So Sick of Debt

Funnily enough, this week is the first time we haven’t had a debt payment to make (because I’m just waiting on the cheque now to clear our debt). So what happens? Hubby’s work decides they are going to change things so they no longer pay them the week they work. Now they will pay them the week after (which does make more sense).

Consequently - long story short - this week he’s only being paid for three days! We wouldn’t have coped with this during our mega debt-reduction period. I would have been sent into a frenzy of figures and recalculations.

Apparently they told my hubby but he `didn’t take it in’. Gosh, he’s hopeless sometimes. But it wasn’t a big deal. I just readjusted some spending and billpaying goals and we’re OK. Isn’t it amazing that being (essentially, nearly) debt free means losing almost half our main salary for a week is not a nightmare.

It just goes to show how amazing it will be when the debt is officially gone.

I AM still waiting on my cheque though. I have no doubt it’s coming but it should have been sent on June 30 and arrived yesterday at the latest. Hopefully, it will be in the mail today.

EDIT: The cheque did arrive today, and was even slightly more than expected ($2160) - the extra $60 will cover any additional interest fees since the end of last month. I didn’t have time to get to the bank so I’ll deposit the cheque on Monday, then have the three-day wait for clearance. All things considered, this means I’ll transfer the last payment next Thursday and will be OFFICIALLY debt free this time next week. If you’ve been following this blog for any amount of time you’re probably as over this saga as I am, but we are reaching the end!

Well, as predicted it is the end of the financial year and I’m not quite out of debt. I still have $2500 remaining to pay: $2100 from a cheque being sent out tomorrow and $400 from tutoring work I’ve done.

But this does mean that from next pay (thursday), I can start thinking about where to put the $500 or so a week that we were putting to debt repayments.

I do have a lot of things planned but the first thing I need to focus on is rebuilding the emergency fund! I would like to get $5000 in there by the end of the year, and - instead fo having the $1000 cushion in there - this time I’ll be starting from scratch again.

Some of our expenses - such as childcare - will go up markedly in July, so at present we won’t have that $500 a week anymore. Instead we’ll be looking at about $300/wk. That’s because I am allocating a little more towards lifestyle and a bit more each week towards billpaying too. We need to rebuild our wardrobes a bit after our year or so of living `poor’, partly because our wardrobes weren’t great to start with!

 And we have to get some work done on our vehicles.

I need to get creative about how to make up the $200 `shortfall’ in savings each week, and I’m sure if I just use my head, I’ll be able to do it. I just need to really think. Spend less in some areas? Or just bring in more?

We’ll get there

Well, I just received a letter stating that my student debt had rocketed up to $25,500 - that’s before this year’s added debt is applied!

I knew I owed about $17,000 thus far and - based on previous years’ assessments - I expected to finish my degree with about $20,000 total. Somehow now, it suddenly looks like this will be more like $32,000!

How did this happen? Well, my accumulating debt was being assessed by the government at old rates (from the early 2000s), despite  a massive jump in university fees about three years ago. I assumed that because I started a different degree first and then transferred, the government had figured (for some reason) that they had to continue to charge me the same way. That’s certainly what my statements showed.

Well, apparently not. Apparently, that was an oversight on their part … and they’ve now added what they call `prior year adjustments’ of about $5000 to my total. On top of that, the debt added from my studies last year is higher than it ever was in previous years, and I assume that will be the same this year.

This is pretty sad in some respects. Somehow $20,000 of debt sounds much more manageable than $32,000. I mean, I know I will pay it off the same way. The debt is not interest bearing, and the system of repayment is that 6% of my salary will be taken to cover it from next year (when I start earning a full-time income). It just means it will take a lot longer to pay it all off.

I’m not going to change priorities. I need to focus on raising a 20% deposit for a home, and the student debt is manageable as is. In fact, if I was to die, the government would just wipe the debt and if I wanted to stop working for any reason (maternity/living overseas/laziness) and my income dropped below the threshold, payment would stop and the government would not attempt to make me start paying it again. If my income jumped above the threshold again, the debt would again start to be repaid.

So it makes more sense to boost emergency savings and buy a house than worry about getting rid of it early. That said, if I ever came into a reasonable sum, I might elect to get rid of it quickly.

All up, it’s not every day that you end up essentially $8000 further in debt than you thought you were! But I guess I’ll cope with it OK. It’s not going to be fun to see the drop on NetworthIQ though.

Day 7 of the abundance challenge with Millionaire Mommy Next Door and the money is getting really interesting. Now I’m looking to spend $12,800. Wow, that’s a lot of moolah and it’s hard not to think about `responsible’ things to do with that money. But somehow I’ll manage it …

So what would I do with $12,800? Once again, it’s an experience thing. My husband and I would take our son out to the middle of Australia to see Uluru (Ayers Rock). It’s a magical, spiritual place that has huge cultural ties to indigenous Australians, and is something every Australian should see.

To be honest, taking this trip - even comfortably - would only probably take up about $6000 of the available funds in this challenge, so with the rest we would travel up to Kakadu and enjoy some of other amazing sites of the Northern Territory.

How would I get the money? This is actually quite achievable, but might take a couple of years. I plan to investigate opportunities for locum work in these locations, allowing us to travel there as a family with expenses paid (travel and accommodation), plus salary. In fact, under arrangements like these, we could travel there and actually make extra money because of the huge rates available to those willing to work as locums in rural areas.

