Archive for November, 2007

So Sick of Debt on hiatus

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Well, it’s two weeks to the day until my first exam and with that timing comes a big decision. So Sick of Debt will be taking a break for just over two weeks – until November 29, to be exact. It’s the only way I can study seriously for my finals and not get sidetracked on PF sites (and thinking of something to write).

When SSoD returns (and don’t worry, it will!), it might have a new look and it will progress to better links, participation in carnivals and generally broader discussion (moving on to topics other than me).

I have to say I’ve loved blogging for the past six months or so, and am looking forward to making SSoD better than ever!

Please stop by in December to see how things are progressing for me. I am banning myself from PF sites until exams are over, so I’ll be very keen to hear how everyone is going when I get back online.

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All quiet on the financial front

Not a lot to report at present. We have got our one and only debt repayment on autopilot and our current focus is to build up our billpaying account as we have a lot of car repairs/tune-ups to get done. There is currently $700 or so in there (we add $235 a week) and it pays all monthly bills, plus Christmas, clothing and health costs (prescriptions etc)l insurances etc.

Anyway, we have to get new front tyres for one vehicle, my husband’s car airconditioning is sounding a bit sick, and I am pretty sure the brake pads on mine are wearing out. My dad has always said that owning a car is the biggest impediment to keeping your money, and he’s right. But of course, the independence that having your own car brings makes it so popular, especially in parts of the country where public transport is virtually non-existent.

So I continue to study for exams and hope for the best. I find myself thinking about money all the time, and I don’t think it’s healthy. But I have learnt to deal with it by keeping a notebook nearby and jotting my thoughts on finance down quickly so I can deal with them later, then going back to my studies. It’ll cost me a lot more than I can save if I have to repeat the year because I didn’t study enough!

I can also report that our gardening efforts are continuing and we are well on our way to having paid off the labour component to the family debt. It’s all looking great as we enjoy late Spring here in Australia.

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The price of being `eccentric’

I’m very bad at losing things. Or, put another way, I’m very good at it! So far this year I’ve somehow lost two textbooks and a stethoscope. Total value? At least $400. I also lose eye glasses, earrings, keys and lipsticks (to name just a few items) all the time. The cost of this, when you add it up, is not to be sneezed at. Yet somehow this is one of my big failings.

It drives my husband insane. He calls it `eccentric’ but at other times it really upsets him. You can imagine how stressful it would be to go on a trip with someone like me. I’ve mentioned before how I left my wallet on a bus during an overseas trip moments after we’d sorted out another financial crisis, and all the money we’d just obtained was in that wallet! When I went on to a conference about a month ago – just for the day but requiring a 90-minute flight to our state capital and back – he asked me repeatedly if I had everything. After he kissed me goodbye (and after I’d cleared security) I found I had no wallet in my handbag, meaning no money … not even for the train ride into the city at the other end (I raced out and found him in time luckily!).

I used to just think this habit was annoying but only recently did I realise how much it is costing us. I really need to think about valuing my things more highly, and not allowing my `eccentricity’ to cost us so much in real dollars.

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A little bit of luxury

Yesterday I was lucky enough to take advantage of a luxury facial that my husband bought for me months ago for my birthday. It was in a ritzy day spa (aah, paid for back in the days before financial responsibility). I hadn’t had the chance to use the voucher until now though, and in fact I was lucky that they didn’t stick to their policy of not honouring them after six months! Otherwise, I wouldn’t have been able to use it at all!

Anyway, it was great, and as I sipped my ultra-chic (herbal) tea afterwards, listened to the (very short) product `information’ spiel and perused the price list (yowza!), I felt quite conflicted. I wanted to think that everything the beautician told me about skin care was just a sales spin, but I had to admit that a lot of what she was saying was right. While she was talking generally, I’m well aware my skin is very dry (and, I might add, a bit spotty) and I know I need to implement at least some kind of skin care regime soon. I wanted to think the facial was fun while it lasted but that my skin would look no different when I woke up this morning, by which time the expensive lotions would have worn off.

No such luck. My skin looks fantastic today … even if I do say so myself. It looks plump and has a nice sheen to it, with few if any bumps in sight. I was almost glum when my husband – who barely registered yesterday that I’d actually finally been to the day spa – made a comment about how fresh my skin looked this morning, after which he asked me what had changed! Of course, it’s great to get compliments from my husband – in fact, I’m lucky enough to get them often- but not when it’s a direct result of something I’m not going to be able to keep doing!

 So I am wondering … again … what’s the difference between being frugal and being cheap? Is a skincare regime something every woman should work into her budget (so long as the essentials are being met, of course). I don’t mean getting expensive facials, or even buying the relatively pricey products at that particular place. I just mean paying for a cut and colour occasionally, and some basic cleansers and moisturisers from the supermarket etc.

