Monthly Archives: March 2013

Spend and Debt Update – Week 4, Monday 25th March – Sunday 31st March

I can’t believe we are in April already…to get the new month off to a Debt Smashing start,  Im going to set a challenge for myself. From Monday 1st April through to Sunday 7th April SPEND NOTHING (aside from my set expenses which are outlined in my budget)

Can I do it? I’ll let you know on my next update 🙂

Oki doki….here is my update for WEEK 4:

Total Income 

  • $0.00 (This wasn’t my pay week)

Spending / Expenses:

(Amounts in italics are included in my regular monthly expense budget as listed in this previous post)

  • Monday: $0.00
  • Tuesday: $2.20 sushi roll
  • Wednesday: $4.30 coffee
  • Thursday: $4.50 coffee, $3.00 easter eggs
  • Friday: $0.00
  • Saturday: $10.25 coffee (for me and my mum)
  • Sunday: $20.00 tithe, $4.90 coffee

Total Expenses / spend: $49.15

Week 4 Summary

Income $0.00 +   $83.00 (bank balance at start of the week) – expenses $49.15 = $33.85 remaining in bank (of this $20.oo is still budgeted for tithe)

Week 4 debt status

Credit card #1 – $1,202.12

Credit card #2 – $4696.67

Personal loan – $7309.87

Total Debt : $13, 208.66

Initial Debt$14, 744.12

Debt reduced by week 4:  $1535.46  (No reduction since week 3 – remember, I make all my payments towards debt on my pay week)

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Training for a marathon and smashing a mountain of debt

At the moment I am training for my first marathon. In 2011 I completed a half marathon during the Blackmores running festival in Sydney. I loved it.

The Gold Coast Marathon, in which I will be competing, is the first weekend in July 2013  and  I started training late December 2012. My training run today was 26 kilometres.

When I returned from travelling in November, after rather sporadic exercising efforts while away, my running fitness was terrible.  The first run of 4kms I did, I truly struggled and felt sore for days afterwards. I was worried I wouldn’t be able to regain the fitness I had when I ran the ½ marathon.

At that time, a marathon of 42kms felt (and sometimes still does!) overwhelming. But it really is a goal I want to achieve. And I had to start somewhere. That 4km run was the first step.

When I sat down to work out the amount of debt I was in and came to the figure of  $14,774.12  I felt the same overwhelming sense. And at that time, I didn’t even have a job, so the mountain just seemed even higher. But I made my first Debt Smashing* repayment towards credit card #1 in February. That was my first step towards my Debt Free goal.

*Debt Smashing repayment is a payment above and beyond the minimum repayment 😉

Training for a marathon requires:

  • Endurance
  • Commitment 
  • Hard work

Paying off a mountain of debt requires the same stuff. Endurance – months and months of debt repayments. The commitment is making these payments. The hard work is sticking with the plan, regardless of how you feel at the time.

You can’t wake up one morning and just decide to run a marathon when you haven’t trained. And unless you are a lucky recipient  of some super cash windfall, you can’t eliminate a mountain of debt overnight.

I am applying this commitment, endurance and hard work to both my goals of running a marathon and becoming debt free. And now, I am many ‘steps’ in (especially with the marathon) I am totally focused to do what it takes to achieve both.

After my first 4km run and after seeing the total amount of debt I was in on paper – I could have let those overwhelming feelings win. I could have said the marathon was just too hard (it is, afterall, a choice to compete!) and I could have continued to stick my head in the sand and ignore my debt.

But I didn’t. I took that first step. And yes, I am still far from both finish lines, but you know what – I’m closer than I was when I started out. I wasn’t defeated by the feelings I had at the time. Both goals were big. They were never going to get any smaller, so I just got on with it.

The first step was the hardest one. But I’m SO GLAD I took it.

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Money as a tool – not just a repayment

We all know the saying ‘money isn’t everything’

And it is true. There are things we need to prioritize above money – family, friends, the quality of relationships and interaction we have every day with our fellow human beings. We have all seen what putting money first does to a person. And the fact that it really doesn’t buy happiness.

But lately, I am understanding the value of money as a tool to help facilitate the goals and dreams in my head becoming reality. Because, let’s face it, some of my big Bucket List goals require cash. Mostly because they involve expense in travel. I am often drawn to challenges requiring an overseas location 🙂  I don’t just want to run a marathon. I want to run the NYC marathon. I don’t just want to climb a mountain in the local national park. I want to get to base camp in Everest. My goals rarely involve acquiring ‘things’ – it’s more about experiences.

