November in Review

November closed out Q1 of my debt reduction ‘financial year’ (what am I like?) OK. Even with a few bumps along the way I think I've pulled things back into line after the mess that was October.

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

November Challenges

• Maximise debt snowball payments this month – Done!, the numbers are definitely down this month.
• Live to new budget – Done! I’m a complete convert to the envelope system for bills/purchases that can’t be automated.
• Stash $300 into starter emergency fund – Done! Granted I have an ‘emergency’ next month with moving, but at least it’s in there waiting to be used.
• Send off 'find my super' paperwork and consolidate all my superannuation into one account – Half Done - found all the super, but haven’t rolled it over yet.
  

Savings Identified and Actioned

No additional savings found this month

Big Wins

No Big Wins this month

Little Wins

• Located all my old superannuation accounts to roll over into my current account.
• Stuck to my new budget for the whole month, I’m really chuffed with myself about this one I have to say.
• Didn't fall to pieces when my real estate agent gave me 60 days to vacate my very cheap apartment.
• Didn't pay any late or overdue fees on my credit cards
• Finally claimed all my work travel expenses (won’t be reimbursed until December though)
  

Hurdles And Dips

Need to move before January 24, 2008. I was paying way below market rate for the rent on my unit so I’ll be looking at at least an extra $45 a week ($195 a month) when I move, which will slow the snowball somewhat.

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Not Accepted Everywhere

It seems Australians traveling in the UK are having trouble spending money on their credit cards. It’s not because they are all being frugal and paying cash!

The problem is credit cards containing microchips with a PIN rather than a signature for authorisations have become the norm. Credit cards with magnetic strips are used here in Australia for the most part, and you don’t need a PIN, just a signature.

The UK moved to the chip and PIN security system in early 2006 in a bid to clamp down on its growing credit card fraud problem.

Some shops even have signs proclaiming "No chip, no PIN, no sale''. I do love a good catch phrase like that don’t you? It’s like going to a pub with a "no shirt, no shoes, no service” sign, you just know it’s going to be a classy joint. :-)

The problem is also affecting travellers from the US, where chipped cards are yet to replace magnetic strips. Seems you don’t even need a signature in the US in many cases, but that’s a whole ‘nother post.

As for the ‘Big 4’ banks in Australia, this is where they’re at with chips in cards:

• ANZ has more than 1.7 million chips cards in the market, and were the first to introduce products in Australian around 2001
• Commonwealth Bank is introducing chips on all replacement and new cards.
• The NAB is yet to announce when they’ll introduce chips
• Westpac has announced the introduction of chipped cards on their products

The Australian market has been slow to switch to chips due to levels of fraud, relative to other markets. It’s reassuring to know we’re not quite as dodgy as some other places, especially since we're the ones who were supposed to be the 'convicts'!

It’s worth checking your cards before you travel to ensure you’re not caught out, and to make sure you have a PIN for your credit card when travelling. That said, any shop displaying the Visa or MasterCard signage is supposed to take your card regardless, but it’s one less drama to have to deal with if your card is chipped.

I wonder if this also applies to Visa debit cards?

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Superannuation Hunt Update

I've had great success with tracking down my superannuation accounts from old jobs so far. The account from my years in hospitality (harks back to the inception of the Superannuation Guarantee), has been located and I’m awaiting the amount and details for transferring it.

Payroll at work have advised 2 more days in regards to the super from my first 8 and a half years at my current company (I was retrenched, and then went back a year later). I had a different employee number so it’s a separate account that I’d lost track of.

I've also found the $1897 from my ‘year in the wilderness’ when I worked in an insurance call centre for six months as I had been unemployed for six months and was going mad. I actually made pretty good money there really, plenty of weekend shift penalties to be had plus commissions.

It’s quite nostalgic talking a walk through your career path, to see how far you've come and how you got there.

I’ll really be able to assess how I’m tracking for retirement once it’s all in one spot, which I’m really looking forward to (who knew super was so exciting!).

