October in Review

October has not been the heady delight of that first month of managing my money, which is to be expected.

First of all let’s see how I did with my:

October Challenges

• Track every cent outgoing for the month of October - didn't happen
• No use of credit cards in October - didn't happen
• Pay 3 weeks rent each pay in October - DONE!
• Stash $200 extra each pay in October for living expenses during salary switch – didn't happen

Savings Identified and Actioned

Switched to staff broadband plan = $660 a year saving

Big Wins

No Big Wins this month, but some are not too far away

Little Wins

• Actually opened my superannuation statement for the first time in years and discovered it’s performing well, and I’m further along than I thought
• Added 1% of my pre-tax salary to the 9% government contribution to boost it to an even 10% ongoing
• Found AUS$165 in foreign currency in my travel wallet to put towards credit card debts
• Started a new job on the 22nd that comes with a substantial pay rise
• Created a new budget to take into November
• Set some smart short and long term goals for my finances, with an initial focus on September 1st 2008
• Identified I have too much stuff and need to throw/give away or sell a large amount of it

Hurdles and Dips

Paid over $1000 to get my house in order – literally (and needed to put most of that on credit cards)

Money Quote For The Day

There are people who have money and people who are rich. ~ Coco Chanel

I think I'd like to be both if that's OK Coco?

New Budget Strategy – Actually Having One!

The thing that I’ve always struggled with when trying to budget is having set amounts aside for all these tiny sections of a ‘traditional’ budget. Then I came cross this post on Get Rich Slowly, called Budgeting for Non-Budgeters: The 60% Solution. It links to an article on MSN Money where Richard Jenkins explains the concept in some detail.

As November is a magical month with 3 pay periods I feel it’s a good time to test this out and tweak it to suit my situation, especially before I move over to monthly pay in December.

Tax is taken out of my pay before I get it, and my superannuation (a total of 10% now I added the extra 1% due to the pay rise) is pre-tax. I’ve fashioned my new budget on net salary for this reason rather than gross as outlined in the article.

Part 1

My budget breaks down like so:

• Superannuation - 10% of my gross salary
• Tax - 28% of what’s left after that

This gives me my 100% take home pay, which is broken down into:

Everyday Expenses

• Rent
• Electricity
• Car, Contents & Health Insurance
• Phone
• Petrol
• Public Transport
• Debt Minimum Payments
• Food
• Charity

These total 75% of my take home pay

Long Term Saving/Debt Reduction

• Debt Snowball
• Baby Emergency Fund

These total 18%

Short Term Savings

• Holidays, Gifts etc

This is 2%

Fun Money

• This is for me to spend on whatever I like, such as getting my nails done, haircuts, going out, general fun stuff

This is 5% for a total of 100%

Part 2

Further to this I’ll be using the envelope method for:

• Petrol
• Public Transport,
• Food,
• Eating Out, and
• Personal

I even found a pack of envelopes in my spare room so there’s no cost to try this out!

Does Daylight Saving = Cost Savings?

Are you a fan of daylight savings? I certainly am, and not just because there’s a ‘savings’ in there! :-)

It’s been a long time coming this year and for the last 3-4 weeks it’s been getting light so early that Angus has been waking me up as early as 4am!

So sleeping in until what is now 7am this morning felt like quite the luxury, even with the clocks going forward so we'd actually ‘lost’ an hour.

Getting a good night’s sleep again will help me be more alert and focused when I get to work, which can only be a good thing in a new job. In the last week everyone in the team was a bit 'off' and we’re all convinced it was the sun being up too early in the morning.

The other advantage of daylight savings is it will be light when I’m coming home from work, so I’ll feel a lot happier walking home, which will save bus fare at least a few times a week.

If I walk home 10 times a month, that’s one less $13.60 TravelTen I need to buy. Walk home 20 times a month (basically every work day) and that’s 2 I don’t need, for a saving of $27.20 a month, plus some free exercise. Bargain!

It’s something for me to consider, maybe every second day to start with, then see how I go…

Ouch! October Is Not Shaping Up Well At All

Just started running some of my numbers for what October is going to look like (for my Ugly Truth post on November 1) and I think I may have in fact INCREASED my debt this month, putting me back higher than when I first started on September 1!

Not good at all.

I know that November will be a good month, with the extra pay period, and the salary increase to top things up, but I never thought I’d see my numbers go up, and my first months effort get completely wiped out.

November is going to have to be a very focused, frugal 30 days to maximise those opportunities I do have to come out ahead over all.

New Job New Opportunities

I started my new job yesterday!

Everything went well on my first day, the usual getting my desk set up and spending time with the new team I'll be working with. I'm really looking forward to getting stuck into the new work and learning new skills. Aussie readers may even see the results of my work in new offers from a certain company over the coming months!

