Everything has changed

So big changes around here.

My husband and I separated.

That was... hard and expensive.

He had signed my daughter up for a phone plan, and with the separation that bill now comes to me. I'm annoyed about that, but there's not much I can do about it.

We'd also purchased a large TV together, and because its staying in my home, that bill is also now mine.

I basically got nowhere for a few months. So frustrating.

Then my parents agreed to go guarantor on a house loan for me, so I could get my own place.

And then they changed their minds. Which is fine.

Dad instead suggested that they could pay out my existing loans, and I could repay them at 0% interest and so get ahead a bit quicker and into my own place without help.

That was very, very kind of him, and I took him up on that offer.

So, as it stands today:

I owe my Dad $32,178.

I owe $100 on my credit card (which has been put away and will not be used unless I can immediately transfer cash to pay off whatever purchase I'm making - therefore making it a cash purchase).

I owe $2335 to the TV debt. (also at 0% interest)

My Dad has asked that I pay him back in lump sums. So I'm saving the payments to him in a separate bank account and tracking my payments using NetWorthIQ.com

My net worth, when I started it last week was -$35,513

My current net worth is -$34,113

Its annoying that I'm higher again than when I started, but I've gone back to basics again and I've also done some tweaking to my budget to free up some extra cash.

I have been really distracted with the ending of my marriage and some family crises but I am absolutely determined to get out from under this debt as soon as humanly possible.

I think I'll try and say something every day about debt and debt reduction... to keep me accountable and motivated.

Big changes

I've been a bit absent, but with good reasons.

I've moved house - which was a very long, painful and expensive exercise.

But the house that I'm not in is lovely and there has been discussions with the owners about us potentially buying it when the time comes. So that is a positive.

The new house has solar panels, so I'm expecting that with a little careful management that I'll have no net increase in my expenses here, with the electricity windfall making up for the slight increase in rent.

I am behind the point that I last left you though, having had to redraw on some of the funds I was ahead in my loan in order to make the move happen. I've also put a bit back onto my credit card.

In response, last night I sat down and redid my budget. We're down to brass tacks here for the foreseeable future until I can right the damage that I've done to my progress.

First step is to put the credit card back to zero.

I've allocated $450 per fortnight to that.

Second is to knock my loan back down. So as soon as I've moved that credit card to zero (I cringe to say that it will be 4 fortnights until the magic $0 appears)... the loan repayments will be going from the current $300 to $750.

My medical debt is fully cleared now, so that is a massive help.

I've also gone through how I manage all my annual payments and allocated them all to my "bills" account, which is separate to my daily account. By transferring out all of the payments and future allocations the day that my pay goes in, I will only be left with a very small amount in my account which is to cover groceries, date night and $50 discretionary spending each fortnight. That discretionary spending is to cover any small incidentals - school excursions that come in last minute and so on.

All payments for this fortnight have now gone out, so I'm starting May with this renewed approach to getting my house back in order.

I suspect that anyone who is like me, not terribly great with money, has these setbacks when they start off on a debt journey. It certainly seems to be the case for most of the debt reduction blogs that I've read - even though most of them are American. I know that it is far from ideal to be having big expenditures like a move when I'm trying to pay down my debt, and worse that I've actually gone backwards as a result of it. BUT, I'm determined to pick myself up and get back to that lovely feeling of $0 on the credit card and thousands in front on my loan. It felt so good the first time and I know that I can do it quickly if I am careful with my money.

So, onwards and upwards as I keep chasing zero.

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