Archive for May, 2009

Still a learner

Gosh, you know, just when I think I have this money thing down-pat, I realise how far I have to go. Well, you know how I formulated a debit acount that we would pay money back to instead of our credit card? Well, this month … when push came to shove … I was so wary of actually taking the money out of this account that suddenly the end of the month arrived and I got charged interest on the credit card purchases! So I’m out $20 and might as well be back in the old days of revolving credit card debt!

Money is such an emotion-laden thing. Why do I have trouble raiding an account to pay for things like our car service, yet I can easily lay down the plastic for the same thing? It’s certainly an anomaly. Needless to say I have transferred the balance from the debit account to pay off $550 worth of purchases on the credit card.

So what happened? Well we got a bunch of bills at once and there wasn’t enough in our billpaying account to cover it all. I kept hoping that over the last few weeks I would just be able to pay the credit card directly from the billpaying account (instead of using the debit account money) but there were too many other bills. Then I just waited too long and the credit card bill hadn’t been paid!

I have to learn that the purpose of this money is to avoid paying interest and if I use it for that, then it has done it’s job. Luckily, as we keep putting $300 a week away for regular bills, eventually I will be able to replenish the debit account and put this whole thing behind us.

I have so much still to learn about myself when it comes to money …

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A good day

Well, thanks for all the feedback given our recent issue with the friend that didn’t pay up. I’m happy to report he has handed back $250 ($100 to go) and has finally apologised. He admitted he didn’t mean to take so long, and he hadn’t wanted to bring it up to us and apologise till he could bring over all of the money, instead of an excuse. Finally he realised he’d really messed up and decided that giving us most of the money was better than none at all. He declares he will bring the rest this week, and I do believe him. I was pretty annoyed for a while, but now am happy to say that he has shown himself to be honourable. Obviously this is a good thing for our friendship!

Anyway, the other news is that I had my fortnightly pay, my Aussie stimulus cheque ($900) and my child care rebate ($1460) all arrive in my account on the same day! A good day!

This means we have been able to:

1) make the voluntary retirement contribution of $1000 – this means at the end of the financial year the goverment will add $1200-$1500 to my retirement account! If I get the full amount, it will mean that over two years I will have added $2000 of my own money with a return of $5000 overall! This is probably especially important given how much my retirement fund dropped in value last year (at least 1/3, or about $10,000). It has helped offset some of that.

2) create a debit account of $2000 – this means there is $2000 at the ready for flights that need to be bought at short notice, or to buy appliances that have blown up suddenly (I don’t want to use the emergency fund for a new TV!). This is to pay for the stuff we would otherwise have placed on credit card and `paid back’. Now we will be paying ourselves back instead of a credit provider.

3) Remaining is about $2200 which has not been allocated. This was going to go towards a purchase of some shares, though it would probably be better used towards our home deposit. I do want to make it a regular thing each year to buy a share parcel, and part of me knows that if I don’t make it a priority some time, years will go by and we still won’t have done it. While I understand that we should maximise our home deposit, I also want to invest at some point and don’t think the two goals need to be exclusive. I also think this is a great time to buy shares and we might kick ourselves if we don’t jump in soon.

We could buy some blue chips like Woolworths or one of Australia’s big four banks. We know these are probably safe bets and are pretty much `on sale’ right now. I talked to my husband and he agrees we should go for it. Taking the plunge is kind of scary though. It’s so much easier to sit tight and do nothing!

Two years ago I could not have imagined dealing with issues as fun as these. I had never even considered what it might be like to not have to use a lump sum to pay off some kind of personal debt. Believe me, those who are working to pay off debt or who have recently done so, the benefits do eventually show themselves. Just work hard and get rid of it for good!

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