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.

Discipline isn't my middle name

First pay fortnight of March, and I stumbled.

I paid a measly $300 off my personal loan, down from my intended repayment of $670.

Now, I'm still paying over my minimum payment, and I'm proud to say I'm now over $2000 in front on my loan repayments in total, but this is a stumble.

Second pay fortnight, lesson learned. I've transferred $370 and the other $300 goes out tomorrow as a planned debit.

I am not a disciplined person by nature - but I am determined and I will get to zero.

Update - February

So its the end of February. How did I do?

Pretty well!

I managed to pay $1580 off my personal loan and $320 off the medical loan for a total of $1,900 off debt in February.

I'm pretty damn proud of that.

The rest of the months budget went pretty well too, although I had some additional expense due to an unexpected trip away with my daughter.

Originally I'd planned to take her to Melbourne to go shopping for her birthday. But for a whole range of reasons we ended up having to stay the night, so I was up for a hotel room, and breakfast, and dinner.

But, it wasn't too bad, because I was able to claim a rebate on some medical expenses that I'd previously paid out, and that covered all the expenses.

All in all, a great month.

Onwards to March, which is a three pay month, so I'm hopeful that it will be an even better result!

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.