So, time to take a deep breath and change our lifestyle: our income has just been cut by almost half. I have done a basic spreadsheet and discovered we need to do something fast.

I guess I just want some ideas on what to do after this month, as I am taking August to get all our existing expenses worked out - I don't know what we pay for insurance, rego etc as I've always just had the money to pay bills when they came in and other stuff is just automatically debited each month.

What I am doing is:
- daily expenses for one month to see what we are spending where.
- working out all set outgoing expenses - insurance, rego, PHI, daycare, rates, internet, mobile etc.
- estimating expenses such as groceries, landline, water, electricity etc based on previous bills
- averaging general amount spent on Christmas, travel etc so I can spread the costs over the year when I develop a budget.

Once I have this information I can:
- start making calls to see if I can get better deals
- work out what is totally unnecessary
- work out what we can sell (have a surplus of modes of transport!)

We have the money to pay out our car loan. We have money set aside to do essential work on the house (replace leaking roof and re-do kitchen with broken cupboards and appliances that don't work!) which we will still use for that. We have no credit card debt (put monthly expenses on card and pay in full each month).

Does it sound like I am on the right track to understanding our financial situation and working out a realistic budget?

Is there something I have missed?

How do we find out if a single income family of six is entitled to any for of assistance?

Go to the Estimator on the Family Assistance Office website. That will tell you what your entitlements are. But because it's based on your financial year's income, if the reduction in income is a temporary thing, it might not be worth applying.

No, reduction middle to long term thing...if the estimator shows we are entitled to something, how do we go about actually getting it???

This has just happened to us aswell and everything I was going to suggest is what you have done in your list.

I'm actually managed to save alot of money by bundling products with Telstra, changing insurance amounts etc.

Plus cancelling things that I had like gym memberships etc. You seem to have everything covered, good luck. Its hard to get used to but once its done its not as bad as it seems.

I have made the first call - cancelled an automatic donation of $30/month to the cancer council. I have done this for 9 years in the name of a friend of mine who died of cancer.

I feel guilty, but have to look at what I have contributed, not what I won't be contributing. That annual contribution is more than than a winter quarterly gas bill (we have gas heating so this is our peak period).

I'd consider selling one of the excess modes of transport sooner rather than later as the rego/insurance is probably costing you quite a bit. Plus the proceeds from the sale could give you a bit of a cash injection to help if it takes longer than expected to start getting any entitlements or sort out other cost savers.

Other things to factor into your spreadsheet are medical costs - with a family of 6 I imagine you'd have quite a few GP appointments or prescriptions over the year. I average out $100 a month just to ensure we have money in the budget there if one of us needs some medical treatment.

Good luck.

It sounds like you are being very sensible, particularly with recording what you spend for August. It might be quite surprising how all the little things add up. Don't forget to make sure you have fee free banking too and if you pay a fee for your credit card, consider going to a fee free one. also, if you have internet check your usage for the last 6 monhts (simiarly with phone bills) - I just did ours and we can step down a plan and save some money there. with the phone, I have realised I was making unnecessary calls when I could have just done one text - things like that, that add up (but that is probably getting a bit much!)

My only thing would be to see if you can retain some savings for a rainy day (eg car needs a major fix or hot water system goes) so that you have options rather than need to apply for a loan or putting it on a credit card with huge interest. but I have to have emergency money in an account or I get very stressed out.

some ways we save money:
We buy gift cards from the entertainment book for our coles/woolies shopping as it gives us a 5% discount. the book does cost about $60 to $70 depending on where you live, but we also buy annual zoo memberships and other things out of there (eg food places for a night out or other entry coupons) to get savings. we bulk buy groceries when they are on special. we always check out the catalogues from all the stores.

good luck and post how you go.

Some payments are based on fortnightly income, I forget which ones though. It's worth at least calling and asking centrelink Oh, and the ones based on fortnightly income have never caused me to have a debt with centrelink even the years when DHs income has gone up and down a lot.
To apply for payments, you do that over the phone too these days If you go into a centrelink office they usually put you on one of their phones anyway LOL

The rest sounds like you have a good plan Once you adjust to living on a single income it will seem easy

If you or DH buy lunch at work, STOP now. Dinner left overs or sandwiches and some fruit are so much cheaper. $10 on a bought sandwich and a drink each day is $50 a week.

Thanks for the idea of making medical expenses a line item - hadn't considered that one other than PHI.

Re groceries/food:

We do our main shopping for dry goods and dairy at Aldi.

We have our meat delivered in bulk once a month (not willing to compromise on this - there are other ways to reduce the budget!)

We get cheap fruit and veg locally.

