can get them for a fraction of the cost at the local game shop a couple of months after they come out when some of the buzz has died down.

    I understand why Keith might feel like he needs $1000+/month for spending, especially if he is travelling all of the time. There can be a lot of pressure to go out for dinners or drinks with colleagues, and it can be difficult to cook if you’re living in a hotel room. I’d encourage you all to look at what he could reasonably cut down so you can save money. (Especially since it doesn’t sound like his employer is reimbursing these expenses?) Maybe there is some room for him to go out once or twice while he’s posted away, but other nights, he goes grocery shopping to keep sandwich, salad, and breakfast fixings in his room, which would be much cheaper than eating out. If he has the option to select lodging with his employer, it might be worth looking into extended stay hotels or Airbnbs where he could have access to a kitchen and branch out on the meals. If he could even limit his socializing with co-workers to one or two beers instead of a full meal with drinks, you could save a lot of money. (<$20 vs. $50-60 each time.)

    I hear you on the facility of a Kindle. I'd consider petitioning your local library to adopt OneDrive because surely you aren't the only person interested in digital content. I'd also start checking physical books out/requesting the books you want be ordered through the library. If you're spending $20/month, you're going through a lot of books! You could also check out Book Lending, which is a person-to-person lending system for Kindle books. You might be able to swap titles you've already read with other users and cut down ton the purchases you make.

    I wish you all of the best as you reconsider some of your non-negotiable expenses and plan your future!

    1. I think I will definitely begin borrowing books from the library. I love the suggestion of contacting the library to adopt OneDrive, thank you!

      1. Is your local library part of the Brisbane City Council library group? They have OverDrive and Bolinda for ebooks and audio. They also have digital newspapers, magazine, music and movies (mostly streamed documentaries, but probably plenty of movies you can borrow in the library). I often use these digital options just on my mobile phone. Phone screens are so big these days!

    2. This is what my husband does – he is military, so we also move frequently and he does travel for work/training as well. Whenever he is out of town, he accounts for some meals out, but hits the commissary or grocer wherever he is and gets himself granola, yogurt, and oatmeal for the time he’ll be there, as well as bread and such for lunches. It still adds up but way less than if he went out to eat every meal.

      I’m not sure if it’s available outside of North America, but since Sam enjoys Kindle books so much, it might be worthwhile to look into Kindle Unlimited. I’ve just signed up for it this year and pay just under $11US a month. As I am a fast reader, I’m usually rotating through books several times weekly. (You can borrow up to 10 at a time – I cycle through and return items as soon as I’m done reading them so I can borrow more.) This, in addition to using library e-book borrowing, keeps costs much lower for me than if I bought all the Kindle books I wanted to read. I hope you can find a borrowing system through your library that will help! In our area it is the OverDrive app, which allows me to borrow from 3 different library systems we belong to. That expands things as well, since they all purchase different items outside the big bestsellers that “everyone” wants.

      Lastly, it warms my heart to see your son out mowing that lawn. My son is around that same age and so frustrated that government laws say he can’t get “a real job”. Seeing other kids who are getting out there working however they can is a good thing. <3

      Best wishes to you!

  9. Sam and Keith got terrific advice here from Mrs. Frugalwoods. It’s a wonderful plan that, if followed to the letter, will result in complete payoff of all debt in 9 months. Just Wow, think how great that would feel! And if the plan is adhered to after that, a savings rate of around 42K a year. In only five years, this would change their financial picture (and spending habits) completely. Great analysis and valuable advice!

    The biggest hurdles are social! If your friends need to be fed in order to be friends, you might have to re-think priorities.

    And I have to just say that Keith seems resistant (“He says that his withdrawal of this amount is non-negotiable and that he won’t consider a lesser amount”). That jumped out at me. Without both partners being on the same frugal page, it becomes a lot harder–maybe even impossible–to achieve these goals. It takes a kind of long-range thinking not to eat the marshmallow in front of you because you know that if you don’t, you’ll get two later. Sometimes, in a couple, money becomes a way to assert the self (ie, I have my own money to spend). The Frugalwoods site has wonderful advice on couples learning to pull the cart in the same direction and it can be learned! One way to re-educate together is by taking the Frugal Challenge and another is by constantly reading books on the subject to gather ideas and discuss them. These books can be found in the library: “The Millionaire Next Door” is one classic, and so is “Your Money or Your Life.” And of course “Meet the Frugalwoods!” Books can inspire you and keep you going when the Spendy-Temptations hit.

    And, yes, all of the family needs to be in on the Project, actively cutting spending and bringing in extra income.

    Frugality can and should be a Joyful Path to the future. Not some onerous thing that takes away one’s freedom. It takes some realignment of one’s thinking to realize that putting the marshmallow into the bank account is better than eating it now. But, oh, the payoff in marshmallows in years to come is so, so sweet!

    Good luck to Keith & Sam on their path to freedom.

  10. I think it will be important for Sam and Keith to get on the same page. If Sam is willing to cut her discretionary spending and lunches out Keith HAS to be willing to cut his discretionary spending. It wouldn’t be fair for Sam to go without and to scrimp and save for the sake of her family all on her own. It will also cause relationship tension in the long run. I think if Keith needs to keep some of that spending for work related to travel (I travel for work, I get it) that is okay, but anything extra should be cut. Saying it is non-negotiable suggests he is not committed to frugality in the long run or towards their collective goals. I think they both want to commit but are scare of how hard it will be at first! I am still in the early stages of frugality right now and and focusing on debt repayment and it is SO HARD. I couldn’t imagine how much more difficult it would be if my significant other was struggling to stay on the same page! But I think they will get to a common ground and Keith and Sam will both be able to cut spending and save TOGETHER – the growing pains are the hardest part.

    I do understand the troubles with being frugal and social – it is so hard to maintain this balance and figure out ways to convince other people to socialize frugally. I’ve also found that when you tell someone you are being frugal or preferred a non-paid activity they almost feel as if you are judging them for wanting to spend money. However, once you set the norm of cheaper entertainment this tension goes away – maybe you’ll even inspire others to spend less.

  11. Sam, you did an incredible job of summarizing your spending! It definitely sounds like the number one thing is getting Keith on board, since you will struggle to meet this financial goal on your own.
    I read that Keith travels six months/year for his job (sporadically). I’m wondering if you also need to own two cars if he is out of town so much. Does he use his personal car for the travel? Could you pursue a ride sharing program? Or lease out his car to earn extra income when he travels (in the US we have Turo that does this)?

  12. First time posting for the case studies

    1. I would add that the family consider moving closer to work (reduced time in travel and also savings in those pesky tolls /petrol).
    2. I would never leave the job if they subsidized my housing – and never get a mortgage as a result of subsidized rent. You’re leaving free money on the table – take that cash! and invest the savings $12k a year. dont give it up.
    3. First task is to earn 18% on investment by reducing that consumer Credit card debt. – Consider balance transfer to a 0% introductory offer – those transfer fees usually 3-5% and sometimes free for a period of time. That way – they will avoid paying the interest as they chop away with their spending cuts.
    4. Contents insurance (figure this is rental insurance) – get rid of it. $81 a month = $972 a year! If ipad is gone – isn’t a replacement cheaper than that? Yes it is…don’t pay for insurance – its just giving cash away.
    5. Sam’s lunch’s and dinners – pot luck it at least until that 18% debt is gone.
    6. Car Insurance: Get ride of the hire car option and the windscreen option – you don’t need it. If you need a rental car in the event of loss of your vehicle – then just go out and rent it. Why put the money down on the rental monthly – “in case” you happen to be without car? Only get what you will definitely need on insurance (that means what is legally required).
    7. Repayment of loan to Parents – perhaps you could let parents know that you’re trying to cut your debt and get better position – to freeze the loan payments until paid off? Perhaps keep the loan interest accruing at 6% monthly – to still maintain some sort of responsibility without asking for a handout from the folks… but hey – its a good trade-off compared to the 18%.
    8. Groceries for food shopping – most people just buy what they want – even when cooking from scratch. Consider just buying what is on-sale at the grocery and being creative – thats what you tube and google is for!
    9. Luke’s car savings – yeah – just drop that savings balance direct into paying that 18% debt boom.

    1. A lot of rentals require you to carry renter’s insurance in order to live there. I would not get rid of that insurance, especially given that they have no emergency fund they could use to cover these items/the interior of the rental if there was a catastrophic event.

      1. I completely agree, insurance is the last thing they should cut. They have no money to replace anything if they get robbed, the house burns down, etc. That money is also a drop in the bucket compared to spending elsewhere.
        Really though, unless the husband gets on board they aren’t going to make much headway.

        1. To each their own I guess…I’d rather build up my emergency savings so as to cover such a cost than spend it on insurance – which is just money out the door.

          Its about balancing…
          What if you’re robbed? – live frugally – so there is nothing worth stealing. Or make sure you live in a better neighborhood with lower crime.

          House burns down – live frugally – so less stuff burns down.

          Agree – the husband needs to be on-board…otherwise it’ll never work.

  13. Just wanted to chime in that a lot of public libraries in the US now offer loans on E-books that can be downloaded easily to Kindle- not sure if this is true in Australia but definitely worth checking out!

    1. Yes! We dumped our Kindle e-book subscriptions and now just check out e-books from the library. Our own library is rather small and doesn’t have a ton of digital options, but there are enough to keep me from buying books.

  14. This is like the ant picnic of all budgets!!!

    There are so many little ants (and a few big ants) eating away at the bottom line and if you’re not careful you just might be out the whole picnic.

    We’re all super nice here and I’m sure Keith is terrific but…the word non negotiable doesn’t belong here really. Everything is negotiable. The frugal boat only has one rider and that’s Sam!!! And Sam’s in debt right now so shes fighting an uphill battle.

    This mishap of financial goals doesn’t smoosh well for a house purchase. Those things are super expensive with taxes and maintenance, constant maintenance.

  15. I think Liz already hit the nail on the head with all of her suggestions–if Sam and Keith follow her advice they will be well on their way to accomplishing their long term goals.

    Also to offer you a little bit of encouragement–it is absolutely 100% worth it to put your “non negotiable” spending money on hold to pay down your debt. I am speaking from experience. My husband and myself also lived a champagne life on a beer budget for the first ten years of our marriage. We were typical Americans buying things we could not afford to impress people we didn’t like. In our minds, we were working hard and deserved these things. However we had over $80,000 in debt at one point (student loans, cars, and a credit card) and were making minimum payments. One day we had had enough of living paycheck to paycheck and vowed to make some serious changes. We also used the avalanche method of debt payoff, and cut out absolutely everything that wasn’t necessary. I will not lie–it sucked. There were many times we slipped up or wanted to give up because we were used to a different way of life. However last year we got “gazelle intense” (to quote Dave Ramsey), and vowed to pay off the last $40,000 in one year. We did it, and the feeling is unlike anything I’ve ever experienced before. We feel like we are on top of the world, and the amount of money we are saving each month now blows me away. It was a hard lesson learned, but the rewards have been so much better than I anticipated. Make a list of your dreams and hang them on the fridge, watch Youtubers who are paying down their debt and have done their “debt free screams.” Whatever you need to do to keep motivating yourself.

    Best of luck to you both, you can do this!

      1. It might help to consider the total you will have to work with each fortnight once all of your debts are paid off. Some people talk about how much extra money that have to use/save once they pay off their mortgage. I think if you add up the amount you are currently putting into debt repayment, plus any extras you can cut now and put towards debt repayment, you might find it very motivating. Imagine how it would feel to have thousands of dollars each year working for you, not going to repayments.

  16. Hi Sam! Thank you for sharing your story. We are right there with you: we have debt as well, less savings than we’d like, and are working to find firmer financial footing. Mrs. F already offered great advice so I am basically just reiterating what she said: make ditching the debt a priority. Once you’ve paid it off, that’s ~$1800 a month you can allocate to other things – like savings, or savings + vacation fund, or whatever is most important to you.

    I am curious to know whether Keith is willing to budge at all on the discretionary spending. From an outsider’s point of view, that seems like the most obvious opportunity for trimming some of the excess from your budget. It’s an area where you’d get a lot of bang for your buck. That said, I know it can be hard to get everyone in the household on the exact same page (example: my husband does the grocery shopping and I think he spends too much… but trying to get him to change his habits there is like hitting a brick wall, and I haven’t pushed it because I don’t want to do all of the grocery shopping myself [being completely honest]). Perhaps he is willing to compromise by giving up a few hundred dollars from the discretionary fund? If he could give up $400 and you could give up $100 from yours, that’s $500 extra dollars that could go to credit card payments.

    I also agree with Liz about the savings for your son’s car. Clearly you two are loving and supportive parents, but I do not think your child will be any worse for the wear if you cease donating to that fund. 🙂

    Anyway, you aren’t alone. Debt repayment is hard and it does take a lot of sacrifice. I know we can do it!

  17. Such a fascinating case study! Thanks for sharing with us, Sam! Having just returned from a trip to Australia and New Zealand, I was SHOCKED at how expensive well… everything is down there! cars, clothes, food, etc… I agree with many of the other posters on here about Keith’s non-negotiable spending. Between the two of you, there’s a lot of “discretionary” expenses and if you can both bite the bullet for a few months, you will crush that pesky debt. You’ll also find that you don’t miss so many of the things we have thought were necessary to have on a regular basis.

    I would let Luke keep his pocket money, but encourage him to contribute to household chores and open him up his own bank account so that he can be saving for his car and other things. And when he is old enough to babysit or wash cars for people or do anything to earn extra cash, he can be working towards having money to purchase a car. I would suggest taking his car fund, setting $1000 of it aside as your emergency fund since you have no savings right now (yeek!) and using the rest of it to pay off debt. It’s so important to have a rainy day fund for gremlins that pop up.

    Hang in there – you will have this debt paid off in no time if you and Keith heed the advice of all the amazing posters here!

  18. A couple of painless savings
    – unlimited internet from TPG at 69.99
    – AFL Live Pass – $99 for the season to hook your laptop to your tv and enjoy every game – better and cheaper than Foxtel.

  19. Hi Sam (and Liz). First time commenter here. I live in the US (San Diego), but spend a considerable amount of time visiting my grandkids in Brisbane (4-6 months/year). My daughter in law is a queen when it comes to being frugal, so I get a front row seat on how she navigates the costs of living in Brisbane. With that perspective, here are my two cents (which they don’t use in Aus any more!): First off: good on ya for keeping your grocery budget so low (for Australia)! Cooking at home saves so much money. Entertaining is a tough one, as I’m not sure “pot luck” gatherings are common there. My suggestion for socializing and finding like minded individuals would be to look for a meetup group that focuses on frugal living (FrugalBris!). If there isn’t one already established in Brisbane, you could start one and see if it takes off. I know there are tons of meetups in Brisbane, so the concept is popular. Brisbane is just full of wonderful, free places to gather (South Bank for example). You could make finding free events around the city a hobby and share with the group. Also, if you are meeting up with your usual friends, could you meet for a coffee, rather than lunch or drinks? Alcohol is heavily taxed and thus very expensive, and dining out is super expensive vs the US. Also, check out Groupon for deals in your area. Finally, not sure if this is just a private health insurance deal or if its included in public health insurance, but my daughter in law gets a subsidized massage each month. You are working very hard at life Sam….as Liz always emphasizes, find those magical free or cheap treats that don’t derail your finances. Best of luck with your goals. I’ll be in Brisbane in a week. Can’t wait!

  20. I think I’d like to point out something that Sam and Keith may not have considered. Part of the reason they may feel pressured to live a champagne lifestyle on a beer budget is the company they keep. You will feel a lot poorer if your friends are millionaires than you will if your friends are grad students. Sam mentioned that she has to make new friends frequently, and that a social life costs money. And it does! My own social circles tend to revolve around activities or places I go frequently: the women from Pilates, the other school parents, the people I know from that art class I take. If Sam and Keith deliberately try to get involved in some activities and social events where they can meet people who are less-well-off than they are, they might not feel the urge to spend to keep up.