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Don't Forget To Claim Your Work Expenses

I finally got around to 'doing my expenses' at work yesterday, I had over $500 in taxi receipts to claim from various business trips. No wonder the credit cards don't seem to go down!

I don't have a corporate Amex, so need to use my own cards when I travel, and have them reimbursed. Goodness know why I've procrastinated sending the claims off so long.

Oh that's right, I'm dumb with money.

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No Luck With Citibank

I got a response on my application to switch my personal loan to Citibank. No go.

No reason given, but they did reassure me that my application won't impact my public credit rating (which I still haven't heard back about now I think of it).

So stuck with an ever increasing variable loan rate at St George for the time being.

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Where Am I Going To Live? - Flat Hunting Begins

The first weekend of new flat hunting wasn't fruitful, but it also wasn't a complete bust. It dawned on me that I've only been on this hunt twice in the last 13 years, and the last time I was 'out there' was in 2001! t least I know what I don't want.

My current agent isn't being particularly helpful, but all the other agents I've spoken to this weekend have been, which was nice. I now feel more confident about how the process works these days and can be sure to attack it properly.

There were so many other people looking at the same flats as me on Saturday, at least 10 at the first place (which was tiny, dank and not nearly close to the 'immaculate' as advertised). The next few places were just OK, and if I was desperate I'd have considered them but I believe I can do better. It's a bizarre sight seeing 15-20 odd people all swarming into a place and checking everything out.

The other thing I've realised is I've been completely unrealistic in the rent I can expect to pay for something decent in the suburbs I'm willing to live in. I spend a lot of time at home, so I want something that I want to come home to. I'm going to have to bump up the top end of my range $20 to get that. Choosing to live by myself attracts a premium. I just can't do the flatmate thing at 38, and I have to accept that there's a price to pay for that.

So it looks like I'll be spending up to 30-33% of my take home pay on rent. Ouch, but that's the Sydney rental market these days.

I've crunched my numbers and that still leaves a $500 per month snowball available over and above set minimums from September, so I can still achieve my goal of being completely debt free by May 2010, so I'm going for it.

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New First Home Owners' Policy

The Australian Labor Party (ALP) swept to power in the Federal election last night, and it will be interesting to see if their housing and broadband policies manifest. I have a particular interest in both (both personally, and one professionally). I’ll focus on the housing policy in this post though.

It seems that owning a home in Australia is becoming more an more difficult. According to the Bureau Of Statistics:

• The average home now costs seven times the average annual wage - up from four times the average annual wage just ten years ago;
• Nationally, first home buyers are now spending 31.7 per cent of their total income on mortgage repayments – up from 17.9 per cent in 1996;
• The proportion of homes being bought by first home owners declined from 21.8 percent in June 1996 to 17.1 percent today.

If you are buying your first home, you may be eligible for benefits under the First Home Owners Grant Scheme here in Australia. The Scheme was established to assist eligible first home buyers to purchase their first home by offering a $7000 grant.

The First Home Plus Scheme (which varies from state to state) also provides generous exemptions or concessions on transfer duty and mortgage duty for eligible first home buyers.

For example, if you buy a property valued up to $500,000 in NSW, 100% of the duty will be waived. If I was looking to buy a property with a purchase price of say $350,000, that’s a saving of $11,240 in duties.

Unfortunately these schemes have become been part of the reason housing prices have got so expensive, especially in major cities.

The ALP want to introduce an additional scheme called the First Home Saver Account.

Essentially, people will be allowed to make pre-tax contributions from their salary up to $50,000; which will be taxed at 15% and then invested in a superannuation style account. From what I've read on the flyer, couples will be allowed to combine their respective savings!

Deposits do have to be saved over a 4 year period (which may rule out some people, possibly even me), and of course while returns may be greater than an online savings account (plus the benefits of pretax investing); it is also possible returns could be lower too as with any investment.

I think this policy for first home owners is just stunning. It is such an incredible idea for promoting homeownership and getting people investing their money to benefit from management and compounding interest, without simply throwing money at people and artificially inflating home prices.