I also received an email from the payroll department. I'm not switching to monthly pay until December, so that means 3 fortnightly pay periods in November - hurrah! This should help the debt payments along quite well.

As I'd thought I was going to switch to monthly pay in November, I'd pre-paid an extra two weeks rent and stashed $400 for expenses in that transition period. I can now use all of that extra money, plus the two weeks worth of rent money to throw at my debt next pay, which will be very nice after all the outgoings due to the inspection in October.

Shame it's not until the 2nd of November as October's numbers are going to be very ordinary...

The increased salary means I can also make a real start on my starter emergency fund. My goal is to have that $1000 stashed away by the end of February 2008.

I've also started contributing 1% of my pre-tax salary to my superannuation, bringing it to a total of 10% of my pretax salary when combined with the government 9%. I'm not going to feel that 1% as it's starting with the first of my increased salary payments, so looking forward to playing an active part (if only in a tiny way)in my retirement funding for the first time.

Financial Goals

These are my top 5 financial goals for the next 3-5 years

• All Credit Card balances paid off in full


• Personal Loan paid off in full


• Emergency Fund fully funded (my goal is $25,000)


• Retirement Savings 9% personal contributions to match company contributions


• Deposit for a House/Unit at least 10-15% (at this point my goal is $35,000)
  

For September 1, 2008, I’m aiming for the following milestones

• 4 of my 7 Credit Card balances paid off in full


• Personal Loan under $20,000


• Emergency Fund funded to $1,000


• Retirement Savings at 3% personal contributions


• Total outstanding debt under $35,000

Found Money

In my further decluttering last night I found the wallet I use when I travel overseas, it's a great little thing as it's just big enough for my passport and has an over the shoulder strap, so I don't need to take a whole handbag with me.

Took a look inside - score! I found Yuan and Hong Kong dollars in there that I hadn't converted back into Aussie dollars from my last trip in June/July this year.

Quick online check of the exchange rates this morning and there's approx $165 I can put towards recouping my cleaning costs this week. Nice!

I Have Too Much Stuff

The last few days have been an epiphany. Everything in my life is connected and changing one thing eventually drives a change in everything.

After months of half baked efforts to get my house in order I finally had a line drawn in the sand with the rental inspection this week. Then last weekend my best friend called and asked if he could come and stay with me for a few weeks while he sorts out a UK Visa (he’s an Aussie living in Hong Kong). He’s arriving on Thursday night! I was actually able to say yes. I’m so excited to get to spend this time with him.

Anyway, back to the topic at hand, too much stuff. My apartment was (and still is to a much lesser extent) stuffed to the gills with junk, clothes, books, DVD’s, handbags plus numerous other bits and pieces. I realise now why I haven’t been able to sort it all out. There’s just too much of it! I’ve been buying more and more stuff in an attempt to feel better, but it’s trapped me, reduced my choices in life and made me feel worse:

• Financially – this one speaks for itself, over $55000 in debt!
• Emotionally – I’ve been depressed for years now (actually diagnosed), I’ve always thought it was just chemical, but I now see how my environment has encouraged feeling as low as I have.
• Socially – I never invite people over to my house. I love to cook, especially for others, and I haven’t done that in months.
• Physically – The stress of living this ‘double life’ has really taken it’s toll, I’ve stacked on the kilos over the years from comfort eating, and the stress of it all has impacted my sleeping patterns for a while now.

The universe is really trying to show me something here, i.e. "you need to change and get your act together girly!" and I need to pay attention and act on the things I’m being shown.

Inspection Update

The agent has been and gone and here's how it went down:

He was in and out in 6 minutes! He made lots of notes about all the things I'd pointed out that needed fixing and the only two things he's asked me to fix are:

• Get the two bedrooms cleared out
• Get the marks on the carpet cleaned (the carpet cleaners didn't do any spot cleaning, just got the dirt out yesterday)

He's coming to do another inspection on the 6th of November to ensure it's been done, but other than that, it's all good! PHEW!

He’s seen all the other units in this block already, so there were no real surprises here for him.

The High Cost Of Procrastination

It’s very difficult for me to write this, let alone post it on the Internet.

As well as my finances being a complete disaster, so is my home, it’s filthy and full of junk and rubbish. People that know me in real life would have no idea I live like that. It’s a secret shame and one that’s costing me a lot of money in multiple ways. I hide my lack of control from all but my closest friends and immediate family, and I haven’t had anyone come over since earlier this year, which is very depressing for me.

It stems from laziness, and then being overwhelmed by the size of the task ahead of me. I literally fantasise about being 'magic' so I can click my fingers like Sam on Bewitched and the place would be immaculate all the time.

Hmmm, that really does sound like my finances too (I confess I've done the same in the past regarding money as well), but then I seem to be making a good attempt at sorting that out once and for all.