    Part of the reason we overspend is a desire to be seen as a specific sort of person. “I want to be the type of person who can afford to get a Starbucks latte every day”, “I want to be the kind of person who can afford to travel abroad.” It’s hard to let go of that, especially if you are inundated with ads telling you that you will be better if you just buy X.

    Spending time with people who have less can remind us that we are not our things. Whether you drive a Maserati or can’t afford a second-hand Schwinn, you are still a human being. If you’re living a champagne lifestyle on a beer budget, find a few beer friends.

    1. I thought about this too. Since Sam and Keith would like to grow their own vegetables one day, why not look into whether there is a community garden or similar that they could get involved in already now? In addition to learning more about growing vegetables they might discover a new community and find new friends with more frugal mindsets.

    2. This also connects with what Lovisa said about joining a community garden – here’s a link Brisbane City Council have for community gardens:

      Also, Luke’s school might have a garden / agricultural science vegetable plot that Sam could volunteer at and get some of the produce. My husband works at a private school in Logan (south of Brisbane) that has a school ‘farm’ – we get eggs from the school’s free-range chickens at a cheaper rate than from the supermarkets.

  21. Mrs. Frugalwoods, as always, is spot on with these recommendations. Along with the notes on sacred cows and a car for your kid, I think the #1 thing is getting on the same page for long term goals. Unless those goals are SO important and inspiring, it is going to be hard to put these things into practice. But Sam, I am SO proud of you for putting this together! You can make some serious headway fast if you put your minds to it. The silver lining to a lot of discretionary spending is you have a lot of room to see some serious improvement FAST. Good luck!! Can’t wait to hear the update in a few months – you’ll rock this.

  22. Fantastic work on compiling your current spending as well as totaling your assets and liabilities, Sam! Collecting all of this information is step one to changing your status quo. You’ve already done the heavy lifting, the rest will be easy if your husband and you can agree on what’s truly important (more on this below).

    Mrs. FrugalWoods’ analysis and recommendations are both detailed and spot-on. Frankly, she didn’t leave much for FW Nation to address! As Mrs. FW pointed out, your #1 priority absolutely has to be paying down your debt more quickly. That is key to completely changing your cash flow situation and can be done within a year, much more quickly than is the case for most people.

    I also concur with the most critical areas that require cutting back to be your husband’s discretionary income (astronomically high), your discretionary income (and eating out), gifts, and your son’s car savings.

    One question for clarification – your line item states that Keith’s spending money includes $500 for “travel costs above and beyond what his work reimburses him for”. What exactly does this include? Is it petrol for his car (I didn’t see a budget line item for that), tolls, hotel stays? If so, the entire $1,084 line item may not be able to be eliminated as Mrs. FW (and I) would otherwise recommend.

    I’ve listed some potential areas of savings below with my recommendations for each, ordered by largest potential impact to the least.

    Debt Reduction
    I believe paying off your two existing interest-bearing loans represents your largest form of available savings. Paying off your $10,000 credit card balance at the current rate of $650/mo. will result in your paying total interest of $1,455.32 over the life of the loan. This assumes that no additional costs would be charged to the card, which is unlikely due to your lack of your ability to save with the current level of spending.

    Paying off your $7,004 loan to your parents at the current rate will result in a total interest paid of $158.99 April on, assuming the March payment has already been made. Dating back to the start of the loan in November 2017, I show the total interest paid will be $414.93 over the life of the loan.

    Not only are you losing money in the form of paying interest on your loans, but you’re also losing out on the money you could have EARNED with that cash had your husband contributed it to his retirement account to resolve the projected income / spending shortage in retirement pointed out by Mrs. FW.

    Taking this “opportunity cost” into account for both of your loans using the opportunity cost calculator at the below link and a hypothetical 7% rate of return of your husband’s retirement account, we find that if you had an adequate emergency fund and had not needed to take out either loan, not only would you have saved a combined $1,870.25 in interest, you would have an additional $1,563.89 and $439.50, in “Foregone Future Earnings” for each of these loans.


    Your total cost of borrowing for these two loans is therefore $1,870.25 in interest paid as well as $2,003.39 in lost earnings potential for a total of $3,873.64. This total represents the cost of your current loans and why they represent your single largest source of savings currently.

    Work From Home
    I will echo the sentiments of one or two previous posters regarding your cost of working being quite high. Between your tolls, petrol, and childcare for Luke, you’re spending $712.41/month, dropping your personal net income by 28.4% to just $1,799.59/month.

    Another way of looking at this is that you are effectively making just $23,951.08/year in before tax income ($32,500 – $8,548.92 total cost of work). $23,951.08/year divided by 25 hours/week works out to $18.42/hour. However, if you account for the additional 15 hours per week you spend getting to and from work, your hourly wage drops to just $11.52/hour! This seems far too low for a woman with your experience and drive.

    Is working from home at all an option in your current position? What about a more flexible work arrangement, where you work three 8-hour days per week (24 hours) rather than working five 5 hour days? This would cut your travel and child-care costs by 40%, a total of $284.97/mo. or $3,419.57/year.

    If neither of these are options, is finding an equivalent job closer to home a possibility? Last but not least, since you and Keith don’t own your home, is moving closer to your work an option? I don’t believe you stated how close you are currently to Keith’s job.

    Fuel Efficiency
    Your 2013 Barina Spark appears to be pretty fuel-efficient, netting the equivalent of 40.6 U.S. MPG from what I could find online, so there’s likely no quick savings via fuel efficiency. However, I was unable to find any specs on your husband’s 2001 Nissan Navada Ute. I did find references to a Nissan Navara Ute which is common in Australia. Can you confirm your husband’s make/model so we can take a look at fuel efficiency as a means of potential savings?

    Auto Insurance
    If you implement Mrs. FW’s advice, you’ll become debt-free within a year and have an emergency fund to boot. One of the major benefits of an emergency fund beyond that of simple stress relief and avoiding the costs of borrowing money for emergency repairs is in insurance savings.

    For example, once you have freed up a good portion of your current income from debt service, you can build your emergency fund to the point that you could replace either of your vehicles with straight-up savings. You will likely find at that point that you can back off from the much more comprehensive (and expensive) auto insurance policy to purchase something that covers catastrophic-level damage only, or you can simply self-insure, paying yourself the equivalent of your car insurance premiums. Doing so represents an additional $1,398.84/year in available savings.

    Contents Insurance
    I would recommend you consider canceling your contents insurance policy. When it comes to insurance, I find it most helpful to evaluate cost-effectiveness by calculating how long it would take for your insurance premiums to pay for the item you are insuring. You can then evaluate much better whether it likely that your risk is such that you would need to replace the item sooner than your insurance premiums would pay for it.

    In this case, you’re paying $972/year in contents insurance. I don’t know the value of your jewelry or the replacement costs of electronics Down Under, but here in the U.S. you can find excellent used laptops with SSD drives at a price point of about $200 – $300 each.

    Unless your risk is such that you expect to need to replace your son’s iPad and both laptops every year, your contents insurance should definitely be on the chopping block. If the policy is required as part of your rental agreement as mentioned by another poster, this obviously becomes more difficult.

    Getting Keith On Board
    The “sacred cows” Mrs. FW mentions above, the largest of which appear to be made by your husband, are one of my largest concerns for your ability to “dig out” of your current situation. Getting Keith “on board” with temporarily reducing your joint spending is going to be the key to the financial freedom you so desperately want.

    My wife and I have naturally opposing inclinations in regard to money – she’s a natural spender, I’m a natural saver. If both spouses aren’t on board with a given financial plan, there can be an awful lot of friction. I’ve found the best way to create a financial plan of attack that both spouses can agree to in situations like this is to start with the joint lifestyle goals that you both desire and work backwards to reverse-engineer the financial requirements to obtain those goals.

    For example, don’t start your budget-creating process with squabbling over discretionary spending amounts – start with the truly important stuff like identifying your shared financial goals and your current lack of savings. If you both share a dream of home ownership and a certain spending amount and lifestyle in retirement, work backwards to determine how much Keith needs to be saving monthly into his retirement account and how much you’ll need to save up for a home down payment by the time you plan for Keith to retire and the timeline by which you’d like to purchase a home.

    After you’ve budgeted to ensure that you’re saving for what’s truly important for both of you in the form of your goals, divvy up your remaining unbudgeted income into discretionary spending categories until you reach $0. This will ensure that discretionary spending does not inhibit or prevent you from reaching your financial goals, as is currently the case.

    When creating a financial plan, I recommend using the below (overly-simplified) approach:

    1) Tally your current combined income
    2) Subtract the required minimum payments on all loans
    3) Subtract the monthly total of all bills (defined as payments to vendors)
    4) Subtract the monthly total of all non-bill required spending (such as groceries, home supplies)

    At this point you’re left with the total of your discretionary income and need to create a plan for it. If you have no debt service, this is where you begin identifying your reverse-engineered monthly savings goals and ensuring that you have them covered. Since you have existing loans, you’ll need to employ the “Avalanche” method to knock them out first before you think about retirement or home ownership, much less discretionary spending:

    5) Apply total of all remaining income after step #4 to loan extra payments using “Avalanche” method

    Once your loans have all been paid off, you’ll be able to adjust your financial plan and budget to restructure the cash you were using for debt service. At this point you’re not out of the woods yet, as you still have no savings, which you’ll need to rectify or you’ll be back in debt before you know it:

    6) Re-assign total of all remaining income previously used for loan extra payments to building an emergency fund in a savings account until your balance is 3-6x the total of items #3 and #4 above, which constitutes 3-6 months of emergency expenses (step #5 no longer applies).

    At this point you have no loans and adequate savings! It’s now time to ensure that you are on track to make your long-term financial goals a reality:

    7) Subtract total of all required monthly savings needed to achieve long-term financial goals (retirement, home ownership, funding Luke’s college expenses) by the desired timeline from the balance remaining after step #4 (steps #5 & 6 no longer apply).

    Now and only now do you truly have “discretionary” income. Since you are confident that your joint financial goals are now covered in your budget, you can spend this money on anything you want. Even if that’s restoring Keith’s astronomical discretionary spending, or funding Luke’s first car!

    8) Divvy up the remaining unallocated income from your budget after step #7 into various discretionary spending categories, starting wotj the most important working and backwards to the least. Adjust amounts in each category as needed until you feel you’ve struck the right balance.

    Ta-da! You’ve now replaced your budget uncertainty with confidence, all while connecting the dots for Keith so he understands you’re not simply cutting his discretionary spending – you’re trying to ensure that you’re on track for the financial future you both desire. This approach has worked well for my situation and several others like it, and I hope it works for you as well.

    Mrs. FW’s recommendations for your situation are spot-on, as are those of many of the other commenters here. I would wish you the best of luck, but I’ve found that when it comes to personal finance, luck has a lot less to do with success than does simple intentionality. Where there’s a will, there’s a way! So let me instead encourage you to stick with it and stay determined. 🙂

    1. Just a few notes from an Aussie, as things are different here. Yes it would be the Nissan Navara (not Navada).

      My interpretation based on the price of the contents ins is it would cover all items in the house (clothing, electronic, furniture etc) with additional specific cover (portable items) for the computers outside the home.

      Those travel times are also fairly common in aus generally. I personally live in a much smaller city only 20 mins from work but it takes me an hour with traffic. I like the idea of working out your hourly rate after travel and costs.

      Your reply is very detailed and I definitely agree with spending the balance after goals/bills are accounted for.

      1. Thanks for the Aussie perspective! If the contents insurance does in fact cover all household belongings (or if it’s a prerequisite to a rental agreement), it is probably a lot more cost effective than if it only covered the electronics and/or jewelry, which was my initial impression.

        Those travel times are crazy! As a fuel efficiency enthusiast and hyper-miler, just catching a traffic light at the wrong time is enough to make me grit my teeth. I can’t imagine dealing with 40 minutes worth of traffic delays, but then again, my perspective is somewhat shaped by the fact that I live in a relatively small community. 🙂

        1. Mr Financial Freedom Project – residential insurances (as opposed to commercial, cars, liability, health or life) in Australia are broadly split into House (covers the house structure and ‘fixed’ fittings such as fitted carpets) vs Contents (covers all movable items / personal belongings – clothes, furniture, furnishings, appliances, bicycles, gardening tools, portable devices – let the insurers know what might be used away from home etc.) And, of course, there are specialty insurances for things like musical instruments. If you own your home or have a mortgage, you’d be looking to get a combined cover of House and Contents insurance – most insurers will give you a package discount on this.

          Electronics and peripherals are WAAAY more expensive here than in the USA. We get the privilege of paying the ‘isolation tax’ that manufacturers / producers charge because we’re at the ‘ends of the earth’. Many like to charge this even when there’s nothing physically shipped – we pay more for downloadable things like e-books, software applications, digital content… I bought an Asus 13.3″ low-to-mid-range tablet-laptop at the end of last year. It was the end of the production line for that model. It still cost me $1200.

          While Sam might be able to get a better deal on Contents insurance, I wouldn’t recommend ditching it altogether.

          1. Oops – meant to say that House insurance does not cover fitted carpets – bizarrely, these are covered by Contents insurance – landlords beware; make sure your landlord’s insurance covers fitted carpets.

    2. Mr FFP, as a fellow Australian, I reckon Keith’s car is indeed a Nissan Navara Ute (the Navada is a typo). Very popular, reliable vehicle.

      1. Thanks, Liz! Since I’m totally unfamiliar with the auto scene in Australia, I had no idea whether the Navada was a valid vehicle that I simply couldn’t locate any fuel specs on or whether it was a typo.

        It looks like there’s several different trims of the first generation (D22) series of Navaras, some with 2.4L I4 engines and some with more powerful but less fuel efficient 3.0L V6’s. From what I could find, the 2.4L model is available in both petrol and diesel versions, while the 3.0L is only available as a diesel:



        That said, there’s both automatic and manual transmission types available for each, so we probably can’t nail down exact fuel efficiency unless we have more info. The second link above seems to put the average fuel consumption at around 9.5 – 13.5 liters/100km, which translates to approximately 24.8 mpg (hwy) and 17.4 mpg (city) in the U.S. That’s pretty solid for a truck overall, but still not great for long-distance commuting in terms of petrol or diesel costs.

      2. Thanks, Liz! Since I’m totally unfamiliar with the auto scene in Australia, I had no idea whether the Navada was a valid vehicle I simply couldn’t track down via Google or whether it was in fact a typo.

        Based on what I was able to dig up, it looks like the first generation (D22) series of the Navara’s come in two basic engine sizes, a 2.4L I4 and a more powerful but less fuel-efficient 3.0L V6. The 2.4L appears to come in both petrol and diesel fuel options, with the 3.0L configured only for diesel:


        There are automatic and manual transmission types available as well, so without more specific info as to engine size and transmission type we can’t nail down specific fuel efficiency. That said, the link above appears to put the average fuel efficiency for most trims at about 9.5 – 13.5 liter/100km, which translates to about 24.8 mpg (hwy) and 17.4 mpg (city) in the U.S. This is really solid fuel efficiency for a truck, but not great overall for long distance travel.

    3. Hi, the car is definitely a Nissan Navara ute, sorry for the typo. Thank you so much for this, we really like your simple approach and we are actually working on it as we speak.
      With regards to Keith, the poor man has had a fair amount of comments on his discretionery spending. To clarify, that amount includes petrol and tolls to get to work, mandatory social club and mess fees, his work uniforms and shoes which we estimate to be approximately $550 per month. Plus travel expenses when away, that are over and above the allowances he gets. We estimate that to be $200 a month.

      1. No apologies needed, just wanted to be sure I was looking at the right vehicle specs! As it is, you did a great job compiling all of your information. That can be a pretty daunting and time-consuming task.

