So Sick of Debt

I’m in love with ghd straighteners. Clearly, I’m a marketer’s dream client because I have fallen for the hype without actually knowing why they are so good. Unfortunately, I will eventually need to buy a straightener because currently my hair (which is chemically straightened) has some very ugly regrowth!

But I am nearly debt free and can’t bear to derail progress for a `want’. When I checked the balances today, I quickly transferred the mega car payment without thinking about it too much. So now I have no choice till next Thursday (when hopefully I do the same thing!

Perhaps if some unexpected money comes along … If so, I have researched the options and have picked out a cheaper brand of straightener. The salon I occasionally go to uses this brand, and they tell me it is just as good, if not better.

Oh, this debt is like a shackle.  And I am  going to be FREE of it soon! But I am well aware it’s not going to be all pedicures and massages once it’s done.

Well, it has been a big couple of days. I was working at the emergency department last night (on a student rotation) when my brother was brought in by ambulance with recurrent seizures. He has epilepsy and though it’s not uncommon for him to have a seizure, in this case they would not stop and he had 5 in an hour.

Unfortunately, in the chaos he was given a little too much medication, causing him to become unresponsive to the paramedics. Hence, when the paramedics radioed ED staff, they started preparing for a resuscitation situation. I was packed off into a relatives room and they started gowning up and readying the equipment. Luckily by the time he arrived, he had stopped seizing and was able to go to a regular bed.

I have to say it was much worse waiting for his arrival with limited information than it ever has been when I have accompanied him to the hospital. I started to get quite scared and shivery. When mum arrived she said I looked like I was in shock. In any case, he woke up after a few hours and went home later that night. Apparently he appears okay this morning. We are all a bit shaken up though.

Mum rang me this morning and we talked about it and she cried a bit. It’s okay at the time (when the adrenaline is pumping) but in the aftermath you start thinking about the future. My brother’s disability makes it harder to treat his epilepsy, and though he has seen neurologists in the past, he is often a bit too hard to do anything for. So no progress ever gets made.

Anyway, on a slightly more financial note: When mum rang this morning and had recovered sufficiently from our chat, she mentioned how she wants to get her finances in order. This is great news. I have sketchy details (from what she’s said and I’ve seen) that she owes the tax office some money, and has money owing on a few credit cards. She recently sold her house and downsized to an apartment, so she has a reasonable chunk of money from the house sale. She doesn’t know whether to pay off the tax and credit cards, or pay down her mortgage to almost zilch. So she’s asked me go go through some of the details with her. I think it’s great that she is starting to think about all this! She is on a good wage with a car thrown in, so right now she has her best opportunity to get debt free before she retires. She knows she lets money slip through her fingers, and using credit cards for everything is a big part of that. She freely admits that if she sees something she likes, she just buys it. I’m going to have to be careful and not scare her off by suggesting some radical program where she has no money left over after the bills and debts are paid. In fact, she first mentioned this a couple of weeks ago (asking me to help her) and I said I would but I left it at that and didn’t pester her - I didn’t want her to say that to me on a whim and then regret it or not be serious about it.

But she’s mentioned it twice more and so now I’m going to work with her to develop a realistic budget, with plenty of cash left over for fun. Then, having gotten a plan in place (better than none at all) she can see what she is achieving and hopefully get excited enough by her progress to tighten the budget herself in a few months’ time.

Well as we inch closer to being debt free, my husband and I have a bottle of Moet in the fridge … ready for the big day. I mean there’s more than a month to go but seeing it sitting there acts as a good visual reminder of how close we are to being debt free. We always planned to celebrate by sharing a bottle of champagne, but we received the Moet as a gift at our birthday party, therefore negating the need to go out and buy it. Now I’m thinking about what else we might do that night. I thought it might be nice to go out to dinner. Maybe we could even have a pre-dinner drink at a seaside bar (oh, the luxury ).   In any case, you can bet we won’t be using credit to pay the bill!

Our account fees fell due again this week. Remember last month when we had our regular $6 fee, plus $18 in ATM fees? Well, my challenge was to keep ATM fees to less than $4 this month.