What am I grateful for today:

• my open mind
• my comfortable existence
• the beautiful rain trees in our garden, that provide the perfect location for my son to play each day

OK so I have a couple of updates that will mean I definitely won’t be debt free this week, nor probably next week! According to the website, the cheque we’re to receive from our health insurer won’t be posted until June 30. I’ll have to receive it, bank it and transfer the money before it hits my actual debt, meaning we will be well into July before we’re actually debt free.

Similarly, my last tutoring pay cheque (which is covering about $200 of the debt remainder) won’t be paid till next Thursday. So … it’s just not happening yet.

I’m strangely OK with that. I’m still happy because I just have to come up with $300 from my salary this week and that’s it from our regular income! The rest of the debt can wait until the money is here. I’ve budgeted some money to celebrate debt freedom this week but I may have to delay spending that for a few weeks. Perhaps I could hide the money in the billpaying account for safekeeping.

I’ve also been rethinking how we might really celebrate debt freedom. I was thinking of doing something more romantic and less spending-oriented than dinner out to celebrate (seems appropriate).

We have this beautiful bottle of red wine that a friend gave us - maybe we should go for a picnic somewhere nice. We have our little boat so maybe we could find a beach somewhere nearby and stop in together with a picnic basket. It could be fun. Or we could go for a drive up to the mountains nearby. There are drink-driving issues with both of those scenarios though ….

Hmmm … this will need a bit of thought.

Meanwhile, I’m running behind on the abundance challenge. We had gotten to $3200 and I had been struggling to think of how to pay for it. Notice inmy last post,  I actually trailed off mid-sentence and forgot to fix it!!

Anyway, I’ll move on to $6400. I would spend this on the Australian must-do experience: A trip to the Melbourne Cup at Flemington Racecourse. I love racing and especially glamming up and putting my ($5) bet down in the betting ring. I’d buy a divine hat to complement my outfit and we’d have a fantastic time watching the race that stops a nation.

How would I pay for it? This is starting to get really hard (and it’s only early). Trying to think  of a way to cram more activities into my already over-the-top schedule is a bit depressing. I’m going to continue to post what I want and what I’m grateful for each day, and if I manage to think of a brainwave about how to pay for it, I’ll add that too!

So … what am I grateful for today?

• my supportive friends from uni
• my mum, who always jumps to help me any way she can

$3200 for me to spend today? Hmmm…

I’ll be happy to have a new wardrobe thanks. With particular attention to shoes and underwear …

How am I going to pay for it? Perhaps I could

What am I grateful for today? How about lying in bed with a newspaper and a coffee … sleep-ins are great!

Day 5 of the abundance challenge and I know exactly what I would do with the money on offer:

AMOUNT: $1600

WHAT I’D BUY:
A dive course for my husband and I culminating in a day out at a wreck off our coastline.

HOW I COULD AFFORD IT: Approach some contacts to write a weekly newspaper column about beating debt. Pretty relevant as everyone has started feeling the pinch lately …

WHAT I’M GRATEFUL FOR TODAY: My son’s milky kisses after his breakfast!

I’ve got that song from Flor Rida in my head - well, just the important part - `Low, low, low, low’.
My debt is looking positively teensy these days thanks to an overnight injection of funds - it now sits at just $2600 - YAHOO!!

I can’t believe it’s nearly here. If everything goes to plan we’ll be debt free this time next week. Even if it doesn’t, I’ll be debt free this time next fortnight. I wonder if I’ll shed a tear?

I know I live in Australia so I can’t go on The Dave Ramsay Show but I might just have to yell `I’m Debt Free!!’ from all the way over here - maybe you’ll hear me.

Well, I’ve come to the conclusion it’s time to really do something about my weight, which keeps on creeping up. I wonder if I eat as a substitute for entertainment, or am I just a glutton?

Anyway, my husband asked me yesterday if there was any way we could work buying a treadmill into our goals for the year. I’m hesitant because it’s the kind of thing we might never use. But he is pretty good at maintaining a fitness regime so maybe we should. If I could guarantee we used it, then I would have no problem allocating funds for it.

We’ll see how things go with that, but in the meantime, it’s day 4 of the abundance challenge. Now things are getting interesting!

DAY 4: $800

WHAT I WOULD BUY:

• the treadmill to boost our fitness (no surprises there, and only if it was $800 we hadn’t otherwise known we were going to get)

HOW I’D AFFORD IT:

• My husband could do some consulting gigs in his line of work

WHAT I”M GRATEFUL FOR TODAY:

• being able to earn a good income
• my upcoming trip overseas

No, the title is not a desciption of my habits but the way I’d like my hair to look. Thus it’s pretty obvious what I’d buy with $400 in the abundance challenge:

• a ghd straightener (or other good brand)
• a cut and colour

How could I afford this?

• Begin placing ads on my site - might take a while to make $400 but I probably could make it within 6 months (especially if I actually worked a bit more on my blog and revenue from it)

What I’m grateful for today:

• gentle doctors who enjoy teaching their students
• the way my son runs straight to me when I pick him up from kindy

Ah yes, my hair will be as thankful as the rest of me when we are finally debt-free!