        You are more than welcome. I’m happy to hear that you guys found my comment helpful in some small way. In m experience, the reverse-engineered budget does a good job of ensuring that your spending aligns with your lifestyle priorities. Too often, budgets are perceived as limiting agents. But budgets (and money) shouldn’t be perceived as barriers, but ladders to our goals and dreams. Working backwards from your goals helps to view budgets in the correct light. 🙂

        In regard to Keith’s spending, that was somewhat what I was expecting you to say in the absence of any other budget line item for his petrol and tolls costs. While the Navara Ute is great on fuel efficiency for a truck, it can’t hold a candle to your Barina Spark. If you haven’t already, you may want to explore the potential petrol savings of a more fuel efficient vehicle if Keith is driving any significant distance and if you’re not using the truck for off-road, towing, or hauling activities.

        Since approximately half of Keith’s discretionary spending is actually fixed transportation and other work expenses, this category probably isn’t eligible for complete elimination as many of us had recommended. Still, you should be able to destroy your debt and build up significant savings inside of a year. Your disposable income will skyrocket once you’ve eliminated that debt service and saved up your emergency fund!

    4. Sam – thanks for clarifying that Keith’s ‘discretionary’ spending isn’t completely discretionary, because what jumped out to me was that his ‘non-negotiable’ amount of $584 is more than your household grocery budget (BTW, kudos on keeping that close to $520 /mth; hubby and I are currently averaging $550 / mth for the two of us – we’re in Logan – I need to give up / reduce spending on biscuits, chocolate, ham and bacon and the like).

      Don’t forget to claim as much as possible on your work expenses at tax time – have a chat to a tax accountant about whether mandatory social club and mess fees are tax deductible; I expect work uniforms (also check out the ATO’s rules about laundering these) would be if they are not clothes he could wear as ‘everyday’ items.

  23. I never comment – this is my favorite and most useful case study to date. It’s nice to read from someone a littler earlier in their frugal journey (because that’s where we are too.) Sam thanks for being willing to put yourself out there! Good luck!

    1. Thank you ! It was very daunting taking this step and airing our dirty laundry so to speak but the suggestions have been invaluable so we are both very happy we did it.

  24. Sam, you are super brave to share this information. Lifestyle creep is hard. That being said, this is about both you and Keith making some hard choices for your family. Financial security will only be achieved by either changing your spending habits OR by making more money. It sounds like your only choice is to find places to cut, even if it is difficult.

  25. Something that helped me a lot in my own frugalization journey was to think if I was willing to steal future experiences/comfort from myself by spending it one something I was likely to forget soon enough (clothes I didn’t need, dinner out multiple times a week, etc.). When I made myself think every time I wanted to eat out or buy something I didn’t need about if something was worth giving up my future dream of buying my own home, being able to retire younger than 65 and comfortably, and travel much more, it was easy to start making those sacrifices.

    My advice would be to really find a concrete way to visualize those future goals–when your grandbabies are born, are you willing to say that you can’t go see them because you weren’t willing to give up your meals out now? Or the expensive gaming habit? Mrs. FW always talks about how our finances are really just a matter of priorities and making sure our money aligns with them. I know it can be daunting at first, but once you build up some momentum, there will be no stopping you, Sam!

    Also, question for Mrs. FW—do you ever hear back from any of your Case Studies about progress they’ve made and suggestions they’ve implemented? I would personally LOVE a blog post that just gave a quick summary of what each case study was about and then maybe give an update. Just a thought for a future post idea 🙂

    1. I do provide updates from Case Study subjects at the end of the posts, but I haven’t done a comprehensive rundown. Might be fun :)!

      1. Yes, please! I sometimes wonder about case studies I read a while back but, to be honest, finding each individual post and scrolling to the bottom to see if there is an update feels off-puttingly complicated. Something like periodic roundups of “our last 5-10 case study updates” would be great!

        1. Yes please! It’s such a faff ty I to find them again and I’d love may be a rolling update post once a quarter?

        2. I def agree. Finding the old case studies and then scrolling down way down only to see there is no update doesn’t really work!

      2. When a new case study is posted could you link back to the ones that have been updated? I too like the updates but they are sometimes hard to find.

  26. “Keith has a job in the Defense Force.” And Keith will have a substantial pension. However, as has been pointed out, his pension will not meet your current lifestyle expenses. Sam, are you aware that there are financial independence blogs written *by* military *for* military? Although the ones of which I’m aware are U.S.-centric, perhaps Keith would be motivated by reading about other military blokes who managed to not have to work at all after military retirement. No offense to Frugalwoods, who writes one of my favorite FI blogs, but maybe the military perspective is what Keith needs to get on board. Doug (retired U.S. Navy) lives in Hawaii, which has a high cost of living, and blogs here: https://the-military-guide.com. I also recommend https://themilitarywallet.com. As a veteran myself, who travelled substantially (aircrew), I am puzzled as to why Keith needs to pay out of pocket for his travel? In the U.S. armed forces, not only are travel and accommodations paid for by the government, armed forces also receive either daily travel pay to cover meals or meals are provided. Although some locations are bare-bones, I always found it possible to save some of my travel pay and make extra money on trips, rather than pay out of pocket. And that included buying gifts & souvenirs at many locations. I say this not to criticize Keith, merely to point out that perhaps he could shift his paradigm and start looking for ways to *save* money rather than *spend* money. It’s easy to get caught up in the “live for the moment” mindset, but the military families I know who did that all had to work after retirement, as the military member transitioned to his/her second or third career. But if you look for ways to maximize (and frugalize) your military pay and benefits, it is entirely possible to retire from the military and be financially independent.

  27. I think Sam and Keith should also read MMM’s article about the true cost of commuting as well. The cost in both time & money for Sam’s commute immediately jumped off the page at me when reading this. Besides the direct monetary gains from making those changes, you’d also have indirect improvements, such as more time to make better grocery choices, etc.

  28. I suggest you investigate amazon Prime. Free books plus free videos. It is $99 in the US, don’t know what you might pay. I have a Kindle Fire and have yet to pay for content.

  29. Hello! I join the first time below the line community as this really resonated with me. Sam, you’re awesome! How hard as a military spouse to raise kids, move around, track spending, make plans etc. And you’ve done that AND captured your income and outgoings really well. Power to you!
    I speak as a newbie to Australia and also someone who’s moved around, plus with some knowledge of being a military partner. In reverse order: the joy of subsidised living is often taxed by high personal spending. Hubby is in his mid 40s and partying financially. He can justify it and it’s normalised by his colleagues, but if he was in another field this would be a bit too much. Talk is cheap: can he/ they reach out to non-military breadwinners to see what a standard % of earnings goes on discretionary spending? Other husbands who travel how do they deal with the work tax of needing to subsidise their time away? Reframe this as “how can you get more value from your travels?” Rather than “you need to spend less when you’re away”, and success is more likely.
    When you are new somewhere you have huge gaps in your knowledge: where’s the best coffee, where’s the best after school activity, best doctor, etc. AND where are all the cheap hacks and bargain hunter hang outs? Women often put this housekeeping need last and you can be well settled – as these guys are – and not know where are the frugal people hang or where savers are making that saving. My advice is to ask. Ask your friends where they save, chances are not everyone in that community is doing things the way you think they are. Join Facebook groups and ask for recommendations. There may be gamer swaps that Luke can join that bring their own friends and mum meet ups too. Talk is cheap: tell people you’re getting frugal and they’ll support you. No one wants you to be in debt! As someone who often takes the hit of socialising as a “new in town” hit, I would respond very well to someone asking me to a potluck dinner or shared BYO picnic in the park, eating out is crazy expensive but normalised.

    And lastly, Australia. I moved here two years ago and love it. However certain things are crazily expensive and normalised as such. Sam I agree you’re paying too much to work and investing in a university option that will then open a big … volunteering opportunity! By all means improve yourself, but be savvy. Can you present your employer with the true cost in time and $$$ of your commute and see if they are flexible? Can you work from home part of the time? Can you put in extra hours as overtime working on docs, ppts, internet research while Luke is gaming? There’s no harm in asking. Can you rep them in your local community? This is a brand value for them, perhaps you’re under-utilised as an on the ground resource two hours away.
    Also, tell your employer about your interest in disability rights and counselling. As an insurer I’m sure they see a lot of this. Perhaps it could be a niche you can develop within the company?

    Coffees out, brunch out, exercise and gym expenses: these are all very expensive in Australia and it seems everyone does it, while wearing $200 branded leggings. I would just start saying no, or putting a limit on it: one coffee out with one friend, or attend a brunch where you explain your frugal plan and that you’ll pay your bill seperately, not shared. People don’t mind if you’re upfront and unlike the US no one really tips here which is basically the ONLY saving there is 🙂
    Books here are expensive and hard to find so I understand how your kindle spending doesn’t seem much at all – it’s less than the price of a paperback here!! To cut down further can you set up a book club that shares its books and meets at home? You could each pass a book on, devour it, report back over wine, move on to the next one! I can also recommend podcasts as a great way to get literary content for free, on books and all topics, and they will keep you company in the car, grocery shopping, cooking etc.
    Finally in my epic reply… you are a thinker. You are going against the family grain by doing this. You will need to go against the perceived spending patterns of those around you to succeed. You may feel self conscious that you’re the lower earners perhaps at Luke’s new school. You know, none of this really matters. Money’s only worth what it can buy. If you and Keith can have the retirement you crave then make it happen by spending less know. Find ways to celebrate its journey because it will be a slow burn. Communicate to those around you and you will be happily surprised at their response! Go forth and conquer, mumma.
    PS: I’m surprised your folks charged you interest on a loan. Maybe they worried it would never come back if they didn’t have that 6% attached to it? Could you show them a debt repayment plan that priorities the 18% interest rate debt and then pays them off immediately after? I think most parents would be reassured by this (coupled with proof that you and keiths spending is changing, maybe they’re worried about that?) and would feel so sick by the money you’re losing on interest that they’d freeze the amount you owe. They’re not a bank, they’re humans. Unless they borrowed the money to give you at that rate it shouldn’t matter to them to just receive it back and not make interest on top!! Just saying.

    1. Personally, I don’t find interest being charged on a loan from one’s parents to be surprising. Both sets of our parents charge interest on monies lent to their adult children – it helps teach financial responsibility and represents the lost earnings they could have received from having those sums invested elsewhere. After all, those sums are what they have diligently saved for their own retirement and they might be making their own financial plans based on expected returns on investment.

      However, I do agree that it’s worth having a chat to one’s parents to ask if they can accept waiting for repayments until the higher interest loans are paid off. If necessary, one could offer the car or some other thing of ‘value’ as surety against default.

  30. Hi – I’m a down under reader too. I live in NZ but I have lived in Australia and owned a house there. I don’t agree with Mrs FW (sorry) re not buying a house due to moving every 3-5 years. I have achieved FI and ER through residential property investing. If you are in a market that is active ( and Brisbane definitely is that) then if you chose the right property this could aid your financial goals. The right property is something that is mainstream and middle of market in its location, and has some opportunity to add value. Eg ugly exterior paint you can change, lack of landscaping, dated interior. If you fixed whatever that thing was in the first year of ownership and made if appealing to the general market ( neutral colours, easy maintenance etc) and had it constantly sale- ready after that, you’d be ready to make a quick a sale and profit when Keith had to move. If you also made sure that property was suitable for renting that could be another option when you have to move.

    1. Hi all – likewise I have lived both in NZ and Australia.

      This is the first time I’ve ever commented. I love the blog and the community ideas it brings together.

      The thing that you do need to take into account in Aus is the stamp duty on the purchase price and that if selling within 5 years you need to ensure that not only is the house you buy going to increase in value relevant to the next house you want to buy but that it is also going to increase in value to pay the stamp duty etc. Also, capital gains would be required to be paid upon selling a family home if you rent out for more than 12 months I think.
      Does the senario of above add up against receiving a considerable rent allowance whilst employed by the Defence force. Would with all the additional costs of owning a home stack up against it’s growing value compared with say investing and purchasing when not moving every 3-5 years?

      Your food budget seems reasonable for your size family in Australia. I would think in Aus it would be hard to cut much off that – especially if for that you then are supplying more meals because you are not going out as much.

      If you’re providing most of the 3 meals + snacks for 3 people per day, it would be about 270 meals + snacks a month in total (an ave of 90 breakfasts, 90 lunches and 90 dinners + snacks – come on – we all need snacks!!!). I try to make the majority of our family dinner meals for 3 people for between $3 to $7.50 per meal and the lower figure would be the vegetarian meals like homemade pizzas (own dough from scratch and pizza sauce and veggies and cheese for topping) or veggie patties or Frugalwoods style rice and beans or pasta with a creamy mushroom and broccoli sauce with a sprinkle of parmesan etc. If I do a roast chicken, I get a large free range one (I buy a few when on special) and it will then also be used for at least 2-3 other meals like fried rice or chicken, noodle and an asian style salad with homemade peanut sauce or chickpea and chicken burritos. these types of meals ensure you never throw away leftover veg etc because you can use them in the meals. Overnight in the slow cooker I make chicken stock and store in the fridge or freezer which then weather permitting gets made into chicken and sweetcorn soup or used as stock. These meals are generally carb and/or veg heavy compared to relying on a chuck of protein from animal sources which I think is the more expensive meals option.

      However, cooking from scratch all the time can be very time and energy consuming! I’m not sure if I was travelling the amount you do I would have the energy to cook from scratch all the time so getting up a stock of easy quick tasty low cost meals that both of you can cook may be an idea. Meals where you don’t have to have certain ingredients and can substitute veg for another veg etc are also the frugal persons friend. This becomes the basis of most of your meals then and you can still experiment once a week or if pot lucking.

      On an aside, we went out for dinner with friends last night (the first time in 6 months) and being the one who normally does all the cooking I loved it. Normally the regular thing is that we have people round or go to their house and do a sort of pot luck thing.

      I checked the menu online before we went and as a couple we had a quick chat about what we might like to eat. We shared a platter and a side that ended up being plenty food between the 2 of us. With a drink for both of us it came to $69. That’s expensive for us but we didn’t choose the place (and the equivalent of around 11 home meals in our budget!) Some other friends did the same but another lot of friends would have easily spent double what we did because of their choices of meal and drinks. We all had a brilliant time and I don’t think our friends had twice the fun we did so I consider that we definitely had the value for money!

      So maybe, if it’s to hard to completely cut down like FOREVER, you could think of it as a competitive 7 month goal to get rid of the debt and during that time explore other options for lifestyle choices so that you can incorporate some of what you enjoy after the 7 months. You may have changed some of your habits by then anyway to redress the balance between the needs of your present and future selves. You can live, enjoy life AND save!

  31. Sam, good job taking the bull by the horns and getting your finances in order. Mrs Frugalwoods advice is sound, take it and run with it. A couple of other things, do your grocery shopping at Aldi, if there’s an Aldi on your drive home from work, shop then. Discretionary spending is literally at your discretion, you don’t have to spend this, especially if you don’t know what it’s being spent on. Check at your library for an eBook borrowing facility. You can download a free app like borrowbox, and read for free on a phone or tablet. If your local library doesn’t have this service, check the state library, you can usually join for free and access their e collection for free as well. Cut the pocket money for Luke, or teach him about saving for the things he wants, he could purchase his own games, and learn some great financial lessons. And the biggest one is talk about this with your spouse. If you aren’t on the same page, your goals will be that much harder to reach. You’ll need to have the hard conversations if you want to get ahead, no two ways about it.

    Good luck, happy saving!

  32. I saved $2,000 dollars from working as a babysitter and bought my first car! Which I kept for 4 years 😀 it was one of my proudest moments of my teenage life 😀 it though me a lot about working hard to accomplish a goal so I completely support the advice about not buying a car for your children.

  33. Thanks for another Australian case study Mrs Frugalwoods! My only addional comment to those above is that I’d highly recommend Sam AND Keith read ‘The Barefoot Investor’ together. The author/book are Australian and great for couples. Despite my own book buying ban (haha other than Meet the Frugalwoods!😃) I do think the book is worth buying – I hear you can get it for $20 at Kmart. All the best!

    1. I am a HUGE fan of The Barefoot Investor! Great tip Kirsty. Aussie focused, easy to read and specific steps to follow. The Barefoot angle might also help to get Keith on board.