We are currently putting $430 a week towards debt. Should I allocate a certain amount from our weekly budget to keep up with hair care, skin care etc? I’m not what I would call a `girly’ girl, but I do like to look good as much as the next woman. When does debt repayment beat out spending money on yourself? I’m thinking that rather than alter my debt repayment amount (which would kill me), I should focus any `snowflaking’ efforts and extra income towards a grooming envelope. I can probably use some of my weekly fun money towards this too. It’s going to be at least six months till I pay off the car at this rate, so I don’t want to look like a hag till then!

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Feeling positive

Speaking of milestones, as I was the other day, my site has passed 1000 visitors this week. Thanks guys! I remember my first few weeks of posting, when I doubted anybody would care what I had to say. Thanks for keeping me motivated!

I was watching the advertisements for Financial Peace University on the Dave Ramsey website (we don’t have it here in Australia). It looked pretty good. One thing that struck me about it though was all the testimonials ie `we paid off $18,000 in debt in less than a year’. I was listening to that and thinking … wow. I wonder what if feels like to do that.

Then I felt really stupid.

Since June this year, we have:

– paid off nearly $7000 owing on our credit card;

– eliminated more than $3000 owed to our family (not counting the amount we exchanged for labour);

– reduced the balance owing on our vehicle by almost $3000; and

– built a $1000 emergency fund.

So we’ve paid off at least $13,000 in debt in less than 6 months, and saved a little bit as well! And we’ve done this on one (relatively good) income, and one casual income.

While living rent-free is a huge advantage for us that I have to acknowledge, I also see this as an achievement in itself. It’s not easy supporting a family member to stay in their own home, and living with an older generation can be difficult at times (as I’m sure it is difficult living with us sometimes!). So while we are doing this primarily to support my father-in-law, reducing debt has been a big driver for us staying here, and we have `paid’ for those debt reductions in other ways ie loss of privacy etc.

However, thinking about this has made me feel so much better, and I realise now that my attitude is sometimes very `poor me’, when in fact I really need to recognise how lucky we have been to be able to stay on track so well.

 We have a few things that we would like to plan ahead for in the next year or so, including a joint birthday party for me and my hubby and a specific gift for another person having a milestone birthday within our family. While we don’t intend to spend a huge amount on either of these, they will come at the worst time of year for us, so they will require a bit of early planning.

I also have the opportunity to do an 8-week placement in a remote location next year (in fact, it’s a requirement of my course), and I would like to do it on one of the islands on the northernmost tip of Australia. This would be a fantastic experience for my family and I, but it will take some funds for all of us to go up there for that long. So we will start planning that soon too. When I get back from that trip, I will almost be a full-time wage earner! This is an astonishing proposition for someone who feels like a perpetual student!

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Reaching some milestones

I’m one of those people who is always looking for a milestone to mark, no matter how tiny. It helps keep me motivated to continue on this debt reduction effort.

The one I’m most focused on at the moment is to get the value of my car loan down below $12,000, which will happen next week, I hope.

The reason I’m so focused on this is that this will mark the point where we will no longer be `upside down’ on this loan. For those who haven’t heard this term, `upside down’ refers to the situation where – if you had to sell your vehicle – you’d actually receive less than you would still owe to your lender. It can apply to any kind of loan for any asset of course, though I guess borrowers are always `upside down’ on credit cards. I’ve already talked about how I think we paid too much for our vehicle to begin with (secondhand) and that negotiating a good price is the best way to avoid being upside down on a loan. In our case, we paid a fair bit more than the car was probably really worth because it had some extra features that we both liked, including a long range fuel tank (we occasionally travel across Australia in some fairly arid, very isolated landscapes, so this was an advantage). However, I now realise these extras don’t add much to the value and we should have negotiated a little better.

Anyway, $12,000 is only an arbitrary figure. We’d get less or more depending on the market and how keen we were to sell. And obviously this milestone is still a long way from owning the vehicle. But at least it signifies the first time in a long time that we could theoretically `sell everything up’ and do whatever came next, without owing anybody anything. I’m not intending to go anywhere and I don’t intend to sell the car, but it’s nice nonetheless.

In other news at present, we continue to make efforts to cut costs, though at times I question the line between frugality and being cheap (for more on this topic, check out Being Frugal in the blogroll). I have a few small amounts coming in and though I want to put them towards debt reduction, I feel confused about whether or not to instead get my hair cut and coloured, or to get some more professional, good quality clothes for work. Though I never question the value of what we are doing, sometimes I wonder why I have to always get so obsessional about things. Why can’t I just be happy putting $200 or $300 down on the car each week, and use the rest to build savings or even have a good time occasionally? I seem to be an all or nothing kind of girl though, and since its working for us at the moment, maybe I shouldn’t mess with it.

Allright, that’s enough rambling from me today…!

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