Cost of Living: How can we save money on household equipment

Bryce: [00:00:27] Welcome to Get Started Investing, a podcast where we attempt to answer the most common money and investing questions from asking you if you're joining us for the very first time, a huge welcome. We strongly recommend that you scroll up and start at episode one. Now we are licensed, but we're not aware of your personal circumstances. So all information on this show is for education and entertainment purposes. And any advice is general advice. With that said, let's crack on. My name is Bryce, and as always, I'm joined by the equity buddy Ren. How are you? 

Alec: [00:00:55] I'm very good, Bryce. Very excited for this episode. Over the next five episodes, we're doing a bit of a mini series and we're diving into some of the key buckets that make up the cost of living and asking how we can reduce them. 

Bryce: [00:01:10] Yes, no doubt we're all experiencing a rise in the cost of living and it hits us in different ways. So we want to try and add a bit of creative ideas on how we can try and reduce some of the areas of expense in our life. Because I think it's important that while you try and do focus on the big ticket items, small changes, consistent small changes can all add up. So this is going to be fun. 

Alec: [00:01:33] Yeah. You introduce every episode with we answer some of your common money and investing questions. And Liam sent us something that really sums up the question we're all asking.

EM community: [00:01:45] Hey, Equity Mates. It's Liam here from Melbourne, Victoria. I've been listening since 2020 at peak Covid. It was good fun. Just wanted to question around how you guys go to manage your household spending. What are you looking at in terms of cutting to help with the cost of living situation at the moment? 

Bryce: [00:02:02] So over the next five episodes we're going to answer Liam's question and look at some of the key areas we've got furnishing household equipment and services, we've got transport, we've got food and non-alcoholic beverages, insurance and financial services and health. And we're going to look at our budgets and see if we can squeeze a little more. 

Alec: [00:02:21] Now, that might feel like a bit of an eclectic mix of categories there. The reason that we've chosen them is that they are some of the key buckets that make up the CPI, which is the measure of inflation. We'll get to that. But that's not just putting it out there that's not how Bryce labels is budget. Yes I know and I am excited for this because you have told us on an earlier episode of get started investing that you a perfect budget up. I think the quote was there's nothing more I can do to save money. 

Bryce: [00:02:56] I mean, if we're going to go through and find the audio, maybe I say that I feel like what I have been focusing on is trying to reduce the really big ticket items on my budget. And what I'm looking forward to in the next few episodes is this is where you can start to get into the nitty gritty and make small, small micro changes. 

Alec: [00:03:17] Well, I'm looking forward to learning for all size tickets big and small, because I'm sure that there's a lot I can do. But look, before we get into it, there's one piece of housekeeping, one very exciting piece of housekeeping that we want to hit, and that is that we have a book that we're launching. Our second book, we know that trying to figure out an investing plan, how much to invest can be difficult, it can be stressful. And so we've written a book titled Don't Stress, Just Invest, which is really the simplest way to get started investing. And why that simple approach is. 

Bryce: [00:03:56] Another tagline is, Correct me if I'm wrong. Ren how to automate your investments and get on with life.

Alec: [00:04:02] Close. Set up your investments and get on with your life. 

Bryce: [00:04:05] Same thing. If you're one that wants to get invested in the market, you're not worried about stock picking, but you just know that it's something that you want to set and forget and have a great strategy and take the market return. This will tell you why that that that is enough. You don't need to be an investor to be invested. Yeah, I think it's four easy steps. 

Alec: [00:04:23] I think the key feeling that I have as an investor and I know a lot of people have, is there's a feeling that you always need to do more, that you need to be saving more so you can invest more, you need to do more research so you can find the next opportunity. There's this constant feeling that what you're doing is not enough, that you're not getting ahead or that you're going to fall behind. And we wanted to really write a book that sort of addresses some of those concerns because we feel them as well and explain what is enough when it comes to investing. So hopefully it can take some of that stress off your plate. So the book is available for pre-order now. Wherever you buy books, we'll include some links in the show notes. It is being released on the 22nd of August, so we're very excited about that. Go and check that out. But Bryce, let's get to the episode today. Inflation and cost of living. 

