Tag Archives: financial freedom

Debt Breakup goals for February

February is almost here! January has just flown by!

So, time for some goals for the coming month. Keeping it simple and not huge amounts:

  • Pay $320.00 off personal loan  – current outstanding balance: $5925.05
  • Add $150.00 to savings account – current savings $140.00
  • 2 spend free days per week – aiming for Tuesday and Thursday each week to keep consistent
  • Contribute at least $30 to my ‘piggy bank’

You can see my savings account is very low – so anyone out there who is new to The Debt Breakup, it’s a good time to follow the blog – my savings are just starting! I hope yours are too 🙂

Let’s make some kickass progress together!

Have a great Tuesday 🙂

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The Debt Breakup – My 2014 financial plan

I am back to blogging.

Back with a financial plan for 2014. Back with more enthusiasm. Feeling awesome about reaching my goals.

My Biggest Debt Mistake of 2013

I set myself an unrealistic goal to be debt free by the end of 2013. That was my biggest mistake.

When I arrived back from travelling at the end of 2012, I was so overwhelmed by the amount of debt I was in, I felt like I must attack this debt with everything I had. Which is a good attitude in theory, but this mindset lead me to setting up an unrealistic plan and budget to knock out almost 15k in just 8 months. For some, this may very well be possible. For me it wasn’t. And without a flexible budget, when life gets in the way as – surprise, surprise – it does, I felt frustrated and un-motivated by the end of the year when I knew my goal was not possible.

Armed with this ‘be practical about stuff’ revelation, I have started 2014 with a different mindset and a more realistic financial plan – that actually (I hope!) covers everything.

And, this may come as a surprise, it is not necessarily to be debt free by the end of 2014.

The Debt Breakup plan for 2014:

  • Pay off $4000.00* of my remaining debt – currently at $5925.05
  • Save $10,500 for travelling at the end of 2014

Travel is the true motivator, the real reason behind wanting to rid myself of this debt. After I travelled in South America in 2012, I returned home with an even bigger passion to travel than I had before – but also with an epic amount of debt. While I was travelling, I still had to account for monthly repayments etc and it sucked up funds I could have used to go further and longer in my trip.

Ok, so yes, the above plan means I still will travel with SOME debt. However, not 14+k worth and what the  * means is I actually hope to pay off more than this.

By channelling any extra funds (tax return, payrise etc) into the debt, I hope to knock out more. But $4k is what I can comfortably pay and account for – therefore any extra is a bonus.

The most important thing is, I am comfortable with the above plan. And I am looking forward to blogging about my journey again, with renewed enthusiasm.

I will continue to update on my weekly expenses and each fortnight – on payday – I will post the budget for the coming fortnight. Which will pretty much remain similar or the same as the following:

My regular fortnightly budget

  • Rent: $295.00 – I split the rent with my boyfriend
  • Travel: $45.00 – Bus fare to and from work. Most days I am lucky enough to get a ride to work with my boyfriend so it is mostly just the journey home I pay for.
  • Phone: $15.00 – I have a prepaid phone and $30 recharge voucher lasts me the month – for calls and texts, mostly the data runs out before 30 days.
  • Internet: $15.00 – On an internet plan for $30.00 per month (not prepaid)
  • Electricity: $20.00 – We are yet to receive our first electricity bill, which we will split evenly, so at the moment I am putting $40 per month away for this but will adjust accordingly when the first bill arrives.
  • Gym: $23.90 – I spent a lot of time deliberating whether or not to keep my membership, and instead just work out at home with some basic equipment and running. However, the gym recently started offering classes at no additional cost to the membership, which is awesome,  and  I decided to keep my membership.
  • Groceries: $250.00 – Grocery costs I also split with my boyfriend and have been tracking the expenses on our grocery spending. Although it does sometimes vary, $250 is a good amount to put aside each fortnight.
  • Tithe / donation: $20.00 – I donate $40 a month to a children’s home in India run by a Christian pastor and his wife. The home assists young Indian girls create a life outside child prostitution which is rampant in that part of India. I was very moved by the pastor and his wife when they spoke at a church sermon here in Australia last year and decided to allocate my donation to the home. It is my plan to increase this amount slowly.
  • Loan repayment: $160.00 – My set monthly repayment is $173.00 so I have allocated another $73.50 per fortnight towards the loan.
  • Buffer: $50.00 – For the first time, I have allocated a ‘buffer’ amount into my budget. It isn’t too large but it is better than nothing!
  • Spending: $230.00 – Most weeks will leave me with $115.00 as spending / entertainment money.