It’s costing me a fortune literally as I have a rental inspection tomorrow afternoon, that I've known about for six weeks. I've procrastinated so much I now need to hire a junk removal service, plus a cleaner to get it as inspection ready as possible in a day. I estimate this will cost me up to $1000.

The smaller impacts of my living like this are things such as not using my stove or oven, so the microwave gets a workout with lots of frozen meals. Yes, they’re cheaper than takeaways (which I had been buying almost nightly before the financial shift), but still far more expensive than cooking my own food, not to mention less healthy. We won’t discuss the multitude of takeaway containers and pizza boxes that have failed to make their way out of the apartment over the last few months until today though.

I have a second bedroom full of junk/clutter, and my own bedroom is just as bad. I have already discovered multiple items of things such as scissors, cleaning products (oh the irony), hair colour, even books! I've been re-buying things I already own, simply because I can’t find them. I have too much stuff, no respect for the stuff I do have and I dare say much of it was paid for by credit cards.

Not to mention of course the emotional cost of the stress of the impending inspections, which I could have completely mitigated by chipping away at the junk over the last six weeks, or the reduced productivity at work due to lack of sleep, or the late fees from losing bills in the piles on the dining table.

I’m absolutely mortified by this situation, but have decided this is a problem I can throw money at this time, for the last time. I’m also determined to earn back as much of the cleaning and de-junking costs by selling off my unwanted books, CDs and DVDs over the next few months, or at least as much of them as I can.

I’m starting to think the universe is conspiring to give me a really big shove/wake up call at the moment, financial changes, home changes, work changes, what’s next, losing weight?

Here’s hoping I still have somewhere to live after tomorrow’s inspection.

Saving Money On Your Internet Bill

One of the staff benefits available at work is a free Broadband account which gives us 7Gb during peak and 14Gb off peak limits. I’d never switched to that plan as I’d figured my 20% discount on a regular plan was enough!

With a new focus on saving money to pay off debts; it was an obvious choice to bite the bullet and switch to the free plan. Even with my 20% discount, my old plan was just over $55 each month.

So that’s another $660 a year to pay off my debts!

For those of you that aren't in my position, how do you save money on your Broadband?

Costs

Obviously the first thing most people think of is going for the cheapest plans available. Are they the best value for your needs though? You should look at all the other factors prior to making your decision, to ensure you’re getting the best value for your money.

Usage (Download limit allowance)

I would strongly recommend selecting a plan one level higher than you think you need for your first month so you don’t get caught out, you should always be able to switch between plans after your first month if you find it’s not the right plan after all.

You should also be aware of what happens if you reach your data limit for the month, will you be charged excess usage or will your speed be slowed down to dialup speed? It’s vital you know this and act accordingly as I've heard horror stores about people receiving $1000+ bills due to running way over their data limits.

Bundling Products

Many providers offer discounts for bundling services or products; eg: if you get broadband and a mobile phone from the same provider, you may be eligible to receive a discount. This could be a % overall or an amount off one or both of the products.

Hardware

If you have a modem from your current provider you may not need a new one if you switch, but if they’re giving them away as part of the offer, take it and sell it on Ebay!

Contract Lengths

Longer contract lengths normally equate to lower hardware charges while a ‘no contract’ agreement could mean higher initial fees or hardware charges.

It’s worth checking the exit fees too, and if they’re on a sliding scale depending on how far along you are in your contract if you want to leave.

As with your mobile it’s worth calling your customer service department (or checking the company website) and get them to see if you might be better off on another plan. Plans change all the time and if your current plan no longer suits, see what’s available to meet your new needs.

Another caution though, make you’re your usage pattern has changed for a good 3 months, if it's just a one month blip, you may want to stay where you are as often if you switch to a new plan you may not be able to go back to the old plan if your usage pattern changes back.

If you are thinking of switching providers, always call your current one first, it’s a cutthroat environment at the moment so their ‘save’ team may have incentives to get you to stay and save you money!

A site that I find to be very useful in Australia is Broadbandguide.com.au. They have all sorts of wizards and calculators to help you make your choice. I’m not affiliated with them in any way.

The best $650 I ever spent

This is Angus, my Scottish Fold cat. Yep, he cost me $650 and I don't regret a cent of it. Oh and yes, this is a professional shot - that I do sorta regret for the lameness and having to admit it's a 'glamour' shot! I'm glad for the photos though.

Back in 2004 I'd been looking for a cat for months. I'd grown up in a house full of animals and had realised that I really missed having a pet.

Lots of research later I discovered the Scottish Shorthair (Folds with pointy ears) after seeing them on Burke's Backyard. Even more searching later, and seeing many Scottish Folds in my quest for a Shorthair, I saw Angus on a breeder website and that was it.

Called and reserved him on the spot (there was an interview process!), and six weeks later he flew up from Melbourne.

