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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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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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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The Ugly Truth – Day 405

Debts

• Personal Loan: -$20,320
• Credit Card 1: -$6,223
• Credit Card 2: -$9,938
• Credit Card 3: -$5,125
• Credit Card 4: -$10,763
• Credit Card 5: (paid in full)
• Credit Card 6: (paid in full)
• Credit Card 7: (paid in full)

Savings

• Emergency Fund: +$2,000
• Car Fund (Maintenance & Registration): +$125
• Short Term Goal Fund: +$1,135 (Current goal is new bedroom furniture)
• Home Deposit Fund ($60,000 Goal): +$1,000
• UK Tour Fund ($10,000 Goal): +$500

Total: -$52,369
Debt reduced from last month: -$665
Debt reduced from Sep 2007: +$4,403

Ouch, that’s not good is it? I've gone backwards $665 debtwise this month, due to overspending on Credit Card 2. I did have some things I had to buy, but had no idea I’d spent that much. I’ll have to go through my statement & find out where it’s all gone to.

I also spent a week in Canberra looking after my nephew, so there were extra petrol costs & added expenses from enjoying myself and taking him places.

It may also have something to do with completing my update 9 days later than usual; my accounts have accrued their new interest for the month already I’m thinking? Not to worry though, it’s onward & upward from here.

I need to send off my balance transfer to move the balance from Credit Card 3 to Credit Card 4, which has a lower interest rate. I also got another Credit Card with a $5000 limit & 6.99% for the life of balance transfers, so will be moving as much as possible from Credit Card 2 to it as soon as I can.

I was actually hoping to get under the $50,000 mark this month, I’ll have to wait until at least the November update now. I expect that to be a better news story, as my personal loan will also drop below $20,000, which is another of my 2008 financial goals achieved.

Roll on payday.

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A Year Ago Today

A year ago today I started this blog. I was $56,772 in debt, and horrified, so decided to do something about it.

• I had a personal loan that consisted of a car loan and a previous consolidation loan of my credits cards, which I had run up again & added new ones to – I was so smart – not.
• I was making decent money but only paying the minimums & then reusing my cards over and over.
• I was paying for things I didn't need or use and did nothing about it (gym membership, online DVD rentals etc)
• I was buying my lunch every day, and buying up to 4 ‘bought’ coffees a day too
• I ate a lot of take away meals & ate out in cafes & restaurants most weekends too
• I was driving to work every day, and paying $17 a day for parking.
• I was paying for my broadband service, even though there was a free staff plan available

I got a great new job in October, which I still love coming in to do each day, and pays me a lot more money!

In November I found out I had to move house. I had no emergency fund at all, no savings, so onto the credit cards it all went. Right before Christmas, and in the Sydney rental market, it was a nightmare.

December and January were consumed with the joys of finding a new place to live and actually moving house. I had a couple of nice financial surprises in the forms of some found money in my travel wallet & all my share dividends, as I’d never updated my mailing address. So I managed to still get my numbers down.

In February, all the moving bills came in and my total debts had actually increased to $61,836! Talk about two steps forward & three steps back. The credit crunch has also hit the world hard by this stage & all my interest rates had gone up, many more than 2%.

March saw my Baby Emergency Fund reach $1000 for the first time – Hurrah!

In April I shopped around for a cheaper Greenslip for my car, and knocked the front bumper off in the local KFC carpark – good times…

I bought a snazzy new vacuum cleaner in May, turned another year older and saw a run of 4 months of consistent debt reduction kick in – finally, some progress, small, but consistent.

June was an awesome month, my annual bonus arrived so I was able to make a serious dent on my debt and still put some money aside for my other goals. It also saw petrol prices in Sydney hit record highs.

July saw me get back under my original debt amount of $56,772 for the first time since February, it was a great feeling. I also scored the employee of the month award at work, which is worth $150 and I still haven’t spent it yet.

August was a pretty boring month to close out my first year, I am getting a lot more offers in the mail to increase my limits though and calls regarding financial advisors, so someone’s noticed I’m trying to pay down my debt.

What will the second year bring? Not sure yet, but I’ll continue to reduce my total debt every month, set goals for myself, and blog about it here!

So as numbers go:

• September 2007: -$56,772
• February 2008: -$61,836
• September 2008: -$51,704

Total debt paid off so far: $10,132 – not too shabby, but I can do better!

I've got a new medium term goal, to double that amount in the next year, so my goal for September 2009 is a total debt of no more than $31440, which is $20,264 less than today. Plus still have my overseas trip in May/June in 2009!

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The Ugly Truth - Day 305

The Ugly Truth

Debts

• Personal Loan: -$21,600
• Credit Card 1: -$6,680
• Credit Card 2: -$8,657
• Credit Card 3: -$5,597
• Credit Card 4: -$11,000
• Credit Card 5: (paid in full)
• Credit Card 6: -$900 So close!
• Credit Card 7: (paid in full)

Savings

• Emergency Fund: +$2,010 – Sorted!
• Car Fund (Maintenance & Registration): +$252
• Short Term Goal Fund: +$1,004 (Current goal is new bedroom furniture)
• Home Deposit Fund ($60,000 Goal): +$1,004
• UK Tour Fund ($10,000 Goal): +$502
  

Total: -$54,434
Debt reduced from last month: +$3,646 – check it out!
Debt reduced from Sep 2007: +$2,338 – YAY!

