Archive for July, 2008

Budget blown!

July 26, 2008 at 10:12 pm · Filed under Budgeting, spending

Ha! Less than 24 hours after my last post, hubby came home with a new $150 frypan! It is very good quality, doesn’t require oil to use and theoretically will save us on our gas bill. He is the cook in our house and does a fabulous job.

But OMG! $150?

I didn’t say anything – he so rarely does this that I couldn’t, especially given I’m much more likely to work treats for myself into the budget than he is.

We will just have a chat about our goals over the weekend to get his mind back on track and I will cover the differential from our billpaying (which shouldn’t be a problem).

I guess this is part of life even after you get debt free – you still have to make sure you are moving in the right direction. Sometimes, it might seem even easier to get yourself in trouble once you’ve achieved it!

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No saving this week

July 25, 2008 at 11:20 pm · Filed under spending

We’re on a bare bones budget because I haven’t worked in a while. I’m looking forward to going back soon and making a little dough to pad out our finances.

I’m very focused on getting that $5000 in the e-fund but to be honest, I’m not doing much to get it there. I have another $600 guaranteed on its way there, but after that, it depends on getting back to work! PLus, later this year we’ll be away for 8 weeks, so I won’t be able to work at all then! So it’s now or never.

Oh well, I’ll concentrate on not going into the red in this week’s budget and go from there.

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Doh! Disorganisation costs me … again!

July 24, 2008 at 9:44 am · Filed under Suze Orman, other stuff, spending

Well today the final payment was due on my airfare to China. No problem, I think. I’ve got the money all ready.

So what happens? This morning, I can’t find my wallet anywhere. That means no credit card, no debit card and no ID to go in to the bank and withdraw the funds.

In the end, I had to pick up my dad and take him in to the travel agent to pay the bill. Since we used his credit card, we incurred a 2.5% credit charge, adding $21 to the bill. I know it’s not a huge amount, but that was going to be money in MY pocket for a change! Because I’m FINANCIALLY ORGANISED now (apparently)!

Here’s the kicker. My dad doesn’t keep statements after he’s paid his bill. Thus, he can’t give me the details so I can directly debit the funds in to his c/c account. So now he wants me to get it via a bank cheque – that’s going to cost me at least $15!

Why do I do this to myself? It’s like Suze Orman says, having your money organised, looking after your wallet … these are signs of good financial habits. This seems to happen to me too often. I need to take better care of my things!

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Less work, smarter saving

July 20, 2008 at 12:20 am · Filed under home ownership, savings

I track our net worth on NetworthIQ – one day I’ll get the graph up on this site but it is a little too complicated for reasons I won’t go into again. Anyway, our NW currently stands at $59,950, which is not too bad. More importantly we are moving in the right direction – we’ve improved our net worth by 7.8 per cent so far this month, which is great!

I have some mini-goals to share at the moment. I’ve decided to cut back on my p/t job permanently – from now on, I’m only working one night a week. That’s because I only started working two nights a week to help us get debt-free, and it really has been to the detriment of other parts of my life - including university work and time with my husband. As far as uni goes, it would be bad to let faster financial success get in the way of actually graduating (clearly failing at the final hurdle would be a very bad financial idea!), so I think it’s reasonable to do this. On the other hand, if I am going to cut back my earnings, I think some of my less frugal habits are going to need attention. These include:

  • buying lunches most work days
  • buying soft drink relatively regularly
  • allowing a lot of things to come under the banner of fun/miscellaneous in the budget

I’m going to have a think about prepping some meals tonight ready for the coming week. I’m also going to figure out a bit of a  general weekly meal plan, which will include a big drop in snack/softdrink consumption, which will help with the budget AND my waistline. As for the fun/misc budget category, I am going to have a look at that and see how planning our good times in advance might help me free up more cash weekly for emergency fund savings.

And now to the issue of that emergency fund. Yes, I have $5000 here as my short-term goal till the end of the year. But we are now on to Baby Step 3 (since we are loosely following Dave Ramsey’s financial system). That means we really need 3-6 months expenses, which I have calculated to be about $35,000. That’s a lot isn’t it? But I’m really thinking ahead here and to last 6 months, assuming we would still need childcare (ie if one of us was sick or had to search for a job for a long time), we would really need a fair bit of cash. A few people have told me keeping that much cash is `dead money’ and we are better off putting it into investments. However, my goal over the next 3-4 years is to save this $35,000, plus about $90,000 for a home deposit. This should be relatively possible because we would both be working and we are already pretty aggressive savers. If we managed to get an offset facility on our mortgage, that $35,000 would sit there reducing our mortgage for the life of the loan, but would be easily accessible if we actually needed the money. I don’t think of that as `dead money’, so I think it’s a pretty reasonable plan.

These are scarily big numbers, I know. But a girl’s gotta have a dream! I think if we work hard – and don’t go for too much lifestyle inflation when I start working – we will manage it.