Anything to increase financial literacy in this country can only be a good thing. It will be interesting to see how it pans out.

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Keeping Up With My Joneses Part 1 – The Car Guy

One of my friends is a very successful, well paid professional; who travels overseas at least 3-4 times a year, has a gorgeous apartment filled with beautiful things and drives a luxury convertible. He just loves luxury cars, we talk about them all the time (I’m a bit of a car nut myself).

He’s very smart with his money. His car is fantastic, its 12 years old though, not brand new. He bought it second hand ages ago and he just loves it. It’s just so him. He’d like a new one some day, but is perfectly happy with what he has right now, and works towards anything new he wants.

He works incredibly hard. His travels are how he loves to spend his downtime, visiting his family and friends all over the world. He comes back with so many stories and experiences.

He’s incredibly generous with his time. He helped me buy my first car last year, spending numerous weekends driving me around town test driving cars under $5000, and he genuinely enjoyed it. He also talked me around from wanting to spend $10,000 for my first car, so he saved me $5000 in effect.

He enjoys the simple things as much as the big shiny things. He spent a very pleasant yet simple evening at my place fixing my rickety dining table and eating the dinner I made with gusto (I’m a good cook though, so he’s only human). He also enjoyed jetting off to Europe to go to a car show with some friends for a couple of weeks not long after.

How have I incorporated his way of life into my own?

Living within my means is an obvious goal I’m working on, buying quality over quantity, working hard for the things that bring you genuine pleasure in life, and remembering to enjoy the simple things.

Why wouldn't I want to ‘keep up with this Jones’?

This is part 1 of my series Is Keeping Up With ‘The Joneses’ A Bad Thing? In order to protect the privacy of my ‘Joneses’ I've tried to be as generic as possible about their particulars.

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Ouch! Moving Is Expensive

I've been crunching my numbers for moving and I’m looking at approximately $3000 to relocate.

This breaks down to:

• 2 weeks rent in advance - $660 (assuming $330 per week rent)
• 4 weeks rent as bond - $1320
• Removalist costs - $500
• End of lease clean of old place - $300
• Bonds for electricity/gas - $100
• Post Redirection for 6 months - $35
• Boxes & tape - $100

Not to mention the hoops you have to jump through to rent a place these days. It’s been six years since I last went through this, and the world seems to have gone mad in the meantime.

I have to supply:

• Photo Identification - current drivers licence or passport
• Other Identification – Medicare card, debit card
• Proof Of Current Address - phone account, electricity/gas account, bank statement, mobile phone account etc.
• Proof Of Employment/Income - current payslip or a letter on company letterhead from your employer confirming employment and salary.
• Proof Of Regular Housing Payments - copy of rental ledger from your current agent
• References from your previous agents, and 2 personal references

The application form I printed out for one real estate to get a feel for things is no less than 8 pages long and asks all manner of questions. All of which you have to answer if you want to have your application considered, supplying all of this is no guarantee of securing the property.

I just need those references sorted out then I’ll be good to start applying this weekend if I find something. If they just need names and contact details though I’ll be fine.

I think buying a place would be easier than this, even more reason to get my finances sorted out so I never have to do this again!

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Two Things That Made Me Smile So Far This Week

1: I was talking to my sister on the weekend and we got talking about money stuff again, my moving costs, her recent major purchase (in cash) and how I’d tracked down some of my rogue retirement funds.

She said she was so happy to hear the self esteem and confidence in my voice these days, particularly when I talk about my finances, and that she was proud of me for getting stuck into sorting it out for myself, by myself.

(This is the same sister who questioned my need for such a large 'dream' emergency fund)

2: Rang Mum and Dad to let them know I’d be moving soon (hopefully). Without hesitation Dad offered money to help with the various moving expenses, bless him. I was so chuffed to be able to say ‘No thanks, I'll be OK”.

