Paying Stupid Tax

Here’s a quick guide on how to spend heaps of money unnecessarily, it’s easy if you try.

1. Don’t keep your passport and birth certificate in a secure, easy to remember location.
2. Move house over a year ago & don’t unpack all your clutter from the boxes in the spare room
3. Realise you’re going overseas in under 4 weeks and try to locate your passport.
4. Turn your entire apartment upside down with no luck.
5. Realise you can’t find your birth certificate to apply for a new passport.
6. Apply for a new copy of your birth certificate, which requires working from home so you can go into the NSW Registry of Births Deaths & Marriages in person, and get a same day certificate processed. Stupid tax of $63, the cost of an urgent issue of certificate as I needn't have paid this at all if I had put it somewhere safe. Oh and don’t forget the Stupid tax of $13 for parking in the city.
7. Book in appointment at Post Office for passport interview.
8. Complete passport application, including getting new passport photos Stupid tax of $9 as my existing passport still has two and half years on it.
9. Submit passport application. Stupid tax of $208 for the passport itself, and Stupid tax of $78 for priority processing (sent out within two business days + mailing time).
10. Berate yourself for days on end for being so careless = priceless.

Total Stupid Tax: A$371, or approx 178 GBP.

I've taken the money out of my Trip fund. It’s not an emergency; it’s my own stuff up. Grrrr.

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So Very Very Tired

Things have been completely manic at work for the last few months. I did however just launch my first product! With that come all the pressures of ensuring the back end systems and processes are supporting the sales of the product, plus working with the communications teams to get the message out to the world.

Very exciting, but completely exhausting.

I guess the ‘good’ news is we’re so busy at work and will continue to be (I'm now preparing my next product) that there’s not much chance of being made redundant any time soon, job security worry would tip me over the edge at the moment.

With all this going on my debt reduction focus has been drastically compromised (as demonstrated by the tumbleweeds rolling around my blog), one person can only do so much at one time well and stay sane.

That said I’m still chipping away at it, thank goodness for automatic payments!

I have my UK ticket all booked and paid for, and my funds are shaping up nicely, I’m quietly confident I won’t have any credit card debt relating to the trip by the time I get back, which is fantastic. I can't promise I won't have a new handbag though...

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Bushfire Appeal

I have to say that after an incredibly sad weekend watching the devastation unfold in Victoria, I’m really impressed with how my company has responded to assist those impacted by the fire and to assist them in their efforts to try and rebuild their lives.

As of this morning:

• Portable mobile base stations are being prepared for deployment and field staff from NSW and South Australia are on standby to assist with the efforts. Dozens of mobile base stations in Victoria were damaged leading to pockets of the mobile network being off the air, when communications are a vital part of the fire fighting and recovery process.
  
  
• To assist customers who have lost property as a result of the bushfires, the company will be wiping all charges on all their services for up to 3 months effective immediately.
  
  
• In addition, the company will be offering free Prepaid mobile handsets with recharge credits to the value of $1000, to customers who have had either their home phone or mobile services disrupted.
  
  
• A Bushfire appeal is being set up specifically for staff to make a pre-tax donation through salary sacrifice. The company will match funds donated by staff.

If you would like to make a donation you can do so online through the Australian Red Cross.

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The Ugly Truth – Day 523

Debts

• Personal Loan: -$15,000
• Credit Card 1: -$6000
• Credit Card 2: -$7100
• Credit Card 3: (transferred to Card 4)
• Credit Card 4: -$15,888
• Credit Card 5: (paid in full)
• Credit Card 6: (paid in full)
• Credit Card 7: (paid in full)
• Credit Card 8: -$4,435

Savings

• Emergency Fund: +$2,000
• Car Fund (Maintenance & Registration): +$0
• Short Term Goal Fund: +$0
• Home Deposit Fund ($60,000 Goal): +$0
• UK Tour Fund ($5,000 Goal): +$0
  

Total: -$48,423
Debt reduced from last Dec 2008: +$3010
Debt reduced from Sep 2007: +$8,349

I've cracked the $50,000 barrier at last - hurrah! I’m also on track for reducing my debt by at least $12,000 in 2009.

