Archive for February, 2009

Still here, still resisting

Just a quick post to let you know that holidays make it hard to stay on a budget! Especially when spent at home, where all of the things you would like to replace are in full sight!

I got paid today and with about $150 extra for leave loading, I put that aside for the houseboat adventure.

I also moved the regular $1300 to the house deposit account, and that is really starting to inch up.

Otherwise, not much to report. I splurged and got my hair chemically straightened today, which cost a cool $300, but which lasts about 6 months. It’s worth it to have professional-looking wash-and-wear hair!

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A time to give

victorian-bushfires

One of the things I haven’t been proud of since we finished repaying debt is that we have not yet made a concerted effort to work out our charitable giving. While we were getting out of debt, I cut back on our giving because I knew we needed to help ourselves in order to get into a position where we could help others more in the future. But with our business and the change in our lifestyles, we hadn’t gotten around to this.

In the wake of the horrific Victorian bushfires, in which almost 200 Australians died, my husband and I decided we needed to get past our inertia and donate. Lots of Australians felt the same, with company and individual donations topping $100 million in a few days. For US readers, this is a huge amount in our nation of just 20 million people.

I didn’t give straight away as I don’t give `on credit’ anymore. But today we transferred $50. This is as much as we can afford right now, but I intend to get us a to a position where we are regularly giving 5% of our regular income away. Eventually I would like to make that 10% (once our emergency fund is a bit more secure perhaps).

I guess we need to talk about how best to deal with giving away this 5% in the future.  I hate that when you decide to give for a specific appeal, you get so much junk mail in the aftermath that it must inevitably cancel out the value of your original donation.

I wonder if there is some way this can be avoided. I’ll have to do some research, I guess.

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Where our money goes

Well, I was looking at my accounts the other day and realised I’ve never really shared how I do things, ie how I pay my bills and organise my spending. I guess you can guess that once we started on our debt-free journey, the first thing I did when either of us got paid was put some money towards the debt we were currently trying to retire.

Nowadays, the first thing I do is put money away for one of our goals (yay!).

Our accounts are structured so there is one main savings account, for which we pay $5 a month in an account keeping fee. You may find it sad that the interest rate on this account is a measly 0.1%. Yep, pretty awful. But the features of the account make up for this.

Basically on my account type you can have up to 9 electronic sub-accounts. These are only accessible online and I can transfer between them without charge. I can also make direct debits out of them and/or pay bills online. When I go online to look at my accounts, each of these accounts shows up in a column.

The interest rate in each of these sub-accounts is 3.75% and there are no additional fees, no matter how many sub-accounts I have. So, I have 6 sub-accounts and I pay $5/month in total for them. I think that’s awesome.

Here’s what I do with our money. When our pays hit our account, the first thing I do is transfer cash to the emergency fund account. Currently, this is $200 a week, representing just under 10% of our net income.

Then if it is a pay week for me, I transfer $1300 to our house deposit account ($650/wk). It’s fun to watch this balance go up so quickly.

After that I start on all the other little things. We save $300/wk for `billpaying’ ie stuff like car repairs, medical expenses, phone bills, car registration etc. Have you ever added up all these for yourself and divided by the number of pay periods in a year? If $300/wk sounds like a lot, use an Excel spreadsheet to figure out how much these add up to for your family, and I’ll bet you’ll be shocked (no wonder we used to get wiped out every few weeks when a bunch of bills arrived at once).

Then I transfer $25/wk to a managed fund we have for our son. This may eventually be used for uni (college) expenses, or to help with his own house down-payment. Once a month, $100 gets debited from this account to his fund. It has been losing money nicely since we started it  😦  but we will stick with it!

After that, I have to pay childcare, which for us totals $230/wk. I pay that online. As our income has recently increased, it will soon be $265/wk. Ouch! Luckily, every quarter, 50% of the total amount paid is rebated in a lump sum. Not sure how long the government will be able to afford to keep this up though.

Then the money remaining in the main account is used for groceries, `gas’ and fun/miscellaneous items. Miscellaneous might be anything from charity donations to class photos. I try not to put expenses like class photos in my billpaying budget, because these are things I can choose whether or not to buy, and which I can alter the amount of even if I do.

Currently, we have no credit card payments, no car payments and no mortgage payments. That said, my car is absolutely awful – a lot of people would be embarrassed to drive it. So one midly negative point about getting rid of my car/credit card debt was that it was not as much of an `end’ point when it came to getting ahead as I thought. Often I have needed to beat the temptation to go into debt again after we’ve slaved so long to pay it off! The slog continues, but I think once we have our house deposit sorted and I have figured out how to afford our next vehicle, then it will all start to pay off. Who knows? I must also admit that we tend to meet our goals so much faster now simply because we aren’t getting slugged with interest and we are not paying off crap we don’t even have anymore!

Anyway, here is what each account looks like at the moment:
Main savings a/c: $101.35 (Since payday is tomorrow, I may sweep some of this into the house deposit fund or save it to pay for a haircut and colour).

