Category Archives: Random musings and rants on Debt

I’M DEBT FREE! Goodbye from The Debt Breakup

Folks, this week I made my FINAL debt repayment! On Wednesday I transferred the final $460.00 to my personal loan.

For those of you familiar with the Dave Ramsay show, here’s my blog version of a debt free scream:

 

I’M DEBT FREEEEEEEEEEEEEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

All balances are at $0.00 – I no longer owe banking institutions anything. My next pay check will be mine, ALL MINE. So, for one final time, lets review my debt stats:

 Starting debt – March 2014

Credit card #1 – $2377.12

Credit Card #2 – $5000.00

Personal loan –  $7397.00

Total debt: $14,774.12

June 2014

Credit card #1 – $0.00

Credit card #2 – $0.00

Personal loan: $0.00

Total debt repaid: $14,774.12 (BOOM!!!)

My journey to Debt Freedom has taken approximately 15 months. I only wish I’d started earlier. If you are reading this blog because you are thinking about getting out of debt, don’t delay – start RIGHT NOW.

A huge THANK YOU to all my fellow debt bloggers for encouraging me along the way. There are so many fantastic PF blogs out there. The days I felt discouraged or ready to give up, I’d just spend time reading over other debt smashing blogs for inspiration!

So this is goodbye and good luck from The Debt Breakup. My next financial journey will be saving for a backpacking adventure through Central America at the end of 2014. I’ve got a steep savings goal to meet by the end of December!

You can follow my progress at www.4000sundays.com – my blog about travel, minimalism and making the most of every day!

Remember – Debt free is SET free. Never give up the war on debt!

Over and out 😉

Elesha – The Debt Breakup

 

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My top 10 tips for paying off debt

As my journey to debt freedom draws to an end, I’d like to share the 10 things that had the biggest impact to reducing my debt. I haven’t included ‘making a budget’ as I think that is a given!

I’ve separated these points into 2 categories:

Action and Attitude

I believe the Actions you take and the Attitude you have while paying off debt are intrinsically linked. You can’t take action without the right attitude.

5 ACTIONS that helped me pay off debt

Saying No

Learning to say no – to people, to purchases and to yourself plays a huge role in winning the war on debt. I found declining invites from friends for nights out, drinks, weekends away etc to be really tough. Tough, but an essential action to take if you want to set yourself free from debt.

While I didn’t tell friends and family how much debt I was in when I started the journey, I did make it clear that I was making a serious effort to tighten purse strings to pay back debt, and that meant I had to cut some fun things out for awhile. Quite awhile. I learnt to say –  ‘I’m sorry, but I really can’t afford to do ABCXWZ this weekend, I’ve got a tough budget to stick to this week’

Most people understand, and if they don’t, well too bad. Certainly don’t sacrifice your budget for someone who doesn’t respect your goals. This doesn’t mean you can never go out and have fun while paying off debt – it just means prioritise the activities that mean something to you and choose those over spending cash on random nights out every Friday.

 

Record every single purchase you make for at least a month.

I actually recorded every purchase I made for a year. It became a habit and it was the key to becoming completely aware of everything I spent. I mean, if I spent  50cents on a packet of gum, I’d record it. Yep, that probably seems excessive – and sometimes it did get to me. But it helped by revealing patterns and behaviours in my spending and where I could ‘cut the junk’.

When I was fully aware of the things that burnt a whole in my pocket, I continued recording everything I spent as a habit to keep me on track. Debt and paying it off HAS to be at the front of your mind EVERY TIME you make a purchase (big or small) if you plan to win the war.

I just jotted down the purchase and the cost on the note section of my phone. Even the simple action of taking out my phone to add to my purchase list was an opportunity to check myself.  I had a moment to think about what I was about to spend and scan the list of the items already purchased that day / week.

So give it a go – 1 month. Record everything. You will be surprised (and potentially alarmed! 😉 ) at where your money is going.

Implement spend free days

I don’t know who originally coined the term Spend Free days in the world of PF blogging, but it really is a genius concept. Many bloggers out there set themselves spend free days and weeks (and months!)

