New Budget, what to do with "leftover money", debt update

Last night I sat down and plugged all of my actual expenditure into a spreadsheet. What an eyeopener.

I had a budget - which I thought I was following quite well. In some areas, absolutely I was, but in others... not so much.

So this month I'm going to change it up a bit. Along with carefully tracking my expenses as they happen on my newly minted spreadsheet, I'm also going to try the envelope system. So any money for groceries, spending money ($25 / fortnight) and takeaways / eating out ($25/ fortnight) will be in envelopes in my purse. That way, when the cash is gone, its gone.

I am working to a $0 balance monthly budget, but at the end of January I had around $65 left in my account. So I've transferred that to savings, and I think what I'll do if I happen to underspend this month (which I'm projected to do at just under $500 if I follow my budget) I'll put that into savings too. That will give me the emergency fund I've been considering without having to actually take anything away from my loan repayments - it money that I've just been losing due to poor budgeting in these past months. I also send $50 a fortnight to savings anyway, just as a drip feed, so that will keep the account ticking over.

Today my pay came through from my second job, $310. I have now transferred that into my loan, bringing the total for the loan to under $31K! Woohoo!!

Even better, with that little kick along I'm right on course to bring the loan back under $30K this month!!

I'm thrilled that I've been able to throw so much at this already - even before my first interest payment hits the account (which I think must be due around the 15th). I expect interest will be around $300 but it will be interesting to see exactly what the impact is.

(Note that I'm not paying more towards the medical as its at 0% interest, and is due to be paid off in 6 more payments anyway)

New balances for today

$30,835 - personal loan
$0 - credit card (woohoo!)
$960 - medical

$31,795 - total

Debt update - 30 January 2016

I had a lot of issues getting the insurance removed from my loan, and the balances have only just been adjusted. 

I actually under calculated the insurance costs (GST maybe?) so the loan balance is currently sitting at $31,145 - I had calculated it as being closer to $31,900. 

Payments will go to the loan on Wednesday of this week (four days) and I'm planning on putting the full $600.  

I am still considering whether or not to start an emergency fund. 

Psychologically, I think I'd like to get a few more payments under my belt on this loan, and get the balance down below $30,000 before I start directing funds away from debt and into savings. 

This will also give me time to get the medical expense paid off, which would be great. 

I have used my credit card twoce this fortnight, to purchase items for a special project I'm working on. I immediately transferred the funds from my savings though - and so the card is still at $0. 

I feel like things are going well.  

Emergency Fund

I read a lot of debt blogs / financial advice blogs and one thing that they all seem to recommend is an emergency fund.

I don't currently have an emergency fund... I have a savings account that has the princely sum of $54 in it at the moment, and a savings account that holds money allocated to bills, but that fund fills and empties in line with my bill cycle... although it does have a floating balance of around $1000 - $1500 normally. Perhaps that really is my emergency fund?

I'm not sure that I want to divert payments away from my debt, but perhaps it would be wise to put a more formal emergency fund in place... most sites seem to recommend $1000 and that would only take me three fortnights - a month and a half - if I put the extra $300 I am currently putting into debt repayment into the savings account instead.

Something to think about.

Second job... uncertainty

I have a second job, in an unrelated industry to my primary job.

Its dirty work, starting very early in the morning, and compared to my daily job, it pays horribly.

But, its not hard work and extra money is extra money.

I don't count the money that the job pays me as income, in so far as it is not included in my budget.

When I get paid - and they do pay on a very irregular cycle, I transfer the whole amount into my debt payoff.

I was told a little while ago that I may not have this job going forward, but today I have been told that it may carry on for a little while yet, which would be fantastic. Theres no guarantee either way, but I'm not going to get my hopes up.

I hope it does go on though - I like the work, I like the change from my daily routine and I REALLY like having the extra funds coming in to go against my debt.

"Found" money

I was just doing some washing and checked the pockets of a pair of jeans that I wore over the weekend.

In the pocket I found $90 in notes and a handful of change, mostly $1 and $2 coins.

I honestly have no idea why I'd put that $90 odd into my pocket instead of into my purse. I'd forgotten it was there. I wouldn't have missed it if it had gone... which is pretty awful I have to admit. It was part of my spending money that I'd allocated within my budget, to do with my major purchase. There were some pick up costs associated with it that I had budgeted for and some of them were refunded.

Given that I didn't realise that the leftover money was there, I'm going to consider it "found" money. As in, money I didn't know I had, and therefore unassigned within my budget.

There are two ways that I deal with found money. For coins, I have a very sentimental money box that belonged to my Pop, that he gave to me a few years ago. It's not pretty - its an old milo tin I think, that he punched a slot into the top of big enough to fit a 50c piece. My Pop must have had it for years. It's developed this lovely grey patina of age, and its label is long since gone. Its heavy - I think it must have been before they started to cheap out and use aluminium :)

So all my coins go into that. I've developed a habit in the last few weeks particularly of emptying the coins out of my purse at the end of every few days into the tin. It must be adding up fast - but I'll keep doing as Pop did and wait until its getting quite full before I go and cash it out into my loan.

The notes are a bit more hit and miss, as you'd expect. I sometimes find a $5 or $10 note in my old handbags, or in the pocket of a coat come the winter time. Up till now I've just been adding those into my purse and they get spent along with my weekly allowance. Not any more.

From now on, "found" money will go into my purse, but I will immediately make a corresponding transfer of funds into my loan from my bank account. I think that some people (Dave Ramsay is one) calls these small one-off deposits "snowflakes". Given that I'm snowballing my loans, it makes sense to use that terminology too for the transfers.