So, where does that mean I will be saving each month? And what about other expenses?

As of 5th March, I will be saving $490.00 per fortnight. Up until then, the amount allocated for savings is smaller and varied, I will outline these in my fortnightly budgets.

At the start of this year I had a few expenses / additional things to save for. I am taking a week trip to New Zealand in February– YAY! – so I need to put spending money aside for that. I also have an interstate wedding (Mach) and interstate hen’s celebration (January).

These are the only interstate trips I am planning this year – last year flight costs etc burnt a big hole in my repayment plan. The trip to New Zealand will be my only holiday this year.

So, I built these additional things into my budget for the first 2 ½ months of the year – which is why  savings amounts are smaller until March.

So, let’s DO this!!

 

A note to say thanks to Eva @  Girl Counting Pennies – who has a fantastic blog and reading her Goals for 2014 really helped me get back on track  🙂 

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Week 32 – Spend and Expense

Ok, so my expense recording was a bit sketchy for Week 32 – I find my vigilance in recording my expenses slips when I feel like I’ve blown my budget – which is unsurprising!

In week 32 I spent 3 fabulous days in the beautiful Byron Bay. It was a mini break I REALLY needed and I had planned to treat myself to some great meals and many cocktails. Unfortunately, the timing of the Byron break and moving in the same fortnight really saw my budget spin completely out of control!

But I really needed that break, and I had been looking forward to it for a long time. I find the biggest challenge with a long term debt smashing mission – which this is becoming – is balancing LIVING life while paying off debt, so you can live the life you want.

It’s a fine line which I haven’t quite mastered walking yet.

 

Monday

$5.50 coffee

$9.00 groceries

Tuesday

$110.00 clothes and shoes

Wednesday

$63 dinner/ drinks

Thursday

$3.90 coffee

$23.90 gym fee

$220 flight

$5.95 sandwich

$250.00 debt repayment

Friday

$12.55 lunch

$290.00 accommodation

$41.00 lunch

$100.00 dinner / drinks

Saturday

$60.00 dinner / drinks

Sunday

$75.00 homewares purchase from Byron Bay markets

$15.00 coffee and cake

$3.50 water

Total spend for Week 32:  $1288.30

Debt summary for Week 32:

Credit card 1:  $0.00

Credit card 2:  $0.00

Personal loan: $6,368.00

Total starting debt: $14,744.12

Debt reduced by Week 32: $8,376.12  (average of $270.00 per week)

 

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Week 31 – Debt and Expense Update

Hey peeps.

I’m a few weeks behind in my spend and debt updates, so planning to post a few all at once and then let you know what the heck I’ve been up too.

So week 31 I moved out of my folks place and into an apartment with my boyfriend. For the sake of my mental health, I could no longer do the epic 4 hour daily commute from my folks place to work and back. I had reached the end of the line on that one, mentally and physically drained and not far from having a public meltdown on the way to work one morning when delays meant the trip to work alone took 3 hours!

A grown woman crying and thrashing around in the 2nd carriage while screaming ‘for the love of God, I’ll get out and push this train – just hurry the f#$% UP!’ is NOT a good look.

A week later, a lease was signed and my commute went from 2 hours one way to 25 mins. WINNING.

However, it has been expensive and thrown a spanner – one of many this month it seems – in the debt smashing works.

Monday

$5.50 coffee

$21.80 postage for gifts

$12.85 groceries

$25 internet

Tuesday

$1.00 bet (It was the Melbourne Cup in Australia – big horse racing day!)

$40 travel

$3.95 health / personal care

$15 drinks

$7.95 Juice

Wednesday

$0.00

Thursday

$52 dinner – took my folks out to dinner to thank them for helping me move the following weekend

Friday

$30 drinks

$26 cab fare

$875 rental bond

$3.80 coffee

$10.00 gift

Saturday (I flew interstate for the day)

$15 lunch

$25 petrol

$8.90 wine

$5.75 soup / takeaway

$20.00 drinks

$3.95 magazine

Sunday – move day!

$56 groceries

$18.00 takeaway coffees /breakfast

$70.00 cash to my brother for helping me move

$14.00 take away

Total spend for Week 31:  

$1,366.45

Debt summary for Week 31:

Credit card 1:  $0.00

Credit card 2:  $0.00

Personal loan: $6618.83

Bank balance:

$529.37

 

 

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Week 29 – Expense and Debt Update

A bit late with my weekly update, but here are the stats for Week 29.