Why such a big deposit? Homes in our area (where we would like to live for the rest of our lives) start at $330,000 for very basic models. We would like to save a 20 per cent deposit for the home we will have for the rest of our lives, so we are aiming a bit higher while we’ll have the capacity to save aggressively. 

In a perfect world, house prices here would come down as they have in the US, but there are conflicting indications abou that in my area, which is in a long-term mining boom with huge numbers of workers and investors continuing to move here. I guess the only good thing about being in our position (yet to save our deposit) is that I would feel very uncomfortable about buying right now. There are some signs the market has hit its peak and I think it will take a while to figure out whether it will continue to soften or stay about the same – or even rise a bit more. I would hate to buy now and then find my house worth a lot less in a years’ time, but I could possibly cope with a small rise in values before we buy.

Anyway, those are my random thoughts for now. My goal remains an emergency fund of $5000 for 2008, and that’s all I need to worry about in the short term!

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Just a little update

July 18, 2008 at 3:06 am · Filed under savings, spending

We were able to add $100 extra to the emergency fund this pay, despite me not working. I hate to say it but the fact we don’t have debt payments means there always seem to be at least a bit available each pay for savings. Who’d have thunk it, huh?

Also, I got some good news about childcare. I’am actually going to continue to be eligible for some help from the government, saving me about $30 a week on our (still massive!) bill. So our budget will not be quite as tight as I thought in coming months.

In other news, I received the money for my bursary (trip to China) and bought my airline ticket. It will be a really quick trip – arriving Saturday night, leaving Wednesday night. But I’ll need to get home to my loved ones! We thought about stretching the trip out and going as a family but we just can’t afford it. We’re just no longer the type of people who do stuff we clearly can’t afford any more!

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My e-fund is growing

July 16, 2008 at 1:23 am · Filed under savings

This is a lovely time of year financially – well, especially so this year, I guess! But besides our new-found debt-free status, my tax return arrived in my bank account today! As predicted, I received $1358 back.

I’ve transferred $1300 immediately to the emergency fund and am leaving the other $58 to cover a few extra things we have to pay for. I’ve actually taken a couple of weeks off work, which will make a dent in our immediate savings plans. But I really needed the break, especially because I need to focus on my studies a bit more.

I haven’t had much time to myself for a long time now and it’s starting to really grate on me – I’ve been feeling like I’m constantly busy, yet I don’t feel I’m doing anything well. Does anybody else ever feel like that?

Anyway, now that we have the financial breathing space for me to take a little bit of time off, I’m doing so. I already feel a lot better, but it also means we have to be a lot more careful with our dollars for a while.

I plan to go back to work in a week or so – we obviously still have our major income (my husband’s salary), so we’re going to be okay in the meantime.

But yay! We have $1500 in our emergency fund! Our goal by the end of 2008 is to reach $5000. That should be achievable but I’m not sure how likely our next goal is. We did hope to fund my next vehicle within 6 months. To clarify for new readers, this final debt we paid off was our car loan, but it’s the vehicle my husband drives. My own car is very close to the end of it’s life, but I’m not willing to take a loan for the next one. I’d like to fully fund the vehicle before I start work in January, because we plan to start saving for our home deposit as soon as I start working. We live in a town where it’s not an option to use public transport, so we will need another vehicle. I guess we’ll see how it goes.

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Carnival of Personal Finance – I’m an editor’s pick!

July 15, 2008 at 12:18 pm · Filed under Suze Orman, blog carnivals

Well, it’s nice to be debt free but it’s even nicer to write about it on the internet! Here, you get to receive fantastic glowing comments about it (whereas practically no-one in the real world knows our achievement – except my parents!). You also get to be chosen as an Editor’s Pick in the Carnival of Personal Finance, which is up now at Budgeting Babe.

This groovy debt reducer is working her own way to debt freedom, and has taken the initiative to host the carnival this week. Thanks so much for picking me out for a special mention, BB! Thanks also to everyone who has linked here from the carnival – I hope you’ll stay and have a look through some of my old posts. I just like to tell my story, rather than offer too much advice.

Anyway, as usual there are heaps of great posts at the carnival, including:

  • Trees Full of Money gives some great tips for those expecting a baby – I’ve been through this and even with the best planning, the money was TIGHT! Have a look if you’re in the market for a bub of your very own.
  • Can I Get Rich on a Salary presents the story of a woman with $428K in the bank who hasn’t paid off her $18K in credit card debt! I caught this segment on the Suze Orman show too too and couldn’t quite believe it. It’s worth checking out.
  • Finally, Blunt Money has picked up on the tendency of old people to say stuff like `I have everything I need’, and wonders if they mean it. Funnily enough, I feel more and more like this the better my financial position becomes (though I must admit I still do have a reasonable wish list!). 

So there you go, there are some very good items on the list and it’s well worth a look.