I've sacrificed my short term goal fund as part of this result though, the bed can wait a couple of months, but I really want to make a dent on that personal loan this year. Same for the home deposit fund, I do want to start building that from this month month though as the interest rates are just so low now.

I’m also going to roll Card 2 onto Card 3 this month, the interest rates are pretty much the same, so for simplicity and one less payment each month (even though it will be larger of course) it’s worth it.

I've been throwing everything I have at my personal loan at the moment as it’s got the highest interest rate, but I’m also considering a switch to paying a percentage of each debt each month, I can currently afford 4% of the current balances, and still save money for my other goals.

Decisions decisions…

Roll on payday.

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Laptop Thieves

To the bastards who stole my work laptop that was in its laptop bag with all my Uni application stuff including all the originals of my certificates, I hope you get ebola.

I popped into Coles (supermarket chain here) at Lindfield (posh suburb) tonight at 7.30pm on my way home from work, was in there for 10 mins tops, came out and you'd smashed the window, got into the boot and nicked my laptop, which has all my work for two major projects I'm working on at the moment, plus my Uni stuff.

I can't begin to tell you how stuffed I am at work tomorrow, not to mention trying to get the window fixed before the long weekend, so I'm not trapped at home the whole time.

Grrrrrrrr! I knew I should have got drive through instead of something healthy and cheaper.

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2009 Financial Goals

Now that 2008 is coming to a close, and the goals for 2008 are done for the most part, it’s time to look forward to 2009 and the goals I’m chasing after over the next 12 months.

• Reduce my Jan 1 2009 Ugly Truth balance by a minimum of $12,000 ($1000 per month). I’m trying to be realistic with this one; $12,000 is a fair chunk to reduce my debt by in a year, while still going after other goals that are important to me.
• First Home Saver Account funded to $5,000 by Dec 31 2009. I really didn't get far with this one in 2008, so really want to get into saving my deposit over the next few years, even while I’m paying off my debts.
• Increase emergency fund to $5,000 by Dec 31 2009. I just think I’ll feel more comfortable having a larger amount put away in the current economic climate.
• Increase voluntary super contributions to 6% pre-tax salary from May 2009 (40th birthday gift to myself). With the 9% Superannuation guarantee I’ll be socking away 15% of my gross income into retirement.
• Pay for 2009 university fees upfront (approx $8,000, less $3,000 rebate from work), not via HECS. Yup, decided to go to Uni. It’s only 3 subjects, with a view to review at the end of 2009 as I’ll get a certificate/diploma/masters for each year I attend, so it’s not wasted if I have to stop.
• Car replacement account funded to $5,000. My poor old car is not on its last legs, but could be in the next 12-18 months. I’d like to have at least some sort of deposit for the next one, as I don’t expect anything much in the way of a trade-in on a 1995 Lancer hatch with dents and scrapes all over it)

As you can see there is somewhat of a shift away from pure debt reduction for me in 2009. I am still aiming to reduce my debt by $1000 a month, but I have turned my focus to long term goals (being debt free is one, but not my only long term goal) and educational expenses.

With the current economic climate the way it is, I want to have more of a buffer in the unlikely event I’m retrenched. I've been through that once before (in 2001 when the IT bubble burst), it sucked and I know what I need to do to feel more secure financially now.

It’s also the big 4-0 for me in 2009, so it’s a case of if not now, when? I’m single, no kids, so a ‘sista’ has to start doing it for herself (my sincerest apologies for trying to talk ‘street’ but it seemed to suit the tone I was trying to get across).

I've also become mildly fascinated with simplicity and feel very ready to live a more simple and streamlined life in 2009, so keep an eye out for posts on my other as to now unused blog, ‘I Can’t Believe It’s Not Clutter’.

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Stupid Woman Rant

I’m sorry in advance for my tirade, but this story makes my blood boil, but I’m not on the side of the ‘full-time homemaker’. I’m not anti stay at home mums, or mums, or full time homemakers, I’m anti these two particular women for being so stupid and making all women look ridiculous by association.