  34. Hi – longtime reader, first-time comment. Thanks for sharing your story Sam! I always appreciated the monthly reader case studies, however they sometimes seem too good to be true, so it’s nice to read about someone in a similar boat to myself and Mr. P². We’ve both got student loan debt, and had to have a come-to-Jesus moment two years ago when we realized what we needed to change in order to achieve our goals. Even now, there’s times where Mr. P² struggles to balance his discretionary spending with our budget, but sometimes you’ve got to grit your teeth and do it. There are definitely ways that both you and Keith can find a balance of having the occasional coffee or meal out while still tackling your financial goals – but you have to sit down and talk it out.

    Also, as a Kindle addict myself, I’ve found physical books at the library as well as the free e-books I find on bookbub.com, great ways to curb my habit. I know someone also mentioned Meetup, which I highly recommend as a great place to meet people and find activities such as book clubs, running groups and mom/kid groups oftentimes for free or minimal cost. Everyone’s given such great advice, and I have no doubt you’ll be able to put a plan together for the success of your family!

  35. Hi Sam & Keith – another Aussie here!
    I’m also studying & I think investing in yourself is so important. How many subjects are you doing? I would consider dropping back subjects & picking up more work. You’re already spending so much on travel time, tolls, before & afterschool care so I think it makes sense to try to make more $$ on those those days.

    Agree with other readers re: Luke’s car fund (ditch it). I’d also suggest next time you move, enrolling Luke in a public school & get him a tutor instead. Studies in Australia have shown that private students do better in their HSC but once at uni, public school students out perform them.

    Keep chipping away at Keith. That discretionary fund has to come down. We use the ‘track my spend’ app which is great for getting a handle on where your money goes.

    Best of luck & keep at it!

  36. Hi Sam, congrats on taking this first massive step! I had to laugh at your comment about the ‘non negotiable’ pay tv for footy – after a 3 year hiatus, we are getting pay tv reconnected today so my husband can watch every game played by his beloved AFL team. Pay tv goes against every frugal bone in my body so we agreed that if he wanted it reconnected, he would have to find other ways to save. He went away to think about it and came back with two things to cut from the budget – the Netflix subscription and buying his work lunches for a month (we won’t go into why we’re currently paying for these things in any case, let’s just say it’s a step in the right direction!) It’s all about compromise! Don’t forget to factor in repaying your uni fees into your post debt budget (I can’t see this figure in Liz’s calculations). And remember that in Oz you’ll get slugged with mortgage protection insurance (for the bank, not you as a borrower) if your house deposit is less than 20%. May I also suggest that you check out the ABC’s fabulous new (and free!) Pineapple Project podcast which is aimed at educating Aussie women about financial management. And don’t forget Rhonda’s Down to Earth blog for another Aussie take on frugal living. Good luck to you, Keith and Luke!

  37. Thanks Sam for sharing & Mrs FW for featuring an Aussie! Some things in Brisbane are so much more expensive, but I think that’s made up for with all the free things available!

    1) well done on your grocery budget – I’m just buying for me & hubby and I spend around the same as you – that’s with buying at cheap stores, markets, in season, and we don’t eat meat!
    2) Brisbane Council library is awesome!! After doing Mrs FWs Uber Frugal Month in Jan this year, we’re still not spending! If the library near you isn’t well stocked, you can request them transferred (small fee of 80c) or read them online
    3) I agree with another comment – read the Barefoot Investor! On your free library app!
    4) Since we moved to Brisbane 3 years ago (from the UK) we never bought a TV (relocating is very expensive & the TV wasn’t a priority. There are endless days of sunshine, why would you want to be inside watching TV??! If it is a rainy day, we watch for free on SBS on demand or the ABC app.
    6) Also agree with the free podcasts – we’ve listened to some gripping thrillers/crime stories on there. Plus loads of educational/self development ones
    7) Also agree wih another comment on the company you keep. We were introduced to Frugalwoods by a friend & we introduced more. We are all in this together – we swap recipe books, go for picnics, cook for each other.
    With the Brisbane climate and so many amazing picnic spots/free BBQ areas, there is no need to eat at cafes/restaurants often (which are also very expensive here)
    8) Shop around for your energy/internet/phone suppliers. We changed energy & get great discounts just for paying on time. Amaysim is also cheap for mobiles. Same for your car insurance.
    9) I travelled too far for work also, it’s not worth it – in time, petrol….your sanity!!
    Good luck!!

  38. Hi Sam, you absolutely must get Keith and Luke onboard if you want to see any real savings start to happen. I find it odd that Keith isn’t prepared to budge, even a little bit on his discretionary money. I know being on the road can be tricky in terms of food (and for US readers, food in Australia is quite expensive by comparison), but there are always frugal options available for a modicum of effort (i.e. really do read those blog posts Mrs FW listed, there are some terrific ideas). Even if you HAVE to go out for dinner with colleagues etc it’s still possible to only have a main course and drink water.
    Luke needs to get on board too. I was a kid who wasn’t allowed to get an after school job (my dad didn’t want anything to interfere with my studies), and anything I wanted was given to me on a plate. Once I got into the real world as an adult, I got into lots of financial trouble because I was so clueless. I lived the champagne lifestyle too. Now is the perfect time to guide Luke into making sound financial decisions to enhance his future. My spending habits are pretty frugal these days, but it took me years to sort myself out and get out of debt. You don’t want that for your son. My children are small, but I am always looking for opportunities to teach them about money, the importance of saving, impulse control etc.

  39. I love the case studies, and I am really interested to see what happens with them, but it is a lot of effort to go back and look through the old case studies for updates. Is there any way you could make it easier for people to track updates? Maybe when you publish a new case study you could include links to any case studies that have been updated since the previous case study?

  40. Hi, as a fellow Aussie, it is good see a case study from ‘down under’. I agree with suggestions above. I would add why not consider some of the credit card offers for low interest rates if you rollover your existing debt. You must be disciplined & make sure not to put any new expenses on the card, but you can reduce the interest rate & pay off the debt much faster & therefore save money. Re purchasing a house, I agree that as you move regularly it doesn’t make sense to keep buying & selling. However you could take advantage of the generous Australian negative gearing tax treatment & purchase an investment property. You could sell this when you retire to purchase your final house. Also I would not buy a car for your son. I agree that your son can save for a car. I have 2 sons & they share the family car. They contribute to the fuel. There is research showing that children are safer drivers when driving a parent’s car & have to ask for the keys rather than just driving. Good luck.

  41. I’m not going to go into the detail of what you can cut back on as I totally agree with all of Mrs Frugalwood’s advice. But what really jumped out at me were two statements you made. Firstly, about your husband’s discretionary spending, “He says that his withdrawal of this amount is non-negotiable and that he won’t consider a lesser amount.” The second statement was about your son, “We would make any sacrifice for his future.” To me, these two statements are absolutely contradictory. On one hand, you say you’d both do anything to better your son’s future, but on the other hand cutting out certain expenses in order to do this is not an option. So one of your statements is false – which one is it? I apologise if this sounds harsh but I work as a family budget adviser and so often I hear things along the lines of ‘I’d do anything for my kids’, as the client continues to run up consumer debt, waste money and refuses to change their spending habits in order to build up an emergency fund. Often all they’re doing for their kids is modelling poor financial behaviour that sadly will then be repeated by the next generation, because they don’t know anything different 🙁

    Living paycheck to paycheck is extremely stressful for all the family, so I really hope that as you go through the list of cutbacks that Mrs Frugalwoods suggested, you really keep your son in mind and use thoughts of a financially stable future as an antidote to the initial gut feeling you’ll probably have, which is that “cutting back on that is not an option” (most people’s initial response!).

    On a different note, I am a Kiwi who also has a husband who was in the military and we had to move (sometimes to a different country) every two years. Obviously, it’s really challenging emotionally when they are away for up to six months at a time, often serving in very dangerous places. However, I took it as an opportunity to really get ahead financially. Being in subsidised housing gives you such an advantage financially and although it’s hard when they are away, I was really able to save on things like groceries, car costs, power bills, etc. etc. during that time. I had a goal of saving enough to be able to buy a house mortgage-free by the time he left the Forces, and I achieved it. My advice would be to stay in the subsidised housing while you can and save, save, save! It strikes me that as a family you need some specific goals around finances. So rather than something vague like ‘we want to pay off our debt’, you need to sit down with your husband and determine some very specific SMART goals (if you haven’t heard of SMART goals, just google), such as ‘we will make cutbacks on ‘x’, so we can make extra payments to the credit card of $y, meaning that it will be paid off by an exact date of ‘z’ ‘. Good luck. Being a military wife, I know you have loads of inner strength and resilience – you can do this!

  42. If you are keen to meet likeminded people in brisbane, then look for the Mustachians Australia Facebook page and come to one of our monthly Brisbane meet ups. Always keen to meet other people on the same page, and the meets always give us so many tips and recharges us.

  43. Hi I live in rural Australia quite isolated but I can download ebooks to my iPad from the closest groups of libraries.
    Also here we need to often make our own entertainment and potlucks are our main form of socialising. The host might provide meat for a bbq – often just sausages or chicken and everyone else brings a salad or dessert and their own drinks. Or else in winter when it’s really cold where I live half of us will bring a casserole and the other half a dessert with the host providing some homemade soup or bread
    We belong to Parkrun which is a free walk/run group which meets for a 5 km walk/run every Saturday morning at 8 am. It’s a world wide group and I am sure there would be one near you in Brisbane.
    Also in my town a group of us got together and we run our own gym /dance group 2 days a week. We bought some basic equipment like stretch elastic bands for strength training, balls, made wooden steps for step ups, bought some second hand dumb bells etc. we got a Health Department grant to have a trainer come for a few months to set up our routines and make sure we are doing the right things . Soon we will celebrate our 10 th anniversary. It only costs us $4 a week for the two days. We pay a dance teacher out of our funds for the dance class once a week. Not only do we get fit but it’s a great way to make friends because we have about 30 regular participants each week. We meet in a building owned by the local club so as long as we are members of the club we are covered by their insurance. Membership is only $ 12 a year. Good luck on your journey.

    1. Hubby and I do park run on Saturdays.(OK OK he does one every Saturday and Me only in the winter. Not crazy enough to run in the Summer heat.) Really well organized and great fun for free.

  44. I am Australian and things are super exy but WOW!!! All the comments about sacred cows, non-negotiables, entitlement and messages you are sending your son are spot on. I am in public service so I know travel expenses are covered to a perfectly acceptable standard so can only assume the extra is for upgrading accommodation or food above max limit (or grog which is usu not covered). I think you may also want to revisit your super expectations as even though a lot of expenses will disappear, if you have to pay rent out of this you will struggle, because unless you both make drastic changes now you wont be able to afford to buy a house and if you take a lump sum to buy a house then this will obviously reduce your annual $$.
    The socialising in Brisvegas is interesting though, I had a friend move there 20 yrs ago and when they came back for a visit (NSW) she nearly cried when we invited them round for a BBQ as she said they had only been invited to someones home once in 20 yrs, dining out is the norm. But I also know two other couples who moved there who mostly entertain at home so it is about the friends you choose.
    Being realistic you do need to think what would happen if you divorced, as you would both be on struggle street.
    On a more positive note we bought our first house at 38, lifesyle inflation set in big time as we “deserved it “, bought new cars, maxed out 3 credit card, etc etc. Then hubby lost job. When he got another job I was that gazelle, paid off mortgage and all debts (several hundred thousand totalj in 5 years, now max out super each yr, invest and live well on the remaining $40-50,000. With hubby again unemployed the difference in having no debt is huge. I now have no idea what we spent all that money on sadly.
    So yes you can do it but you need to be on same page and really question why you think you need to spend what you do on what you do.

  45. Sam, you’ve done a fantastic job of putting together all this financial information for the case study. I’ve read through all the comments thus far. I think Mrs. FW has laid out the perfect plan for your family and I’d do exactly as she describes. But you’ve got to get your husband and son on board the frugality train, otherwise you will be miserable as you’re the only one working toward those goals. I’m not sure if you follow Mr. Money Mustache but do go there and read his info on commuting. Your commute costs are crazy high and a big time suck for you. Others gave good suggestions about this. Absolutely Luke needs to fund his own car in the future. I grew up without an allowance and bought my own car from money I saved. It builds character and gives a lot of satisfaction. Take that $2K and pay down your debt as Mrs. FW instructed. Someone suggested ditching renters insurance but I’d advise keeping it because right now you have no savings. If there was a fire or other disaster and you lost everything in your apartment except the clothes on your back, you’d need to replace most or all of it. You should continue to rent since it’s subsidized (free money!) and because you move so often. Home ownership is expensive. I love reading on my Kindle and I get a lot of free books by using https://www.bookbub.com. Highly recommend you sign up there. One thing I don’t remember anyone mentioning is selling some of your possessions. Living the lifestyle you describe, I bet there are things you don’t currently need or use that you could sell and put that money toward your debt. Kudos to you for being so brave to post your financial situation. I hope you succeed and wish you all the best! PS: I retired early at age 49 so I can tell you it is so worth it to reach these financial goals of yours.

  46. Well done Sam for biting the bullet and making a start, it ain’t easy …..But it is soooo worth it to be debt free and have some savings.
    I am Australian and my local library does have ebooks also the big charity shops (Vinnies ) have hundreds of books some are quite current.
    A second hand Toyota will serve you well, get it RACQ Inspected and dealer warranty, so you know the history.
    I think renovating every time you move won’t be something that is realistic with your social life , so I would say when you are able just buy good well researched land and when that is payed off buy another, by the time you retire the values will have gone up considerably and you will be well on the way to owning your home with the proceeds of land sale.
    Good luck with paying down the debt quickly and do try to find a like minded group for support and encouragement.

    1. A word of caution if you’re thinking of investing in land: Any property other than the principal residence attracts capital gains tax on sale (and, in Tassie, at least, possibly in Qld as well, attracts land tax for the duration of the ownership). At least with a rental property, you’d have (hopefully) rental income to offset that tax, but with unimproved property, you wouldn’t.
      You’d still come out in front, as the CGT is charged at your personal tax rate, but it’s not a clear profit.

      1. Thankfully, land tax in Qld only applies if your portion of the taxable value of the land is more than a certain amount ($600,000 this financial year). Otherwise hubby and I would be in a less good financial position as we own part of a steep hillside (yes, we do intend to build on it).

  47. Whew! What a challenge! The boys really have the best of the current situation. I went through a similar situation with my ex-husband and was unable to get it under control. As I said, he became my ex-husband. Obviously, the best situation is for you both to be on the same page. It may be difficult at first, but in case of that happening just go right ahead yourself. You have a choice of attempting to live on $30,000 less in retirement which will be super difficult, or just starting in a small way now and picking at it as you go along.

    First I agree that you should find another job closer to home. It doesn’t make much difference what it is at the moment but it will save wear and tear on both you and your car. This will give you valuable time to do the research needed to continue . Assuming you can figure something out (my plan when I was doing this in a new place) was to first hit the obvious sources and then when that failed just going into every business in town with a stack of resumes. That always worked eventually. You wouldn’t believe some of the weird part time jobs I conjured up. Obviously when you get turned down ask them politely to keep your resume on file in case something comes up down the road. If something better turns up change jobs. Always keep your options open and talk to people about what you are looking for. You never know where a good lead is going to come from.

