A new day dawns

OK, so our crazy spending is back in check – all credit cards now remain at zero and our emergency fund is intact. It really is time to get back in control of our finances – a new day dawns in our household as to how we handle our money.

I’ve realised that I’m good with `big picture’ saving but not the small-scale stuff. I let lots of little amounts of cash fall through our fingers. I don’t shop around the way I should and when I do, I don’t apply the savings to something meaningful. I’m hoping to move this blog in that direction – exploring the possibilities in respect to being more frugal – in coming posts. I also hope to meet our goal of $5000 in an emergency fund ASAP, and need to brainstorm about how best to do that.

Looking at all our accounts and analysing how best to manage this little spend-up made me realise that I’ve never really outlined our full financial position before. Maybe I was too shy. 🙂  However, I thought maybe it would be worthwhile to do this (for you and for me).

Here is our state of play:

  • $140 in everyday account (I can’t make myself call this a savings account!) – NEXT WEEKLY PAY IS ON FRIDAY, $140 remaining includes petrol and misc budget items.
  • $105 in billpaying account (cleaned out today to get our financial house back in order after our spend-up)
  • $88 in son’s managed fund account ($25/wk is sent here, $100/mth removed to his managed fund – current value of his investment is about $1600)
  • $1600 in our emergency fund
  • no credit card debt
  • no personal loans

Superannuation (retirement accounts):

MINE: $26,166  This is down $3K from last year because of the downturn in share markets. With my super company (like any other) you can allocate the kind of investments you want your accounts in. Last year I changed mine to High Growth (25%) and Growth (75%) on the advice of just about every personal finance book I’d ever read. That’s because I am so many years from retirement, so I can cope with a high exposure to the share market. The $3K drop this year is not unexpected and doesn’t worry me at all. The other thing is that last financial year I managed to find $1000 to make a voluntary contribution to my super (in Australia, your employer must make involuntary contributions on your behalf). As I’ve said previously, this means the Australian Government will throw in the maximum co-contribution of $1500 to my account because I was a low income earner last year. In some respects, it is good for me that the markets are down because when the government throws in that money, it will buy more units in the fund at a lower price.

PARTNER’S: About $40,000 We don’t track this online so this was the value in last year’s annual report that he received. I would have expected it to drop markedly over the year, however we recently heard from another employee that their fund was one of the few that maintained a small amount of growth in the past financial year. I won’t believe that till I see his statement but if so, it’s fantastic news.

STUDENT DEBT: $30,000 – As stated previously, this is interest free and paid back to the government once earnings reach a certain level. I will start paying it back at about $50/week with my salary next year. I don’t consider this to be a significant debt as it would be last on any priority list to make extra payments on. Louise at Eliminate My Debt (another Aussie) put it well when she described HECS as more like a tax on Aussies who went to uni. If I came into some extra money, I would put it towards a home deposit or other investment before I considered paying this off.

If I get really brave, in the next few days I might post our weekly income and spending allocations. Let’s see whether I am really ready! 🙂

So that’s our financial state of play. It’s not great, given that apart from our cars and furniture, we don’t own anything. But given that I just completed eight years of university and am about to start work as a doctor, I guess my earning potential is going to go up quickly (though not as fast as many would think!).

Our priorities remain a home deposit and emergency fund. I am opening it up to the universe to provide any opportunities to speed up our achievement of these goals!

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