Financial New Year Resolutions

It’s the last day of the financial year here in Australia, and I couldn't think of a better time to review my 2008 Financial Goals to see how I’m tracking, it’s the calendar year midpoint for the non Aussies too:

4 of my 7 Credit Card balances paid off in full

I've paid off two cards so far, and expect to pay off another next month, but getting that last one paid off by December 31 will be a serious stretch. I’m still going for it though.

Personal Loan under $20,000

This goal is on track, as I increased the repayments on my loan to accommodate the 3 (yes 3!) interest rate increases I've seen come though this year alone (damn credit crunch). I actually expect to reach this goal by November 2008.

Emergency Fund funded to $1,000

This goal is completed, I've actually got $2000 in my emergency fund as of this month, so I’m pretty chuffed about that. In addition I've established separate savings accounts for car maintenance, saving for new things (like a bed), and my 40th birthday trip to the UK in 2009.

Retirement Savings at 3% personal contributions

This goal is completed, I increased my personal contributions earlier this year so that chugging along, and I don’t even notice the difference in my pay packet these days.

Total outstanding debt under $35,000

Ah, yeah, this one isn't going to happen, it was an ambitious target even before I had all the expenses of moving house at the beginning of the year. I’m not going to achieve this one at all this year, but I’m still plugging away at reducing my total debt number.

So all in all I feel I’m tracking at 60% success rate, with a lift to 80% if I can manage to get that fourth credit card paid off.

That’s still a pass mark isn't it? :-)

As with a weight loss diet, you can’t throw in the towel if you don’t hit all of your targets, doing something right consistently will get you where you want to be, even if it takes longer than you originally thought.

How are you doing with your 2008 financial goals? Still on track, overachieving, adjusted for life impacts or given up? (I hope it's not the latter)

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Show Me The Money!

I received my pay rise letter late last week, and I'll be getting a 6.5% raise starting the 15th July, which is a healthy increase considering the current economic environment.

Since July 2007, my salary has increased by 21%, not too shabby! I went after and got a promotion last October which really helped that number along, but I've done well in that new role and have been rewarded accordingly, if I do say so myself.

I spent the weekend (no, not the whole weekend – what do you think I'm like?) tossing around what I should do with it against what I really want to do with it. I’m happy with the compromise I've decided.

One of the easiest ways to pay down your debts or save for your goals effectively is to not increase your lifestyle along with any salary increases you receive.

This makes for a substantial snowflake to add to your goals each month.

I did this when I started in my new role back in November last year (having already started paying down debts by then thank goodness), and will do this again in a modified way with this new increase.

I'm really looking forward to using 50% of the extra income to increase my debt repayment efforts, and will allocate the other 50% to the 40th Birthday UK Tour Fund.

I'm comfortable with how my lifestyle is these days, with a healthy focus on debt elimination, while planning for upcoming expenses, and still having something left over to enjoy my life along the way.

I have nothing but admiration for those who have a single minded, do without all 'wants', nothing until the debts are gone, 'gazelle like' intensity to eliminate their debts, but I know myself well enough to understand I need to find a level that would address everything I want, including paying off all my debts.

Just like the name of this blog, paying down debt is like a diet. If you go too extreme for you (what extreme constitutes is entirely subjective of course), you’ll end up 'bingeing'. In my case on unnecessary items, like trashy novels, unplanned trips to Ikea and takeaways every night.

Or maybe that’s just me.

Are there things you've kept in your budget that others might not consider necessary?

I'd love to know what you budget for that's may seem frivolous to another, or are you extremely focussed and have cut out all 'wants' until you’re debt free, I'd love to hear about that too.

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Sydney Petrol Prices Hit Record Highs Ouch!

Petrol (what others may call gas) prices reached a record high yesterday, with prices of $1.72 a litre for unleaded petrol.

To put that into perspective for the non-Aussies, that translates to:

• 6.17 US dollars a US Gallon (= 3.785411784 litres)
• 3.77 Pounds a UK Gallon (= 4.54609 litres)

That $4US isn't looking quite so bad now is it?

Petrol is always cheaper here on Tuesdays, and was a low as $1.50 a litre (yup, that’s considered low these days) this week, but on Wednesdays it’s been jumping to record highs for the last six weeks. It then stays high for the remainder of the working week, before dropping over the weekend towards cheaper Tuesday.

This means that even with my small 1.6 litre, 4 cylinder hatchback, it will now take just over $50 to fill it, compared to the $35 when I bought it two years ago.

I also use the 4c a litre petrol discount vouchers (what others may call coupons) that we get from the supermarket (if you spend over $30 at one time), it’s only a dollar here or there but it all adds up over time. My local Woolworths is at the end of my street and my local Caltex that takes their vouchers is only 2 streets away, so it’s not like I’m travelling all over to get that dollar.

I’m SO glad I moved so close to work! Walking hasn't increased in price, it’s still free, even on Wednesdays. I haven't had to adjust my petrol budget at all yet, but I only get one fill a month, not two like I used to.

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Starter Emergency Fund Sorted

I received my annual bonus late last week, so was able to complete funding my starter emergency fund to the $2000 I was working towards. Yay!

As a very pleasant extra I also receive the Superannuation Guarantee on the bonus payment, so got a nice boost into my retirement savings this month, on top of my regular monthly salary contribution, plus the 3% I'm contributing myself pre-tax.

For the non Aussies, the Superannuation Guarantee is our version of a retirement fund, the big difference to say an American 401K is it’s mandatory for employers to contribute on your behalf. Employers must pay a minimum of 9% of your pretax salary into your superannuation (retirement) account. As my bonus is considered part of my package, it counts toward that 9% total for the year. Sweet!

As for the rest of the bonus, I've:

• set aside $1000 to go into my First Home Savers Account once it starts here in October,
• paid a decent chunk off my focus card,
• paid a double payment on my personal loan,
• boosted my goal account to $1000 (I really need a new bed and mattress),
• bought a new outfit for work (from Target, 30% off),
• put $500 aside to start my 40th birthday 'UK tour' fund for June/July 2009.

July’s Ugly Truth is shaping up to be a very good news story!

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The Ugly Truth – Day 276

The Ugly Truth

• Personal Loan: -$22,750
• Credit Card 1: -$7,000
• Credit Card 2: -$9134
• Credit Card 3: -$5,970
• Credit Card 4: -$11,351
• Credit Card 5: (paid in full)
• Credit Card 6: -$3,860
• Credit Card 7: (paid in full)
• Emergency Fund: +$1,508
• Goal Fund: +$351
• Car Fund (Maintenance & Registration): +$126
  

Total: -$58,080
Debt reduced from last month: +721
Debt reduced from Sep 2007: -$1,308

May was an expensive month.

I had car registration, pink slip and green slip to pay, which came to just under $1000 – that included the two new front tyres required to get my pink slip, which wiped out my Car Fund and then some. I’m determined to prepare better for these expenses for next year so I’m adding $125 to the car fund each month to cover those expenses next year, plus servicing and my NRMA membership as required. I just want to have the cash on hand as the expenses come in throughout the year.

I've also added a Goal Fund to have money to buy those bigger ticket items as they come in, I really need a new bed for example, so that has to be saved up for, not charged to a card.

Still knocked a smidge over $700 off the total of my debts though, the seemingly ever increasing interest rates on my cards are killing me! Looks like my prediction of being back under my original debt of $56,772 by June was accurate though.

Roll on payday.

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