I soon jumped on board to employ this effective little tactic in my own Get Debt Free strategy. I would regularly set myself 2 spend free days per week. These are days where you spend nothing, except on essential items – ie, a train ticket. Ok, so what stops you buying something you really want on non spend day? Well I saw the whole point of spend free days to curb mindless consumerism on the junk items.  You know, the stuff you buy without even thinking *hand goes to wallet, money comes out, I’m $10 poorer without even batting an eye*….. magazines, coffee, lunch takeout, a glass of wine after work, that kind of stuff. The point of my spend free days was to put a stop to spending without thinking. It worked.

 

Cut the junk STRAIGHT AWAY  

We spend money on so much SHIT. Seriously.  Cut the junk from your spending. Like, straight away. If you are in debt and looking to get debt free, frivolous expenses must go immediately. These purchases add nothing of real value to your life except a fleeting moment of satisfaction or more likely, distraction. Then it is all over red rover and you’ve spent 5 bucks on a magazine to read about the latest Kimye scandal.

Make your budget REALISTIC – it is ok to ease into it.

Yep, I know the enthusiasm…. you are all ready to pay off your debt and you want to go in, repayment guns a blazin’ and smash it out ASAP.

This type of excitement is exactly what you need to get the momentum going. But one of the side effects to this excited attitude is a rather optimistic approach to setting your budget. Which is turn can lead to disappointment, frustration and wanting to give it all up, a few months in when all the excitement has worn off.

I had a huge budget fail when I first set about paying off my debt in March 2013. I drew up a budget which showed I would be out of debt in October 2013. The budget was unrealistic. It didn’t account for EVERYTHING and it left me with very little spending money.  I knew for awhile it wasn’t working but I kept at it, and kept beating myself up when I went over budget (surprise, surprise) each month. Then I hit Debt Fatigue in a big way – I was WAY off my (unrealistic) goal and it would be another 8 months of debt repayment past October. Frustrated, disappointed and sick of debt – I stopped blogging for awhile, although I continued to make smaller repayments. Then I regrouped – I got my shit together with a realistic budget that included everything and set about attacking debt again with my new debt free date.

Set yourself up for success with a realistic budget. A good budget is not rigid, it’s flexible and fluid and allows you to adapt when you need too. When you look at your expenses, cut the junk first – without even considering keeping those items. Then, slowly, you can whittle down your expenses.  You will be surprised what you are happy to go without and places your budget can be cut further once you get into a momentum.

5 ATTITUDES that helped my pay off debt

Never EVER EVER give up

We all know the saying and it’s cliché for a reason.

If you don’t give up making repayments, you will be debt free. At some point. One Day. Maybe not when you thought – refer to my Budget Fail – but if you don’t stop making those payments, the numbers will continue to tick down. We all have shit days when paying off debt. The days we want to buy everything in sight, where we are angry, frustrated and generally just pissed off at the hold debt has on our lives. Don’t let any of those reasons make you give up. Giving up is not an option. Take another look at the budget, cut yourself some slack for a week or buy a nice little purchase for yourself. Then get back on the horse and keep going.

Own your OWN debt

You are in debt because of you. If you acknowledge you are in debt but refuse to blame yourself, well, you are going to get nowhere fast. The most important thing when making a financial life change is the long term change of bad financial habits or behaviours. If you are looking around at everyone else to blame for your situation, you will never change the habits that got you there in the first place.

Continue to give and pay your own way

Ok, so this is a dual tip – action and attitude. People with stingy attitudes towards giving will NEVER BE SATISFIED with what they have. Getting debt free isn’t about being stingy towards others. I have continued to donate to charities and causes I support. There will always be others worse off than you. Sure, debt sucks but I don’t struggle to put food on the table or pay my rent. Others aren’t so fortunate. Never think that your situation is the worst. Wherever there is a lack, there is an opportunity to give – so have a giving attitude. Also, don’t skip out on a round of drinks with your mates if you have chosen to go out for the night. If you can’t afford it, don’t go.

Don’t think you are alone

If your attitude is Woe Is Me, No One Else In The World Understands This Debt Thing, then take 2 seconds to type I’m In Debt into google and you will see no, you certainly are NOT alone. There are so many stories, so much inspiration, so much advice out there around getting out of debt, you should never feel alone. Ok, so maybe you are the only one in your family or circle of friends in debt, but investigate the resources available to you – and the support! The PF blogging world has been a huge inspiration to me.