One of the conditions of me getting him was to show him for a year, which I did and with reasonable success, he's a Silver Double Grand Champion. I made some good friends from that experience (including the family that were on Burke's Backyard!) and learnt a lot about cats, breeding and show politics. Best in Show has nothing on cat shows, trust me.

He costs me approximately $1 a day to keep, has shredded my couch, and wakes me up at 5am every morning, then proceeds to go and curl up somewhere and sleep for 20 hours a day himself but he's awesome.

It's his birthday today, so I'm going to splurge and buy him a king prawn for his dinner.

I'm not a crazy cat lady, I swear!

Well Hello Super Fund!

I received my annual superannuation (retirement fund) statement tonight for the last financial year. I almost fell over when I opened it (for a change, I never seemed to bother with them before).

My Super is now sitting at $124,057.77!

I need to check tomorrow if that's both my funds from working at this company combined or just this last 5 years, but regardless I can't believe how much I've accrued!

Even more exciting is my employer contributions were $6130.80 for the period, and I contributed a whopping $797.74, but the total increase for the year was $31664.44, so a return of $24735.90 or 26.7% on last year.

This is HUGE for me. It's the difference between retiring at 60 instead of 65, and if I start adding personal contributions (my long term goal is to match the 9% company contributions) I'll be set. I've decided to start with adding just 1% (for an even 10% total contribution) when I move to my new role next month, and then gradually build from there.

Yay for compound interest!

Work Perks - Wishlist Points

At work we have an internal rewards and recognition programme. You can nominate people for displaying one of the company values within your division, and if approved by their manager they receive Wishlist points to redeem for anything from BBQ’s and trips to the Great Barrier Reef, through to books or a silicon case for your iPod.

I seem to do quite well out of this scheme, as I work on multiple projects at any one time, so have many interactions with people all over the business. I guess I’m also do something right too!

I want to make the best use of my points to help me meet my debt reduction goals, but still have some fun with them too. So if I use them to buy ‘luxuries’ such as magazine subscriptions and things like that, so I can enjoy them and not spend a cent! I’m lucky that the two magazines I actually buy (Real Living and Delicious) are both available on the scheme.

This will save me (or at least avoid me spending) $71.50 for the Real Living & $76.45 a year for the Delicious off their cover prices.

The other bonus is I can use these points to start my Christmas shopping, plus my sister’s birthday which is coming up soon too.

Bargain!

The Ugly Truth - Day 31

The Ugly Truth

• Personal Loan - $23,868
• Credit Card 1 - $4934
• Credit Card2 - $7268
• Credit Card 3 - $5461
• Credit Card 4 - $7120
• Credit Card 5 - $0 (paid off in full!)
• Credit Card 6 - $4113 (oops, went up $113)
• Credit Card 7 - $3170 (oops, went up $170)
• Emergency Fund - $0
• Savings - $0
  

Total = $55,934
Debt reduced from last month = $788
Debt reduced from Sep 2007 = $788

I didn't actually use my cards this month, they were charges from August that came across after the 1st September, so it was a surprise, but not something I'd done this month.

October Challenges

Well I’m a month into my ‘debt diet’ and it’s time to think about October. It’s going to be a challenging one, as I’m switch from fortnightly to monthly pay in November in the new job, so will have a 4 week stretch between pays, but only 2 weeks salary to fill it!

So the snowballing will take a hit this month as I need to pay 3 weeks rent instead of 2 over the next 2 pays to cover it, plus stash extra money away for getting through those two weeks without income.

This is of course why savvy people would have emergency funds! It just highlights even more why I need one and that I’m doing the right thing by getting myself sorted out. With the money I earn, this should not even be a blip on my radar, but it’s actually cause for concern and a real driver to change the way I live.

I’m determined to not use my credit cards unless it’s an emergency over that period.

As part of my ongoing financial awareness, I’m also going to be tracking every single cent I spend this month, to see where it all goes and what else I can cull or adjust to throw on the debt.

So that boils down to:

• Track every cent outgoing for the month of October
• No use of credit cards in October
• Pay 3 weeks rent each pay in October
• Stash $200 extra each pay in October for living expenses during salary switch

September In Review

Savings Identified And Actioned

• Cancelled Fitness First gym membership = $900 a year saving
  
• Cancelled QuickFlix membership = $443 a year saving
  
• Cancelled VideoEzy Unlimited membership = $360 a year saving
  
• Started brown bagging breakfast = $1230 a year saving
  
• Started brown bagging lunch = $1645 a year saving
  
• Started using public transport to get to work = $3970 a year saving

Big Wins

• Paid off credit card number 5 on the 22nd September
  
• Got a new job that pays 10.6% more than my current salary! Starts on the 22nd October.

I will now snowball payments onto credit card number 7 from October. I'm on my way, Woohoo!