While nothing much as changed on the debt front, I did stick to my goal of only buying 1 coffee and shopping at ALDI for my weekly shop. I also managed to not spend money on alcohol…but my boyfriend very kindly spotted me some beers last night 😉

Spend summary

Monday: $3.00 water, $15.00 on travel card

Tuesday: $0.00

Wednesday: $150.00 on travel card, $140 board

Thursday: $40.50 gifts

Friday: $23.00 gym

Saturday: $70.00 dentist, $4.50 coffee, $30 phone recharge card, $35.00 donation

Sunday: $27.30 dinner

Total spend: $538.30

Debt update

Credit card #1 – $0.00

Credit card #2 – $0.00

Personal loan: $6708.64

Total debt remaining: $6708.64

Total starting debt: $14,744.12

Debt reduced by Week 29: $8,035.48

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Wearing the same clothes. Over and over and OVER again.

I am so freakin bored with my wardrobe.

Clothes are pretty much the first on the hit list of things to go when the budget gets serious. I have had 2 skirts, 5 tops and 2 dresses on high rotation for the last 10 months as my work wardrobe.

Most items are black / dark and simple. Coming into the new season (summer) fashion, all these delightful light, bright and fabulous numbers are calling to me from shop windows.

Must.Not.Buy

Yes, yes, I know – first world problems. But, this blog is about my journey to debt freedom, and that includes leaving no whinge or frustration unsaid.

So, now I have that off my chest, the plan from 14th Oct – 14th Nov is to eliminate the items that burn a hole in my pocket.

After tracking my expenses for months, I can identify where a large portion of my $$ goes:

  • Coffee – yep, no surprises there!
  • Alcohol – seriously, in Australia drinking in bars / restaurants is SO expensive
  • Groceries – now I am not going to eliminate groceries altogether obviously! But I need to be smarter about where I purchase groceries and what I buy

So, my approach is this. Purchase only 1 coffee a week. Purchase NO alcohol. Shop at ALDI rather than Coles for my weekly work lunch groceries. I rarely ever buy my lunch at work, instead I do a shop every Monday morning for what I need for the week. But sometimes that shop can still cost me quite a bit. I tend to buy ‘brand name’ groceries and I do love the organic health food aisle 😉 But over the next month I just need to make simple purchases, not sacrificing healthy eating, but just getting down to necessity only.

So this was the 1st week and I have kept on track so far.

If I am going to blow this debt out of the water by the end of the year, it is crunch time. I have felt on a really tight leash lately and it has been doing my head in a bit, but I’m pulling out all stops to go into 2014 debt  free.

‘Perseverance is is the hard work you do after you get tired of doing the hard work you already did’  – Newt Gingrich

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Week 28 – Spend and Expense update

So, I missed Week 27 update as I record all my expenses in my phone.

And my phone died for a few days, when it came to, some of my notes / contacts were no longer!

So here are my Week 28 stats – no real change to debt. But I have a plan for the next 4 weeks and will give an update on that in my next post:

Spend summary

Monday: $7.00 coffee

Tuesday: $7.10 groceries, $ 4.90 takeaway juice, $110 gifts

Wednesday: $20.50 test for drivers licence

Thursday: $28 taxi, $100 dinner (it was a birthday dinner) , $40 gift

Friday: $7.95 gift, $20.50 licence test, $145 drivers licence fee, $80 drinks

Saturday: $4.00 coffee, $20 on travel card

Sunday: $5.00 raffle ticket, $4.00 bag, $20.80 groceries

Total spend: $624.75. 

Debt update

Credit card #1 – $0.00

Credit card #2 – $0.00

Personal loan: $6708.64

Total debt remaining: $6708.64

Total starting debt: $14,744.12

Debt reduced by Week 28: $8,035.48

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Week 23 – Debt & Expense Update (credit card #2 under $1000!)

Woo hoo!

Credit card #2 is under $1000! Only JUST. But I’m taking it as a win! When I started this blog that card was maxed at $5k.

This week I did have a HUGE expense – I paid to have my household items currently stored interstate to be delivered to my parents home. It cost $1870 for the delivery and $140 for the remaining storage for September. While this was a big outlay, it means I will no longer be paying $180 per month like I have for the past almost 2 years.

