Archive for November, 2008

Time to get serious

It occurred to me yesterday that I keep waiting till we have two incomes to worry about the saving thing. Despite my best efforts, I never seem to be able to save 10% of our income … usually because there’s always `one more thing’ I have to make sure is paid for (to keep us from going into debt again).

While I know we’re in a better position than before, I feel we’re stuck again – instead of being stuck with near-limit credit balances, now we’re stuckat the point where our various commitments keep us just out of debt .. but only just. What would I be doing if I still was paying $170 a week on our credit card like I used to? How would I manage it?

The reality is, I think we have lost our way a bit. I am letting our various expenses creep up because I don’t have the debt, which used to drive me forward. Even though I really want to get savings happening, if I know I have lots of expenses coming up, I always pay them first to ensure we don’t go into debt. But there is always going to be another expense around the corner, and maybe we have to start learning to keep that 10% out of the picture. If that first 10 per cent was already gone, we couldn’t let the expenses creep up either … or we’d go into debt.

This debt and money thing is so psychological ….!

Anyway, while we were away, we lent somebody close to us $740. We really couldn’t afford it and it probably wasn’t the best financial move, but we agreed that we would do it because we believed in the person. However, we made it clear to ourselves that we could not expect to get the money back.

Well, this week the person turned up with the first $450 of what they owed us. It was a very nice surprise. Given the number of expenses we have upcoming, my first inclination is to apply that money to help pay for those upcoming expenses.

But I’ve changed my mind. We are putting that money in our emergency fund. We didn’t expect it back, so it’s `found money’. If we don’t want to go into debt, we’re still going to have to work as hard as we were before this person turned up with the cash.

Forgive me, I think I’m going into a new phase of thinking about how our money should be used, and as usual, it means a lot of soul-searching and thought. ANd you get to read about it whether you want to or not!

My biggest desire is that when that first full-time paycheque arrives in January, I don’t want to use it to pay off bills from graduation or anything else. That first paycheck has to be like all the others coming after it – applied to our emergency fund and house deposit account. If we don’t start that way, I fear we will continue on the wrong track with this. Let’s hope we can do this.

So, the plus side? $450 is going back in our e-fund. The negative side? Almost $1600 of non-recurring bills in the next month, not counting fun stuff like a graduation dress!

How are we going to pay for this?
– cutting down my phone package (which I never adequately use anyway)

– cutting back our cable package (which we share with my father-in-law)

– cutting down my internet package (now I’m not a student, I’m not using it as much)

– food budget savings

– doing a some shifts at my old job (if they’ll have me)

– getting my hubby’s tax return in (will trigger some rebates that will pump up our cash)

I guess we’ll see how we go in a months’ time!

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Guests are gone … and focus is back on budgeting

Well, we’ve had visitors for 5 nights, which has affected my ability to keep track of my money and blogging. The baby’s cot was set up in my office, so it’s hard to get a second to log on and do my thing, between the sleeps and the feeds etc!

It was great to have my friends here, and even better they didn’t want to party hard because they had their little one to worry about. So it was all about seeing each other and hanging out at home – better for the bank balance too!

Their visit was also good because it was the friend whose baby we had intended to fly south to see – it was one of my financial goals for 2008. However, it wasn’t going to be achieved because we had too many other things to do (ie 9 weeks elective in another town) and there was unlikely to be any cash left to get there. So it was lucky that they had occasion to come up here – it allowed us to see the baby, give them somewhere to stay for free and meant we didn’t have to spring for plane tickets! A win-win situation for everyone!

This couple are among our best friends but it is worth sharing that they are in a completely different financial situation to us, mostly because of good financial sense and also because of some family circumstances. In the past, it has been hard sometimes to hear about their good financial fortune, which allowed them to pay off their first home within a year of buying it, invest in a second investment property, live in very cheap military accommodation while reaping income from both properties, buy some stocks, buy 2 late model cars and a large trailer boat with cash, and apparently have so much wage income that they `had to see someone about what to do with it all’. The green-eyed monster came out on my part a couple of times, I’ll admit!

But they have had bad luck too – it took them more than 2 years to fall pregnant, which was hard because they were used to everything coming easily to them. And some of this cash they had came from an inheritance from a parent, who died relatively young. So you see, I would never trade that experience for the financial advantages it brought. Money is not everything.