The longer my money is tied up in debt or debt elimination, the longer it is not actually working as a tool for me. It is working as income for institutions. The sooner I am out of debt, the sooner money will actually become a resource to fund the dreams that do require cash.

For years, the plan for my monthly income has looked something like this:

  • Rent
  • Laptop repayment
  • Phone repayment
  • Payment Credit Card #1
  • Loan repayment
  • Payment Credit Card 2
  • Whitegood rental payment

Etc etc etc, You get the idea. A lot of ‘repayments’.

This is what I WANT the plan for my monthly income to look like:

  • Expenses
  • The rest – FUNDING MY DREAMS!!!!!!!!!

Bring on Debt Free(dom!)

Getting by without the frills…..

Backpacking  through South America taught me a lot about what I can and can’t do without. Any fellow traveller would agree – when you are humping a huge backpack around for months at a time, you get pretty darn picky, pretty darn quickly, about what goes in.

Suddenly, hair product – beyond shampoo and conditioner – are no longer necessities. Wearing the same clothes day in and day out is actually preferable to buying more thus adding anymore weight to your back . Souvenirs are only selected (if at all!) based on weight and size – postcards anyone?

And then you realise you have been travelling, surviving and thriving with 15kgs of worldly possessions  for months on end. Coupled with a typical travelling budget (aka – not friggin much) it turns out that you don’t actually need much stuff to be happy.

When I got home, I was broke. Making what money I DID have last until I was once again employed, saw me sacrificing the ‘I Wants’ to make sure I had enough for the real ‘I Needs’  (yes, coffee is a real I Need but I had to even sacrifice those daily cups of goodness in the end 😉

And, I got through it. I was down to my last $20 in the bank when the Big Man Upstairs smiled on me and got me a great job.

So, by the time I commenced my Debt Breakup plan, I had some training and experience in getting by without all the extra frills and toppings we often consider Needs. Living in a world so unbelievably focused on consumerism and ‘achieving’ status through the accumulation of possessions, it’s no wonder the line between a Need and a Want has become so blurred.

A generation growing up with the  ‘need it now’ mentality puts every new product touted as the next latest and greatest – into the Need category. Only to find, a few months later, something even MORE awesome has taken it’s place. Better rush out and buy (charge!) that too.

What an exhausting and expensive merry-go-round to be on.

Now, even though I have the cash to buy these things, I’m still trying to live that ‘leaner’ life and direct that extra cash towards my debt.

More than that, I have the knowledge that letting these things go for the time being won’t kill me. My possessions don’t own or define me. I can take a personal stand against the onslaught of marketing slapping consumers in the face every day. I can say no thanks Apple, my life is just fine without the iPhone 5000045.

And there is quite a lovely freedom in that.

withoutmoney

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Spend and Debt update – Week 3, Monday 18th March to Sunday 24th March

I’m a little behind in my update.

I was away for work again last week and stayed interstate for the weekend to catch up with friends. It was a busy (and rather exhausting!) week. I felt like I did spend money on things I really didn’t need – mainly to pass the time at airports! But I was happy I didn’t spend to much money eating out / drinking even though my weekend was full of catching up with friends.

Once again, I exceeded my coffee quota (are you beginning to see how much I love my coffee!!) But I challenge ANYONE spending 5 days in Melbourne NOT to drink more than 2 cups. Melbourne coffee is the best.

So, here we go:

Total Income 

  • $1595.00

Spending / Expenses:

(Amounts in italics are included in my regular monthly expense budget as listed in this previous post)

  • Monday: $4.50 coffee
  • Tuesday: $0.00
  • Wednesday: $20 book, $4.50 coffee, $10.00 transport, $140.00 board, $130 credit card #2 repayment, $425.00 credit card #1 repayment, $182.60 storage 
  • Thursday: $0.00
  • Friday: $13.0 taxi ride, $7.50 gift card and wrapping, $110 accomodation,  $178 loan repayment, $125.00 transport, $29.00 insurance, 
  • Saturday: $6.00 breakfast, $16.50 transport, $4.95 magazine, $5.00 lunch, $24.95 medicine
  • Sunday: $3.90 coffee, $15.00 taxi ride, $4.00 transport, $41 lunch (food and drinks), $28.50 book and magazine, $4.50 coffee

