So Sick of Debt

Unfortunately, I have a daily transfer limit from my everyday account of $500, so I’ll have to do the other $50 tomorrow. So my car debt stands at $3550. It’s nice to see such a significant jump down, after the dodgy month I had in May.

If everything works out, I could be debt free by Thursday next week! Or payment for my uni work will be late and I won’t be :(. At least I know it’s just this week and next week left, where money towards the car actually has to come out of our paycheques.

On Thursday this week I’m going to be paying $700 off the debt, instead of my usual $500. I did an extra shift at work last week, so that will help, and I was able to crunch the buddget a bit more. So this is how the last of the debt should pan out:

• tomorrow - salary ($50) - new balance $3500
• Thursday - salary ($700) - new balance $2800
• Next week - health insurer cheque ($2100) - new balance $700
• Net week - salary ($300) - new balance $400
• Next week - tutoring ($450*) - new balance -$50
• Next week - monthly interest ($50) - new balance $0

* I’m actually going to get paid more than this, so I need to figure out where that should go - I suspect, it will be straight into the empty emergency fund.

Of course, the interest will vary a bit from the amount above but I can deal with that. This is all pretty exciting! I WILL SOON BE DEBT FREE!

 And with that, it’s time to move on to day 2 of the abundance challenge with Millionaire Mommy Next Door.

Day 2: $200

How I would spend it:

• cushions for the Balinese day bed my mum gave me - $100
• cushions for the bed in the spare room - $100

How I could make it:

• sell some of my boy’s baby things, including a kids’ dresser we no longer need

What I’m grateful for today:

• having a safe place to live
• the way my mum, dad and I call each other every day
• enjoying my work and study

This is fun! Maybe I’ll even act on some of these early wants - but only if my method of paying for it is above and beyond my budgeted income!

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 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!

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.

For nearly a year I’ve enjoyed spending Thursday nights (pay day) updating my net worth and the sidebars on the right of this page. Tonight*, because of the upcoming party, there’s nothing to report. It feels weird. I know it’s okay, I planned for this and I will enjoy this use of funds, but it irks me not to be saving anything this week. I might just sneak the $100 extra my husband earned this week (for taking a short-term supervisory role) and put it in the account from where our son’s managed fund contribution is drawn. That way we’re ready when it’s due. Even though that’s 3 weeks away, this allows me to feel we at least did something financially `virtuous’ this week!

* If you’re reading this in the States and it’s only Thursday morning, we’re way ahead of you on this side of the world!!

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.

I’ve been tagged by Dolly Iris to share 7 random things about myself. I’m pretty boring but I’ve got a few:

1) I’m a bit obsessive-compulsive about silly stuff. Like if I’m in a chair with my feet up, and one hits the floor, I have to tap the floor with the other foot too. Then I have to tap the other way `so the other foot gets to go first’. I know … don’t judge me, people!

2) I have been at university/college for 8 (count ‘em) years, and I did a night class that was four nights a week/three hours a night while working full-time the year before I started that. I’m over it!

3) When I was aged 10-13, I was obsessed with famous murder cases and murderers, and used to get all the gory details from library books etc. I also used to like horror movies but now that I work with casualties and go into surgery etc, I can’t stand watching these movies - I think it’s because the only way I cope with seeing these injuries and doing something to help is to NOT concentrate on the pain the person must have gone through when it happened.

4) I occasionally cut my own hair, which I get away with (usually) because it’s curly. I cut my brother’s hair all the time and am actually pretty good now at men’s cuts. But my husband doesn’t let me near him …

5) I’m 30 years old and have never lived outside my home town. It’s a reasonable size, so it’s not that bad. I’d like to travel and maybe live somewhere else for a while but I know I’ll end up back here eventually.

6) My mum and dad are among my best friends. As you can tell, that means we’re a close family.

7) My dream holiday would be a six-week Italy/France/Greek Islands getaway with a week in Egypt thrown in on the end. Not so random and weird but worth mentioning!

