Progress Report - 14 February 2016

All my loan repayments were made at the start of my pay fortnight, and my new budget is going well. At the end of the first fortnight I'm within budget. I'll give a full report at the end of the month. 

So - debt balances as of today:

$30,235 - personal loan

$0 - credit card (woohoo!!)

$800 - medical 

Total debt: $31,035

Starting debt (19 January 2016): $32,195

Total paid off to date: $1,160

I know that interest is going to hurt on this loan, so I'm glad to say that I've already managed to get ahead of the payment schedule already - after only one month. Having ongoing boosted payments is going to help to significantly reduce the interest that I'm paying on this loan, and reduce the length of time that I'm under the debt.

I was discussing debt with my partner a few days ago. I asked him how he was going with his loans - he seems to be travelling ok. He asked how I was going - I told him what my balance was sitting at and he was shocked. 

I'm not sure why he was shocked... he knows how much debt I carry... but I guess its not something that we discuss all that often. He made a really interesting comment about how depressed he would be if he was carrying that amount of debt.

I'm not depressed by it. I'm annoyed that I let myself get into this situation, but in the end, it was me that did it. I made choices, and I have no option now but to deal with the outcomes of those choices.

BUT - I'm on a really solid track to wiping out this debt and I feel really, really good about how that is going so far. 

I think there are other things I could be doing to squeeze even more out of my budget, to boost those payments further. Thats something I'd like to work on in the coming months. But for now, $760 a fortnight (or $1646 a month) seems like a pretty solid base payment for this single income household to manage.

That's $380 odd dollars not a fortnight than the minimum payment :)

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