Sure, I may need to use a credit card again for a short time (until I get my bond back etc), but I’m not even entertaining borrowing money from my retired parents, nor do I need to! I could hear he was pleased, not that he wouldn't have been happy or able to lend me money, but that I was able to manage for myself.

Mum was all 'oh, so are you going to sell your stuff on eBay?'

We should never have bought her that computer for her 60th...eBay indeed! *lol*

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How Do You Pay Your Bills?

I pay all of mine by Bpay, on payday. I don’t have that many recurring bills:

• Electricity
• Home Phone
• Car Insurance
• Contents Insurance
• Heath Insurance

The Electricity and Home Phone are actually quarterly bills, but I divided the last bill by the number of pay periods before the next one and pay that amount each month. Then once the bill comes I just pay any extra that might be due before the due date and it’s all good.

The insurance bills are the same amount each month, and my car/contents don’t cost any extra to pay by the month which is handy.

The annual bills sneak up though, like my NRMA coverage which I've just paid. So I've now divided that by 12 and will pay that much each month into my new ‘bills’ account (renamed my ‘future car’ account for now) so I’ll be covered for next year.

I also need to work out my registration, green and pink slip amounts too so I can start putting money aside for them as they’ll come up again in May. I’ll obviously need to divide those by the remaining months between now and then so it doesn't hurt too much at the time!

I don’t know why, but I’m fascinated by how people manage their bills. There have been some great posts out there lately that I really enjoyed:

• JD at Get Rich Slowly has two posts outlining why you should or shouldn't prepay your bills.
• TV Girl and Money covers making all your bills ‘monthly’ regardless of how often they actually fall. It’s a great post about creating a budget all round really.
• Paid Twice had a nice surprise recently when she opened a bill and found (after the initial shock wore off) that the amount was a credit, not owing. Wouldn't that be nice?

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Is Keeping Up With ‘The Joneses’ A Bad Thing?

I believe it’s who your ‘Joneses’ are, and what your motivation for keeping up with them is.

My entire life seems to have been spent comparing myself to others, from the ‘cool’ girls at school, through to people getting promoted around me at work, to seeing the successes of my friends and family manifest for them.

I've come to realise that this is because I didn't have any real goals or dreams for myself, so I relied on tagging along on other peoples. Or became envious when they had or did cool things, when I of course could have had or done those cool things if I’d made the same choices as them in many cases.

Now my focus has shifted more towards identifying what’s important to me, and what my dreams and goals are, I see things differently. Rather than envy those who have done and achieved great things in their life, I look and ask them how they did it, and if it’s something I can replicate in my own life, to pursue my own goals and dreams then I can and do!

I have quite a broad range of friends, all of whom I consider successful, as they are living their lives the way they want to. It’s not all about money, but having it, (or not having debt more importantly) does play a part in each. It’s the freedom to make choices for yourself that really stands out, not the level of income/money itself.

I've got a few examples that come to mind, so I’ll be looking at each of these people in more detail and writing separate posts about them (names changed of course) over the coming weeks.

• Part 1: The Car Guy
• Part 2: The Investors

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New Budget Mid Month Update

I've just started my second fortnight of the new budget I started in November. It’s worked a treat! I’m so proud of myself for sticking with it and being realistic enough with the numbers when I worked it all out in the first place.

There was a minor tweak to make ongoing though, not in the amounts but in the timings of regular automatic bill payments. As I’m moving to monthly pay in December, I really noticed the bills that are currently falling due before the 15th of the month and have arranged to have them all moved to the 16th or later to ensure I’ll always be paying them on time, and from my savings account.

As for my envelopes, they are fantastic. I have them to cover the irregular expenses that need cash over an automatic payment: Petrol, Public Transport, Food, Eating Out, and Personal. I ‘restocked’ them on Friday, and found that:

• Petrol - was untouched (but the car does need filling now)
• Public Transport, - all used and within budget
• Food – had $50 left over as have been away for work and have been very frugal the last 2 weeks). Also no big ticket grocery items, like shampoo etc.
• Eating Out – all used and Personal dipped into to supplement - need to watch this one more closely
• Personal – all used up

I loved that I could buy a few bottles of wine from the winery we visited on Friday (as part of my business trip last week - stunning place McLaren Vale) with no guilt as it was from my personal money to spend as I please.