So now that I am done, I tag (only 3 bloggers):

The Good Life on a Budget

Ugly Debty

Eliminate my Debt

The Rules:

1. Link to your tagger and post these rules on your blog.

2. Share 7 facts about yourself on your blog. Some random, some weird.

3. Tag up to 7 people at the end of your post by leaving their names as well as links to their blogs.

4. Let them know they are tagged by leaving a comment on their blog. 

Well there’s only a day to go and it doesn’t look like we’ll hit the $8000 mark on the car loan (barring an unexpected windfall tomorrow). Still, $8265 is a good achievement, given that if we hadn’t made the extra effort over this past month, our debt would stand at $9044 right now.

It has inspired me to continue to set specific goals with our debt reduction.

Perhaps the most ambitious is to become consumer-debt free within a year of starting this blog. My first post was on July 7 last year.  It is possible for us to make it, but only if we work hard. Really hard.

It would probably entail me working an extra night a week, and us curtailing the entertainment for a bit. Thanks to this big effort we’ve made in February, we have already brought forward the car pay-off date to September 4 (from September 23). However, our efforts currently need to go into putting the money aside for our birthday party, which is going to cost at least $1000. We also have made a $500 commitment towards another family matter. This means our ability to put money directly on the debt is going to be curtailed for a bit, let alone trying to make extra payments.

I don’t know how realistic all this is. However, just like February’s $8k challenge, even if we don’t quite get there on deadline, this continued intensity will get us debt-free so much faster. And who knows what’s around the corner that might nudge us that little bit closer?

Well, here is my new look. I’m not sure if I like it yet but I do like the fact that each section of the blog is more well-defined than it was in the old design, and perhaps a little easier to read. I’ll stick with this for a while and see what I think in a month or so.

We’ve had a little budget meltdown this week. After getting paid on Thursday, it only took till Friday afternoon for our account to be completely empty! Of course all the bills had been paid, and food and fuel had been purchased but still … normally our fun money gets strung along a little longer than that. I had bought a few little items and so had my husband … we just didn’t realise we were both doing it! Says a lot for communication, doesn’t it. Not sure if we will get through the week without clawing a little back from the billpaying account. However, it interests me how little of a `big deal’ this is. While I never like to go over budget, the fact is we have an emergency fund and a billpaying account, both of which have just over $1000 in them. So we can definitely juggle a bit and pay back the money over the next few pays.

In fact, this gives me an idea for my next post. In the coming days I’ll discuss my billpaying account, how it works and what it includes. We have operated this account since before we got married in 2002, and it has always been a great way of keeping us out of trouble.

No, the title of this post is not about me.  I’m not out of debt at all! But on the Dave Ramsay Show on Saturday night, a guy called in to say he had been outof debt for just 72 hours when he and his wife decided to finance a car.

Somewhat cryptically, he described it as being for his son, who was just a toddler! Dave was confused and sounded him out on whether or not it was a real car, but the guy said it was (with that price tag, it would want to be … but how then could it be for his son?).

Anyway, Dave was pretty unimpressed. He couldn’t see how you would work so hard to be debt free just to change your whole philosophy in a matter of days.

But the chilling part is, I can see how it could happen. Already, as I near my debt free goal, I start thinking more and more about the stuff I can `afford’. The fact is, I can’t afford anything as I don’t even have any savings. I know there is a difference in me these days, as I am able to steadfastly refuse these impulses. But that doesn’t mean they go away.

I worked really hard to pay down my credit card and a couple of other small debts a few years ago, before caving and paying for an ill-fated holiday on credit. I know how easy it can be to just drop all your good work and go back to square one. I guess the only good thing is that I didn’t let myself slide so far the second time around.

There’s no doubt, a lot of our decisions about credit have been poor (or this blog would not exist). However, I’m also thankful, in some respects, for having to go through this journey. I don’t think I would have learned so much about money and good financial sense without having to pay down this debt and make every dollar count. I expect that the change in us is going to extend to life after debt.