Emergency fund a/c: $1400.03 (with $200 more coming tomorrow)

House deposit a/c: $5704.31 (Next payday of mine is Tuesday so $1300 more will be added then)

Son’s fund a/c: $150.05 (I stuck some Christmas money given to him in here and have to figure out how to manually add it to his fund.)

Billpaying a/c: $459.98 (But I have a massive quarterly utility bill which might wipe this out completely!)

Miscellaneous: $3.32 ( a good place to `park’ money if I am keeping it for something eg to put the $101 at top if I decide to get my hair cut next week and don’t want the money to remain easily accessible to us!)

Holiday a/c: $0 (we are going on our houseboat adventure in a few weeks so we won’t be adding to this newly created account any time soon!)

Husband’s dream boat a/c: $0  (This is a fun account that hinges more on dreams than reality, because if we had enough money for this, it would really go towards our house deposit, then our emergency fund!). But it costs nothing to have this account here so there’s no reason he can’t dream!

Anyone else want to share how they handle their weekly money split?

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Resisting the urge to splurge

AAARGGH! This is why I’ve learnt to avoid the stores!

I have had a new drive to decorate (ie buy things for, not actually improve) the house, and so 9am rolled around this morning and I was standing there waiting for the homewares store to open. It was so sad, me sitting there looking desperate to part with my money. I actually felt embarassed for myself.

Luckily, when I got inside I decided that the items I’d been lusting after weren’t as great as I’d remembered.

This is one of the benefits I’ve gained from being more careful with my money. I have to still really want something the third time I see it in the shop before I’ll buy it. Near enough is no longer good enough. It means the bar has been raised in terms of actually parting with cash. And it’s surprising how often I realise I’d thought something was way nicer the first time I saw it. 

I had been quite taken with the idea of a glass lantern to hang on our small side patio (outside a window), but once I got back into the shop, I didn’t like the item in question as much. So, no loss!

I am also trying to remember that all these `little things’ add up to a lot and could slow down our dream of owning our own home.

So I traipsed back home again empty-handed.

However, there are 24 more weekdays remaining on my holidays so I’ll need to show the same discipline for a few more weeks yet!

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So Sick of Debt: the `On Holiday’ edition

Well, I am now officially on leave!  I am going to sleep in this weekend and really enjoy it before getting busy to make the most of my time off.

We also added the latest $200 bucks to our efund and it is really starting to climb now – it’s up to $1400.

However, I am a bit worried about how to handle the early payment required for our houseboat trip. They want the balance of our trip 30 days in advance (ie now!), which would require hitting the efund or putting it on the credit card! That’s because although I have allocated where the money for our trip will come from, neither of these lump sums have actually hit our account yet.

Does this mean we’ll be back in debt, even if it is for a short time? I’m not really happy with either of the two options above, which is exactly why one of my goals for this year is to accumulate a $2000 slush fund for situations like this! Looks like I would have been better off accumulating this straight away.

This is exactly the reason I didn’t think it was fair for my new employer to make me take holidays so early, as I didn’t have time to save for my holidays specifically.  Apparently it is in our award that they can do this to us, but I don’t necessarily believe that it is true. It’s also been ruled on by employees (administration staff) who would never accept it if it was forced on them. However, being at the bottom of the medical heap means they can do stuff like this apparently.

Anyway, it’s happening now so I need to make the best of it. I thought I might do some work on our father-in-law’s house. I was thinking about learning to tile, as there are a few small rooms that I could start on and see how I go. My husband is very handy so he could step in if I go off track.  But maybe it’s harder than I have been led to believe. Any thoughts?

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Sick of work

Is it OK to be just 5 weeks into your career and completely over it already? 🙂
Hopefully I’m just having a bad day…
On a good note, I got my fortnightly pay and officially have more money in an account than ever before in my life (not counting that fraction of a second when I’ve received the money ready to pay the seller when getting a car loan (just before I wrote the bank cheque as payment!).
Nuh-uh! This is our cash, baby!

I also have to see a financial adviser this week to learn about salary packaging. I will post with the details after my appointment on Monday.

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It just keeps coming

OK, we are really having a nice little run now. My husband went to the accountant and it turns out that instead of the $150 or so we were expecting, we will get a tax refund of about $950, or closer to $800 once the acountant is paid! Lucky my husband didn’t get me to do it electronically. I hadn’t been fully aware of the things he was allowed to claim, and could have ended up costing us some money.

Otherwise, life is pretty quiet. I have an elderly family member who is really very obviously in the last few days of her life, and we are all spending a lot of time at her bedside saying goodbye. It is a hard time for all of us, and means we are not spending much time out and about. It is also now less than a week until my holidays start. I will be spending most of the time at home, but might do some household projects and try to get a few of our priorities sorted, such as doing our wills and sorting out our insurances (ie are we getting the best for our money?).

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