Bryce: [00:05:15] Yes. So we should probably start with the jargon that we're going to hear a lot of and speak a lot of throughout this series, and that is the CPI or the Consumer Price Index. Now, the Consumer Price Index is a monthly measure and it's an indicator of inflation or the movement of the price of goods and services. It's measured quarterly. So that's why every three months we'll get an update from the Australian Bureau of Statistics and it measures the changes in the price of a basket of goods and services, which account for a higher proportion of how we spend and and consume it. Interestingly, it's actually for metropolitan households.

Alec: [00:05:59] Oh really?

Bryce: [00:06:00] Yeah, this is from ABS, but. 

Alec: [00:06:03] Australian Bureau of Statistics. 

Bryce: [00:06:04] Yeah. So it's metropolitan. They look at how people are spending and then they create baskets to then be able to determine how the price of those baskets has changed. So in the current CPI, the baskets include food and non-alcoholic beverages, alcohol and tobacco, clothing and footwear, housing furnishings, household equipment and services, health, transport, communication, recreation and culture, education, insurance and financial services. [00:06:28][24.5]

Alec: [00:06:29] So they're the 11 spending categories that make up the basket. Yeah, the ABS spend their quarter waving those baskets together and painting a picture of how much more expensive or how cheaper. But these days, how much more expensive life is becoming. Yeah. And so when we set out to do this five part series, we recognise that there were some categories where we couldn't do a lot housing. We've covered it well, everyone is aware of it and unfortunately we don't have a magic bullet that can reduce the what on average 9% increases in rent that people are saying and who knows how much in house prices. So we figured that one, I wanted to talk about alcohol and tobacco, but you were adamant that your tobacco budget wasn't okay. 

Bryce: [00:07:19] Here we go. Yes.

Alec: [00:07:21] But that one's that one is relatively straightforward.. Stop smoking, stop vaping? Bryce? 

Bryce: [00:07:26] Yep, no vapes 

Alec: [00:07:29] But we've chosen the five that we think there's generally in most people's budgets. Certainly in my budget, there's a bit of fat that can be trimmed furnishings, household equipment and services, transport, food and non-alcoholic beverages, insurance and financial services and health. Yes. So let's start with furnishings, household equipment and service. 

Bryce: [00:07:50] So as we said, this is a basket. So it's firstly important to recognise what goes into this basket. So we have furniture, carpets and other floor coverings, household textiles, major household appliances. I wonder whether, oh, then we've got small electric household appliances, glassware, tableware and household utensils, tools and equipment for house and garden cleaning and maintenance products, personal care products, and other non durable household products. Child care, interestingly, comes in their hairdressing and personal grooming services and other household services. 

Alec: [00:08:24] Now, this category in the past 12 months is up 6.7%. The main contributors to this rise were non-Jewish household products. Up 8.8%. And domestic and household services up 5.1%. So, Bryce, with your perfect budget and your multiple tabs spreadsheets, let's start with what your budget looks like for this, and then let's get into what we can do to emulate your shining example. 

Bryce: [00:08:58] Well, my budget isn't going to be clear cut here because this doesn't include food. Okay. Let's say that I think the biggest ongoing expense for me here is just your cleaning products and household bits and pieces, like I'm not going out and buying major household appliances all the time. So personal care and hair products I did right down here, hairdressing. That's one where I could definitely cut expenses. Yeah. Yes. I'm really happy with my barber.

Alec: [00:09:27] How much do you pay per cut? 

Bryce: [00:09:28] Too much? 75 bucks.

Alec: [00:09:31] Oh, my. Yeah.

Bryce: [00:09:32] So I used to. I used to pay 35. And I think I was actually thinking this morning that I want to get one before going away. And I don't want a lot of that. It doesn't matter if you go to the 75, if they take half a centimetre or five centimetres, it's still the same price. 

Alec: [00:09:47] Why did you go from 35 to 75? 

Bryce: [00:09:50] I just felt like they'd just genuinely think you'd get a better job. 