Total Expenses / spend: $1523.40

Week 3 Summary

Income $1595.00 + bank account balance from previous week  less expenses $1523.40 = $83.00 in bank account

Week 3 debt status

Credit card #1 – $1,202.12

Credit card #2 – $4696.67

Personal loan – $7309.87

Total Debt : $13, 208.66

Initial Debt$14, 744.12

Debt reduced by week 3:  $1535.46 

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Spend and Debt update: Week 2 – Monday 11th March to Sunday 17th March

Week 2 – Monday 11th March to Sunday 17th March 

Ok, so I did terribly on my ‘only 2 purchased coffees per week’ challenge! Epic Fail this week. I was travelling for work to complete some rather intensive training, so I think this may have had something to do with pushing my coffee quota up!!

Total Income (this was my week between pays so zero income)

  • $0.00

Spending / Expenses:

(Amounts in italics are included in my regular monthly expense budget as listed in this previous post)

  • Monday: $25.00 clothes, $3.00 groceries
  • Tuesday: $4.90 – coffee
  • Wednesday: $3.80 coffee, $7.90 groceries
  • Thursday: $0.00
  • Friday: $4.20 magazine, $4.40 coffee
  • Saturday: $23.85 Breakfast (me and mum), $7.00 groceries, $5.95 DVD rental
  • Sunday: $40.00 tithe, $4.00 coffee, $10.00 gift for friend

Total Expenses / spend: $144.00

Week 2 Summary

Income $0 less expenses $144.00 = $58.00 in bank account

Week 2 debt status

Credit card #1 – $1627.12

Credit card #2 – $4826.67

Personal loan – $7397.57

Total Debt : $13, 851.36

Initial Debt$14, 744.12

Debt reduced in week 2:  $0.00 (remember that I make all my debt repayments on my pay date – which wasn’t this week)

On Socialising – The fine line between being financially savvy and a tightass

A couple of years ago I signed up to receive a newsletter on hints and tips to save money. One edition had the following money saving ‘tip’

To get free food, gather dandelions from a field to make a soup or tea, completely free.

Um, seriously?*

I know some people take saving to the max (ie the above dandelion gathering and extreme couponing) but there is a line between being savvy and just being, well, a tightass.

Personally I live by a simple rule. If I want to be a tightass when purchasing things for myself, ie – a homebrand makeup remover instead of a brand one – then no problems, because that choice effects no-one but me. But never be a tightass in social situations. If friends invite you out for drinks, and you know you can’t afford to go, then stay home. Don’t go out and expect people to shout you drinks all night and then try and skive on the taxi fare for the way home.

This is being a tightass.

We’ve all been out on nights with people like that, it’s annoying and if you continue this habit, people are not likely to invite you out – to avoid having to not only pay for their drunken bender, but also supplement yours.

So you may say, well what am I supposed to do, sit and home and not go out drinking. Well, if you are saving for something or paying off debt, the answer is YEP.

Doesn’t mean you have to miss out on every social occasion. Just save a little aside each time you get paid – or budget ahead – so when you do want to go out, you have enough cash to enjoy yourself and not worry.

This is part of the discipline required to save money or pay off debt. You will have to say no to some – maybe lots, depending on how popular you are! –  social activities. It won’t be forever – just until you have reached your goal. And by then, you might even realise what an epic waste of money alcohol is and only decide to hit the town occasionally anyway.

Plus there are lots of things you can do in social situations for free.  Catching up for breakfast with friends is way cheaper than dinner and drinks.  Or get everyone to bring a dish and go to someone’s place for dinner.

Just make sure your dish isn’t a big bowl of free dandelion soup.

*I am aware there is medicinal benefits for this soup and there is a traditional French soup involving dandelions – but the fact that it was posted as a tip just for the fact of being free with no reference to medicinal or other benefits, I personally found, hilarious.

 

Being cheap

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The disappearing $20 note…and my thoughts on twin pack chocolate bars

Recently I have begun a little habit of keeping my wallet empty.

Not because I have spent all my cash. But because it was never in my wallet the first place.

See, I notice this strange phenomenon occur when I break a $20.00 note with the intent to make a small purchase, something of only a few dollars. I make the small purchase and then, within a few hours, or a day, the rest of the $20.00 miraculously disappears.

It  hasn’t been magically absorbed into the atmosphere.  It’s been frittered away on purchases I really didn’t need but felt almost compelled to buy because, hey, I’ve got some spare change so why not!