I've transferred the 'leftover' money into my emergency fund instead of snowballing it off a credit card in light of the upcoming move.

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60 Days Notice To Vacate

Got home last night from a business trip to find the landlord has given me 60 days to vacate my unit. I need to be out by January 24, 2008. Great.

He advised he’s not willing to issue a new lease (I’d been on a month to month lease for 6 years), so the flat hunt begins. I was upset for a short while, but now I see it as an opportunity to move on to something new.

The downside is I’ll have to pay a lot more rent per week than I’m currently paying due to the Sydney rental market being what it is, and that’s going to put a bit of a dint in my debt repayment for the short term, not to mention the costs associated with moving. They are not abandoned of course; it’s just that till I’m set up in my new place the snowball amount will be diminished considerably.

Having done a quick search this morning, I’m looking at a rent increase of anywhere between $15 and $45 a week, depending on where I’m willing to relocate to.

I’m also so grateful that I have had a focus on eliminating debts over the last few months as I’m in a much better place to cover all the costs with cash over credit where possible. Had I done nothing, I wouldn't have even had any available credit, and it would have been a disaster!

Moving somewhere cheaper isn't really an option for me as any savings in rent would be eaten up in extra travel costs to work.

It’s also a little bit of a relief to know that I won’t need to spend another sweltering February in a west facing top floor unit with no air-conditioning!

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Spending Time With A Frugal Guru

No I haven’t spent money signing up for a seminar; I’m just going to visit my Nan.

My Nan is 92 years old and has always been frugal, in the best sense of the word. As was my Grandfather before he passed away a few years ago. I wish their sense of frugality had sunk in earlier, but I've certainly already got a lot from them that make me who I am today, so picking up more of her tips can only be a good thing.

She’s frugal, but only so she can use her money for the things that are important to her. She lived through the depression and Second World War, so there was no choice but to watch what you had and use it wisely.

She saves wrapping paper, wastes nothing, only buys what she needs, grows her own vegetables, composts her scraps and always has done these things, she’s such a trendsetter!

My sister and I bought some of her favourite perfume a few years back and we had to put conditional use on it as part of the gift – as in we insisted she use it every day or otherwise she would have ‘saved it for good’, she was 90, what was she saving it for? :-)

Some the things she chooses to spend her money on these days are:

• Big TV And Cable Subscription - When you live alone and spend a lot of time at home, and your eyesight isn't as great as it once was, this is money well spent for her. She loves her cricket in the summer, plus she gets to watch all her favourite shows (HUGE fan of The Bill for example).
• Getting Her Hair Done - She gets her hair set every Friday and has done so my at least my entire living memory. She’s had to change hairdressers as her original one retired! J
• Going On Bus Trips - My Mum and my Great Aunt always seem to be going off somewhere for a few days on community organized bus tours with her these days, it’s fantastic to see.
• Medical And Home Care Visits - yes, she’s on a war widow’s pension and this takes some of the sting out of these costs but she’s still out of pocket for some of this.
• Maintaining Her Home - She’s not renovating or anything, but she does get the lawns mowed regularly and had the placed painted inside and out not long ago.

She’s also got a regular taxi driver, who takes her to the hair and doctor appointments, and has been known to nip over the road from the salon to get her a BBQ chicken if required!

One of our favourite things to do when I visit is to do her grocery shopping in person (she usually gets it delivered). She just loves it, and I love spending the time with her (OK, I admit I love doing groceries too). She pushes the trolley, as it keeps her stable and she feels safer that way, and I work her list. She loves being able to pick out her own fruit and vegetables and inspect all the new items on the shelves. Then we go to a café and have coffee.

Not a big day out by a lot of people’s standards, but it’s one of the highlights of my month, all for the cost of minimal petrol and bridge toll; which she tries to pay for...funny old thing she is.