Where I can save an easy $10 a week is impulse/treat foods for me. I am not changing my spending habits this month, but I will keep all dockets for this month to see where I am being frivilous.

Print out your cc & account statements for last 12 months, if you have internet banking. Or drag them out of your files. I like the start with this. Gives you a better average on bills, as some bills are more seasonal. So for gas/electricity/phone/internet/mobiles etc add up the yearly bills and divide by 12 to find monthly or 26 for fortnightly. Our income is fortnightly so I work everything on this basis. With big bills work out how much you need to put aside every fortnight/month to be able to pay them. Note any seasonal bill differences - maybe more gas in winter for heating or more electricity in summer for aircon. As you may need to save more in certain months of the year - if you have big bills comming up soon don't average them over 12 months, as you won't be able to afford them. You may need to look at monthly payments for rates/insurance/rego etc, some companies charge extra for this. If you have rego due soon on one of your extra modes of transport sell it now. You'll get a refund for any unused insurance on a motor vehicle when you sell ring up and cancel the insurance.

If you ahve aircon for most aussies that's an extra you can just turn off, nice but not necessary. If you heat turn your heating down to 18 during the day when home, turn off when out, turn down as much as possible at night. Is your hot water on off peak, this can really help as hot water can be 40-60% of electricity bills (where you don't have aircon or electric heaters). Turn all unused appliances including TV's etc off at the wall, this can save a surprising 5 - 10% on your electricity bill. Standby power can be a huge drain.

Look at your incidental spending each week, it can really add up. You might need to set a limit, say you/kids/DH get x dollars for incidental spending per week, take it out on a weekly basis and when it's gone, it's gone. Set a limit for the food shop - start by averaging all you food bills out over the year, see what you pay and see if you can still afford it. If you can't go to your first shop with a budget of what you can afford per week, and spend a bit of time working out what you can buy with it.

Unless your getting rewards from the cc you might want to switch all bills/spending to your bank account during the adjustment period, otherwise you might end up accidentally spending more money then you have and being unable to pay it off at the end of the month. Or if you have online banking keep tabs on it till you get the hang of the new income.

Good luck OP.

Just on a philsophical level - find out if you're a credit fritterer or a cash fritterer..

I can't for the life of me work out where the cash in wallet goes, but my credit card is always, always, exactly what I expect it to be and constantly monitored. Me = cash fritterer. Answer, I take out cash once a month, if that, and if that's not enough, it's done. No more.

But some people are the other way around... credit, credit, credit, credit, OMG 9billion dollar bill...

The utilities is the one that has me worried - we have moved and I have never had to pay a water bill before. But we apparently have a very low bill - council came and replaced our water metre because of how much the useage dropped when we moved in! They laughed when I told them we were used to being on tank water and said it all made sense.

The daily access charge for electricity is double here, and the useage costs are also higher.

We don't use aircon, and we already have the gas heating set to 18 during the day. I'm a wimp and have it 14 overnight as I am still up for three-hourly feeds (which I wish would stop now she is almost 12 months!!!).

The rates here are also double what we used to pay.

So I think it will take us a full year in the house to really get a feel for what the utilities costs are seasonally and ovreall. At this point I am taking the hoighest quarterly bill for my guestimate.

Therin - thats a good point. I am a cash fritterer - cash does not stay in my wallet, but I am excellent with cards. DH is hte opposite - he is card fritterer. so he gets cash in his wallet, I get the cards nad it works well.

I don't want to prepay bills or spread payments out, so I do a cash in / cash out spreadsheet for the year, so I know where my big months are coming, and whats a good saving month.

I.e. July is a nightmare for us - two regos, two car insurance, house insurance, DD's birthday is just the start of it. Knowing it's coming, makes it easier to manage.

And agree with the cash / credit approach - we really started saving when we slash our cash withdrawals - we take out $200 on the 1st of the month, and that's it for our cash for the month. Also really helps to get better accuracy in what you are spending your dollars on.

Start a coin jar - we empty ours in November, and get usually about $6-700 dollars, just in time for Christmas!

Mamabug, if you have just moved to a new area, then utilities will be hard. do you have your usage statments from your previous place? alhtough using a high quarter is a good way to estimate.

really shop around for electricity and gas - prices can vary alot and there are a lot of deals out there (eg 24 months contracts get cheaper rates etc), but unless you are sure you will be in the same area for the time period, check out the cancellation fees ( we will need to do this to our internet when we move).

Found the online estimator. I over estimated our income for a safety net on over payment and was floored by what it suggested we may be entitled to receive!

I think I can start to breate again if it is close to accurate. It will more than pay for the groceries each month, and actually leave us with a little bit to put away as savings.