Anyway, we are looking like having a turn-around in our own financial position in the next few months, and the important thing is to make the most of it. That’s what we intend to do.

While my original goal was to have $5K in the EF by end of the year, right now I would be happy to just remain debt free and cover all the upcoming costs of my son’s birthday, Christmas, two car registration bills ($600) and medical registration ($420). If we can do all this and not be in debt in a months’ time, I’ll be happy. Now I have to figure out how!

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Job status looking up

Well ,apart from all the other news to share, the first is the details of my upcoming job. My base salary will be $58,000 but apparently with overtime in some terms over the year, the total will be more like $70,000. The hospital will also cover home telephone installation, line rental and for a set number of calls over the year (or the equivalent to a mobile number). I won’t need relocation costs covered, so most of the rest of the entitlements don’t mean much to me.

Apparently, the base salary works out to $2143/fortnight – so I will have to learn to budget fortnightly from now on (though my hubby will continue to be paid weekly). After tax, my wage will work out to about $790 a week. That’s good news! We aim to save at least $600/week over the coming year, so we don’t plan a massive change in lifestyle.

The other news today is that under a job reshuffle, my husband is competing for a closed candidate position. If he gets it – and it looks fairly promising – he will be up for a $20,000p.a. pay rise!! And that’s using the minimum pay rate in the scale advertised for the position (the salary varies depending on the candidate’s experience etc)!! Needless to say, he will be working hard to get it. If he does, we might get closer to our dreams a little bit faster.

Now for the bad news: our emergency fund is no more, and we have a range of upcoming bills. The trip was hard on our vehicle, and it needs a bit of work on the engine. We also have a range of small bills that piled up while we were away. And both of our vehicles’ annual registration fees are due in two weeks’ time. So there won’t be too much chance to replenish the EF in the short term, unfortunately. However, I will settle for getting everything paid without relying on credit. If anything does go on the card, I have a big focus that it must get paid back within the 55-day interest-free period.

With the new jobs in the family, we will need to have a real focus on not spending more than we earn. If we are going to get this extra money, it must be put to good use. Given the current financial situation, we consider ourselves lucky to have jobs to go to, so we shouldn’t squander this opportunity to create a nest egg. I aim to ensure that we do make the most of it.

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Back to civilisation … but missing island life

Well, I’m finally back home after 9 long weeks away!! What an experience! So much has happened since I last posted that it’s hard to put it all into just one item. I think I’ll be taking a while to get our lives back on track, let alone our finances.

The good news: I’m finished all of my assessment for university. So now I await graduation in December!! There were a few champagnes tossed back on the verandah of the unit I was staying in while on my placement last week! After so much work (8 years of tertiary education), it hardly seems real.

The bad news: Our finances went backwards while we were away. Our emergency fund got eaten up by costs and a few dramas, and we have a lot more costs to face in the coming weeks. I’ll expand on that in coming posts.

The better news: On January 5, I start work! So soon we will have another income. We plan to use the bulk of it for savings (both emergency and house savings). But we also plan to put a few more low-cost activities on the agenda, like camping.

The ugly news: How about the world financial meltdown? My biggest surprise has been how few PF bloggers have even touched on it in their posts. Is it a matter of debt repayment being the top priority? Maybe because people feel it’s a `big end of town’ problem and it doesn’t affect them? On the few occasions I was able to log on while I was away, I was surprised by how little comment it generated amongst my fave bloggers.

In any case, we are home safe and sound but we had to deal with a lot of added costs while we were on the island. It is a very remote place and food is highly expensive. However, our accommodation was free and most of our travel costs were covered by the university. The hospital was a 20-second walk away so I could leave for work at 7.58am! No cars for 8 weeks! I could see the chopper land (loaded with new patients from the outer islands) from my lounge room window.

The island is lovely and one I would like to go back and work on in the future. There are some good financial incentives for medical staff who want to work there too (ie lump sum payments), however you need to have advanced skills to be a useful member of the medical team.

In any case, I have lots more to tell but need to pay some attention to unpacking and getting things sorted here. I am checking out everyone’s blog pages too and keeping up with the happenings in your life.

It’s good to be home!

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