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How Much Do I Need For My Emergency Fund?

I was talking to my sister on the weekend about my long term goal to have $25,000 in an emergency fund, and she thinks I’m crazy! Not to have an emergency fund mind you, she thinks they are a great idea.

It’s just that she thinks that $5,000 would be more than enough for ‘any emergency you’re likely to encounter’. I should mention my sister and her husband are VERY good with their money, so her advice is something I take seriously.

I guess I may have been a bit gung ho with factoring a 12 month emergency fund, maybe the ‘traditional’ 3 month ($6,250) to 6 month ($12,500) version would be enough for me?

I've got 5 years of service coming up next month at work (for the second time at this company), which means I’d get at least 10-15 weeks severance pay if I was retrenched (again) plus get my long service leave paid out, which would be another 6 weeks or so. I’m not likely to quit in a huff or get fired; the company isn't going under any time soon, so I’m now a bit confused.

Oh and when I mentioned the ‘baby emergency fund’ my sister freaked! I've forgotten that not everyone speak in PF Blogger terms, and would know what I was talking about. I think she thought I was saving money in case I had a ‘baby’ emergency. She asked me to refer to it as a ‘starter’ emergency fund from now on.

Oh how I laughed.

What sort of emergencies should a 38 year old, single gal with no kids, no mortgage (renting) with full car, contents and health insurance plan for? Any suggestions? What are you planning for, 3, 6 12 months of expenses? Or salary?

A fully funded emergency fund is a couple of years away at least, so goodness knows why I’m obsessing now anyway, but a gal can dream can’t she?

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Should I Try And Move My Personal Loan?

I was looking at my HR site for more work benefits to take advantage of, and I've found one that I really think I should investigate further.

We have offers from Citibank called 'Citibank At Work' where we get discounted rates over and above those available to the general public. This one caught my attention:

Citibank Personal Credit

Consolidate your debts with a low 5.9% for life on balances you transfer and a great 12.99% p.a. ongoing interest on purchases and cash advances.

• $0 Transaction fees and ongoing fees
• 5.9% for life on balance transfers
• Low 12.99% p.a. ongoing
• Annual fee of $69

If I compare this to my current personal loan it seems like a really good deal, one that could save me over $3000 interest over the course of paying it off.

Current Loan

• $9 monthly ongoing fee = $108 per year
• 13.45% p.a. (variable)

I would of course actually have to get approved for the full remaining amount of my personal loan, and I have no idea how tough Citibank are, but I think it’s definitely something to look at.

It’s my largest single balance and will be the last debt I pay off, so if I can save interest accumulating along the way then that’s a good thing right?

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I'm A Volkswagen EOS In Debt!

It struck me today that the amount of debt I'm in is almost exactly the same amount it would cost to buy my 'realistic dream car', a brand new and fully optioned VW EOS.

It was a huge light bulb moment for me, for two reasons. One, I can't believe I let things get so bad that I'm a 'sweet car in debt'. Two, now I'm in such a debt reduction mindset I can't believe that I'd ever spend over $55,000AUS on a car!

That said, by the time I've paid off all my debt and fully funded my emergency fund, I should be able to pick up a second hand one for much less than that. Score!

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More Free Money!

Not a bad haul from the letter box today.

Got home to find:

Free Money #1 - a $20 gift voucher from Myer One,

Free Money #2 - a share certificate for the 700 NIB shares I received for being a member when they went public yesterday.

Nice! So that's $40 so far for Christmas shopping, and a new investment!

November is shaping up quite nicely so far.

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Carnivals Of Debt Reduction And Personal Finance

Patrick at Cash Money Life hosted the 112th Carnival of Debt Reduction this week, and my post Do You Get What You Pay For was included! I'm so excited!

This weeks theme was 'Making Progress', so very appropriate for my current situation.

David at My Two Dollars hosted the 125th Carnival of Personal Finance this week, and Do You Get What You Pay For was included too!

