March 2014 – Side income challenged failed

Non salary income

March was a very busy month for us because of work, and it still is in many ways. This update is going to be very short. It’s important though, that I record that I failed my challenge to increase non salary income by 25% which I set in last month’s report. It decreased by about one third mainly because advertising income for this site dropped off slightly, and I wasn’t motivated enough to find other opportunities to make extra cash on the site. The hunt continues.

I suppose if it was really easy to do, everyone would do it.

It was a more expensive month than last (pretty obvious when last month we spent less than 25% of our income!) but it wasn’t too bad, with spending right on average, as you can see below.

Spending rate


All of the other graphs are really good this month, with all of them moving in the right direction.





Wallchartyears to FI


Networth Mortgage Investments

    Hypermiling and the art of increasing gas mileage

    Hypermiling and how to increase your gas mileage


    Hypermiling is quite simply the process of driving as efficiently as possible. It is about getting the maximum miles out of a tank of gas.

    Before I get into the detail about how to save money by modifying the way you drive, I should note two important matters at the outset. The first is that the best way of using less gas is to drive your car less. Living close to work, riding your bike or using public transport are the best ways of lowering your gas bill.

    The second is that the type of car you drive will largely determine how far you can go on a tank of gas. This does not mean that it is frugal to go out and buy an expensive new car because it’s more economical than your current car. Rarely will that be a good move.

    It also means that the tips below are more important if you drive a gas-guzzler, not less. If you drive a gas inefficient car, then you stand to gain more by driving sensibly, but at some point you’ll be limited by your car, not the way you drive.

    Some people suggest pretty crazy ideas in the search for miles per gallon, like tailgating and other dangerous ideas. It should be pretty obvious, but I’ll say it anyway: Staying safe is the most frugal way to drive, even if it costs a bit more in the short term. Avoiding hospitalization or long term injury is frugal. Getting home safely is more important than miles per gallon, so if you’re looking for ‘extreme hypermiling’ look somewhere else.

    The best hypermiling techniques

    I’ve done a fair bit of research into this, and hopefully I’ll save you scouting around a number of other sources – here are the best tips to increase your miles per gallon:

    Invest in a fuel economy gauge

    Normally I wouldn’t advocate buying a gadget to save money, but a fuel usage monitor is a good exception. They help you work out what is the most efficient highway cruising speed for your car, and it also provides feedback in real-time so you can drive as efficiently as possible.

    Personally, I like ScanGauge monitors because they are relatively cheap and really well reviewed. If you follow the above link, you’ll see that this particular model has over 500 reviews at an average of 4.5 stars.

    This one will work on almost all cars made after 1996, and will give you a ton of stats and averages that will help you tailor your driving to make sure it’s as efficient as possible. If you only follow this tip, you’ll probably accidentally discover the rest, just by trial and error.

    Coast rather than using your brakes

    If you have your foot on the accelerator right up until you have to brake to go around a corner, you are wasting precious momentum that you built up whilst accelerating. It is much more efficient to get off the gas far enough before a corner so you don’t have to brake. The more time you spend with your foot off the accelerator the better. This is one of the best hypermiling tips that you can employ.

    The ultimate example is people who speed up very quickly between lights, even if they know it’s a red light coming up. Let the car coast as much as possible. It’s also good for saving your brake pads from unnecessary wear. Don’t take it to the extreme obviously, brake if you need to stay safe!

    Remove unnecessary weight

    The more weight you carry, the more gas you’re having to burn to travel the same distance. Remove any unnecessary weight in your car – if you’re storing something in your boot because you’re too lazy to take it out, do it now!

    Remove roof racks

    They ruin the aerodynamic performance of your car and cause a lot of drag.

    Use kinetic energy to your advantage

    This is similar to the hypermiling tip about coasting – where possible, try to maintain your momentum while driving. If you are driving over rolling hills, speed up slightly on the way down the hill to make use of the natural ‘free’ speed, and slow down as you near the peak of the hill.

    Make sure tires are inflated

    This can make a considerable difference to your rolling resistance. Make sure they are inflated to the factory recommendations at all times. It will also improve the life-span of your tires as well.

    Use cruise control

    Generally your car will be better then you are at regulating your speed. This will stop you creeping up in speed without realising it. Once you work out the optimum speed for cruising, set your car to that speed to make sure you sit at the best speed for as long as possible without deviation.

    Roll up your windows

    This reduces your drag and will help with your aerodynamic and hypermiling performance.

    Optimize your route

    Planning ahead can help you avoid unnecessary city driving, and to make sure you take the shortest route possible. Avoid idling at all costs, it’s a killer when it comes to fuel economy.

    Turn off car if stationary for more than 30 seconds

    Provided you have a very reliable car, it’s normally more efficient to turn your car off if you are going to be idling for more than 30 seconds.

    Turn off AC

    Some cars lose up to 10% efficiency by using air conditioning. If it’s not too hot, make sure it’s off, and just use your cars fans. Some people who live for hypermiling take things to an extreme use just the fans and carry a spray bottle of water to spray their face to keep cool. Personally, I just reduce my use of AC as much as possible.

