Tag Archives: personal loan

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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May update – glance at savings and debt

Howdy!

Here are the figures for how the month of May shaped up:

Debt

Credit card 1 – $0.00

Credit card 2 – $0.00

Personal loan: $ 1,273.01

Savings

$750.00

Buffer fund

$0.00- buffer fund hasn’t recovered since my visit to the dentist!

Total starting debt in March 2013 – $14, 774.12

Total debt paid to date – $13,501.11

Total debt remaining: $1,273.01

 

Later alligators!

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Week 45 – Spend and Debt update…and oh, my trip to New Zealand!

So..I am a bit over my spending allocation this week..

Spending funds allocated for Week 45 – $110.00 – This amount is for Wednesday (just been) through to Wednesday (coming)

Actual funds spent for Week 45 – $150.95. 

$40.95 over budget and still 2 days to go until I ‘pay’ myself again 😦

Also, it has been a ‘short’ week as I was in New Zealand and using my allocated NZ spending money until Wednesday eve.

Monday: New Zealand

Tuesday: New Zealand

Wednesday: New Zealand

Thursday: $15.00 groceries, $4.00 tank top (this was an emergency purchase as the one I wore to work ripped at work!), $3.95 health / beauty purchase, $4.00 card, $15 gift, $5.00 health /beauty purchase

Friday: $3.60 coffee, $5.60 takeaway lunch, $10.00 drinks

Saturday: $8.80 coffee (for myself and bf), $6.00 canvas – to make a cool artwork from a tea towel I purchased in NZ – my only souvenir! , $9.00 storage box, $12.00 scales

Sunday: $20.00 tithe to church, $29.00 breakfast – took mum out as she had paid for me the fortnight before.

Additional payments this week – not part of my usual fortnightly expenses but had been allocated to the budget for this fortnight:

$185.00 for accommodation for a friends wedding – interstate – in March

$76.00 for the wedding gift

Wins and fails for week 45

  • My ‘no spend’ days were non existent this week – fail! – and I went well over spending budget!
  • Wins: Both the accommodation and wedding gift came in slightly under the budget I had allocated, $200 for accom and $100 for gift. Also, we received our first electricity bill and it was $177, so $88.50 each. I’d actually put aside $190.00.

Starting debt at March 2013: $14,774.12 (ok, something weird is going on with my ‘Week’ numbers for my updates – I started the debt breakup in March 2013 but I am only up to week 45 on my updates? I think I may have messed up my tally mid last year when ceased posting as work was crazy hectic and I was on the verge of a mental breakdown! Anyways, my next update will be at 1 year pretty much and will start my tally again Year 2 – week 1 etc.)

Current Debt: $5,775.05

Debt paid: $8,999.07 (so close to $9,000.00 in repayments!)

Week 45 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.

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Get real – stop buying stuff you can’t afford

So here’s a cold hard little debt busting fact:

When you are up to your eyeballs in debt, you can’t afford expensive hobbies. You can’t afford go out to eat at 5 star restaurants every week. You can’t afford to shout rounds of cocktails to your friends at Friday night drinks. You can’t afford that expensive faceceam – even if it on special.

Before I got serious about debt repayment, I played a little (and financially dangerous) game of spending tug of war when it came to the things I really couldn’t afford.

I told myself these things:

  • I deserve it.
  • I’ve had a tough week.
  • It’s on special.
  • The world might end if I don’t get it.
  • It’s not a lot of money.
  • Whats the point in going out for just one drink?
  • It will make me happy.

The last reason is possibly the worst of them all. I was happy in the moment I purchased whatever it was. Then I felt anxious, guilty and hopeless about my ever mounting debt and my seemingly inability to stop spending money.

Truth is, most of my blow out expenditure was on nights out – booze and food. Drinking + making intelligent financial decisions do not go hand it hand. For me, anyway.

I don’t even know how many ‘mornings after’ I woke up to an empty wallet and a vague feeling of handing over my credit card to the bar to buy drinks time and time again.

This sort of spending – silly, wasteful spending – had to stop. Even the seemingly not so silly spending did!

Even spending $15.00 (that’s not much right??) over your budget each week adds up to $780.00 a year! Thats $780 towards debt freedom or savings!

If you are in debt, you have given up the freedom to spend money left right and centre. Quit the vague promise to yourself to ‘put more money towards my debt this year’.

Be clear in your commitment. Draw up goals. Plan. Budget.

And stop buying stuff you can’t afford.

 

 

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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

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Be consistent in the little things

It is important to keep your eye on the prize. The BIG picture – the reason you set the goals you have to reach the outcome you want. My BIG picture is to Travel The World Debt Free.

But it is SUPER, DUPER important to remain consistent in the LITTLE things. The day to day activities and actions that you need to do to reach that BIG goal.

To me, consistency in taking positive actions and steps– in all areas, finance, health, relationships, career – is KEY.

Consistency forms habits. And good habits in personal finance are priceless.

What LITTLE things am I doing every day / week to make the BIG thing (Debt Freedom!) a reality?

  • I record all my expenses. Every day. I log them into the notes section of my phone, then I put them into a spreadsheet at the end of the day.
  • I try (SO HARD 😉 not to buy takeaway coffees every day! Everyone has a little spend vice…the ‘small’ amount that adds up and burns a hole in your pocket! Mine is coffee.
  • I listen to personal finance podcasts or read PF content via blogs / books / internet almost every day. This helps keep my goal at the forefront of my mind – I get hints and tips and feel inspired!
  • I say No to the items I really don’t need right now. Consistently saying no, delaying gratification and not letting frivious purchases sidetrack you actually becomes very rewarding. And, the more you do it, the easier it becomes!
  • I review my budget weekly. A weekly review can curb any major blowouts and keep you on track.
  • I donate to my piggy bank. This is a fairly recent habit I’ve developed, but already I can see over time with consistent donations this little piggy will be laughing all the way to the bank!

What little things are you doing consistently to reach your big goal?

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What do you do for work?

My fellow debt blogger over at  20andjuststarting   asked me this question on a recent post. And I too am curious to know what other debt and PF bloggers do to earn a crust.

Me, I’m a full time Event and Communications Coordinator. I have to say, it’s a pretty sweet gig and I do enjoy my job. My salary is probably  slightly less than industry standard, given I work within the not for profit sector.

I’d like to be able to make some extra cash like so many who are smashing debt do, but I’m always a little stumped on this one…I don’t really fancy getting a second job…I did do that for awhile and it just amounted to BURNOUT. While Im all for debt repayment, I need to stay sane as well. It would be cool to have a little side hustle, but I just don’t know what!

So, fellow debt bloggers – what do you guys do for work? Any ideas on ways to earn extra cash would be appreciated!

 

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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 🙂

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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?

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