Both carnivals are chock full of fantastic posts about a wide range of topics, check them out!

A big thanks to them both for hosting!

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Favourite ‘Frugal Friendly’ Fast Food

Made at home naturally! I made this last night and froze the other 3 serves for lunches or home made ‘ready meals for later in the week.

Pasta 'Bolognaise' – 4-5 Generous Serves

• 500g Packet Pasta $0.49
• 500g Beef Mince $2.50
• 500g Jar Pasta Sauce $1.89
• 1 Decent Sized Onion $0.62
• ½ Pack Grated Fresh Parmesan $2.09

I’m sure most folk would know what to do with these ingredients, but just in case:

1. Put a pot of water on to boil for the pasta.
2. Chop and sauté the onion in approx 1 tablespoon of olive oil.
3. Add the mince and brown, breaking up any lumps as you go.
4. Add the pasta sauce. I also add a splash of water into the sauce jar and give it a shake to get the extra sauce out and add that in too.
5. Once the water is boiling, add the pasta and cook to directions, usually 11-13 minutes.
6. Drain the pasta when ready, pop it back into the pot and pour the sauce over the pasta
7. Mix it all together, dish up into serves and add grated parmesan.
8. Eat with gusto!

Total Cost = $7.59 or $1.90 (4) - $1.52 (5) per serve. Bargain!

What I love about this one is it’s so quick, yet so comforting and satisfying. Not to mention easy on the food budget!

This in no way resembles the proper Spaghetti Bolognaise my Mum makes of course. That was from scratch and took hours, and was/is truly awesome.

Do you have a favourite frugal meal you make regularly? I'd love to hear about it!

Do You Get What You Pay For?

I've been fascinated by generic or home brand items for some time now, but haven’t been buying them nearly enough. Coffee with my work colleagues last week sparked a lively discussion about buying generic items. Interestingly enough we all do, and are all quite proud of ourselves for doing it!

As the conversation went through what we would or wouldn't buy, we were debating whether or not the fact we’re in marketing means we’re able to see through the hoopla & branding and able to just buy what suits our needs. I think this is true, but I also feel that frugal is the new ‘black’, to borrow from the fashion vernacular.

Rising interest rates, high petrol prices, and ever increasing consumer debt means more and more people are looking for ways to cut back on expenses. Throw in climate change and living ‘green’ into the mainstream consciousness and we’re about to hit critical mass. Look at the proliferation of PF blogs out there for example (this one included!).

If the 80’s were all about ‘Greed Is Good’ then I think the second half of the ‘Noughties’ is shaping up to be all about ‘Frugal is Fab’ ;-)

As for my own story, before I started on my ‘debt diet’ I was aware of and used certain generic items, but I certainly didn't use them to stick to a budget or for anything remotely resembling frugality. I've always thought it was silly to buy name brand soda water for some reason; it’s just fizzy water after all.

To this day I think of chocolate biscuits as being a status symbol of sorts, as we never had them growing up, while my friends in the next street always did (my first ‘Jones’ perhaps?). I have a friend who feels the same way about frozen meat pies!

I still have a barrier with certain things at this point, such as shampoo, conditioner, toothbrushes, make up and deodorant, but I’m at least cutting back to cheaper brands or keeping my eye out for specials.

The top 10 things I now almost always buy generic (unless the name brands are cheaper) are:

• Milk
• Sugar
• Water Crackers
• Paracetamol/Ibuprofen
• Laundry Soaker
• Washing Powder
• Fabric Softener
• Scourer Sponges
• Plain/Chocolate Biscuits – strangely enough I don’t buy chocolate ones that often!
• Soda/Mineral/Tonic Waters

I’ve tried all of these over the last few months and I genuinely don’t notice any difference, and in some cases they’re actually better than the brand name ones!

Something to watch out for though are ‘fancy’ store brands, they’re not always the cheapest option (yes, I’m looking at you Woolworths Select, taunting me with your delicious white chocolate and macadamia biscuits).

