So Sick of Debt

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

Hubby went grocery shopping this morning and I just happened to check our balance just now. Yikes, we spent $235 on our weekly food shop (though admittedly we didn’t shop properly at all last week)!

I’m sensing (based on other bloggers’ published food bills) that for a family of three adults and a kid, $235 seems very high. And it is, even by my regular budgeted $200 max standards. But even that $200 figure seems much higher than other people’s.

For one thing, I’m not sure that the currencies/food prices in the US and Australia stack up in a similar way. Also, from what I’ve read and seen, in Australia we generally don’t seem to buy as much cheap, processed food as some Americans (not all!). This focus on lots of fruit and vegetables, and fresh meat or seafood, might account for our higher food budget. Or we might just be a family of piggies!

The other thing is, we don’t eat out at night except on very special occasions, so we spend a little more on making nice meals at home. And in Australia, we don’t have a coupon system. We just check catalogues for the specials if we want to cut our food budgets.

Am I just justifying our food spending? Well yeah, a bit. I keep meaning to work on a way to cut our grocery spending but it never seems to happen. I think my focus is on other ways of cutting debt, and at the moment this is in the too-hard basket. That’s OK, because my hubby is going to step up to the plate. He is going to watch the budget a little more closely next week, and also says he wants to start planning meals a week in advance to ensure we only buy what we need (he’s the cook in our house). So I really am happy to leave this part of our budget and lifestyle in his hands.

 I just received some really exciting news. Because I am doing Honours as part of my degree, I’m completing a medical research project. A few months ago, my supervisor sent an abstract (or summary) of my work for presentation at the annual conference of the international organisation for this particular medical field.

Well, I just heard back this week that my abstract was accepted for a poster presentation. This means I put the details into a poster and it is displayed with hundreds of others outside the conference meeting rooms. As author, I will be there to discuss my research with specialist doctors and researchers.

And guess where the conference is being held this year? China! This is so exciting!

The second bit of news is the important one. I separately heard this week that my medical school has awarded me a prize to pay for $2500 of the cost of attending this conference. That includes flights, accommodation and registration fees. So I can actually afford to go!  

So I will be away from my family for a few days in September, unless we can figure out a way to afford for them to come. We’ll see what happens there. But in the meantime … YAY! 

Because I haven’t carried debt on my credit card for some time, I haven’t had much cause to check the rate on it. Its now at 14.45 per cent!. And mine is supposed to be a low-rate card! In Australia, your interest rate doesn’t change if you are late paying, or if you are over limit, though you do have to pay fees in those circumstances. Basically, everyone with a certain card type pays the same rate. It’s just unfortunate that everyone’s card - and mortgage rates - seems to be on the way up. If I had credit card debt now, I’d definitely be motivated to seek an alternative card though.

If you are wondering about the rate, it’s high because Australia is actually in a very good economic state right now. The sub-prime issue in the US hasn’t made huge inroads to our markets here yet.

I guess the good part about the high rates is that I’ve got a 7% return on a sub-account to my main savings account. I have easy online access to it and can get it immediately by transferring it to the main savings account any time.

In other news, our Aussie dollar is closing in on the US dollar - soon we might be on par or higher! In 1996 when I came to the US on a holiday, the AUS:US exchange rate was about 76c:$1, but the Aus dollar has actually been down as low as nearly half the US one in the last few years. I think you’ll be seeing a lot more Aussie tourists visiting in the near future as it has become so much more affordable (unfortunately I won’t be among them anytime soon as I have other financial priorities right now, but I do plan to come back and see so much more).

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.

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.

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!

So I finally made a visual representation of my debts, savings goals and achievements, courtesy of Ticker Factory. Like it? Meanwhile I also updated the real state of my emergency fund (post-car repairs) and found it wasn’t as bad as I’d thought! I need to find  $470 to get back to where I was (closing in on $1020). Then I’ll change to my next e-fund goal of $5000. I’m feeling good again - I know it’s all in sight.

 Not sure if I am finally catching on about what it means to be frugal, but for the first time I am really thinking about whether or not I need some of the things I want to save for. I still want to do the travel stuff and things related to experiences (like celebrating my graduation) but I’ve been lusting after all this furniture lately, desperately trying to figure out how to afford it. Now I’m thinking: what exactly is wrong with what we’ve got? Sure it’s not my style and it is getting older, but it isn’t shabby and it isn’t awful. It’s probably a bit bland for my taste but there’s plenty of time to express myself in future, when I can afford it. I think I would rather think about doing stuff with my family than buying stuff. Hopefully this feeling won’t pass!

OK, so now we have to figure out how this move is going to work. First of all, here’s a scan of our finances:

• $1012 in our EF
• $1025 in our bill paying account
• Able to save $500/week till we move

So then, there’s the new digs. We have put in an application in for either of two houses that are not yet vacant. Both have three bedrooms, airconditioning and polished floors but one is $AUS320 (available next week) and the other is $340/wk (available early May). We prefer the second house - it is nicer and the long lead-in gives us time to save our bond and some of the expenses of moving.

We have had some good luck: just as we are now moving out from here, my mother happens to be downsizing from her home into a much smaller unit in the city. She has collected some beautiful furniture over the years, very little of which is going to fit into her new home, so guess who is going to be the recipient of much of it? Amongst these items is a beautiful Balinese carved wooden day bed, which she has given me as an early graduation present. Needless to say I am thrilled. But we will also be able to benefit from a lovely comfortable couch, a dining table with some old but nice chairs, a desk, an outdoor table setting, some basic storage units and a heap of small decorative items. We’ll also receive a heap of plants to spruce up our back patio (really just a square of paving). We got rid of a lot of our basic items when we moved in here a few years ago, so it is fantastic that we won’t feel the need to go buying `stuff’ to fill our new place (we won’t really have the money to do that anyway!). The only thing we will need is a washing machine, but we may be able to use some funds from our billpaying account for this.

So anyway, it seems like we will have the cash to pay for our bond and our first 2 weeks of rent (needed in advance), plus all costs related to the joint party we are having in May. We shouldn’t need to cut in to our EF - fingers crossed!

Our debt repayment schedule is going back to basics (just over minimum payments on the car loan), but I am hoping the lump sums I had planned to use to boost our emergency fund later in the year can instead be used to wipe out this debt. And just to feel like we are getting somewhere, we will put $20 a week towards the EF once we are settled in.

 It is disappointing to halt our quickie debt repayment system but I am confident we’ll find alternative ways to cut the debt … if a little more slowly than we had planned.