And my last piece of advice?

Be passionate

A passionate attitude toward doing all you can to get out of debt, will see you realise that debt free date sooner than you thought possible. So get started today – and change your life! Debt free is set free.

So, there are my top 10 tips – I’d love to hear they number 1 thing that has helped you on your journey to debt freedom!

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The one habit I couldn’t break

Readers of the Debt Breakup will probably be familiar with my love of coffee. So I guess it comes as no surprise that the one habit I couldn’t kick during my journey to debt freedom was my daily coffee.

I tried, I really did. Sometimes, I went a week with only a few coffee purchases. Or a month on a coffee budget. Sometimes coffee purchasing was sporadic. I would take different routes to work to avoid the cafes I would frequent and the siren call of caffeine. 

But long term resistance was futile.

I gave up trying to give up coffee about 3 months ago. I thought, fuck this. I love coffee. It is the ‘one a day’  treat I allow myself when I have given up buying a lot of things that once upon a time appeared on my Stuff I Buy list. 

I don’t miss a lot of things on my old Stuff I Buy list. The further down the path to debt freedom I got, the more I realised I could get by just fine without a lot of the things I thought I needed. Don’t get me wrong, I still have the occasional urge to spend ridiculous amounts of money on clothes or skin care or bust out and take an impromptu trip to Bali. 

I knew I needed to give up those things, to get where I (almost!) am. I told myself if was a limited time frame for me to have to curb my spending, so just suck it up and get on with it. The funny thing is, along the way, curbing these habits and changing spending patterns out of necessity, I can confidently say I won’t be returning to them, even when I’m debt free. Yep, I’ll buy more clothes and yep I’ll do more ‘fun’ stuff but I won’t be spending beyond my means and I will be socking as much cash away as possible to fund my end of year trip to Central America.

So, a lot of purchases got the boot. But my small skinny latte stayed. Afterall…life if to short not to drink coffee.

On another note, I have 1 more payment to make – my current debt balance stands at $623.01.

oh YEAH!!!!!!!

 

 

Its your debt. It doesn’t matter to anyone else.

With less than a month to go until my final repayment, I have been reflecting a little on my journey to debt freedom and something that has struck me is the solitary nature of this battle.

Only 2 people – other than readers of the Debt Breakup – know exactly how much debt I’m paying off. Honestly, no-one else would really care. I mean sure, people would be like ‘good on you’ and ‘well done’ or even – ‘well you were stupid enough to get into that much debt in the first place so woop de doo, you’ve paid it off’

Most people won’t realise –  or care too much – about how much it has taken to get to this point. Patience, diligence, restraint, sacrifice – REPEAT. Over and over again.

And really, when it comes down to it, why should anyone else care? This is the debt that I got myself into and I’m getting myself out of. I have no dependents and no spouse, so it affects no one but me. Yep, it was stupid of me to rack up so much debt – am I simply not just doing what I should have done years ago and making things right. Every cent I have paid towards my debt has been my own, no one has given me a leg up. It really has been an extremely solitary endeavor, and one that may have felt quite lonely at times if it weren’t for the readers of the Debt Breakup.

Blogging about my journey here, albeit anonymously, has helped me carry the momentum when I felt like giving up. The kind comments and encouraging sentiments left on my blog have told me I am not truly on the journey by myself. Others out there have felt the same sense of anxiety, panic, anger and stress about debt, and the sense of achievement as we pull closer and closer to the goal of $0.00.

My aim for this blog was never to take over the PF blogging world with a million readers and 1000’s of comments. It was to share my story and hope that others may find some inspiration, just as I have found in the many debt busting blogs along my journey.

So, thank you readers of the Debt Breakup. I can honestly say, this process would have been SO much harder without the blog and the readers 🙂

$0.00 is in sight. Oh YEH.

Have a great day!

 

 

2 more payments left!

Pay day today and I put $480.00 towards my loan – only $1273.00 left to go!