    Next: Groceries. Cut your grocery budget in half. Now it is study time. I’ve picked up a lot of info on the internet. Surprising enough most people with blogs and those with You Too channels have a lot of good ideas. First you will need to break your reduced budget into “so much” a week. Then you have to make general meal plans for the month, some of which will be repeats. Obviously, not every day can be a “meat” day, but good healthy meals can be on the table every night. Mrs. F has a lot of help for this, but here are a couple of things to chew on: The least expensive vegetable are carrots and potatoes around here. What are yours? These will make frequent appearances on the table. Both are healthy and should be combined with whatever else is on sale or in season or both. What are the most expensive things, by pound, that most of us pick up all the time? They are lunch meats at the deli counter, packaged foods, frozen foods (except for sales on frozen vegs), and impulse buys. A sneaky one is lettuce. You are buying it by the ounce which can easily amount to $9/$12 a pound around here. You must have a list and don’t buy anything that isn’t on the list. Start making your list with your meal plan and don’t allow yourself to buy anything else. Use the oatmeal for breakfast routine if you can get away with it. If that works, budget in to buy a 25# bag and split it up and keep the excess in your freezer and take out one bag or jar of it at a time. You need to check your grocery flyers every week. Circle the items that are the best prices at each store. You will probably need to go to more than one store every week. Meat will be hard at first. If you use the envelope method for your grocery money each week, save every cent that is left over for a big meat buy down the road. In the meantime do the best you can with what you’ve got. Set yourself a “buy price” on meat and when you see whenever meat on your list hits your “buy price” load up with as much as you can and put it in your freezer. I know of one gal who buys her beef and chicken this way and she always buys a year supply at her “buy” price. Don’t be shy and ask for a rain check if they don’t have all you want to buy. You can get more the next week at the same price that way. Don’t take your son with you to the grocery store. All kids hassle you for treats and create a stink in the store if you don’t comply. It’s easier to just eliminate that possibility.

    If anyone questions your menus, the answer is simple. We have to cut back in order to pay off our debts. I’m just doing what I can to make that happen. Please understand and support my efforts. It won’t last forever.

    Your darling son: He’s old enough to mow lawns. I’m retired now and all the kids that have mowed my lawns over the years
    started at 10 or eleven and stayed until they went to college. Use that $2K to put on your credit card debt pronto. He can save for his own car. It’s been my experience that the kids that are handed everything expect that to last their whole lives. You will get some grief, but it will save you from a spoiled brat down the line. He’s old enough to start learning how to handle money and take responsibility for his wants.

    Electricity: I gather it’s expensive in Australia, but then all frugalistas want to cut that down. Mrs. F has a couple of good posts on this, as do others, so more research to do. So, I’ll just give you a couple of the obvious ones: Don’t turn any lights on during the day. Open the curtains. Turn every light off the minute you are finished with it. You may have to tramp around the house checking this at first. Unplug everything that has a plug when not in use. All electronics should be hooked up to a strip and turned off at the strip when not in use. All appliances have phantom power using your electricity when not in use. Keep the toaster, the toaster oven, the blender, etc. etc. all unplugged if not in use. And, yes, keep the phone charger cord unplugged when not in use. Even that uses phantom energy. You should be able to track the percentage you lower the electric usage each month and congratulate the boys for their cooperation.

    I sincerely hope you can all work together on this as a family. It’s truly the best way.

    And the end of my story with my ex? He passed away poor and living with a child from a second marriage. I am retired and make more money now than when I was working. I can go, do and buy what I need without financial worry. I wish that for you and your husband.

    1. I appreciate some of your points but I expect that cutting the grocery budget in half is not going to fly. In our last year of being vegan / semi-vegetarian (2015), hubby and I averaged $475 / mth in groceries just for the two of us. Could that have been lower? Absolutely. Could it have been in the ballpark of $260/mth? Absolutely not…unless one of us wanted to starve, and hubby was effectively already doing that (which is why our diets had to change).

      Before reading this case study, I’d never really thought about food in Australia being expensive, because I live within the Australian system, but maybe it truly is by USA standards.

  48. I know people who have lost everything in a fire in a rental without insurance. It’s not a situation I want to be in.

  49. Sam, congratulations on taking steps to become financially stable. One suggestion would be to try and find a job that allows you to work from home. This would eliminate a lot of expenses: work wardrobe, petrol and tolls, car mileage, eating lunches out and after school child care. So many companies are going this route now, it may be an option. Good luck and keep focused on your goals and you WILL be successful!

  50. I, too, love this Reader Case Study…because this couple seems so much more “real life”/everyday than many of the other case studies who are already so successful with their frugal lifestyles.

    In regards to changing other people, my husband and I have both been sloppy with our finances for many years, pointing fingers at one another for who spends what and whose debt is worse, etc. When it comes down to it, no matter how much we want others to change, we can only change ourselves..but the good news is that our own individual growth often has a positive and empowering effect on others in our lives. My husband nagged me for years to make various changes in my spending habits (even as he continued to fritter away money as well), but I wasn’t ready to change until *I* was ready to change. Now that I’ve begun our journey toward financial independence and he sees my enthusiasm, my husband has made incredible changes in his own spending habits. The subject that once existed only as a wedge and made us fight has, shockingly, brought us closer. Good luck to Sam and Keith on their journey! Keep the faith, you can do it!

  51. Sam – Thank you very much for sharing your story.

    There’s been some great suggestions so far, so I don’t have a lot to add.

    The only other thing I’d recommend – if you haven’t already done it – is to check the government unclaimed money registers just in case you have any money sitting there from when you’ve moved interstate, that can go towards the debt.

    There’s a search page on the Moneysmart website (https://www.moneysmart.gov.au/tools-and-resources/find-unclaimed-money), as well as the state registers (just do a google search for ‘Unclaimed Money QLD’ etc).

    When I checked, I found $50 on there from about 10 years ago, when I lived in a different state. Not much, but I figured it was still better sitting in my bank account than elsewhere!

    Also, whenever I’m planning a purchase, I usually visit the OzBargain website (https://www.ozbargain.com.au) to see if there are any discount codes or specials (eg. when I was researching travel insurance recently someone had posted a code for a 20% discount). They also have deals on entertainment etc.

  52. Hi Sam,
    Regarding the credit card debt can you try to refinance it for one of the 0% interest balance transfers banks are offering- what you were paying in interest can now go straight to debt.
    I would also suggest salary sacrificing a small % of your income to catch up on your superannuation- this will save you tax and can also be withdrawn for a first home under the new super saver scheme. Get the Barefoot Investor book from your local library, you should find some useful Australian specific info in there and join the barefoot investor Facebook group- lots of great information and discussions shared there.
    Goodluck on your financial journey !

  53. As others have mentioned, I suggest you have a serious conversation with Keith about where his discretionary money is going and why he needs so much. I am perhaps too cynical, but to me, it’s a red flag that he won’t budge on reducing such a high amount AND he withdraws it in cash so you can’t see where he is spending it.

    I know others have questioned the utility of finishing your degree, but I recommend you do it. Even if you never use it to the full extent, it’s something that has weighed on you. Don’t have regrets about what you could have done!

    Best of luck, Sam!

  54. I would purchase the book The Barefoot Investor $19 from Big W. Unfortunately you won’t be able to get this from the library because when I looked a year ago there were 598 holds (so if everyone has the book for 4 weeks you get the drift). Invest in this book it is simple logic and a step by step about what to do. It will be an added bonus on how to do things with the advice you have already given. If you only get another $7K pa from getting a degree I would weigh up the cost of the degree. Maybe work one more day to get the extra $$. I would also suggest getting onto your local FB buy swap sell page. Sell anything that’s unwanted in your home from decor, tools, clothing anything. This is a great way to declutter and make money. Just take a clear photo on your phone, add a description and you can treat it like a competition. Every $10-$20 adds up. Sell 5 things worth $20 and 10 things worth $10 and you’ll have another $200 (put it straight on your debt). I would host BBQs and bring a plate or provide sausages and rissoles and a tossed salad instead of steak. Everyone is happy to bring some nibbles for entre or desert. Just ask. The only thing I would perhaps keep is Netflix because if you are home a lot it’s nice to watch movies and documentaries and if you are going to do everything else cutting back I think Netflix could be your “luxury” item. Go for bushwalks etc. If you feel funny about having BBQ’s at your house and asking people to bring food …do it at a nice picnic spot and everyone bring their own food. Also we do Pizza on a friday night at home and we make our own dough and they are delicious. Food in Australia is way more expensive than the USA and I thought your food bill was okay for the month. Aldi is your best friend and I am exclusively shopping there with the exception of about 6 items which I get from Woollies however a 500 gms bag of pasta is 65 cents…at Aldi and even though the supermarkets home brands are cheap it’s still better at Aldi. I agree that you have to want to make changes and commit to them. The thing is debt is basically spending money in the future that you haven’t earned yet…………there is no other way………….than paying it back. Both read The Barefoot Investor book because it will be a simple guide on putting the steps into place and getting on the same page. Good luck.

  55. Sam, does your credit card give you frequent flyer points that you can use to reduce the cost of your interstate air travel? I have found that a great help.

  56. Hi Fellow Aussie (Western Aust here!)

    Re: the book spending. I totally get it. However, you can borrow (at least in WA) from the state library on every other e-reader but kindle. You could get a cheap kobo (buy nothing group, gumtree, sales) and recoup that saving in a few months and still get to read whatever you want. Sell your old kindle too. Use a software called Calibre (download free off the net) to remove the security from the kindle books, and put them on the kobo. Then you have all your current books and you can borrow too. I did this about 2 years ago – haven’t spent money on books since.

  57. Wow! I am impressed with so many suggestions and assistance! We are working through everything as we speak and evaluating what we think will work for us as a starting point.
    We are going to start with all the suggestions of Mrs Frugalwoods, and a few others and see how fast we can pay down our debt and get some savings before we consider the bigger issues of my uni study and the high costs associated with my work and buying a house.
    Thank you Mrs Frugalwoods for getting to the heart of what we need to do with a few short sentences! We are feeling very positive we can make great changes.

  58. Hi Sam,

    As another Ausie I question the utility of Keith making $352.00 a month in Personal Super Contributions while you both have so much debt and no savings. I am assuming that this payment is in addition to the compulsory super payment that the Defence Force pays Keith’s Super Fund.

    If the personal contributions are pre-tax (i.e. a salary sacrifice or Keith is planning on claiming the new tax rebate) then Keith will be saving somewhere between 17.5 cents and 22 cents on the dollar in taxes (depending on his tax rate). Which is about the cost of your credit card debt. If it is a post-tax payment then you do not event get that immediate bonus.

    It may be more effective to use that money to pay down debt and get a handle on your finances, set up an emergency fund, and save for a 20% house deposit.

    Increase your investments in super later when you only have mortgage and help repayments rather than credit card debt.

  59. Lots of good stuff here. Just two thoughts from me. 1 the biggest thing that helped me cut sending was getting crystal clear on values (some great tools to help with this in the uber frugal challenge) 2 most australian libraries have e-book loans via their websites – have you looked into this in brissie?
    Good luck.

  60. Very minor in the scope of things, but as someone who has both rented and gardened for my entire adult life it is entirely possible to grow a decent proportion of your veges and some fruit in a temporary living situation. Most veges take 3-6 months to be ready for harvest (some even less!) so if you are living anywhere for a year or more I’d go for it!
    If space/time is limited start with easy care high value stuff – I start out at every place with herbs such as parsley and spring onions and greens such as rocket – and as you go you’ll learn how to grow more if you want to. In terms of fruit, strawberries are pretty easy care and very moveable, and for bush/tree fruits you could consider growing a few favourites in large containers – all depends how keen you are.
    I recommend starting small and you’ll see what the right amount of garden is for you

  61. I too live in Brisbane and can vouch for all their struggles; the bills (dear God the electricity prices when its summer here!), the pricey groceries and just about everything else. There’s some awesome advice in this post, which I will be sure to apply to my own life too!

    Love the idea of case studies by the way, such a fun way to spread financial wisdom!

  62. Hi Sam,

    There might be some tax advantages if Keith were to pay the additional retirement savings into your super account (instead of his). Your combined retirement savings would increase by the same amount and you could use the tax savings on paying down debt/ saving even more. Sorry for being vague, I know a specific super rule exists for couples with unequal income to support their partner’s retirement savings but never had reason to look up the details.

    Some more Brisbane specific advice:
    The twice yearly Lifeline Bookfest at the Convention Centre has used books from $1 (their $2.50 section is always awesome value) and also stocks games (between $2.50-$10). It is one of the biggest used book sells in the world and they have an excellent selection, however for games you want to come early on the opening day as popular picks sell out quick. You’ll also be supporting a good cause – Lifeline is running the suicide prevention hotline (unfortunately a big issue in Australia, not least because of financial stress!).

    Brisbane City Council runs a fun and free ‘active parks’ sport program all over the city. They also frequently organise activities like mountain biking, canoe/ kayaking, or SUP excursions for just $5pP. They are a bit harder to find on the website but worth checking out.

    Oh, and you can read library e-books (both City Council and State Library) on your phone by downloading their app. Not as nice as an e-reader, but it’s completely free.

  63. Wow, thanks to Sam and Keith for being vulnerable to let everyone see all of everything money in their lives. It is a great first stip. So yes, let’s get paying down the 18% debt first ASAP.

    One thing that Sam mentioned early on is that she is going back to school to become a counsellor. I noticed that the rate of pay annually is more, but not much more and doesn’t offer any overtime like the job she has now. Is there an option for her to work a few extra shifts to bring in a little more money in the short term to pay off some of the high interest debt?

    Also, I didn’t notice any university debt in the breakdown. How is that being paid for? Is it free in Australia? If so, that is great, go for it, but if not, is it worth it? Is the amount it costs going to outweigh amount you will get in return?

    The other thing I noticed was how much they talk about spending money on food. I think it would be a shock to them if they paid attention to how much money they spend eating out, paying for BBQ food, going out for drinks etc. I encourage them to spend a month closely adding all the things they put in their mouth. I know it was for me when I did the Frugal challenge. (as a single person I was spending 900$ a month on stuff I put in my mouth!) I would guess that lots of the discretionary spending goes to this. I encourage them to try a cook from home challenge. Sam has mentioned how much she likes cooking at home. Why bother going out? You can make some totally amazing meals from home for less than half the cost of eating out. Going out for drinks? I usually offer to be the Designated Driver. My friends get home safe and I get free pop at the bar and can have that one drink early on. It is also a great excuse to not drink very much. Then when I do go out it can be a special event, or I have friend over to the house for drinks. BYOB of course.

    I don’t understand why people think they need to provide all the food at a BBQ. Maybe it is just me, but tell people to bring their own meat and that I will help cook it on the BBQ. Or I provide the burgers and tell everyone to bring a salad and their own drinks. It isn’t tacky at all. Just bringing community together. If someone thinks that is tacky, they aren’t the kinds of friends I want anyways.

    I agree that paying for someone else’s car is silly. Luke is 10 years old. He will not need a car for 6 more years. They can pay down the high interest debt now and then have more money later if they want to help him pay for a car when he is 16. Maybe he should work for his allowance and he should be in charge of starting a savings account and he can decide what that money he saved goes towards. Maybe he won’t want a car, maybe he will want that money for trade tools or something else.

    I also wouldn’t recommend that they buy a house now. They move a lot, selling a house often adds an extra stress they don’t need and real estate costs are expensive. I would guess they might lose money if they stopped renting and bought, especially since they get a rent subsidy. I would recommend saving the difference for what rent would actually cost and put that in a savings account towards purchasing a house down the line. When Keith retires, they won’t get the subsidy anymore, so then it would be a good idea to buy something. Then they will live somewhere long term.

    I also wonder how aware Keith is of their situation, due to the number of things they think they cannot cut, makes me think they are both or at least one of them is in denial of their spending.

    I think that is all I can think of, (lots of things)

    Hopefully that helps.

    1. You make some great points.

      And to answer your question about higher education fees – no it isn’t free but you can get a loan from the Federal government (their are limits on how much you can borrow for courses at different academic levels) that is paid back once your taxable income is above a certain threshold. These loans are indexed (i.e. interest is charged) in line with the Consumer Price Index. When I did my degree 20+ years ago, there was a year when the CPI was negative, and yes, my debt was reduced (not by much – it was less than 1% from memory – but still, it went down).

  64. Sam, you’ve received a ton of advice. I hope that you and Keith will reach your goals. Will you keep us posted? It would be interesting to hear from you in a year. Be strong and courageous. Set small goals along the way and be sure to celebrate your milestones, frugally, of course! And when you don’t quite make a milestone, think positive and let it motivate you to double down. Onward and upward!