“I couldn't believe it. It was like being back in the '50s. “

Honey, you don’t have a job, that’s why you didn't get the phone contract. You have no proof of income, as your husband is paying the bills (yes, even if you are the one who physically pays them), so what did you expect the poor rep in the store to do?

"Being a mum is a full-time job and it's a very hard job - the hardest job you can have - because if you get it wrong, the ramifications for everyone are enormous," Ms Fair said.

Being a full time Mum is hard, blah blah blah we all know that, but it doesn't demonstrate any financial capacity to pay off a 24mth phone contract if you have no income.

As for you Ms. Eva Cox of the Women's Electoral Lobby, the company should not be ashamed. Calling for a boycott of Vodafone is ridiculous.

To give you some perspective on why this has made me so mad, I don't work for Vodafone, in fact I work for a competitor.

We have to do Trade Practices Act - Consumer Protection compliance training every single year (even those in non customer facing roles) specifically to ensure we do not sell/develop/market dodgy products to customers or make them sign up for things they couldn’t reasonably be expected to understand (selling to persons who are mentally disabled, or deliberately misleading customers with Marketing offers, or not ensuring customers capacity to pay at point of sale).

It’s just as likely that we’d see this same woman on ACA or Today Tonight wailing we had sold her a phone and we’re the big meanies because we’re expecting her to actually pay her bills and she’s just a stay at home Mum.

You know you've seen those stories before.

As an independent woman this sort of thing infuriates me, the sense of righteous indignation for something that is completely unreasonable is what sends us back to the ‘50s, not Vodafone.

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How Did I Go with My 2008 Financial Goals?

It’s getting to that time of year, when I look back and see how I went with the goals I set myself this time last year.

4 of my 7 Credit Card balances paid off in full

Not quite done, but I do now only have 3 cards to pay off, not 7.

Half marks? +0.5

Personal Loan under $20,000

Done and by a fair amount, as of today the balance is $18,135 (interest for the month still to hit this before January 1st though).

A full mark is warranted here +1

Emergency Fund funded to $1,000

Done and doubled actually, I've got $2000 in my starter emergency fund. I've also set up travel, goals & car funds.

Another full mark +1

Retirement Savings at 3% personal contributions (on top of the 9% Superannuation guarantee)

Done, and just quietly could I have picked a worse year to do this? *lol*

Or maybe it was a good year as I’m getting extra units at bargain prices? I've contributed over $10K to my retirement account this year and the total balance went down $50K – Ouch!

+1 as I didn't stop contributing even though the share prices tanked. I learnt my personal risk profile is exactly as I thought it was which was surprising.

Total outstanding debt under $35,000

Move along, nothing to see here *whistles while looking away from you all*

No marks a big fat 0.

So all up I've given myself 3.5 out of 5 or 70%, which I’m pretty happy with.

Progress not perfection is the name of the game.

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I Have No Words…

I just received an email from my best friend in the UK:

I can't wrap this up any other way, so here it is in an email.

Your combined Christmas and 40th birthday present is your flight to the UK.

Happy birthday and Christmas!

So you'll need to get me dates so I can book, or I can transfer the money to you.

It’s a very green gift because no trees died to make wrapping paper to wrap it. :-)

I’m just so stunned I just had to tell someone!

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Buying Gift Cards – With Gift Cards!

I realised the other day that I had a heap of small denomination (we’re talking $950 worth) Coles Myer gift cards that are due to expire at the end of December. I got them from work for various things and from Flybuys and hadn't got around to using them.

They’re a pain to use as they are all $10 or $15 denominations, so I've been using them to pay for groceries mainly, and I really didn't want them to expire, they’re effectively free money after all.

So I took them all into my local Coles and asked if I could use them all to buy a one new large value card, and they said yes!

I now have a $600 Coles Myer card and a $350 card that I can also use at Coles Express petrol stations too, both with a 2 year expiry date.

Just in time for Christmas shopping as they’re also valid in Myer, Target and Kmart, plus Vintage Cellars for the booze, hurrah! They should last me for at least a few months food and petrol wise, so that’s a bonus for saving more money from my trip and paying down more debt.