Alec: [00:09:53] That is lifestyle creep, bro. Like that. 

Bryce: [00:09:56] I know. 

Alec: [00:09:56] Come on.

Bryce: [00:09:57] I know. So let's just say I can save money on the hairdressing. What we should do is by the end of the series, I do what I. What I could be saving here. So that's a $50 saving. 40? 

Alec: [00:10:07] Ask me how much I spend on hairdressing. 

Bryce: [00:10:09] I know you do your own. 

Alec: [00:10:10] Yes, it's pretty good. 

Bryce: [00:10:13] Okay, so hairdressing, personal care. I used to be big into hair products. Don't have any. 

Alec: [00:10:18] Use of it. 

Bryce: [00:10:19] Yeah, I don't. I don't wear them at all now. 

Alec: [00:10:20] You're telling me you've thrown the gel away?

Bryce: [00:10:22] Absolutely. That's why I wear caps now. Anyway, I think for me, the biggest ongoing Ren and I've got a couple of others here, but ongoing is just your general household stuff. And I think that for me, this is where I used to work at Woollies. I used to work household goods and items category, whatever that was called. I can't remember. And the brand here, I don't think has a big direct relationship to quality, so to speak. I think a lot of the products that you can buy for Aldi at 30 or 40% of the cost work just as well are really good in fact. So I think for me, household stuff, shower cleaning, all that sort of jazz Aldi. 

Alec: [00:11:05] Chemical products. 

Bryce: [00:11:05] Chemical products, yeah, Aldi, Aldi or even Costco, they sell similar sort of non non brand stuff. That's where you can get some decent savings. 

Alec: [00:11:15] Can we like do you know how much you've saved making that switch. 

Bryce: [00:11:20] I couldn't add it up. 

Alec: [00:11:20] Do you not have historical tabs on your budget. 

Bryce: [00:11:23] Hold on. I should do that. But I think the difference between dishwashing liquid can be four or five bucks a bottle. 

Alec: [00:11:29] Yeah, the big one that I found. Even so, I'm still a woollies for my chemical just because it's closer. The difference between your branded, you know, like your cold power or whatever and your Woollies brand, especially with washing liquid. It's crazy. 

Bryce: [00:11:45] And you also need to pay attention because a lot of them are now high concentrate and so you actually don't need a lot of liquid but people get carried away with just big squeezes. Five lid, five lid caps worth of liquid. 

Alec: [00:12:00] Yeah, yeah, yeah.

Bryce: [00:12:01] You don't need it. 

Alec: [00:12:02] Just high mission and have that thing about how much toothpaste and to use it. Yeah, yeah, Yeah. Reckons that everyone uses too much. It's probably like yeah, it's definitely the same colour. But here's something that someone could do. Give us like a standard measurement for like, hey, brands like you're saying don't use five cups worth, but no one's doing not. 

Bryce: [00:12:22] Yeah, that's it. 

Alec: [00:12:23] But like what is the right amount? Someone could spin up a website like Pantene shampoo for Woolworths brand washing detergent. Like what is the right amount? Like K Brands tell us what we should call. 

Bryce: [00:12:36] And so another thing that's coming out Ren now that I'm thinking about that falls in this category for me is our TV just blew up a lot. Yeah, Yeah. So we don't have a TV at the moment and while not like literally went bang, but it just went tick, tick, tick, tick, tick. And then the screen just went.

Alec: [00:12:52] No way. 

Bryce: [00:12:53] Yeah. So this for me falls obviously into major household appliances. And there's a very big temptation here too, too I think you can overspend on something like this. So I know back to Aldi and I don't know what the quality is, but you can always pick up a decent size. No brand TV from the middle section of Aldi.

Alec: [00:13:15] Yeah.

Bryce: [00:13:15] For low for like low hundreds. 

Alec: [00:13:17] The other one is Kogan.

Bryce: [00:13:18] Yeah. Wow. Yeah. So I bought my parents a Kogan TV. Awful. Really? Oh yeah. It was low. It was low range. The size is great, the pictures great, but the quality of the speaker is awful. So they get a Kogan speaker. 