So I'm off to make a $90 snowflake thanks to my jeans and my found money!

What's the damage?

Last post I said that I had extended my personal loan. 

The new balance, once the insurance is removed, will be $31,835.

I have set up an automatic $600 payment to go out each fortnight and I will be putting any extra that I can against it. 

In good news, the interest rate is actually lower than it was before - now sitting at 13.69% - down from 14.99% on the previous loan. 

Totals as of tomorrow - when all payments for this fortnight are made:

$31,235 - personal loan

$0 - credit card (woohoo!!)

$960 - medical 

Total debt: $32,195

My mini goal has been updated - looking forward to getting back under the $30k mark!

New debt payoff goal: December 2018

A setback, but I'm not sorry

I've made a fairly significant purchase.

It required me to refinance my loan to take an additional $5000 on top of the existing balance.

There was the payout figure, plus a $150 loan processing fee, and then the $5000 added to my balance.

I also elected to take out the loan insurance, but I'm going to call and cancel that tomorrow.  The loan insurance is payed up front for the full term of the loan (7 years) and you pay interest on the whole lot - I was feeling particularly risk averse when I took it out but on reflection its not needed. There's a 28 day cooling off period, so I can cancel it now with no penalty.

On the upside, my interest rate is lower than before - apparently I qualified for a discount by virtue of my employer being part of a scheme at the bank I'm with. So that actually will save me money over my last loan.

I've also paid out completely my credit card now, and my repayments will be the snowballed $600 a fortnight, so the extra money will be repaid in no time.

I'm not going to detail what my purchase was, but I will say that I am not sorry, and I'd do it again tomorrow.

Updated balances later this week when I've taken that insurance off my loan and made this fortnights payments.

Impulse Buying and "Stuff"

I've been a pretty impulsive buyer in the past, and its resulted in me having far too much "stuff" hanging around the house.

My daughter and I had a clean out yesterday - I've sold some things, I've also sent a big black garbage bag to Vinnies. Its a start.

I told my partner what I was doing, that I was tired of the house being so cluttered. He laughed and told me that my house wasn't cluttered... his house is cluttered (we don't live together).

His house is cluttered, its a typical boy house. He's forever buying stuff on eBay - and he has hobbies that use a lot of equipment and he's just totally unable to say no to a bargain. I have to say that he does buy things that come in useful, but it also means that he has a lot of... well... stuff.

I want to keep going with my own de-clutter. I'm going to go through my spare room thoroughly - there's plenty in there that could go. I've held on to a lot of things for sentimental reasons, but really, I can take a photo and let those things go.

I went to a hardware store today. The shower caddies that I bought aren't working. They're the suction cup variety. Unfortunately, they don't hold onto the walls in my shower. So my partner hung one up on hooks over the top of the shower. I thought I could get some cheap chain to hold the second one on, so they could hang one above the other.

Cheap chain. Pffft. The cheapest packet that was rated to what I needed was $13.90. Then I needed clips to hold the chain to the caddy base. Another $7.00. So I went looking at caddies - maybe there was a new one that I could buy for under $20 and I could sell the ones I've currently got. Nope - the only one big enough to hold my stuff was $30. I made it nearly all the way to the front counter with that caddy in my hand, and then I turned around and put it back. The shampoo can sit on the floor. The $30 is going against my credit card instead.

Now I'm going to clean out some more stuff :)

Mini goal

I've been thinking about when I will feel like I'm making progress on my debt. 

When I spoke to the bank yesterday they said that they "don't negotiate on interest rates for personal loans" so that's a shame. Worth the ask though. 

I'm looking forward to getting my total debt below $25k. It's a little way off, but it will feel good to get there.

Totals at 6 January 2015

Totals as they stand today:

Credit card: $181.78

Loan: $26,419.54

Medical: $1,120

Total: $27,721.32

My interest and loan admin fees hit my personal loan, which is why there's a disparity between last times totals and this one. 

I paid $500 against the credit card earlier this week and I should have clarified that $300 of that was "extra money" from my second job, and $200 of it was from my regular $300 payment allocation. 

I've now paid an additional $100, so I'm square for this fortnights regular payment and I've kicked it up by $300 for a total payment of $600 this week. 

I'll knock that $181.78 off completely next fortnight and then snowball the balance of the $300 regular credit card payment into my personal loan. 

There are now only 7 repayments to be made on the medical expense too so I'm feeling really positive about how soon that will be cleared. 

I'm going to the bank today and I'm hoping that I can knock down the interest rate on my loan while I'm there. Doesn't hurt to ask!

Christmas and some payments

So Christmas really threw a spanner in the works as far as my budget went. 

I guess it's important to know for next year to put more aside and ensure that I've got a buffer. I'm not going to beat myself up about it - just get back on track now that the silliest part of the season is over. 

I was paid for a number of shifts in my second job today, and I've transferred $500 into my credit card account. 

The balance on the credit card is now down to $289.86

Interest on my personal loan has been applied so the balance is up to $26,719.54. There is a payment to be applied later this week though, so I'll update again then. 

Current net debt: $27,009.40

Should note that this doesn't include the medical bill but I'm not sure of the current balance on that. I've made the normal fortnightly payments so I guess that it's gone down by $160 with another payment due to go out in a few days too. 

I feel like it's only going to take me this fortnight to catch the credit card back up and take it down to a zero balance. 

It's been taken out of my handbag now and no further charges will be added. 

Next fortnight I'll be able to start snowballing into my loan balance - I'm looking forward to that!