As it turns out, I nearly made it. ATM fees were $6 this week. Does this mean I should aim for $2 next month? I’ll give it a go.

Another $500 was sent off off to car debt this week - it is nice to have just one debt to focus on. We have $4600 remaining on the car. Yikes! It is getting close. It seems like getting from $10K to $7K took FOREVER but now this last bit is going quite fast. I’ve heard people say you tend to pick up speed as it gets closer and now I know it’s true! 

Disappointingly, despite receiving some extra cash this week, it has to go on paying back an budget overspend from last week. It wasn’t just the party -  we had guests in the house and seemed to be cooking for a lot of people over the week as a whole. It doesn’t matter, but I would really like to try to improve my attempts at frugality in the future. Notice I keep saying that but never doing it? Maybe between full-time study, motherhood and part-time work, I just can’t fit it in. Or maybe, that’s just an excuse. All I know is, I’m happy to be nearly debt-free and I think it would be exciting to speed that process along by whatever means possible.

Well, we hosted our joint birthday party over the weekend and had a blast! It was a wonderful night with good music, plenty of food and good conversation with great friends. At least 20 friends flew in from other cities to attend. We have also had people staying in the house (my sister-in-law and a childhood friend of my husband’s), which has been interesting!

Because we have some very creative friends, two different bands played, and some firedancers we know put on a little show in our backyard. It was a really amazing night.

I actually didn’t do too badly in the hangover department because my son woke up at 2.30 am and I retired for the night to put him back to bed. However, the party continued till 4.30am!! Then a lot of guests came over again from around 8.30am for a `recovery breakfast’. Lucky we weren’t too sick to be up to greet them.

The only part that might be a bit scary is the budget. My husband had a mixup with some lighting I asked him to get, and bought a whole heap of lanterns we didn’t need. I need to see if I can take them back, though I’m a little worried the shop might only offer an exchange. Also, the food seemed to add up to a bit more than I expected. I also over-catered on alcohol and we should now have enough wine in the pantry to last us for a year or so (we don’t drink that often)!

Anyway, once all the receipts are collected I’ll assess the damage. I’ve had to do a bit of extra work as a favour to my boss over the past  week, so I will be bringing home a bit extra and that should cover any shortfall. Anyway, you only turn 30 once (even if mine was really weeks ago), so I don’t regret it causing a little extra financial pain.

I forgot that the Federal Budget was being released this week. It’s all pretty good for people in our position. Here’s what may be of particular benefit to my family in the financial year ahead:

• a tax cut of at least $30 a week (based on our income) - that money will help offset changes in our circumstances that will make our finances tighter from July to December (I will earn more money over the whole year, cuttng me out of some benefits, but I won’t get any of that extra money till the second half of the financial year).
• an increase in childcare rebate from 30 per cent to 50 per cent - boosts money in our pocket over the year by at least $1500.
• a move to pay child care rebate quarterly, instead of at year’s end. This will help with our likely cash flow difficulties projected for later in the year.
• baby bonus of $5000 to new mothers remains in the Budget - not sure if I’ll have more children but if so this money will help. It will now be paid in 13 weekly instalments of $385, a bit like a maternity pay arrangement. There is a new means test but we are not in danger of being affected by it.

So overall I can’t complain about the Government’s plans for the upcoming year. It was reported to be aimed at helping `working families’, so I guess that’s us.

A little while ago I mentioned that our health insurer was being taken over by a larger company, and if the takeover went ahead, it would result in a cash payout for us. Well, the deal is done - the policyholders have voted for it to go ahead and the Federal Court has given approval, meaning  the insurer (MBF) will be taken over by BUPA.

When I first posted about this, I didn’t understand why we got paid if the deal went ahead - after all, we would remain members and our policies would remain intact. This is it in a nutshell: MBF is a `mutual’ organisation,  so it is essentially owned by its members. When it is taken over, it is the members who divide up the takeover proceeds (in this case, $2.4 billion).

Some policyholders are disappointed because MBF was previously planning to list on the sharemarket, instead of being swallowed in a friendly takeover. In that scenario, each member would have automatically become a shareholder. That would have made me a first-time investor!

