Saturday, 11 February 2017

Old Money

A delicious Laksa cooked up by
our family friend Gail



Hi Folks

The phrase "old money" generally conjures up thoughts and images of generationally wealthy folk eschewing people with new money as 'naff' and undesirable. Sometimes it talks of money that is inherited rather than earned coupled with powerfully, formidable, hyphenated surnames....the vieux riche.

However, that is NOT what I want to chat about with you today.  The old money  I am referring to is OUR old money.  How old is our money?  How long has it been untouched for?  I referred to this concept here and labeled it as self-insurance savings.


I spy pie in the fridge!


The older our money is, the more self reliant we can feel. Let's be realistic however, not touching our money and letting it age can be a daunting task - it can feel nearly impossible sometimes.  The end result is to have at least six months worth of expenses socked away so that in effect we are spending money that is already six months old (or more).


Our lovely oil lamps out on the deck lounge room.


Be Patient.
It can take significant amounts of time to build up some old money - five years is reasonable. Put a little away without fail every time we get paid...even if it is a tiny bit. It will add up over time.

Lock It
The greatest nemesis for the accumulation of old money is its ease of accessibility. Have an account that requires a double sign or a notice-of-withdrawal policy.  Either or both of these things will robustly keep our old money from the sweaty grasping fingers of convenience.

Automate It
If we have to manually allocate money to our old money account then that habit will probably dwindle or lapse....so, automate it. Talking to our pay office to get a small amount sent directly from our pay packet into the old money account before it hits our normal bank account will ensure old money continues to grow and age. The less attention we give it, the more likelihood there is of our old money not to be touched and to quietly grow.

Give Ourselves A Pay Cut
I had to create a faux demotion to trick myself into putting away money to create my old money account. I pretended that I got a small pay cut, reorganised my budget accordingly (much pencil chewing occurred!) and then automated that amount to flow into a separate interest bearing account. It can be very surprising how small amounts can grow.

Tithe Other Windfalls
Take 10% of an unexpected or non-standard windfall of money. Take 10% of that profit we made selling that car, take 10% of that birthday money, take 10% of that tax return, take 10% of any unexpected cash and pop it straight into the old money account - that still leaves us 90% do with as we see fit.


The banoffee pie has been well and truly  tucked into



Old money can be a great blessing, a measure of personal integrity, a self-created insurance policy, a tangible indicator of self discipline, a calm generator and an insomnia blaster.


Take care folks and stay nice.

Mr HM


Defrosting the $50 freezer.
It is still cheaper to do this every
three months than fork out for
a new one.

4 comments:

  1. That last point is so true---you certainly sleep a lot better knowing there's a "cushion"...........

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  2. Brilliant post again,savings is our downfall. We do save and as it builds and we start to feel good, something happens and the money is required, which in it's self is a good thing, but as we get older the need to have saving grows. Hubby is retired on a good pension, when I retire my pensions are really low, years of stay at home mum. My big plan is I can retire in October 2019, but I aim to work for at least 6 more months and save every pound I earn. But for now we are build our saving again, just in case.............

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  3. great post...I especially love the idea of 10% of windfall money to the old money account...which is my IRA account...can't take $ out for nearly three more years...so it's easy to ignore...

    ReplyDelete
  4. Love this post! We are single income (I'm a SAHM) I automate $5 a week to go into such an account, haven't been doing it long, but we've got $500 in there! No where near 6 months of bills, but it makes me happy to know it's there!
    -Kelly B

    ReplyDelete

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