The thing that made me laugh was the guy at the counter didn’t bat an eyelid, all he asked was ‘did you win these at bingo?’

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The Ugly Truth – Day 458

Debts

• Personal Loan: -$19,136
• Credit Card 1: -$5,681
• Credit Card 2: -$6,147
• Credit Card 3: (transferred to Card 4)
• Credit Card 4: -$15,719
• Credit Card 5: (paid in full)
• Credit Card 6: (paid in full)
• Credit Card 7: (paid in full)
• Credit Card 8: -$4,750

Savings

• Emergency Fund: +$2,000
• Car Fund (Maintenance & Registration): +0
• Short Term Goal Fund: +$1,250 (Current goal is new bedroom furniture)
• Home Deposit Fund ($60,000 Goal): +$1,000
• UK Tour Fund ($10,000 Goal): +$1250

Total: -$51,433
Debt reduced from last month: +$321
Debt reduced from Sep 2007: +$5,339

Another tiny change downward this month, as I had to get the car serviced and it cost heaps, plus pay the NRMA membership.

I need to make more of a dent in those balances down though, it’s driving me mad.

I’ll be tracking my spending more tightly over the next few months to see where it’s all going.

I did manage to add another $250 to my travel fund and also my short term goal fund though so that’s cool.

My goal for this month is to finally crack through the $50K barrier, it’s been far too long coming.

Roll on payday.

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To Postgrad Or Not To Postgrad, That Is The Question.

(Apologies to Bill Shakespeare for my paraphrasing.)

I've just completed an Executive Certificate in Marketing Management through work, which I really enjoyed (especially as work paid for it in both course costs and actually running the course on site during work hours – sweet!)

It’s got me thinking about continuing my studies. I had commenced an undergrad before this opportunity presented itself, but my course through work was at a post grad/MBA level and I did OK, well even.

I’d really like to go after a Masters in Marketing, as I think the next few steps of my career will require tertiary education as well as experience, so it’s now or never really.

I've got myself booked in to an information evening next month to find out more about it from lecturers and speak to current and recently graduated students about what the workload is like, as I’ll be working full time as well as studying.

The big question though is the cost. I’d be looking at approx $2,588 a subject, and I’d have to complete 11 subjects (as I've already completed one subject), so that’s $28,468 over the life of the Masters or $9,490 a year (assuming two subjects a semester and two semesters a year).

That’s $791 a month I’d need to find in my budget each month to pay for it upfront.

Alternatively, I can pay a 20% surcharge and have 8% of my salary deducted each month (the joy of HECS/Fee-HELP) until the total amount is paid off. 20% equates to $5,694 though, which is a lot of surcharge, so I’m leaning towards paying upfront.

The other two things with paying upfront are:

• I can ask work to contribute up to $3,000 per calendar year, which could reduce my outgoings by $9,000 over the life of the course, and would mean I’d only need to find $541 a month in the budget.
• The other is the course fees are tax deductible, which could also help pay for things as my annual taxable salary would be effectively reduced by $6,490 (after the $3,000 I’d get back from work) which would push me down a tax bracket.

I was in a meeting with our ad agency yesterday and they showed us reports that MBA applications have gone through the roof, which is an unforeseen side effect of the global financial crisis.

People are investing in themselves rather than the stock market it seems.

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It’s the little things…

One of the guys in the office just returned from a Macca’s run and so now I’m sitting at my desk enjoying a chocolate sundae, with my headphones on listening to Ministry of Sound Classics (Disc 3) and analysing broadband data usage patterns by rate plan.

Life is good.

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Squeaky Wheel Gets Grease!

Last week I decided to email my bank about my so called ‘variable’ loan only going up, and never coming down, even though savings and home loan rates have dropped. *cough*StGeorge*cough*

Their home loans go down overnight after (or even in anticipation of) an interest rate drop from the Federal Reserve as do their online savings accounts, yet their personal loans and credit cards have stayed as high as ever.

They had no such hesitation to put them up 5 times in the last year as interest rates went up.