As for me, I’ll make time to share the latest in our always eventful financial lives in the next day or so. Thanks again to everyone who has commented for your kind wishes and thoughts.

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IT’S OFFICIAL – WE’RE DEBT FREE!!!

July 12, 2008 at 4:53 am · Filed under reaching debt freedom

This isn’t me but it’s exactly how I’m feeling! We’re debt free! We finally did it, one year and 5 days after starting this blog, we’ve paid off $27,000 worth of debt. I can’t believe the feeling of freedom we both have. In the lead-up to the final payment, I started getting a bit blase about how it would feel to finally get there. But now I am just savouring every minute of this!

We’re not rushing out to celebrate tonight. My husband is working his biggest weekend of the year – wouldn’t you know it? :)  - but our wedding anniversary is on in the next few days and we’ll go out to dinner for that.

I am just so grateful to be able to start moving on to focus on the great things ahead for us. I think I’ll even swap my tickers around from Monday to signify the switch to a new focus – savings. It will be nice to be able to legitimately start entertaining the thought of funding our home deposit.

I am just so excited and raring to get started on the challenges ahead.

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Happy Birthday to So Sick of Debt!!

July 7, 2008 at 1:00 am · Filed under Uncategorized

 

Today is the one-year anniversary of my blog! I am so happy to still be blogging after a year, and am proud and somewhat dismayed to report that my family and I will be debt-free this week, almost to the day since I became a blogger. How’s that for timing?

I took a look back at that first post and I have to say, it was very uncharacteristic for my style since. You can read it here. I basically set out my intentions for the blog and for debt reduction before settling into a list of the basic tips I could give to someone trying to cut their debt. The tips were fine but I soon realised I wasn’t a `10 reasons/10 ways’ kind of blogger. I just wanted to tell my story.

Since then I’ve found some amazing blogs, and learnt so much about what I really want out of money and our future. I realised that becoming debt free was going to be only part of the journey. I also had to overcome feelings of being trapped in the living situation my family was in, and feeling that scrimping together a tiny deposit for a home was going to turn that around.

It took me a while to realise that what we needed was to stop buying crap and to build an emergency fund, before we could even think of buying a home. Turns out that was a good move because here in Australia, interest rates have risen right along with house prices. We would have bought right on the peak of the market, with maximal interest rates and no equity. Now I’ve seen and learnt so much from the subprime crisis in the US, I am glad to say I am lucky I did not buy just yet.

The hard part of learning more about finances is the bit where you figure out how much work still has to be done before you can really reap the benefits. We still have to save a reasonable emergency fund and – at least – a 20% home deposit. This is going to take us years, and is a formidable goal.

But I am finally starting to feel good about our financial future, and why not? We are proud to call ourselves debt-free (well, this coming Friday at least!) and I think mentally we have come so far in just one year.

Before I stop rambling, I want to acknowledge some great bloggers who are regular commentators on my blog. Without you, I would probably not feel accountable and who knows if I’d still be here? So thanks especially to:

- Fabulously Broke in the City

- Dolly Iris

- Louise at Eliminate my Debt

_ Debt Dieter

- Ugly Debty

- JvW at The Good Life on a Budget

- Saving Diva at Saving for a Home of my Own

_ Lynnae at Being Frugal

- JW at Need to be Debt Free

There are many more and I may have missed some of you, but I do really appreciate all your kind words and support, and I look forward to our future shared successes :) .

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Tax time – I love it

July 6, 2008 at 1:07 pm · Filed under Planning, savings

In Australia our financial year runs from July 1 to June 30, so this is the time we start pulling all our paperwork out to submit our returns. I love tax time, probably because my tax is uncomplicated and I have almost always received a return.  By the way, we don’t pay state taxes _ well, only in a `user pays’ kind of way (eg speeding tickets and nature park levies) _ so there’s only the one set of federal taxes to worry about filing here.

Guess what? This will be the first year my return will go on actual savings! I have absolutely no consumer item in mind for the cash I’m due to get back. To give you some back story on this, ALL of my returns that I can ever remember receiving have gone on part-payments to a credit card or towards buying a consumer item. Yup, all of them. Often it would be both in one, ie a consumer item I’d charged to a credit card in readiness for my tax refund (to pay back when it arrived). Talk about stupid …

Anyway, I just did my taxes and lodged the return online, and the estimate for my return was a total of $1358.65! Hallelujah! (*I’m happy dancing right now …*)

Since our first goal as a debt-free family is to get our emergency fund up to $5000 by the end of the year, it looks like we are well on our way to meeting the challenge!

I should get the funds from the tax return in my account within 14 days. Added to that, we have about $350-$400 STILL owed by the university for the tutoring I did AND I should be able to put at least $300 away from our salary within 14 days (I did take the night off last Friday so I’m not getting as much in my pay packet as usual).

All of this means we could have a $2000 emergency fund on the go within weeks!

It feels like everything is starting to work out …

I am a happy woman!

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