  65. Liz did an awesome job outlining a great action plan! I echo her suggestion that Luke can work to buy his own car. I worked through high school and saved up money to buy my own car. Not only did I feel accomplished of my hard work but I took care of the vehicle since the funds came out of my pocket.

  66. Hi, Sam! I live in Brisbane too and wish to extend lots of encouragement to you for making a start on savings and goals. We have a boy who is just a little older than your Luke. We don’t give him pocket money but we do support him to do a little neighbourhood job where he earns a bit of money (we undertook this as a family project). He saves most of his money but is now expected to pay for little things such as a sport magazine he likes to read. Perhaps, you can help your son to identify a couple of small things he can buy for himself using the pocket money he’s earned and help him to save the rest. I love to read but I don’t own a kindle. I also used to buy many, many books but switched to borrowing from my local library and now only buy the occasional one. Just recently, a book I am dying to read was released at a retail cost of $85. I put a reservation on library list and I will be able to read it for free when it becomes available to pick up. Our son, with his own library card, borrows books and dvds from the library too. We very, very rarely eat out and I think this would be one area of your budget where you could cut back quickly and save a lot. Last night, we had friends over for dinner. I made glazed and baked chicken marylands (bought on special and frozen until needed) and a big platter of homemade fried rice. (Cheap! Great for filling up hungry teenage boys! I also swear by pizza!) Our guests brought dessert. Sharing the expense of meals like this will help cut those costs. Good luck! Meg:)

    1. I don’t suppose it’s the book ‘retrosuburbia’, in which case snap! (Just a guess based on the price).I reeeallly wanted to buy it but will wait patiently for a library copy. I have saved a lot of money doing this over the last few years and when books aren’t as good as I expected I never feel like I didn’t get my money’s worth

  67. I am a long time reader and first time poster, but Sam’s situation is one that I can relate to. I once had my financial life dissected by MMM and I applaud you for sharing yours. I think where you are at (with some Retirement savings, some debt and a desire to do better) is very common around the globe. To share your story in these forums, knowing that have folks who have been flexing their frugal-muscles for a long time will have plenty to say and making sweeping statements about the changes you should make is the definition of vulnerability. This is a wonderful site, because the Frugalwoods and followers really are very lovely! Obviously, people who submit case studies are open to feedback or they wouldn’t write in. However, it can still be difficult to hear all the things have are doing wrong and what you ‘should’ be doing instead. I wish that I could say I took all that wonderful advice I received and applied it perfectly and am now debt free and on my way to early retirement, but unfortunately, that is not the case. I hope that happens for you, but in this wonderful thing call life, things are rarely that ‘easy’.

    I am happy to report that I have found some things that have worked for us and our situation has dramatically improved and we are in a much better financial position now that we were before. Two things specifically that struck me in this case study (that I can completely relate) to are
    a) a spouse who is not quite on the same page (maybe in theory, but not in reality) and
    b) how social pressure (real or perceived) can derail your best intentions.

    My husband has a long list of untouchable items in the budget. We had long conversations; looked at numbers and discussed goals etc., but when push came to shove, many of the big expenses are still in my life (think Truck and huge gas bills and other recreational vehicles). They were deemed untouchable and pushing, ‘educating’, arguing got me know where. What I really learned is if you have a reluctant spouse – unless you are willing to sacrifice your marriage (which I was not) and/or become a nagging fish-wife, it is better to focus your efforts on all the items in YOUR OWN control FIRST(eg. your clothing, books, lunches out, cell phone etc.). Next move to lower cost substitutions that don’t impact your DH in any real way (insurance premiums? internet/phone packages? etc.). Maybe your hubby is ready for a big change, but maybe he is not. So my suggestion is that if your hubby is not really ready – focus on your own personal spending or the spending you have direct control over off the hop. It seems unfair (Why should I be the only one to sacrifice?!) but as I saw our savings account grow and debt shrink (slower than they could have if we had both been trying), it was worth it to me. It has taken a few years, but we now have a sizable emergency fund, thanks almost exclusively to me reducing my spending and saving any small windfalls. That small buffer is worth the lunches and the penny pinching around groceries and kids clothes etc. Avoid the temptation to railroad a reluctant spouse into a spending overhaul (no matter how ‘right’ you are). It will only create resentment. Instead, soften the approach. If his spending money is currently 1084 on average, request that he reduce it to 984 and see if he can work with that. After a few months of that, maybe scale back to 800? Also, once he sees how hard you are working and the traction you are getting in your own frugal actions, maybe he will be more willing. My dh is down to 100$ per week when he used to spend more than double or triple that without a second thought.

    On the social side, I am still struggling with this also. It is so ingrained in so many social circles to go out for lunch/dinner, do things (trips to the zoo, trampoline park etc.), have fun…that again – it is hard to make an abrupt change. I completely understand that making big changes all at once works for some people, like pulling off a band aid. But the fact that you said you have tried this approach before and ended up back where you were (overspending!) makes me wonder if a more gradual approach here could work too. Try alternating going out for kids activities vs. staying in and having people over. Then when people see how fun and relaxing it is to just hang out together and let the kids play in the yard, you can reduce the going out and increase the staying in. Or look for cool things to do “out” that are free or cheap and suggest those. For gift giving it can be hard (read: awkward) to go from giving expensive store bought gifts to everyone and their dog; to passing out homemade gifts…but setting a budget for gifts and then reducing it with each passing event until you get to something that you can manage in your budget is a way for it to be more gradual. Some people are very good and matter of fact about saying I am not doing X because it doesn’t fit in our budget, but I find (spendy) people are more receptive and understanding when you give a reason for your changed behavior that they can relate to. Eg. I am cutting back on my lunches out because we are saving for a beach holiday in the summer vs. I am not going for lunch anymore because it is not in my budget or I can’t afford it. I don’t know why!? Because really the end result is the same…no lunches out=money saved, but for some reason one is more socially acceptable than the other.

    This is all a very long winded way of saying that the suggestions and path presented is amazing advice, but if for some reason some or not all of it is workable in your real life, that is okay too. Don’t beat yourself up. You are doing the best you can for your family. Try to avoid all or nothing thinking. If you are not able to implement all the suggestions, but can do a few…you will still make progress and feel more in control of your money and your situation. I wish you the best of luck!!

    1. So much wisdom here. Thank you for sharing your thoughts, Kelly. I agree, taking control of one’s own actions is the way to get started and feel empowered. And to you Sam, thank you for putting yourself out there. You are brave to be so open and I think your situation is so common and for sure one that I relate to. Most people I know are not paragons of frugality. They are in debt and living for the moment. It is good to read about someone who is striving to improve but with very familiar challenges. And Mrs. FW thank you for selecting Sam’s case study for us all to read. I am always inspired to do better after reading these posts.

  68. Lots of good comments here Sam. And congrats on taking the initiative to reach your financial goals!! My comment is going to be less about the specifics of your spending and more about the psychology/emotion of spending (which is a huge part of cutting costs and becoming more naturally frugal). I too was in a place where our monthly spending was averaging between $8,000-$10,000, and similar to you guys, my husband and I didn’t really know where it was going. It was a 3-4 year journey for me to really address what was happening and get our expenses cut 50-60%. My suggestion would be to:
    – do an Uber Frugal month if you haven’t already. It was a game changer for me.
    – look at Liz’s monthly spending summaries. When I found this website I quickly found her spending summaries and started poring through them. After reading 6-8 of her monthly totals over the history of the blog, what really struck me is how infrequently she/they must spend. Maybe this sounds obvious but for me it was a huge realization that they must have numerous days a month where they literally spend $0. So if you approach each day like “how can I spend $0 today”, it might help you and your family. It helped me a lot. And then things like paying a toll to drive to work become a problem to be solved to eliminate the cost (can you get a job closer to home? Is there another transit option? Etc).
    – get your husband on board with reading Frugalwoods if he doesn’t already
    – check out other frugality and financial independence blogs. Different voices and perspectives will help you and your husband identify and work through your emotional/psychological set-points with regards to money and lifestyle
    – check out simplicity and/or minimalist blogs & books. I find for me the three ideologies are closely linked and all have provided me increased happiness and helped me progress to be more frugal.
    – track every single expense. I do this in a plain old excel spreadsheet. My husband and i sit down weekly to review the expenses. This is where we identify any areas we can optimize (ie. Hey our monthly car insurance fee went through – we should shop around when the annual renewal comes up), and really get clear about what we spent money on that actually wasn’t really necessary (ie. we still pay for Netflix every month. At this point we have decided not to cancel it but acknowledge it’s a “perk” in the budget and we could easily live without it by renting movies and TV shows at the library for the kids)

    I typed all this on my phone so hopefully its not too jumbled and is still helpful. Good luck with your goals!! 🙂

  69. Just a couple of more thoughts for some great folks. You probably almost had a heart attack when you read my grocery post. Be aware that the first month is the most frustrating. Once you establish a batch of workable recipes and get familiar with your sources you will breeze through the weekly grocery flyer situation in 5-10 minutes. Also, you will probably end up with one “cleaning out the frig” meal each week as the idea here is NO WASTE. It may be a mish mash of a bunch of different things but use it up. Hundreds if not thousands of dollars is wasted each year by tossing out food.
    Also, you are probably wondering about putting the extra oatmeal in the freezer. This is to avoid bugs and rodents. There are other ways of doing this, but you will have your hands full for awhile so skip that for now. Take this one step at a time.

    Bread is expensive everywhere. Your next step is to make your own. If you don’t have a bread maker, thrift stores, garage sales and “boot sales” are your best bet for finding one for $10 or less. Just make sure it works before you buy it. If the book is not available you can find a lot of recipes on line. I don’t like the hole in the bread the bread makers make so I do my mixing on the “dough setting” or “pizza crust setting” or whatever similar it is called on whatever machine you find. I take the dough out and put it in a bread pan for the second rise and bake it in my toaster oven. If it won’t fit in your toaster oven, use your regular oven. 350F or “whatever” C that is similar. 30-35 minutes usually to finish. Once you get used to doing this you can toss the ingredients in when you come home from work, and then bake it off after dinner. Don’t cut into it while it is still warm. Also, learn to tap the bottom of the loaf when you take it out of the oven to make sure it is done. This is a touchy feely thing that you will figure out as you go along. I make my bread for 50 cents a loaf. A big difference from the many dollars at the store. If you mess up at the beginning, just keep at it. It beats the heck out of hand work.

    I gather you think you have only 2 grocery stores. Guess what! Grocery stores aren’t your only source of groceries. Google “salvage grocery stores in my area”. We have three in my area. Google “restaurant supplies”. We have one in my area that is open to the public. Google “U-Pick farms in my area”. We have dozens. I once spent 75 cents a pound for a huge box of berries. Google “farms that sell direct to the public”. We have hundreds. A few of these places have CSA’s and are willing to give you a free box of produce if you spend some time on their farm filling boxes for others. Neat trade off. You can find these folks at any farmer’s markets in your area. We are lucky in that we have a local land grant university that has assembled all these folks but I suspect you will have to hunt further to find them. If you are willing to stop by after your work, do the same thing for that address. You may find your best finds there.

    See what I mean about research. The key is to examine every expense and figure out all the ways you can reduce your actual cost. By using some of the above, assuming they are available to you, you can actually meet a new lower grocery cost.

    I was thrilled to see that you both have already started to figure out your beginning. Good for you both.

  70. Sam, there are much better mobile telephone and internet deals here in Australia. Is your family willing to lower their usage for a lower fee, until your debts are paid?

  71. Another Aussie first time commenter here. Thanks for being so open and honest Sam! It is really hard to work out where money is going and you did a great job. Mrs FW has given some great suggestions about where to start so you’ve got lots to get going with.

    It seems to me that ‘Keith’s Discretionary Spending’ line item isn’t really discretionary spending; it would be better renamed ‘Money Keith Spends’. If he’s anything like my other half, he finds the idea of tracking spending really intimidating. What I did with my partner was chat about values, life goals, then money goals, then ‘where we are at’ followed by ‘where we could be’. These chats happened slowly over time and I often waited for him to bring the subject up. Once our feet were firmly planted on the same page, I explained what our spending looked like with the info that I had (mine and ours, but not much of his) – similar to yours, there was a ‘bloke’s spending’ line item. He still isn’t any good at tracking spending, but he now spontaneously discusses big purchases with me. About once every few months he asks me where we are at financially and is much more attuned to making our life head towards our goals.

    Something that has always helped me is a visual. When I was a teenager and saving for something I would colour in squares on a grid to mark off savings progress and now I use a graph on a spreadsheet. You could draw up a grid or a thermometer for your debt and put it somewhere obvious at home. It will give you a visual trigger to high five as you get closer to debt free!

    Another useful thing is to automate as much as you can. Money you can’t see is money that doesn’t get spent.

    The hardest bit is getting started, so good on you!

  72. Hi Sam! We are in the defence forces too! We totally understand the moving all the time. A book that really helped us was Dave Ramsay’s total money makeover. Should be available at the library. Also with your spouse pass you should be able to use the gym on base depending on which base you are near.

    Also a quick plug I am going to be starting my financial independence blog Australian version called stillsmashingavo.com soon. So head on over if you need some Australian tips my husband and i have picked up over the years! 🙂 all the best and you can do it!!

  73. This is one of the best case studies I have read, I think mainly because I have been in very similar circumstances before now, earning a good salary but with credit cards and loans holding me back and feeling the need to “reward” myself with treats for working hard, therefore stopping me from paying off the dreaded debts….A few years ago my (then new) partner gave me a stern talking to and I worked hard to pay off the debts and life has been so much easier since. My mother always says you can’t move forward when you have debts (other than a mortgage) and I think she’s right. The cuts and lifestyle changes will be worth it to feel more in control and sleep better at night. Good luck!

  74. I can relate to Sam’s story from the standpoint where one spouse is more invested than the other on being debt free. I think that until you both get on the same page regarding finances it will be rocky. My spouse could be your spouse’s twin, he loves his electronics and is the spender while I am the saver. It took me years but I finally got through to him that if we sacrificed a little now, we could reap the benefits later. Nagging doesn’t work, trust me I tried. His goal is to have a waterfront property and I pointed out that at the rate were going, spending everything we earn, he is never going to get to that goal. It finally clicked. I wish you much success in your journey!

  75. I really think you hit the nail on the head with this one. There is a shocking amount of discretionary spending going on here and I think they just have to decide whether the gratification of their immediate desires is more important than being debt-free and financially secure. An uber-frugal month challenge sounds like a great way to get started. I’m usually not one to dismiss higher education, but in this case, I wonder if Sam’s time might be better spent trying to economize at home, instead of studying for her degree. Best wishes!

  76. I’m also in Australia, and wanted to give some suggestions about specific socialising ideas. I started looking around for cheap things to do about a year ago, and am now so busy, I’m having trouble fitting everything in. I also moved a fair bit when I was younger.

    – Community Gardens. You can absolutely start a veggie patch in 3 years, even in a rental property, you can have a good one going in a few months. But given that you want social interaction, I’d look for a local community garden. They are often super kid friendly too. There are also community groups that do gardening working bees for pensioners that can’t manage their gardens anymore. Or you can start a garden work swap. You help me out for two hours this saturday, I’ll come and help you next saturday.
    – Park run and other community exercise groups. If there aren’t any that suit you locally, look into starting something. Find a friend or two that wants to walk regularly, and set up a day and time, and make it a priority. There are also those park exercise equipment set ups, which are kinda fun to play on, and if you’ve got a friend, you don’t feel like as much of a dolt. Group sports that you will have to pay for may also give you more socialising bang for your buck than a gym.
    – Trivia nights and other free events at pubs or clubs. I’m finally going to the fortnightly “Sea Shanty singalong” at a bar near my house this Tuesday, and will have much entertainment for the cost of a beer. You just have to learn to say no to the second beer.
    – Picnics. Potlucks can be hit and miss in australia, but picnics near a good playground are always bring and share. You also don’t have to clean your bathroom for them. There are also an awful lot of free events around that lend themselves to bring and share picnics. A lot of communities put on free movies or bands in parks, that can be easy to invite people along to for a low stress get together.
    – Open house with a super cheap staple meal. A friend of mine has an occasional friday open house, and her husband makes a huge pot of dhal and another of rice. It’s super cheap, and people are asked to bring their own drinks and anything else they’d like to share, if they want. You could do the same thing with homemade pizza or pasta, if you don’t do dhal. Nothing wrong with Aldi wine and homebrew if you want to have some drinks on hand.
    – Sewing bees and craft get togethers. Boomerang bags is a community sewing group that meets to sew reuseable bags. Independent craft shops also run stitch and bitch evenings, and you can find them in other random places too.
    – Australia wide service groups. The SES, the Red Cross, Rotary or Lions. Some may have dues, but being nationwide, you’ll have an automatic social group when you move interstate. Are there any family groups within the defence force you could join?

