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 🙂