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!

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!!

We got an unexpected and rather large package from our health insurer yesterday. Turns out that inside was a letter and a prospectus. Our insurer is to be bought out by another company, and if the plan goes ahead, each `contributor’ will receive a payment based on how long they’ve been with the company and what kind of cover they’ve held in that time. In our case, the estimated payment will be $2100! We will remain covered by the same brand, with the same conditions, and the same regular payments.

In Australia, private health cover just essentially buys you the chance to be seen more quickly and in more comfortable surrounds, but it is worth having. (We have `universal’ health cover for all citizens but there can be delays for non-emergency treatment).

Anyway, our insurer is a not-for-profit but this change will mean it will become a for-profit agency. The obvious question is what this buy-out will do to our premium. An independent administrator has ascertained it is unlikely to affect premiums significantly (partly because of the government interventions involved), though I guess that’s not set in stone.

My husband and I talked about it and we said it was essentially `free money’ from our perspective, and if the premiums go up too much we will just have to consider moving to a competitor.

So hopefully, we will receive $2100 sometime during the year! If you’d told me in January to expect a cash payout  from one of our regular monthly creditors this year, I would have laughed. I guess we’ll be sure when it actually arrives. I have some ideas for where that money could go.

Which reminds me … I plan to update my 2008 goals, and where I am with them, in an upcoming post.

Some opportunities have come up at the university to tutor other students, mostly in small group scenarios. Some of the opportunities include regular weekly hours, while others are one-off teaching events of three hours or so. This kind of work has so many benefits:

1) helps me build links to other year groups and builds my teaching skills

2) helps me get to know medical and administration staff at the university - always good

3) Gives me a chance to revise stuff I should know - and get paid for it!

4) It looks good on my CV and counts as me having completed extra professional development requirements on this year’s assessment (= better marks!)

5) It’s a job where I can more legitimately be away from the wards during the day because it is the university employing me to tutor students

and lastly …

6) EXTRA MONEY!

I’ve done tutoring before for the university so I have a good chance of being selected. I think the pay is about $30/hour, with at least a couple of hours’ work a week or more. Every bit helps!

Woah, that’s a hard sentence for a PF blogger to get out! As someone who may be in this position next year, I am obviously HUGELY looking forward to the extra funds next year. I know that when I first ran the numbers of my full-time income, I imagined our lives changing - we’d have better clothes, have more fun, be better looking ;) etc. But to be honest, I’ve run the numbers properly over the past few days and the truth is, the extra money is not going to make a big difference to our lifestyle. However, I’m not being a sad sack. I do know it is going to improve our future in a big way.

So to explain, my casual income will be replaced with a full-time salary. The first few things to consider, though relatively minor, is the difference in tax rate and the start of student loan repayments. My tax rate will change from 15% to 30%, and I will start losing about $50 a week to the government to repay my non-interest-bearing student debt. So that takes a small chunk of the expected extra money. Not earth-shattering stuff though.

The second thing to consider is that I/we have a lot of ground to make up. We don’t own a house, and I don’t have any investments (apart from a small amount held for my son). Happily, soon we won’t have any personal debt either!

We are likely to stay living with my FIL for another year or so, simply because he won’t cope without us, and it makes good financial sense for us to stay. So I can’t say that moving, renting or mortgage costs are going to adversely affect our financial situation.

Instead, my definition of security has changed a lot. Before, I felt like it was as *simple* (ha!) as paying off my debt and saving for a home.  Now, as I approach paying off my consumer debt (about $9000 to go) by the end of August, I realise not only will I need a much larger home deposit than I thought, but I will also need a signficant emergency fund put aside before I will feel confident enough to borrow a chunk of money for the mortgage. In Australia, interest rates are closing in on 9% - we have had 11 interest rate rises in a row. So now, before we buy, I feel we will need to save at least $15,000 into an EF, and in a perfect world, save at least $25,000 for a deposit.

Clearly, that would be hard if we did start renting. And it is such a lot of money, that I can see our new more frugal existence is going to continue, double incomes or not. I hadn’t probably realised that either when I first started paying down debt.

Furthermore, our interest in finances has led us to realise our goals are wider than just buying a home. We will also start contributing extra to my husband’s super (as of this week) and we aim to start investing small amounts each month in a managed fund as of 2009. Meanwhile, we’ve also realised we should be paying to have our wills sorted out and when I start work I will need to get life insurance. All this financial responsiblity costs money on a week-to-week basis.

This adds up to a lot of things to save/pay for over the next few years. And this means we already have a lot of plans for our extra income. We are going to slightly increase our entertainment budget, but it will only be a small percentage rise.

Don’t get me wrong, I’m not complaining. I’m glad I’ve finally learned a bit more about the wider financial world. It just seems like every time I look around, there’s another aspect of our financial health that we should be taking better care of. Don’t worry, we WILL take control !

My hubby and I had a little chat about the future yesterday, discussing how our finances will change when I begin working full-time. Granted, that’s not due to happen until just less than a year’s time (49 weeks but who’s counting?!?) but it may have implications long before that.

My starting salary is about $55,000 in Australian dollars, plus overtime. This will be like pennies from heaven for our family, which has existed on 1.2 incomes for some time!

But during our discussion, when my husband said `remember, well be more than $50,000 better off next year’, I was quick to remind him that it actually wasn’t that simple.

For a start, I currently work a part-time job, at which I earned $12,000 last year. I’m currently on track to do the same this year, meaning the coming increase in funds is more like $43,000. Still great, of course.

But then we need to consider the financial help we will no longer be eligible for (and rightly so):

- Family allowance: we currently get $85/fortnight but this will drop to around $25. This cuts just over $3100 a year from our income.

- Child care - we currently get a subsidy to pay for child care but will have to pay full fees when I start earning money. The difference is about $65/week, adding up to an extra $3400 a year! Again, it is not so simple because all people who pay for childcare get a 30% rebate on childcare costs from the government. However, this is paid once the year is over and can’t be factored into a regular weekly budget.

Those are just the things I can think of right now. 

The other thing is, because the financial year extends from July to June, we may have to reject receiving family payment in the second half of this year (when we aren’t yet earning any extra) because the amount I earn in the second part of the year might make us ineligible over the year as a whole. That would mean we would have to repay money, which of course I am not keen on. So our finances will be a bit rocky in the coming year or so. After that, however, I expect things to even out and for life to be a little easier. We will remain frugal but at least our finances might not keep me awake at night!