Alec: [00:13:31] Well, still save money. 

Bryce: [00:13:34] But anyway, so I think a couple of things for me. Also, if you're thinking about moving and you're looking to buy appliances, one big recommendation from me here in Australia is the Appliances Online website. Super easy. Great service. They do the installation and really competitive pricing. Yeah. 

Alec: [00:13:51] And they take your old ones away. 

Bryce: [00:13:52] So call out for me. What about you Ren, how do you think about this line item, if at all? 

Alec: [00:13:58] I don't. I mean, for some of the major household appliances, I think I bought most of the stuff online from appliances online or Facebook marketplace. 

Bryce: [00:14:09] Yeah. 

Alec: [00:14:10] Probably less Facebook marketplace for this kind of stuff. But but in terms of like I don't have a line item for cleaning products, I just don't claim my house. No, that's not true. I just buy it from Woollies. Hairdressing is obviously DIY. I highly recommend guys just shave your head girls as well. Just everyone shave your head. But yeah, I think the theme throughout these five episodes is you do like an itemised spend, whereas I have a bucket of money each pay that I just try and live within those means and then the rest. I know that if, if I just spend what I've allocated for spending in general, then everything else will be okay. One last one. Producer Sascha, has submitted something for hairdressers. If you don't want to go my route and just shave it off, which again, I highly recommend if you go to hairdressing academies or types. There's often you can get discounted hairdressing or beauty treatments. There's one in Melbourne where Sascha is located called Buba Academy by Bay Academy, so that's another one if you want to get like a hairdressing student to take her idea.

Bryce: [00:15:30] That reminds me, I actually went to book my haircut yesterday and saw that they have an apprentice there for 40 bucks rather than 75. So maybe I'll do that almost back to the 35. Nice. So we've asked some of the guys in the office as well to see if there are any deals out there that you can jump on in each of these episodes and ones come through. You can get $10 off in your birth month. If you sign up to IKEA, it's a free membership. So they'll give you ten, $10 off when your birthday swings around. If you need to go out and buy any furnishing. 

Alec: [00:16:02] Doesn't really like ten bucks. The ten bucks, Great. Doesn't really move the needle if you're buying IKEA stuff. No. And here's one that we debated whether we included or not. I think we do. Bryce didn't think so. Some councils offer free trees and you feel confused by that. But if you don't get them for free, you got to buy them.

Bryce: [00:16:23] Yeah, but the trees fault like trees fall in this category. 

Alec: [00:16:28] Well I don't think there's not another category that would fall into that area, household furnishings. 

Bryce: [00:16:35] So I guess if you want to go out and get a tree we'll put we'll put links to these deals in the show notes. 

Alec: [00:16:43] Yeah. There's there's a link on our blog and that has collated all the local councils and governments that offer free trees and we'll include that in the show notes. There are some councils that will offer up to ten trees, but other councils will only offer one. What council you in Bryce? 

Bryce: [00:17:03] City of Sydney. 

Alec: [00:17:04] Doesn't look like they do according to this list. 

Bryce: [00:17:06] There's no way to plant a tree, that's why.

Alec: [00:17:09] Sure. If you're in the inner west, you can get one tree. But if you're in the Cessnock Local Council region, you can get up to eight trees for free from the council. 

Bryce: [00:17:19] There you go. Anyway. 

Alec: [00:17:22] Maybe you sell them to people whose households don't offer free trees. 

Bryce: [00:17:27] For $100 challenge. Anyway, let's just bring it back because if so, if you're looking for some simple and easy ways to save money across the furnishings, household equipment and services, obviously think about Aldi, Costco, Cars.com that I use. Facebook Marketplace is a great one for appliances. Look at appliances online and then some great tips there around hairdressing with the academy. If you have any tips for us and want to share them with the community, jump into our Facebook group and we'd love to hear from you. Any assistance in this space for us is going to be great. So we'll leave it there. Next week, we're picking up transport and having a look at ways in which we can save money on the costs of transport. But for now, we'll pick it up next week.