Now you may not have noticed but there’s a dramatic change to my numbers this month, in more ways than one. Who doesn't love an annual bonus?

First, I'm back under $56,772 (the amount of debt I had when I started this blog). Woohoo!

Second, and more importantly (to me anyway), I’m no longer reporting my debt total by including my Emergency, Car and Short Term goal amounts in the final number, and it’s still less than when I started, plus there’s money in the bank! If I did run the numbers using the old way, the numbers would look even better still, but wouldn't be clearly outlining my situation.

I have $4,772 in available cash should I need it, but it’s all allocated for a purpose (other than the emergency fund of course), so I don’t think it will be going anywhere other than where it’s supposed to.

I’m really re-energised about improving my finances after making such a dent this month, my next target is that pesky $900 on Credit Card 6, I want it gone by August 1. I did waver about making a double payment on my personal loan this month, but it’s got the highest interest rate so felt it was worth waiting the extra month to pay off Credit Card 6.

Roll on payday – and my payrise!

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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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The Ugly Truth - Day 214

The Ugly Truth

• Personal Loan: -$23,560
• Credit Card 1: -$7,421
• Credit Card 2: -$7,842
• Credit Card 3: -$6,311
• Credit Card 4: -$11,310
• Credit Card 5: (paid in full)
• Credit Card 6: -$4,068
• Credit Card 7: (paid in full)
• Emergency Fund: +$1,006
• Car Fund (Maintenance & Registration): +$300

Total: -$59,206
Debt reduced from last month: +$798
Debt reduced from Sep 2007: -$2,434

March was a bit of an up and down month. No big cheques to speed things along unfortunately, but downward progress is still being made. At least I'm now back under $60,000 which I'm really happy about.

Now to get my debts back under my starting debt figure of $56,772. I expect to have it back to that amount no later than June 2008.

I've got my Emergency Fund back up to $1,000 after using it for car repairs earlier this year, which is great news. I'm going to continue building it to $2,000 as I feel more comfortable with that amount set aside.

I've even got another $300 set aside for registration and my pink slip that are coming up in May.

I've increased my pre-tax personal superannuation (retirement) contributions to 3% and increased the ongoing monthly payment on my loan to $700, as it’s now the highest interest debt I have, and the interest rate increased yet again last week, unbelievable!

Roll on payday.

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The Ugly Truth – Day 186

The Ugly Truth

• Personal Loan - $23910
• Credit Card 1 - $7444
• Credit Card 2 - $7333
• Credit Card 3 - $6288
• Credit Card 4 - $11382
• Credit Card 5 - (paid in full)
• Credit Card 6 - $4148
• Credit Card 7 – paid in full!
• Emergency Fund - $501

Total = $60,004
Debt reduced from last month = $1832
Debt reduced from Sep 2007 = $3232

I can’t believe I've been at this for 6 months now. It’s gone so quickly, but I've also learnt so much.

February turned out much better than the last two months, as I've settled into a routine at my new place, work got busy (but fun and challenging) and some money rolled in!

I got a nice stack of dividend cheques, which helped right at the end of February, plus I also finally got my bond money back from my old place, which will cover upcoming car expenses over the next few months.

The best news is I paid off Credit Card number 7 last month. Other than that, it doesn't feel like I've made any progress when I look at the numbers; as I’m still over $3000 worse off than when I started! Erk.

I can’t believe I was only $5 dollars off dropping back below $60,000. I know I could have just paid the extra $5 before I posted this and made a big deal of the drop, but if I can’t be honest with myself, I’m not changing any habits. It's also a really easy win for March!

I feel really different about my money now, and I'm very aware of how conscious I am about my spending and debt reducing habits these days. I think it bodes well for the future, my future in particular.

That has to count for something doesn't it?

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Big Wins - Second Credit Card Bites The Dust!

I’m very proud to be able to say I paid off my second credit card in February!

Only more 5 to go from here (yes I know I still have 5!), and only 2 more to meet one of my 2008 goals of paying off 4 of my 7 cards by December 31, 2008.

Credit Card 7 - $0. Paid in Full 29/02/2008

It was both my lowest balance and my highest interest rate, so regardless which snowball method you follow it’s all good. From now on things will head down a modified Dave Ramsay plan.

I now have a $400 payment to snowball onto my next focus debt, namely Credit Card 6 which is now my smallest debt, plus my increased focus on my Personal Loan, which now has the highest interest rate of all my debts, and is also the highest balance.

Onwards and downwards!

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Gives With One Hand And Takes With The Other

Remember how happy I was when my bank increased the interest rate on my online savings account?