In the last few weeks I have made some further adjustments to my budget:

  • I cancelled my gym membership – saving $23.90 per fortnight
  • I’ve been walking consistently  to and from work.- saving $35.00 per fortnight

I cancelled my gym membership not because I didn’t use it but because I intended to join a new gym closer to home. However, with the walk too and from work each day – just over 8kms per day in total – I’ve found it to be a good substitute for the gym at the moment.

My current fortnightly budget looks like this:

  • $295 rent
  • $650 loan repayments (I put $450 on today as $173.00 was taken off last week as my actual repayment)
  • $50 buffer fund – current buffer fund is non existent as I put it all toward a recent dentist appointment.
  • $20 electricity
  • $50 save
  • $15 internet
  • $15 phone
  • $30 health insurance
  • $20 tithe
  • $250 groceries
  • $225 spending

This pay won’t play out exactly as planned, the dentist appointment meant my savings took a bit of a hit and I needed to make up for it this pay. I also bought a very nice bottle of champers and took my boyfriend out for a celebratory dinner last week – extra expenses to come from my savings that I needed to make up this week.

2 more pays (hopefully! I don’t want to be tempting fate here by being so excited 😉 to go folks!

I hope everyone is having a good debt busting week this week!

Elesha 🙂

Check out my new blog – 4000 Sundays

The Debt Breakup will be finishing up pretty soon – only 3 payments left!

I will continue to blog – no longer anonymously – on my new blog 4000 Sundays.  The next phase of my journey – saving for my trip to Central America at the end of this year, along with other bits and pieces – will continue here!

Come on over and check it out 🙂

Under $2000!

Today was payday and I transferred another $650 onto my personal loan – bringing the balance under $2000!

Current loan: $1892.95

It is very exciting to see the number 1 at the start of what is left to pay of my debt. 

3 payments (hopefully!) to go 🙂

Elesha

Old habits die hard. But they do die.

Changing habitual spending patterns has probably been the biggest battle I’ve faced on my debt free journey.

Those habitual spendings are often quite small, unassuming amounts. What I have also learnt is those small amounts can cause even the best budget to become derailed. It’s the purchases you make without thinking / on auto pilot due to habit that you need to watch out for.

So, these were my top habitual spends:

COFFEE – Yep, those who have followed along for some time on the Debt Breakup will know my never ending struggle to not buy coffee every day. Up until recently I have still struggled, although I haven’t purchased a coffee every day for a long time. I’d have 3 during the week. Lately though, I’ve only purchased 1 during the week and 2 on the weekend. This also has to do with a lack of coffee shops that ACTUALLY MAKE GOOD COFFEE in the city. To be honest, I got sick of buying shit coffee for $4.20 a cup                                                   

Old weekly coffee habit approx: $30.00 per week

Current coffee purchases approx:$12.00 per week

Magazines – Celebrity gossip and general fitness / health. Firstly, buying a celebrity gossip mag is like taking a $5 note and setting it on fire. Absolute waste. And I’ve gained nothing from reading it…except the knowlege Kim Kardashian has had a 3rd butt augmentation and Lady GaGa is now spewing green foam from her mouth during live performances. At least with the fitness and health mags, I gained some knowledge. I REALLY struggle not to buy magazines in airport lounges, and with all the interstate trips I did last year I spent almost as much on magazines as flights!

Old weekly magazine habit approx: $10.00 per week

Current magazine purchases: $0.00 per week. I read stuff online and I also received a yearly subscription to a health magazine Prevention for a gift at Christmas so I get a mag every month 🙂 my gym also gives out free magazines.

Friday lunches: I’ve always been pretty good at taking my own lunch to work because it is straight up just a huge cost saving. But I would still treat myself to lunch on Friday. I do think it’s a nice treat for a Friday, but I’ve tried to minimise the cost a bit. Rather than purchasing a full meal – from $11 – $15, I’ll buy a side of hot chips or a sushi roll to have with the lunch I bought from home, so this will only set me back about $3.

Old Friday lunch habit approx $11.00 per week

Current Friday lunch habit: $3.00 per week

So by working on breaking the cycle of habitual spending on the above 3 things, I have saved myself over $40 per week which is pretty awesome. It has taken awhile though…but I no longer wrestle with the decision to buy these things like I used to when I first started cutting back. I see them for what they are – a waste of $$ with the potential to delay my debt free date!