Now my committed expenses are as follows:

$280  per month – rent

$360 per month – travel

$178 per month –  loan

$25 per month –  internet

$30 per month – phone

$44 per month – gym

$29 per month – loan insurance

 

My expenses this week looked like this:

Monday: $25.00 groceries, $3.90 coffee

Tuesday: $3.10 personal care, $100 concert ticket, $40.00 put on travel card

Wednesday: $8.95 earrings, $3.95 snack, $4.00 groceries

Thursday: $12.00 personal care, $18.00 drinks, $100 put on travel card, $23.90 gym fees, $2010.00 storage and removal fee

Friday: $3.90 coffee

Saturday: $30 drinks, $40 sports nutrition bars, $22 dinner

Sunday – $12.00 second hand book, $8.00 coffee

Total spend for Week 23: $2, 468.70

Debt summary

Credit card #1 – $0.00

Credit card #2 – $932.00

Personal loan: $6893.69

Total debt remaining: $7825.69

Total starting debt: $14,744.12

Debt reduced by week 23: $6,918.43

 

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Week 21- Debt stats update

Happy Sunday guys!

Here are my debt stats for the week:

Spending summary

Monday: $4.20 coffee, $45 groceries, $50 groceries,

Tuesday: $8.90 coffee, $11.70 groceries + haircare,

Wednesday: $4.90 coffee, $4.95 breakfast, $97.00 flowers for a gift, $23.90 gym fees, $29.00 loan insurance, $80 travel, $140 board

Thursday: $8.00 postage + packaging,

 Friday: $5.00 coffee, $12.95 postage, $20 groceries, $25 bottle of wine, $22.00 drinks

Saturday: $7.00 coffees, $30.00 dinner and drinks

Sunday :$20 groceries, $6.00 groceries, $7.00 coffees

Total $662.50

Debt summary

Credit card #1 – $0.00

Credit card #2 – $1344.88

Personal loan: $6893.69

Total debt remaining: $8,238.57

Total starting debt: $14,744.12

Debt reduced by week 21: $6,505.55

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Contracts suck

So I realized that over the last 2 years I have slowly freed myself from the grip of contracts. Even before starting my debt smashing mission this year, I made it my aim to see out current contracts I was in and not resign, or ‘upgrade’.

Contracts essentially are debt. You are committed to a monthly, weekly or fortnightly payment. People will harass you if you don’t make the payments. It’s the ‘I want  it now. Like ,RIGHT now dammit!’ *stamps foot* mentality that gets you sucked in.

I was in a phone contract, laptop contract and white good / furniture contract. All of those are now done and dusted. I have the shitty old laptop I’ve had for years (and spent 2 years in a contract for) and a *gasp*an Iphone 3. 

How RETRO is that!

I was in a contract for the phone for 2 years too. It was all shiny and new and ooohhh check out my iPhone 3 peoples!!! at the start.

And then very quickly the word iPhone was followed by escalating numbers (what are we at, like iPhone 5000 now??) and my phone did indeed become relegated to the crusty ‘has been’ part of phone stocking stores and they stopped making covers for them. I actually found the cover thing the most frustrating.

I remember going into a store and asking for the iPhone 3 covers. The guy looked at me with what I suspect was a mix of sympathy (perhaps she can’t afford a better phone) and amusement (um, doesn’t she know iphone 3’s are sooooooooo 2010) and shook his head.

Fortunately, I am not in the slightest bit gadgety or cool. So I have no use for newer / better / shiner versions every time they come out. Which is good, because, in case you haven’t noticed, newer / shiner and better things come out every freaking week.

So, my laptop my be slow and cumbersome – but hey, its working. I’m writing this post aren’t I? And my phone might be totes uncool, but oh well. I’m not paying some provider $90+ a month.

These days I pay my internet – $25 a month (can cancel with 30 days notice) and no contract pre-paid phone recharge vouchers – $30 a month gets me by just fine!

When these things do eventually come to the end of their lives I will purchase replacements IN CASH.

Aside from my credit card and personal loan, my biggest ‘must pay’ commitment is my furniture storage cost per month, which is $183.00. I have arranged for this to come out of store and be delivered to my folks place in  the next month. The delivery is a huge $1870 because I now live interstate. But Im using money I received from my tax return to pay this cost, and get this monkey off my back.

Slowly, slowly I am getting out of financial commitments. Patience is a virtue in this game! And it’s also the way to stay out of those contracts in the first place – be old school and save for what you need.

 

 

 

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