It is similar to the 2 chocolate bar phenomenon, which occurs regularly in my life. Any chocolate bar that comes as a 2 pack, I open that pack with the intent to eat 1 of the bars. And save the 2nd bar for ‘later’.  (Note: It is likely I brought this chocolate bar with the change from the $20.00)

It’s saved for later alright. 5 minutes later. I’ve inhaled both bars, when I only meant to eat one and I’m left with a nice little sugar buzz,  holding an empty packet.

Exactly what happens when I break a note. Intend to break it for a small purchase. And save the rest. But in no time Im left holding  an empty wallet, on my way to withdraw more cash.

I am realising more and more that the small things make a difference. When you have a small notes and a couple of coins rolling around in your wallet (your change from that $20.00), you really don’t think twice about spending it. And it’s normally on crap you don’t really need (eg – aforementioned chocolate bar)

Anyways, now I am trying to make most purchases via eftpos and carry as little cash as possible. And so many stores these days have very low (or no) minimum purchase amount. So, even small cashless purchases are easy.

Without that loose change rolling around, it seems I’m spending less and minimising cash withdrawals.

And eating less chocolate. Which isn’t always a bad thing 😉

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Don’t buy things you can’t afford

James had a decent job.

He was married to Amy. Amy, who was studying, had a part time receptionist role.

James and Amy wanted to buy their first house together.

All their friends had big houses and threw fabulous parties where everyone had fun.

They wanted a big house too. They wanted fabulous parties. They wanted all their friends to know how happy and successful they were.

James and Amy went to the bank. The bank congratulated them on being ready to purchase their first home. And an extra congratulations on how much money they had been approved to borrow.

It was a lot of money. More than James and Amy could afford. But if the bank was saying they could have it, then it must be ok? Besides, imagine how big the house would be.

James and Amy accepted a mortgage, signed the documents and brought the big house.

Each month they made the repayments, but there was hardly enough money left over. The bills built up. They paid for all the expenses on their parties, on credit card. And the bills built up. Soon it was hard to buy groceries in cash. They went on credit cards too. And the bills built up.

Amy lost her part time job.

James and Amy fought. There were no more parties. There wasn’t even enough money to do the things they used to enjoy together, like going to the movies. James and Amy felt anxious whenever their friends asked them to go out. They knew they could no longer afford it.

James worked harder, and longer hours than ever before. But with the bills and the mortgage, he could no longer keep up. Amy and James fought bitterly over money. Their lives were consumed with a financial burden to big for them to bear.

Amy left James. Their marriage was over.

The house was sold for 10 of thousands less than the outstanding debt. Amy and James, even without the home, and without each other, are still owned by the bank. Yes, owned.

All because they wanted the big fabulous house to show off to their friends.

Don’t buy things you can’t afford.

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Week 1 – Debt Smashing Stats (Monday 3rd March to Sunday 10th March)

So, every week on Sunday I will post a summary of my income, expenses and current debt. I get paid fortnightly so I pay the majority of my expenses and debt repayment for the fortnight on my pay date. So next weeks update will look a little different to this one.

I had this info all nice and fabulous on a little excel spreadsheet but I can’t insert it into this post. Im a bit computer challenged on these types of things so if anyone can suggest how I can add an excel spreadsheet please let me know!

Week 1  – Monday 3rd March to Sunday 10th March aka The First Serious Week Of Debt Smashing

Total Income (this was my pay week so majority of my expenses come out fortnightly on my payday)

  • $1595.00 (fortnightly pay)

Spending / Expenses:

(Amounts in italics are included in my regular monthly expense budget as listed in this previous post)

  • Monday: $0.00
  • Tuesday: $0.00
  • Wednesday: Credit Card #1 debt payment $750.00 , Credit card #2 debt repayment $133.00, Board $140.00 (this amount includes food) , Phone $50.00, Travel $100.00 and Flights $195.00
  • Thursday: Coffee $4.50
  • Friday: Drinks $16.00
  • Saturday: Coffee $4.50
  • Sunday: $0.00

Total Expenses / spend: $1393.00

Week 1 Summary

Income $1595.00 less expenses $1393.00 = $202.00 in bank account

Week 1 debt status

Credit card #1 – $1627.12

Credit card #2 – $4826.67

Personal loan – $7397.57

Total Debt : $13, 851.36

Initial Debt: $14, 744.12

Debt reduced in week 1:  $922.76

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