What items do you habitually spend money on?

Week 53 – I’ve paid off over $10,000!!!

Happy Saturday blogger and reader friends!

Ta DA! I reached a milestone this week. My debt repayments now total over $10,000 🙂

The vice grip of debt is loosening it’s grip around my paypacket……….soon, it will be mine…all mine..

.*cackles in a strange Wizard of Oz witch type way*

ha.

Anyways, here are my stats for this fortnight:

Starting debt at March 2013: $14,774.12 

Debt repayment on 19th March 2014: $650.00

Current Debt: $4382.56

Debt paid: $10,391.56!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

Buffer fund: $250.00 (increased by $50)

Savings: $350.00 (increased by $90)

This is the countdown I have stuck to my fridge 🙂

Image

Liebster Award!

Big thanks to Sarah at Life In the Orchard who nominated me for a Liebster Award 🙂

Thanks so much Sarah!

liebster-award

There are some great blogs out there tackling debt and sharing their journey’s, and the Liebster Award is a great platform to recognize them, so I’d like to nominate:

Healthful Saver

Indebted2debt 

making my way to zero 

Guys, your questions to answer at the bottom of this post 🙂

And now for the ‘rules’…

1. Thank the person who nominated you and link to their blog. 2. Show off your award on your blog (in a post, widget, etc. like I did). 3. Answer 10 questions given to you by the nominee before you. 4. Create 10 questions of your own. (Don’t worry, you can use mine if you want). 5. Nominate 5-10 of your favorite blogs with fewer than 200 followers and notify them of their nomination. 6. And of course, tell them about it and provide a link back to your website so that they can know more about the award!

Here are my questions from Sarah at Life in the Orchard:

  • What is your favorite thing about yourself? I am quite happy to be alone, in fact, it is the source of my energy…quality alone time with me J The older I get, the more people I meet, the more I realise this is quite a rare gift. To simply enjoy your own company.
  • What is your greatest accomplishment? I find it hard to say what my greatest accomplishment is…a life has so many facets, and I don’t think I have 1 accomplishment to cover them all. A few recent things I am proud of though – completing (just!) a 50km ultra marathon and the progress I have made in paying off the debt I have to date. When I am debt free, I could certainly say that will be the biggest financial accomplishment in my life!
  • If you could do anything for a living and money wasn’t an issue, what would you do? Own a vintage / retro furniture and homewares store or a travel writer.
  • What in life is holding you back from living your dreams? Debt / lack of savings at the moment. But I’m well down the path of changing this – so by the end of 2014, LOOK OUT! My life of long stints of wandering the globe (that’s my dream 😉 shall begin!
  • If you could take the vacation of a lifetime where would you go and why? Italy…and eat…and eat…and eat…
  • Where is the best place you have traveled? Colombia
  • What inspires you to blog? My getting debt free journey – and hopefully inspiring others with the same goal!
  • When you first started your blog what was the purpose of creating it? I started my blog after reading other debt free / personal finance blogs and decided I wanted to track my journey too.
  • How has blogging enhanced your life? I would say blogging has certainly helped keep me accountable on my mission to pay off $14,750 worth of debt. I find the blogging world of personal finance super inspiring…..you can be very honest on an ‘anonymous’ blog on the subject of money. A subject most people find awkward / embarrassing to talk about with friends – especially if they are in debt.
  • If you won a million bucks what would you do with it? Buy a modest home / invest some and spend the rest travelling. Imagine how much amazing food I could eat in Italy with that kind of cash 😉

Questions for the blogs I nominated are:

  1. What is your favorite thing about yourself?
  2. What is your greatest accomplishment?
  3. If you could do anything for a living and money wasn’t an issue, what would you do?
  4. What in life is holding you back from living your dreams?
  5. If you could take the vacation of a lifetime where would you go and why?
  6. Where is the best place you have traveled?
  7. What inspires you to blog?
  8. When you first started your blog what was the purpose of creating it?
  9. How has blogging enhanced your life?
  10. If you won a million bucks what would you do with it?

Have fun guys!

Ciao 🙂

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