I must have written a decent email, as I had a call from their customer relations area on Friday. This was to thank me for my feedback and advise she was going to have someone look into my situation and see what they could do for me. I didn't think much more of that over the weekend and assumed I wouldn't hear anything.

So it was a pleasant surprise to have just had a call from the person she said would call me and he’s offered me a 1.5% interest rate drop, which will drop my minimum payment by $72 a month. It’s still variable, and if the rate ends up dropping below the new rate I’ll still get those reductions.

I won’t be changing my new payment of $1000 a month, it just means that for no extra effort on my part I’ll be able to pay an extra $864 a year off my loan, plus save at least an additional $300 a year in interest.

It pays to be a squeaky wheel, especially in a competitive banking environment.

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The Ugly Truth – Day 428

Debts

• Personal Loan: -$19,877
• Credit Card 1: -$5,412
• Credit Card 2: -$5,485 ($5,000 transferred to Card 8)
• Credit Card 3: (transferred to Card 4)
• Credit Card 4: -$16,105
• Credit Card 5: (paid in full)
• Credit Card 6: (paid in full)
• Credit Card 7: (paid in full)
• Credit Card 8: -$4,875

Savings

• Emergency Fund: +$2,000
• Car Fund (Maintenance & Registration): +250
• Short Term Goal Fund: +$1,000 (Current goal is new bedroom furniture)
• Home Deposit Fund ($60,000 Goal): +$1,000
• UK Tour Fund ($10,000 Goal): +$750

Total: -$51,754
Debt reduced from last month: +$615
Debt reduced from Sep 2007: +$5,018

Not a huge change this month, but I’m OK with that as I had a lots of bills come in that needed to be paid, I managed to pay them without dipping into my emergency fund, and factoring in the monthly interest I’m paying it’s still a win to have the total go down.

Not all the balance transfers had been processed as of today, I’m still waiting on the balance of Credit Card 1 to go over to Credit Card 2, and then I’ll have my new snowball in place.

My personal loan is now under $20,000 which is great, and now I’ll be throwing $1,000 at it every month from now on (it’s got the highest interest rate of all of my debts), that should see larger debt reductions each month ongoing.

My focus card is now Card 2, so any extra snowball or snowflake money will be going on to that card from now on.

I also managed to add another $250 to my travel fund, as I’m looking to go in May 2009; I really need to get cracking on building up that fund now. Especially considering the exchange rate, Aussie dollars to pounds Sterling is never a pretty exchange, but it’s even worse at the moment.

Roll on payday.

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Who Do You Read

I'd looking to expand the blogs I read on a daily/weekly basis, as the last week or so I've been so hungry for online readin that I've been coming back to an empty feed reader. It's the busiest time of the year at work, so reading about something other than my own life when I can is a great way to relax.

Gentle readers, I'd love to know your must read blogs, so I can add them if I'm not already reading them. Let me know in the comments, and please include your own too if you have one.

They don't have to be personal finance related, I'm interested in pretty much everything!

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Government Handouts Don’t Always Help Those Who Need It

The Australian government's recent first home grant policy change is shameful. Don’t get me wrong, this isn't entirely sour grapes as I’m not in a position to take it up myself, it’s simply a short sighted, bad idea.

For the non-Aussies, the government announced they will double the first home buyers grant from $7000 to $14,000 between now and June 30 2009. First home buyers get a further $7000 for new build houses.

This will only encourage those who can not afford it to take on excessive debt and invest in an asset that is fundamentally overvalued here in Australia. At the same time property owners and investors who hold significant equity in their homes following years of above average returns are given a free ticket to exit the property market before it really starts to fall. It’s well known that the grant isn't actually for first home buyers; it’s actually a bonus for those selling to first home buyers.

Property values at 7-8 times annual income are unsustainable and need to fall. Other countries who had over inflated property markets are currently falling back to averages around 3-4 times income, so why is Australia an exception?

The government is trying to engineer the fall in Australia to be more extended and less severe than other nations like the US & UK, but by doing this all they are doing is passing the losses from those that can afford it and who are sitting on large equity in the properties, and passing it on to the young and so called future engine of the Australian economy who can almost certainly not afford it.