    Also, consider finding a job closer to home. Not only will it save on transport costs, but you’ll feel like you’re more a part of your local community, instead of yet another commuter. You’ll be more likely to bump into people you know through work at the local shops, and will increase your local friends, who are often more likely to just pop over for a cuppa, as you don’t have to drive an hour to catch up.

  77. Yay, another Queenslander! My husband and I found ourselves in a similar situation last year. The 1st thing we did was switch our credit card to a new one with a big interest free period. This saved us so much money and we were able to smash the credit card debt so much faster. We track all or spending with Pocketbook which is an amazing budgeting program that links to most Aussie banks. All your transactions can be itemised and tracked so you know exactly where your money is going and you can work out where you can cut back.

  78. My suggestion would be to further itemize all spending. You did a pretty good job of laying it all out there, but breaking the discretionary funds down further will help. You need to know where every dollar is going (and will probably find that many of those dollars are going nowhere important!). Categories like food are a good place to take a closer look since there are often cheaper alternatives. Try eating less meat and buying in bulk.

    Good luck Sam! I enjoyed reading a case study of someone at the beginning of their financial journey. It takes a lot of bravery to share things that aren’t all rosy. You’re not alone!

  79. Check out Bookbub.com – you can select the categories that you like to read and every day you get an e-mail with books that fall into those categories. Some are free, some are .99, 1.99 and 2.99. I glance through and only select the books that are free. It takes me directly to amazon.com and I “buy” with one click and it sends the book directly to my kindle.

  80. Suggest that you rethink paying for your son’s university fees for the same reasons as Mrs Frugalwoods gave re saving to buy him a car. I am Australian too – most young people go through university on government supported loans which they pay back when they are earning. He needs to learn responsibility – there is nothing stopping him getting a job and using the money towards his studies. Living in Brisbane, which is so hot and humid, I can understand your taking out a gym membership. I guess the shock for me is your husband’s discretionary spending – this needs to be unpacked. What is he spending it on? beer? pokies? horses? dogs? even buying a few coffees every day adds up. I recently split up with someone who was buying 4 coffees per day at $4.50 each = $18/day x 10 working days + coffee on the weekend – that is $400/month that could be reduced significantly by taking coffee things to work.

  81. I just want to recognize how hard it is to swim again the social norm current. Even though this financial advise all might make sense when it comes down to turning down or changing social events it is SO hard. I haven’t had this challenge with frugality but the last couple of months I’ve had some health challenges and I’ve had to restrict my diet a ton. No sugar, alcohol, grains, among other things. This felt near impossible when it came to eating out and social events. I was so worried that I would be judged and I would come up with these elaborate excuses in my head of why I wasn’t going to eat that food that everyone else was partaking of. Something I read in a book really helped me, the author said “You are a grown up, no one can make you eat anything” and that really changed my attitude. I often brought my own food, refused desserts and drinks, or got a salad at a restaurant instead of the amazing looking burger. Each time I worried about what I would say but almost %100 of the time it was NO BIG DEAL. No one even questioned me on my food! I would similarly apply this to your frugality and say you are an adult and no one will make you buy anything. If you get an invitation to go out to eat and you’re meeting someone new so you don’t have the familiar support maybe eat your main meal ahead and then get a small bowl or side salad that won’t cost much and skip the drink. They probably won’t even notice. If they question you on it just say your doing a budget reset that month and then change the subject. This might feel a lot less fun to you (limiting my food certainly did to me) but I just try to remember that the important thing isn’t the food but it’s the social engagement that’s important. Then I could still look forward to going out because I would be with my friends instead of the food. Maybe when it comes to closer relationships you can explain your reasons more in depth and ask directly for their support. For example if you decided to really tackle your debt this year and decided to cut out your trips to your family for the year maybe you could explain to your parents that you are trying to meet some bigger financial goals and pay down debt, explain that this will improve your quality of life and ask if they can support you this year when you might not visit them as often. Maybe then you can decide with them that you won’t come at all this year or that maybe you’ll just go once at an important time, or you’ll just send your son once this year, etc. Same for your close friends and those social engagements. But with my experience and my diet they probably won’t even think twice about it if you invite them over to your house for dinner instead of eating out, or if you cut down on the elaborate food you serve etc. The first couple of times it will be really difficult and awkward but usually just for you. If you’re committed to it yourself they will accept it and go along! I wish you the best luck! Swimming against stream can be extremely difficult but so rewarding along the way when you do it.

  82. I don’t have too much to add, but I wanted to say “good for you” for recognizing the position you’re in and putting yourself out there publicly.

    The one thing that absolutely struck me was the savings account for your son’s car, which prevented you from paying for your husband’s car repair and necessitated taking out a 6% loan. This is a CLEAR indicator of your priorities, and as other commenters have said, I think you could take a second look at how this communicates family values to your son.

    That said, my parents did buy me a super-cheap car as a teenager, but I had to pay for my own gas (beyond a certain basic amount) and insurance. I was a competitive swimmer and they were tired of driving me to practice twice a day. And I had very little opportunity to work – mainly just lifeguarding in the summers. In hindsight, it’s not like my swimming led to anything lasting like a college scholarship or a career, so I don’t necessarily agree with their decision.

  83. Great case study. One thing I noticed is just how much money you are spending going to work – a lot of it on travel. If you could find something closer to home instead, you could eliminate a lot of cost. Especially if you found hours that worked around school hours so that you could eliminate after school care costs.

  84. “We are focusing on investments this year” is greeted with awe and admiration (you’re investing in your future,right?), while ” We can’t afford it” meets with derision, or disbelief. Actually, it’s no-one else’s business what you do with your money,but rephrasing your rationale can reduce the aggro, and reflect what you’re doing more accurately! It also helps to remind you that you’ve chosen what you want to do with your money,and spending it on fleeting pleasures didn’t make the cut!!

  85. Sam, well done for taking steps to change your patterns of behaviour. Some observations:

    – Buy and read the Barefoot Investor book. Scott Pape offers straight forward advice for Australians and explains things simply. His Barefoot Steps, especially Step 2 setting up three buckets – blow (rent, food, petrol, etc), mojo (rainy day money), and grow (savings) may help manage your money so you can start Step 3 and domino your debts
    – Keith’s ‘discretionary spending’ is the single largest monthly expense but doesn’t make sense. Keith won’t ‘travel’ for work like some readers here will think. If the six months away involves being in the field on exercise then the ADF pays an allowance of either $39 a day (Tier 2) or $67 a day (Tier 1, google the latest ADF pay rates). As he gets accommodation, sometimes under the stars, and rations on exercise his field allowance money should be used to pay down debt or increase your savings. If Keith is travelling for work like civilians do then the ADF pays travel allowance. This will cover flights, hire care, accommodation, and meals and incidentals. Separate out what Keith actually spends to commute from home to work to better understand where this money is going. Membership of a mess is compulsory for ADF members and involves a monthly fee but not everything on a mess bill is compulsory – don’t use a mess bill like a credit card. Unit social clubs are not compulsory. ADF members receive an annual uniform allowance of $680 to buy polyester uniforms, polished shoes etc. If Keith wears camouflage uniform most days these can be exchanged for free at the area clothing store when they wear out. So where is all this money going? Work it out and you can pay down your debt and then start saving
    -Some of the advice about Keith’s superannuation doesn’t apply. If Keith has worked for the ADF for 15 years he is probably a member of MSBS a defined benefits scheme. Most of the scheme is unfunded and paid by the government from consolidated revenue once a member retires either as a pension, as a lump sum, or part of both. This money can be accessed at age 55. A member is also obligated to contribute 5% of after tax salary per pay to the scheme which is probably the amount you listed. He can salary sacrifice more if he wants. Like regular superannuation the money contributed by the individual can only be accessed on reaching preservation age >60
    -Buying a house. Be wary about the advice to stick to renting. Once you get rid of your debt you could save to buy a house, at least so you have one paid off when you both retire. The ADF has a Home Purchase Assistance Scheme (HPAS) that provides a few thousand dollars (payable once) to assist in buying a home in your posting location that you must live in for 12 months. Keith may also qualify for the Defence Home Ownership Assistance Scheme (DHOAS) that pays a subsidy of a few hundred dollars a month into your mortgage for a set period. Once you have a deposit think about buying a place 12 months before Keith has to post. When you are posted somewhere new you will get a rent subsidy in the new location and can rent out your property using renters to pay some/all of your mortgage. If you move back to the old location, live in the house and keep paying the mortgage down. The ADF rent subsidy is nice but you wont have it in retirement. Use the next 17 years (43+17=60) make some progress on owning a home in retirement.
    -Good luck.

  86. Hi Sam,

    As an Aussie who used to spend $3500 per year on toll road, I totally understand some of your costs. The extensive list of suggestions complied by Mrs Frugalwoods is super awesome.

    What I’d suggest is perhaps start small. Pick one thing (or maximum two things) to improve on per month, one for you and one for Keith. Do something small everyday- small and continuous- the Japanese concept of kaizen. Do a list of “amount saved” on top of tracking spending, make your small victories visible!

    Good luck!

  87. You’ve got some great advice so far.

    You should be eligible for the government co-contribution. If you contribute $1000 in after tax money to your super, the government will kick in $500.

    I really liked the section in Your Money or Your Life (by Joe Dominguez and Vicki Robin) about calculating your true income by including the costs associated with working at your job. Maybe when the time is right you could look for a job that is closer to home, or at least more efficient to get to.

  88. Hi Sam,

    Thanks so much for sharing your story. I share Mrs. F’s perspective on the analysis and strategy, so I won’t try to rehash that here.

    The one thing that touched me most, on a personal level, is that the one of the largest single chunks of your expenses is your husband’s discretionary spending, which you labeled as “non-negotiable.” There can be many ways to rationalize this, particularly since he currently has the higher income. To me, this is just one example of why finances are one of the greatest sources of stress in a relationship. And, since you describe this very significant part of your expenses as non-negotiable, I get a sense that you have difficulty discussing finances with your husband, particularly on a co-equal basis. I think that your first step is to develop this aspect of your relationship with him. Mrs. F has outlined reachable but challenging goals. I’m convinced that they will only be met if you and your husband mutually agree on them. Otherwise, I fear that you might pull out all the stops on your end, but still be far from your goals. And, unless you’re willing to settle for getting halfway… or a third of the way … to your goals, then resentment is very likely to follow.

    While my wife and I certainly aren’t masters of frugality, we do have a strong partnership when it comes to finances. Here are a few principles that we live by.

    1) We consider all of our income, assets and debts to belong equally to both of us. Both of our paychecks go into the same banking account, and most of our financial life plays out in jointly held accounts. In the rare cases where an account is only in one of our names, the other one has a power of attorney and can manage that account equally.

    2) Risking redundancy, we are strictly divested from the philosophy that the person who earns more has more say. If we did, than I would permanently have veto power over our finances. If we were to do this on a net income basis, my wife would be doubly penalized. We live in Germany, and here there are different models of income tax withholding. If one partner earns substantially more that the other, your net income will be highest if the larger earner has a lower withholding rate than the smaller earner. In a sense, my wife is partially financing my net income with her withholding. If a married couple wants to apply a “this is mine, that’s yours philosophy,” then, at least in Germany, it is only fair to correct for inequities resulting from the tax code. Our philosophy is much simpler: everything belongs equally to both of us.

    3) We make all of our financial decisions jointly. When we first moved in together, we went so far as to track every single DM we spent (the Euro came later). My wife, who is the more frugal of us, taught me a lot about how to save money at the supermarket, for example. We don’t track our expenses that rigerously at the moment, but the transparency that we started out with has left us in a position where we both have a very good idea where all of our money goes.

    My wife and I have different strategies and comfort zones when it comes to investments. She is much more conservative. Every investment decision has been made together, be it savings account, stocks, mutual funds, retirement insurance, or our mortgage. That was tedious at first, but I’m convinced that our savings results have benefited from it. My wife has lowered our exposure to risk, and there is no blame for how things have developed as we were both equally committed to the decisions we made together.

    4) We keep regular tabs on our financial picture, and we keep each other informed. While I don’t use the online tools that Mrs. F recommends, there are two spreadsheets that I update on a monthly basis. One is a tally of our total assets and debits, the other is a summary of income and expenditures per month. This is a regular check on whether we are meeting our goals, and an opportunity to make adjustments before we get too far off course.

    I hope some of these ideas are of help. I get a sense that you would like to apply frugal strategies to your benefit. Do whatever you can to get your husband on board. I devoured “Meet The Frugalwoods,“ and I think it can be a source of inspiration, also for your husband. Even if you don’t get to >70% savings, or adopt a lifestyle of extreme frugality, I think that the book can be a great conversation starter to talk about what your life’s priorities are and how your financial habits contribute to or prevent you from living according to them.

  89. So many people suggested here that the car fund be used for credit card debt that I give a different suggestion: as you clearly see you are capable of saving (the car fund), keep doing it but convert it to emergency fund. Keep funding it at the current rate and use the rest of your future spending reduction for debt payments. The lack of emergency fund is what caused some of the debt initially and without it you risk getting it again.

    Another important thing: often when spending equals income (when income is not super low) the simple act of saving something is easy given it’s initially small. We started long ago with $60 / month and pretty soon grew the amount 6-fold (and these days more).

  90. Hey, Sam. I agree with everyone else in that you have done a great job so far. Your breakdown of expenses is impressive.

    However, I think the source of your financial troubles is in your and your family’s lifestyle mindsets. I think a lot of the reason your previous attempts at frugality have failed is because you are taking on a deprivation mindset every time you consider frugality. Even in your case study, you appear to think the frugal lifestyle will be temporary. That you will be able to become spendy again once you achieve your financial goals. Instead of seeing frugality as a temporary inconvenience, you need to shift your mindset to see it as a lifestyle choice focused on your definition of “enough.”

    I like to compare this mindset to diets and a healthy lifestyle.

    For example, consider a person who is on a diet. They have decided to deprive themselves entirely of sweets, bread, pasta, and pizza to make themselves healthier. This mindset may work in the short term. But in the long term, they will fall back into their old ways. Why? Because every time they see/think/hear about/smell one of these items, they trigger a thought process that reminds them that they can’t have that thing: a negative thought process. Continuous negative thought processes do not work in the long term. No one likes to feel like they are failing.

    Now consider a person who practices a healthy lifestyle. They eat a majority of healthy foods, and wellness is integrated into every aspect of their life. However, if they see a pizza or sweet, they aren’t going to deny themselves the treat. But they recognize it as a treat. Treats are something they indulge in every once in a while, but they have realized constantly eating them does not make them feel great in the long term. Eating healthy and occasional indulgence makes the treats that much more delicious. This person has adopted an abundance mindset. They never have the sensation of failing at a goal because they have determined what makes them feel good.

    I think your biggest challenge will be finding your “enough.” What spending really makes you happy, and what you are overindulging in due to a deprivation mindset.

  91. I’m an Aussie, living in Melbourne, Victoria.
    *TPG unlimited broadband 59.99 per month.
    *Kogan prepaid mobile 16.90 for 30 days 2GB data, unlimited calls and text. Or 179.90 for 365 days.
    Highly recommend to read the money guide Barefoot Investor.