It was of course a glimmer of hope in sea of bad news about rising interest rates here in Australia. However, that bad news has caught up with me and the same bank has now increased the interest rate on my personal loan too. It was so great while it lasted those few heady days in February...

This of course increases my minimum monthly payment, which reduces my ability to save anything in that high interest savings account with all it's delightful extra interest rate!

My personal loan now has the second highest rate of all my debts, which at 14.2% is more than all my credit cards except one. (That one is both my highest interest rate and lowest balance, so it's my focus debt at the moment)

With that in mind, and a strong desire to achieve as many of my 2008 financial goals as possible I've decided to permanently increase the amount I’m paying off my loan each month. One my goals was to get my loan balance under $20,000. The minimum payment has jumped to just $4.00 less than I’m paying now (I was paying an extra $10-15 per month since the beginning) and won't come close to achieving that goal.

After crunching the numbers I’ll be increasing the loan payment to $700 ( was $570) per month from March. This means I can set it to be paid monthly, comfortable in the knowledge that I’ll easily meet one of my goals for the year. This change alone will save me over $1000 in interest over the term of the loan, even without taking my debt snowball and snowflaking into account. It will make a bit of a dent in my snowball amount, I still have one, it's just smaller for the credit cards.

How are your goals for 2008 tracking so far?

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The Mail Is In And The News Is Good!

I received my dividend cheques for my company shares in the mail today. I was expecting $678.14, so imagine my delight when I added them up:

• $137.10
• $89.19
• $109.93
• $194.68
• $60.99
• $54.81
• $64.53
• $56.80
• $157.35
• $39.02

and they came to $964.40. Nothing like a $286.26 snowflake to make a girl’s day! As soon as I get a chance this week, it’s off to the bank to bank them so I can put it all towards paying off debt.

I don’t think there’s anything more important when trying to eliminate debts (for me anyway) than taking full advantage of any windfalls that come your way to get yourself into a better position.

I also received a letter from one of my banks offering to switch me over to a gold card with a pre-approved limit that’s $3000 more than I have now. It was such a great feeling to not be tempted for even a moment.

Things are looking better than they have for a while now financially.

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The Ugly Truth – Day 95

The Ugly Truth

• Personal Loan - $24187
• Credit Card 1 - $7125
• Credit Card 2 - $7293
• Credit Card 3 - $6318
• Credit Card 4 - $12033
• Credit Card 5 - (paid in full)
• Credit Card 6 - $3998
• Credit Card 7 - $882
• Emergency Fund - $0
• Savings - $0

Total = $61,836
Debt reduced from last month = -$5969
Debt reduced from Sep 2007 = -$5064

I’m really feeling two steps forward, three steps back at the moment.

December and January were incredibly costly with the moving costs topping out at over $5000 once I factored in bond/rent (I essentially paid 12 weeks rent in January and the rent on my old place); plus the car repairs at $730 destroying my fledgling emergency fund and debt snowball for January. Credit card #4 was also a bit of a shock to be honest, I didn't think I'd used it as much as I obviously have. Ouch

I haven’t got my bond back as yet from my old place, which doesn’t help my numbers of course, I’m expecting it in the next two weeks which will make a decent impact for next month.

February has been decreed ‘Frugal February’ for me, I’m determined to get my numbers down as much as possible. I really want to get Card #7 cleared, the interest rate is 18.75%. I wasn’t able to get its entire balance transferred over to Card #1 as they can only transfer up to 95%.

Roll on payday.

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I’m Back! So Are My Bills And Debts…

Well I’m all moved in to my new apartment, even though I’m still surrounded by boxes and the week long issues with phone and broadband connections have only just been resolved.

The move cost me an absolute fortune, and I’m glad it’s behind me so I can refocus on eliminating my seemingly ever increasing debt load.

The movers cost twice as much as I expected, pushing the total costs of the move up over the $2500 mark. One of the joys of being single with no family in the city to assist with the moving process. It’s amazing how your friends disappear into the woodwork when the moving word gets mentioned.

Unfortunately, due to lack of emergency funds almost all of this had to go on the credit cards so I've started the New Year more in debt than ever.

That said, I have a shiny new budget in hand, my envelopes at the ready and payday is today, so it’s time to focus on moving my finances to a better location, now I’m all moved myself.

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The Ugly Truth – Day 95

The Ugly Truth

• Personal Loan - $23123
• Credit Card 1 - $4950
• Credit Card2 - $7499
• Credit Card 3 - $6398
• Credit Card 4 - $7429 (work expenses to be reimbursed off this one this week)
• Credit Card 5 - (paid in full)
• Credit Card 6 - $3925
• Credit Card 7 - $2993
• Emergency Fund - $450
• Savings - $0

Total = $55,867
Debt reduced from last month = $1090
Debt reduced from Sep 2007 = $905

November undid the mess of October, but finding out I have to move before the end of January 2008 meant less to snowball onto debts as I’ll need it for moving costs. I’m still in front though at the moment, which is great news.

I switch to monthly pay from December 1, so this will be a true test of my budgeting powers, especially with double rent to be paid for at least some time when I find a new place.

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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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