Tag Archives: paying off debt

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!

Tagged , , , , , , , , , , , , , , , , ,

A slow shopping spree

I SO miss buying clothes. Debt smashing is rewarding and all, but damn, sometimes I just want to bust out and buy a new wardrobe.

Right before I left for my South American backpacking adventure I spent quite a lot of cash on the items I needed for the trip – backpack, locks, headlamp etc. I also spent quite a bit on clothes.

When you have a small amount of clothes on high rotation for months and months, you want to start the trip with clothes you aren’t already sick of wearing. I am pretty much sick of my entire wardrobe at the moment. Unnecessary clothing purchases were the first thing to go when I got serious about paying off debt and saving.

In preparation for my trip to Central America, I have decided to approach my clothing purchases in a different way. I have prepared a list of the items I want to take and plan to purchase these throughout the year and pop them in a box to stay all nice and new for my trip!

Sure, I could put the money aside instead but I think this approach will give me the little shopping hit I need occasionally, and it’s just a bit of a different way to prepare 🙂

Here is my list:

  • 3 x pair of shorts
  • 3 x t-shirts
  • 3 x singlets
  • 2 x casual summer dresses
  • 2 x hoodies
  • 2 x leggings
  • 1 x pair of jeans
  • 1 x pair of hiking pants
  • 1 x rain jacket
  • 1 x cardigan
  • 1 x jacket

I will be taking other things (underwear etc!) but these are the things I’d like to have new 🙂

Speaking of holidays, I’m off to New Zealand tonight! Just for a week 🙂  but I can’t wait! I won’t be posting my normal weekly spend report on Sunday but I’ll check in after my trip and let you know how I went on my holiday spending – holiday budget vs actual spend.

Ciao!

Tagged , , , , , , , , , , , , , ,

Week 43 – Spend and Debt update

Week 43 report reporting on my expenses that come from my allocated ‘spending allowance’ per week. All other regular and fixed expenses are outlined in my budget here and automatically debited etc. Grocery spend – although variable, is outlined in my fortnightly budget too.

Spending funds allocated for Week 43 – $35.55 – yep, super duper small allowance this week! I am heading to New Zealand next week (YAY!) so really wanted to channel as much cash as possible into my spending for NZ!

Actual funds spent for Week 42 – $24.85. Under budget! Yay!

Monday: No spend.

Tuesday: No spend

Wednesday: No spend

Thursday: $7.45 lunch takeaway

Friday: $4.95 coffee, $5.95 lunch, $1.00 movie rental

Saturday: $2.00 movie rental

Sunday: $3.50 coffee

I passed my 2 spend free days per week challenge, actually had 3 days!!

Starting debt at March 2013: $14,774.12

Current Debt: $5,850.05

Debt paid: $8,924.07 divided by 43 weeks = $207. 53  debt repayment per week on average

Tagged , , , , , , , , , , , , ,

January 2014 – At a glance debt and savings stats

During 2014, I will be posting a monthly ‘at a glance’ update on my Debt and Savings balances.

At the end of January, things were looking like this:

Debt

Credit card 1 – $0.00

Credit card 2 – $0.00

Personal loan: $5925.05

Savings

$140.54

Things are going to be fairly quiet and unexciting around the savings corner until March!

Later alligators 🙂

Tagged , , , , , , , , , , , , , ,

My fortnightly budget for 2014

So folks, this is my regular fortnightly budget – my take home pay each fortnight is $1620.00

  • 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.

Tagged , , , , , , , , , ,

Money – Getting the feel of it

Over the holiday season I read a book called:

It’s Your Money: Becoming a Woman Of Independent Means by Gail Vaz-Oxlade.

One of the tips she gave, is to physically handle your money. Get back in touch with the paper.  I’ve heard this tip before, so it’s not anything new but I’d never really tried to put it into action. It’s so easy to swipe your debit card for purchases. Money just becomes numbers and dots on a screen.  Unless you have many different bank accounts for all money allocations (which she also recommends) if you are like me, you are constantly doing the sums in your head to figure out what still needs to come out of that amount in your account.

But this year I’ve got my lil’ envelope plan going on!

So, I set up direct debits for as many of my expenses as I could, so BOOM! they are just whisked away on payday with no chance to spend. My holiday savings go direct to my savings account.

Then I withdraw a lump sum of cash which includes:

  • Spending money for both weeks (I get paid fortnightly)
  • Buffer fund
  • Electricity
  • Any other ad hoc expenses: ie, at the moment I am saving for my trip to NZ

Then I allocate the cash into the appropriate envelope and I’m done!

So really, once I withdraw that cash, there is no reason for me to do the sums on what is left in my account and I actually handle the money. Plus I don’t get hit with the $2.50 withdrawel fee from ATM’s when I use other banks to withdraw cash. Man I HATE those fees!

All that remains in my account as a fluctuating balance is the money for groceries and regular loan repayment as that is deducted at the end of each month.

And…I’m going really old school with a piggy bank!

Well, it’s more like a piggy box. That doesn’t have pigs on it. It has elephants. But I digress…

I am trying to put in $2 coins and $5 notes into the box – not every single $5 note as I would go through cash pretty quick! But all my $2 coins.

This year is about seeing the money I spend!

Do you have a great tip on how you allocate your funds?

Tagged , , , , , , , , , , , , , ,

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

Tagged , , , , , , , , , , , , ,

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

Tagged , , , , , , , , , , ,

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

Tagged , , , , , , , , , , , , ,

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.

 

 

 

Tagged , , , , , , , , , , ,
Appalachian Trail Girl

A How-To for Hiker Girls

Forks in the Road

the intersection of food and travel

Single Girl's Guide to Becoming Debt Free

And the lessons she's learned along the way!

saving{s} grace blog

a journey to financial freedom through following Jesus

4000 Sundays

Life adventures. Mostly involving travel and ridiculous amounts of caffeine

bad yellow duck

New York. Bath Toys. Etc.

Debt Free Martini

Blogging away my debt in hopes to drink an imaginary debt free martini....and finally become financially fit.

Banishing Loans

Because sometimes a 20-sided die makes more sense than money

Balancing purses and pennies in heels.

... in search of the perfect balance between living frugally and living to the max!

Double Debt Single Woman

a single woman paying off over $140,000 of debt

The Healthful Saver

The Quest for Healthy Savings and a Healthy Lifestyle

Simply Save

Saving money & simplifying life

I Make My Bed

A Walk through a Change in my Finances

Making My Way to Zero

Making my way to zero one day at a time

TML Work Blog

Share financial tips and work

Living Awesome

A Road to Happiness, Success and Fulfillment

Life in the Orchard

A Little Crafting, Cooking, Gardening and Living

Budget Loving Military Wife

Our Journey from Debt to Wealth