Why isn't the government actively trying to promote people to save some money? Their original proposal of First Home Saver Accounts is still an excellent idea, so why did they all of a sudden change their minds and promote people to skip saving and go straight for their first home?

In 4 years time when people have proven they can save some money and house prices have fallen they will be in a perfect position to buy a house and pay for it over the long term. The banks must have a bug in their ear as they’d rather make money handing out loans, rather than pay interest on savings.

So that’s still the path I’m going to take. Save my money, live within my means and buy a home when I can afford to do so. It seems crazy that I earn as much as I do and can’t affords to buy a home on my own, but that’s the way it is here at the moment.

The process of trying to spend and borrow our way out of every economic hiccup is destined for failure. We can not keep increasing debt levels happily ever after, I know this even without a mortgage, my original debt load was exactly the amount I’d need for a house deposit, and I feel this keenly.

At some point of this financial crisis we’ll all have to take some pain, and I’m glad I started peeling off the band aid in September 2007.

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Mum's 2 cents On The Financial Crisis

I got this email from my Mum today:

*********************************************************
Following the financial crisis on Wall Street uncertainty has now hit the banking sector in Japan.

In the last seven days Origami Bank has folded, Sumo Bank has gone belly up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while today shares in Kamikaze Bank were suspended after they nose-dived.

While Samurai Bank is soldiering on following sharp cutbacks, Ninja Bank is reported to have taken a hit, but they remain in the black.

A spokesman for Haiku Holdings was lost for words over the financial crisis, while according to rumours Nippon Bank was starting to feel the pinch.

500 staff at Karate Bank got the chop, the Judo Bank has been thrown out of the system after their stranglehold over the market was broken, and Tae Kwon Doe Bank executives kicked out at their critics. Further, a Kung Fu Bank CEO is reported to have said 'it is time for them to leave', while the Reiki Bank is now at full stretch after a long period of relaxation.

Analysts report that there is something fishy going on at Sushi Bank where it is feared staff may get a raw deal. Meanwhile Geisha Bank has bowed to the inevitable and shut.
*********************************************************

Thanks for that Mum, you know things are starting to come around when people are making jokes about it.

Is this a particularly Australian thing, to make jokes when a situation is bad?

'You see, that's another thing that my parents gave me: an enormously great sense of humor." - Liza Minelli

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Making Some Changes To My Snowball

I spent some time last night looking at my remaining debts (who am I kidding I look at them most nights), and how I can reduce the total minimum payment I have to pay each month and reduce the monthly interest bills overall.

So what I’m planing to do is:

• Apply for a balance transfer of Card 3 (15.99%) to Card 4 (10.22%)
• Close Card 3
• Confirm $5,000 balance transfer of Card 2 (15.99%) onto new Card 8 (6.99% for life of balance transfers, $5,000 limit)
• Apply for a balance transfer of Card 1 (11.79%) to Card 2 (11.79%)
• Close Card 1
• Increase monthly payment on loan (14.89%) to $1,000 a month (was $700)

I’m still snowballing, but if the minimum payment is reduced then there’s more of my debt payment amount to actually snowball/flake? Confused yet?

I've worked out this will save me almost $1,000 in interest if I can manage all the changes with the various companies, and still allow me to save enough for my UK trip in May next year, plus get the $5,000 I need to put into my First Home Savers Account before June 30 2009 (once I open the account of course).

Am I crazy here, or does this make some form of sense?

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Another 2008 Financial Goal Achieved!

Even though this month’s ugly truth showed a backslide, this doesn't mean it's all doom and gloom in Debt Dieter world.

I got paid today & I’m pleased to report my personal loan has finally dropped below $20,000! This was one of my financial goals for 2008, so I’m happy to see that one happen at last.

Goals 1 and 5 on that list have no chance of happening now (although goal 1 will be pretty close), but I am aiming to get my total debt under the $50,000 mark by the end of this month, just for my own sense of achievement.

The other good news is Credit Card 2 is now under $6,000 too, but I won't know final balances until the November 1 update.

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