But I’m happy to receive the cash, which will probably be used to finish off the last of my debt. Why do I say that? These payments are set to be made in late June, by which time we should owe just under $2000 on our vehicle.

So YAY! An unplanned windfall is now definitely coming our way.

EDIT: Holy crap! I just realised June is next month. That means we will more than likely be consumer debt free by NEXT MONTH! This is so exciting!!

So I have some time to spare so I thought I’d update you on a few fronts. I’m nearly half way through the uni year now so I am nearly a graduate! It is starting to become more real now and I feel a bit more ready to get out there and see if I can do it too. One of the last things I need to do before graduation is an 8-week clinical stint in a small town, working at the hospital there. My family will come with me, meaning we will need to rent somewhere. That’s going to be costly, but we have just gotten some good news that might balance that cost out.  I just found out that my son will be able to `leave’ his daycare centre and come back when our 8 weeks away are up - without having to pay a holding fee. That’s because by then he will be around the age when kids move up to the next level of care. So the director of the childcare centre will allow him to leave the toddler room, and on his return he can `rejoin’ at the kindergarten level (he will be nearly 3 by then). That will save us about $175/week in fees while we are away and is going to make things so much easier. Considering I won’t be working for 8 weeks, that will be really helpful!

Also, I started going to yoga classes about three weeks ago. I received a 6-week beginner course from my husband as my birthday present, and I am enjoying it more each week. It has surprised me to find that I’m relatively strong (more so than you might think by looking at me).  I intend to continue when the course is done, but it will cost $12 a lesson (once a week). It’s probably worth it to have some `me’ time though.

Also, the party that we were contributing to (on behalf of a  relative) was on this week. We had allocated $550, and we ended up placing it on the bar tab. Because it was a 21st, we didn’t know how long it would last (how many people were coming, how much would they drink), but it was actually quite a small function and this amount was just right. The money ran out just as the restaurant started packing up tables and chairs (the universal hint that the night is over!). It was a lovely night and we were really happy to be able to contribute in this way.

Our own party is coming up very soon and happily, the money is ready. The breakdown is as follows:

Party hire: $250 - tables, chairs, linens, glassware

Alcohol: $250 - enough to supply some wine and midstrength beer.

Babysitting: $60 - one of the young women from hubby’s work is a professional baby sitter by night. She will be there to put my son to bed at a reasonable hour and keep an eye on him. Though we will be at home, I think this is a good idea.

Food: $300 - we are making most of the items but this amount includes $100 for some sushi to be made for us. This allows us to offer something hearty for the vegetarians too (and I love sushi!). We are making mini quiches, satay sticks, chicken wings etc.

Miscellaneous: $140 - we need to hire some lighting, buy serviettes, etc. This should be more than covered by the remainder. However, it’s always important to build in some contingency money. I’m starting to get excited about seeing everyone!
 

Meanwhile, I’m also looking forward to Thursday, when we will get to put the next $500 towards our debt!

Since I paid off my credit card debt, I haven’t paid any interest. But funnily enough I have used my credit card almost as much as before! I remain focused on paying it off within days of any purchase, but I find that purchasing with the credit card is quick and easy. I know, I know … that’s the idea!

Basically, I don’t use the credit card without having planned to do so, and I am always confident that I can control my behaviour with it. But sometimes my money attitudes seem a bit strange.

For example, say I need to buy an item that will cost $300, and I’ve saved the money in a high-interest account (without debit card access). I can either pay for it with the credit card, then go online and pay it back, or I can transfer the funds from the online account to out working account.

However, if I do the latter, then manage to negotiate on the price, or get a better deal than expected, I have to send some money back to the high-interest account, meaning I have to do everything twice. I might have transferred $300, spent only $230, then had to go and send the $70 back to the high-interest account.

Instead what tends to happen is that the $70 seems like free money to me, and we spend it on something else! Sound familiar? I know, it’s classic credit card behaviour, but using money I’ve saved! How’s that for weird. So I prefer to use the credit card and pay it back. It works for me, but I understand why for others it might not.