Louise at My Journey To Eliminate Debt has a great post about milk that relates to this, (I personally can’t stand powdered milk and refuse to drink it under any circumstances), but if it works for you and your family you can save a fortune!

Are you a ‘generic’ shopper? Are you like me where there’s a limit and certain things you would never buy generic? Or can you just not bring yourself to buy the stuff at all?

Getting Rid Of Over Limit/Late Fees For Good

One of the ways I’m still throwing good money after bad is through bank account and credit card fees. Especially those mind-blowingly expensive late and over limit charges.

For October 2007 alone I paid out $55 in over limit fees, plus $12 in transaction fees.

This is all on top of the $400+ in interest payments of course, and those charges will incur even more interest until I can get these cards paid off for good. This is a ridiculous and completely preventable situation for me to still be dealing with.

I’m making sure this ends now by getting all my cards back under their limits with my first pay yesterday, having all minimum payments, plus the $10 extra per month I pay on each, paid into them on or before November 16. Then the last pay on November 30 will work as a buffer going into December.

Blueprint For Financial Prosperity says I shouldn't be paying any fees on transaction accounts at all, so I’m also going to consider shopping around for a new everyday account. I need something with unlimited free online transactions though, as that’s how my payments and budget distributions are set up.

No Credit Needed has an excellent series on 33 Days and 33 Ways to Save Money and Reduce Debt, which got me thinking about how I too could work Eliminating Fees, which is day 1 of 33.

A Fantastic Reminder And A Reward!

Got home last night to find two things in the post that made me happy, especially after having to post those October numbers.

First, I received my final statement from that first credit card I'd paid off in September, showing the account closed and a $0 balance. Nice!

Second, I opened an otherwise unassuming envelope and found that Flybuys had sent me a free $20 gift voucher simply for shopping at Coles over the last couple of months. I hadn't had to use any points for it, it was just a offer they had running that I'd forgotten about. Nicer!

I'll pop that aside for Christmas methinks.

I'm on a work offsite today, so other than train fare into the city and back it's all paid for. Hurrah!

The Ugly Truth – Day 62

The Ugly Truth

• Personal Loan - $23622
• Credit Card 1 - $4993
• Credit Card2 - $7685
• Credit Card 3 - $6496
• Credit Card 4 - $7094
• Credit Card 5 - (paid in full)
• Credit Card 6 - $4024
• Credit Card 7 - $3043
• Emergency Fund - $0
• Savings - $0
  

Total = $56,957
Debt reduced from last month = $1023 going backwards…
Debt reduced from Sep 2007 = $185 higher than when I started

As expected, October was a complete shocker. I’m actually in more debt than when I kicked things off in September.

I’m looking forward to this month being a lot more productive and making some decent impact on my debts, with serious snowballing to be done. I have two weeks worth of rent to add first thing tomorrow, plus I've got expense claims coming through as well.

I’m confident this won’t happen again. I won’t let it.

November Challenges

Well I’m 2 months into my ‘debt diet’ and not unlike a weight loss diet I've come up against challenges that threatened to derail my efforts. That said, it’s simply a matter of picking myself up, dusting myself off and keep moving forward one dollar at a time.

Now that my monthly pay doesn't kick in until December, there’s 3 pay periods this month; which should really assist in getting that debt snowball rolling again and gathering some momentum before the end of the year. Not to mention the pay rise kicks in from now too!
I’m two weeks ahead in the rent from last month, so will use my first November pay to really get a good head start on that snowball.

I’m also kicking off my new simplified budget, which I’m excited about using in real life.
Last months unplanned expenses really showed me the need for at the very least a starter emergency fund of $1000, so I’m looking to get that underway too.

I've got two weekends away, a work trip, and my companies Christmas party this month too, which should all throw some challenges (or at least opportunities to make some good decisions) my way.

November in a nutshell:

• Maximise debt snowball payments this month
• Live to new budget
• Stash $300 into starter emergency fund
• Send off 'find my super' paperwork and consolidate all my superannuation into one account

Ugly truth post to come…