    Accelerate slowly

    There is no need to speed up quickly, all it does it burn fuel unnecessarily. A decent guide is to try to only use the first inch of your accelerator where possible.

    Think I’ve missed something? Let me know in the comments below. What are some of your hypermiling tips?

      February report: 25% spending challenge

      Spending rate 25%!


      Last month we set a pretty crazy challenge, which was to spend less than 25% of our wage for the month of February. It was more challenging than it had to be because I had to travel for work, which caused some duplication in expenses, but we got it done, finishing the month with a total spending rate of 24.14%. 

      It’s obvious that being able to save a large portion of your wage will have positive consequences for your finances, but it’s not until you have a month like we have had that you can sit back and take stock of how effective it really is. We’ve been able to put a much larger portion of our salary into our mortgage, which you can see in the following graph:

      25% spending rate improved our mortgage graph heaps


      If were able to do this every month we’d be able to get rid of our mortgage must faster than we thought was possible, and we’d be able to start increasing our Vanguard investment account big time. The reality is that we can’t have months like that all the time because a lot of what we did was just pushing expenses into March – but there were still lessons learned that will help us save more in every month.

      We had a good look at how much we were spending on food and realized that were was a bit of waste there – we’ve been cooking more on the weekend so that we have left overs for dinner most of the week. This frees up time that would otherwise be spent cooking and cleaning up at night, and avoids the temptation to make a special trip to the supermarket for an extravagant meal (or takeaway, although we do that so rarely that it’s almost not worth considering).

      Overall, it was a great challenge, because it has renewed our commitment to keeping our expenses as low as possible without missing out on any fun. It’s sharpened us up a little bit, and also made me remember the inherent fun frugality can bring. I still haven’t had any alcohol since last year, which is another good reminder of the value of these challenges – they can provide a productive hangover into subsequent months. Much more useful than the old hangovers I used to get that’s for sure!

      Other financial charts

      Wallchart for February


      The massive drop in expenses for February brings it excitingly close to our theoretical investment return. It’s theoretical because it takes into account non-retirement assets that aren’t actually being actively invested, like the equity in our house. To some extent it’s just useful for motivation purposes, because we don’t intend to actually sell this house anytime soon. It’s a nice reminder that if we did, we could earn a large part of our monthly expenses if we moved that equity into our investment account.

      When the red expenses line crosses under the yellow investment income line, we know we are becoming close to being financially independent (at least theoretically).

      chart7 chart_5 chart_3 chart_1 (1)


      March challenge: increase non-salary income by 25% compared to February

      Increasing our non-salary income is a goal of ours for 2014. Time to start putting that into practice. I’m not sure how I’m going to achieve this goal yet, but I’ll let you know how I go next month. As you can see from the above ‘non-salary income’ graph above, it is generally trending upwards, but a 25% jump is going to be hard to achieve.

      Time to start brainstorming! I have been considering starting a new site, and have purchased a couple of domain names, but I don’t think I’ll be able to get them up and running and earning money in a few weeks. It’ll have to be something else, but I have no idea what just yet.

      I recently posted about some passive income ideas I’ve had here.

      If you are earning money on the side, what is it and how much are you making? Let me know in the comments below.

        10 passive income ideas

        Last year we focused our energy on becoming as frugal as possible. We will be continuing that trend, but our area of focus this years is passive income.

        The idea is to earn more money without spending much of your precious time. Ideally, it’s about creating assets and income streams that continue to work for you even while you’re sleeping.

        Here are some of the passive income ideas I’m either already doing, or considering doing this year:

        1. Index fund investing for passive income

        This takes the cake as the king of passive income in my opinion. You should carefully consider your own financial situation before investing – there are many potential risks involved that I can’t explain fully here. This article shouldn’t be considered financial advice in any way – get your own professional advice before investing.

        Investing requires initial capital to start up, but after it is set up it is normally just a matter of setting up an automatic contribution when you get paid, and allowing compound interest to do its thing over a long period of time.

        What you end up with is a stream of income that is constantly working for you while you’re at work or doing your own thing.

        We have been investing with Vanguard for about a year, and it has been a very simple way to get exposure to Australia’s 300 largest companies. We invest in the “Australian Shares Fund” and are looking forward to expanding our investments into international shares, and bonds to make sure our investments are properly diversified.

        Further reading:

        1. Boglehead wiki and forums
        2. A Random Walk Down Wall Street by Burton Malkiel
        3. MMM article on the topic Continue reading

          When being frugal is fun

          Our challenge for the month is to spend less than 25% of our after-tax income.

          It’s a pretty crazy challenge, and not one that we’re going to be able to keep up all year unless our income sky-rockets unexpectedly. We are almost a week in, and it has been surprisingly easy.

          I expected the process to be difficult because our budget is already pretty lean. We spent most of last year perfecting the art of cutting unnecessary expenses, so I expected our MEGA FRUGAL MONTH to be a bit dull and a struggle. Continue reading