  92. Hi Sam,
    We live on Australia. Some saving ideas on the phone and internet.
    TPG unlimited broadband 59.99 per month
    Kogan prepaid mobile 16.70 for 30 days unlimited calls & texts, 2 GB data / 179.90 for 365 days.

  93. Suppose they do not meet the goals and cannot buy (or do not want to buy) at the end of Keith’s service=end of rental subsidie scheme, house sitting might be an option to live cheaply. Would that enable you to save up and buy a home? Or a campervan, so you can travel and live cheaply in various places? Or live in thailnad (cheap) and fly often to Aus?
    If you do not like those ideas, that would be a nice starting point for actionpoint 1 of FW’s advice?
    Thinking though your end-of-ADF options (and their costs) might help visualise the different scenarios: Spending now, buying a home later, travelling later to kids and grandkids.

  94. I am a retired counselor and so I come to this situation with a little different perspective. I think Keith is spending a great deal of his “allowance” for booze. He should not have to spend additional money on his air travel unless he is upgrading to a class where the drinks are free. His mess bill should be just about a wash if he only is paying for food. If I am right he will not be able to keep his spending under control until he gets this aspect of his life under control. I don’t know how things work in his part of the world but in the states you can get a debit card that you can use like a charge card but when the account is empty you cannot charge any more. If he gets a debit card and puts say $800 on it for the first month and when that is gone he is done spending for the month. This will give him a printout of his expenses and from that he should be able to spot other areas where he could cut back so perhaps the next month $600 will do. Go back and reread Dave’s post from March 23rd. He seems to be very knowledgeable about the ADF financial picture and thinks that Keith’s allowance is much greater that any reasonable need. I would leave the little things alone until the big ones are tackled successfully. Case in point the $27 cable bill. If Keith can get his spending down to the same level as his wife’s he will be saving 35 times the cable bill. If keeping his football addiction fed helps him manage his other spending it will be well worth it.

  95. Interesting to read an Australian case study. I agree with Mrs. Frugalwoods that there is a tremendous amount of fat to cut from this budget. No more cable, no more buying books, no more buying a car for Junior (he can get a job!), no more vacations (do Staycations instead), and no buying a caravan until you knock down that debt. What is Keith spending more than $1400 a month on? What is Sam spending a couple hundred bucks a month on? Itemize all of those costs by writing down every single thing you spend, even if only for a week. When I started doing that it forced me to lock down my spending. I actually keep track of all my expenditures by writing them down in a an old-fashioned ledger book (I balance my checkbook this way too—-I bank entirely online, but I also write everything down in this ledger, it makes the little numbers on the screen “real” for me.)

    Seems to me you could save almost 40 grand a year just by eliminating a lot of unnecessary luxuries and taking advantage of libraries, free broadcast television, cooking more simple meals, hosting potlucks, and getting rid of the discretionaries. Good luck!

  96. I am new to reading this blog -but am loving the case studies and comments. I agree with so much of what has already been said. My partner is very frugal which I love. I am not by nature but he has taught me to be more so. He has shown me so much of what I loved were simply luxuries. He has always saved – packed lunch, not paid for cable, sold stuff he no longer needed bought second hand. We rarely eat out – by rarely I mean we go out once or twice a month. It helps that much of what we enjoy, camping, hiking and running is extremely low cost. He does not have a problem paying for something if he needs it but funny thing is, he needs and is extremely happy with very little. Good luck with all the changes and I hope you reach your financial goals!

  97. Hi Sam and the rest of the FW community,

    I’m in Logan and grew up in Brisbane.

    I’m wondering how the Navara is used. Is that type of vehicle the only type that could be used or would something like a station wagon suit? The reason I ask is that Transurban places Navaras and other utes in “Class 3” instead of the “Class 2” of ‘ordinary’ cars such as station wagons. Class 3 vehicles are charged 50% more than Class 2 on the tolls. https://www.govia.com.au/using-brisbane-toll-roads/toll-pricing

    Several others have mentioned community gardens. BCC has a page about these: https://www.brisbane.qld.gov.au/environment-waste/be-clean-green-brisbane/community-groups/community-gardens-city-farms/find-your-local-community-garden
    They sound like a great way you can reduce your food bill by growing veges and get social interaction all for low cost. You might also like to enquire at your son’s school – many schools have a ‘school farm’ and might be willing to share produce with, or sell at below market rates to, parents who contribute time to their care.

    There are lots of other community groups around that don’t charge an arm or a leg to participate and will often reduce costs for those who volunteer in them. DH and I joined our local dog obedience club when I got my first dog 4 years ago. I appreciated what I learnt so much that I did the course to become an instructor. With the way our club works, I don’t have to pay training fees for when I train (as a student) with my dog (DH still does because he’s not an instructor) – that saves $5 a training night (we go once a week for each of us). That might not sound like a huge saving but it also confirms my point that Not-For-Profit community groups are often relatively inexpensive ways to socialise.

    In that vein, I’d recommend quilting groups but, unless you already have a stash of fabric and tools, it can be an expensive hobby. However, many groups will do charity work and you can often sew and chat for cheap if you’re happy to work on the charity projects.

    You can find more info about community groups via the State Gov’t webpage: https://www.qld.gov.au/community/your-home-community/groups

    As a perennial student myself, I say finish your course, UNLESS you are really only doing it in order to *maybe* earn a higher salary. If that’s the case, it’s not worth the angst – do something you actually enjoy instead.

    I agree with most others on here – let Luke save up for a car for himself. He’ll appreciate it more and get a self-esteem boost at what he’s been able to achieve when he reaches that milestone.

    Are your family and friends able to visit you a few times instead of your always visiting them? I know that some people can’t travel far, but many people don’t bother when the other party always appears to be happy to make the trip.

    I also endorse the idea of tracking EVERY SINGLE THING you spend ANY amount of money on (you might or might not choose to track sub-categories of your groceries). Get a receipt from every retailer. If they don’t issue receipts automatically, ask for one. Keep a notebook in your bag so that if they don’t issue one because it’s an unregulated purchase (e.g. you pay a friend $5 petrol money for dropping something off on the other side of town) you can still record it somewhere.

    All that data isn’t just for the eyes of the retailers’ reward schemes. It’s for your eyes too. Transfer it into a spreadsheet or other app that you and hubby can share and update in real time. That way, you can both see how your finances are actually tracking. And all that data will feed into your budgets as noted below.

    Apart from the credit cards (BTW, ditch those and switch to debit cards at least until you have paid them off) have 3 bank accounts – ‘everyday’, regular direct debits, long-term savings. Keep the account your pays are deposited into as the direct debits account. Set up a separate account or a sub-account for the long-term savings. Set up a separate account for the everyday stuff.

    Work out a sensible monthly budget for your everyday and small value stuff (groceries, petrol, postage etc.) based on your spending as per your tracked data (above) and transfer that amount to your everyday account (which is accessed via debit cards only). Each week, take out ONLY the weekly amount, in cash. Use ONLY that cash for those items. You can’t buy things if you don’t have the cash for them – no going back for more half-way through the week – so don’t spend up big on chocolate until you’ve bought the fresh fruit and veg. 😉

    Take note of which direct debits are coming out when, and how much they are – mark them on a calendar placed where everyone will see it as they move around the house each day. Keep a suitable amount to cover these in the direct debit account. Send all other sums to the long-term account. This will double as your emergency fund and your long-term savings account (although you could shunt long-term savings off to another separate sub-account or ‘high interest term deposit’ account if you want).

    You’re aiming for 3 to 6 months worth of expected expenditure in your emergency fund. This is primarily to cover your bills (rent, food, power) if you find yourself unemployed. I think of unexpected necessary expenditure (emergency car repairs, new fridge/microwave/washing machine when the old one dies…) as coming from the long-term savings account, which is why they’re just one account for us.

    Hope I haven’t bored you with my post. 🙂

  98. Hi Sam,

    I live in Logan and we’re regular users of the toll roads around here. Are you aware that the Navara (because it is a ute) will be charged 50% more than a regular car through the toll points? If it’s not absolutely necessary to have a ute, you might want to consider replacing it with something like a station wagon with a tow bar. In this case, for those odd occasions where a station wagon won’t do (e.g. you need to move a large piece of furniture that won’t fit inside), a trailer can be hired for much less than the ongoing cost of the ute.

    Let Luke save up for his own car. He’ll appreciate it more because it will truly BE his, earned from his own efforts. The best thing you can do for him is to model saving for a significant purchase.

    Are your family and friends in WA able to travel to see you? (Or are they already doing this in the school holidays when you’re not going to them?) If you’re always travelling to see them, and they are physically capable of travel, consider asking them to come to you. Most people won’t think to travel to the other party if they think that the other party is always happy to do the travelling.

    I’m glad you clarified Keith’s discretionary amount of $584 isn’t completely discretionary if mess fees are compulsory because what jumped out at me was that that figure was higher than your grocery budget. Does he get any particular benefit from those fees e.g. significantly reduced meal prices that can’t be matched by taking a packed lunch?

    To hit both the gardening dreams and the low cost socialising desires, check out community gardens. Also check out whether your son’s school has a ‘school farm’ – they might be happy to share produce with families who participate in its care. Here’s the BCC’s page: https://www.brisbane.qld.gov.au/environment-waste/be-clean-green-brisbane/community-groups/community-gardens-city-farms/find-your-local-community-garden

    Other cheap socialising avenues are community not-for-profit clubs. I see that you’re already volunteering with things in the community or at Luke’s school. Do you get anything other than kudos for this? For example, our dog obedience club waives training fees ($5 a session) for instructors (we’re all volunteers) and gives us a free dinner once or twice a year. Plus, we have a free sausage sizzle on the last Friday night of the month for any member who turns up. It’s all good socialisation for us and our dog. 🙂

    It’s perfectly acceptable to invite people over for a BBQ and ask them to bring their own meat and alcohol while you provide entertaining space, bread rolls, salads, soft drinks etc. You can even indulge your cooking hobby by foisting your creations on your guests, if you like. 😉 You’ll also be taking the pressure off others who might also be thinking that they HAVE to provide meat and alcohol whenever they invite others over. So many people are chasing their tails trying to keep up with others’ perceived expectations that really don’t exist.

    Review your contents insurance – check out all the insurer’s rates for bundled vs unbundled policies. For instance, if you’re an RACQ member (and yes, it does pay to belong) you can get discounts on CTP, car and contents insurance if you go with them. Discounts are higher the more policies you have with an insurer. $962 p.a. seems like rather a lot. I’ve just done a quick check on RACQ and even without any discounts (other than no-claim bonus) and using a nil excess, they’d charge around $670 p.a. (bought online) for a policy that covers $90,000 of contents (that’s not specifying any items that you take away from home) but of course, YMMV depending on your contents.

    On that insurance line, as soon as you can (i.e. as soon as you have saved the lowest excess amount) get an excess on your policy – most people don’t need to make many claims on their contents (unless they live in a flood-prone, or high crime, area) so you’re unlikely to need to use it. RACQ’s price, as noted above, drops by about $70 p.a. for a $150 excess. BTW, I’m just using RACQ as an example because I’m familiar with them.

    Keep track of how much you spend on EVERY Single Purchase. All that data is worth at least as much to you as it is to the retailers! Get receipts for everything – ask for one if it isn’t automatically given and the value is variable (e.g. we don’t ask for one when we get a roast chicken because the price is always the same and we get them regularly) and keep a notebook in your bag to record unregulated spending e.g. $5 petrol money to a friend for carpooling; $1.25 to a busker.

    When you can access it, get all that data into a shared spreadsheet or app that you and Keith can both update in real time, at the same time. That way, you can track your spending so you won’t have any more ‘I really don’t know what we spend this on’ issues; have a clear idea of costs over the long term to feed into your budgeting system; know how much you need in your dire emergency fund (we’re both suddenly unemployed but we still have to pay for rent, food and utilities) plus your ‘why did this happen now!’ emergency fund (the car battery/fridge/microwave/washing machine has just karked it and we really need a replacement within a week).

    We’ve been doing this for 9 or 10 years now. I can go back through the spreadsheets and find all sorts of data, such as how long the suspension rods in the washing machine last (5 years) and how much they cost to replace (back in March, $288 total for parts, labour and call-out fee – beats $1200 for a new machine). I’m not yet at the point of detailing to the level of how much we spend on soy milk (me) vs oat milk (hubby).

    But, speaking of oat milk, the same product, just with an own brand label, is cheaper at Aldi. The same goes for baked beans. It pays to keep an eye out – not everything is cheaper at Aldi if there’s a special on at Woolies or Coles – but many things, or their equivalents, are.

  99. One book that changed my financial life: total money makeover by Dave Ramsey
    I will add that maybe you can work a few more hours per day so that you can potentially drop a day that you have to go in. This would save some commute expenses and childcare expenses. Or, work more hours period and just make more money.
    I’d try to live off your husband’s income, and put your income towards debt repayment. It is a radical thing to do, but once you’ve paid off debts you can then SAVE your income for that future home.
    Also, get some big pots and start growing lettuce/herbs/tomatoes/peppers. Then you can search for a community plot of land that you may try to garden in. It’s also a great way to meet new people.
    I say use the car savings as your new emergency fund, and plan on saving up for a used car for either of you especially since one is older. Your son can have one of your cars…
    Anyway, I think Mrs. Frugalwoods has given you really great advice-good luck you are on your way to a debt free life!

  100. I am astonished that Sam only sends $20 per month on pet care! I have cats and spend a minimum of $43 a month each on their food, worming, vaccinations, flea treatments, and the annual vet visit. That doesn’t even include pet insurance (which I insist on having after one cat was bitten by a snake requiring $2,500 in anti venom and hospitalisation, and another ate 3m of string and needed a $3,000 surgery!)
    I would love to hear more about keeping companion animals responsibly and frugally.

  101. Not sure if Sam and Keith will ever see this comment, but I want to extend enormous congratulations to them both. Reading this update made me SO HAPPY! They are certainly making Frugalwoods Nation proud! I’m so glad to hear they are doing so well and are experiencing such peace and happiness as a result of the changes they’ve made. Truly inspiring!

  102. Way to go, Sam and Keith!
    As well as being debt free, which cheers me enormously on your behalf, I’m delighted at how your opening up to your friends about spending less has given them the freedom to reduce their spending too – that’s a real multiplication of benefits for you all with reduced stress all round. 🙂

  103. I’m a fellow SE Qlder so I enjoyed this case study. The only addition I would like to add is the recommendation about it being unrealistic to purchase a home due to frequent moves. I completely disagree with the advice. The property market in SE Qld is on the move and the pricing is getting scary. By not purchasing, they will need to rent and then at retirement use that money for purchase which then negatively impacts their bottom line and subsequent lifestyle. My advice would be get in and rent that property out to tenants and use the Govt investment incentives to pay it off. Rentinvest. They could continue to rent themselves and take advantage of the subsidy. We have moved on average every 2.3years of our married life (21 years). We own 3 homes. Rent income has helped pay them down and we now have a massive amount of equity across the 3 properties. One is positively geared and we are readying ourselves to purchase another. When we retire we will have $thousands of dollars in rental income which we will live off so we won’t need to touch our super. At present we get rental income of $520 week, $460 week and $420 week with $930 a week in costs. The $470 positive income goes to repairs and maintenance account and as it has a substantial balance we will use $$ for deposit for the next purchase. We are and have been a single income family for 15 years. So it is very doable. Good luck with it all. Keep your eye on the prize!

  104. This is so interesting! As a Brisbane resident myself it’s really cool to see how you’ve taken the lifestyle information Sam provided and broken it down step by step. This is great for readers and even better for Sam and Keith, who have done a great job!

  105. I read this advice with interest as someone who lives in SE Qld. I hope the savings made there put towards a house purchase. That $350000 to $550000 house in 2018 is now worth $650000 to $1000000 in most of Brisbane. Some areas even more. It difficult to break habits, more so to create and continue new ones. I hope this couple are continuing their frugal journey.

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