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)
Monday, 30 June 2008
Financial New Year Resolutions
Friday, 1 February 2008
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.
Monday, 10 December 2007
Financial Goals For 2008
I’d set some goals to achieve by September 2008 (the anniversary of my starting my debt diet):
- 4 of my 7 Credit Card balances paid off in full
- Personal Loan under $20,000
- Emergency Fund funded to $1,000
- Retirement Savings at 3% personal contributions
- Total outstanding debt under $35,000
I've realised now that these are pretty ambitious targets for September 2008, what with moving expenses etc, but a girl has to have a goal, and if I can nail all of these by December 2008, I’ll be thrilled.
I’m also looking at that retirement savings line. I already contribute 1%, but that extra 2 % may actually go into a managed fund instead of Super, or into a First Home Saver Account if the government kicks the scheme off this year instead.
From January 2008, I’m also going to start tracking and reporting (in my Ugly Truth posts) the amount of debt interest I’m paying out. I've avoided seeing the real cost of my financial choices to date, and it’s time I face up to the impact.
If I’m sticking to my plan, the number will go down every month as the balances go down, which will provide extra motivation.
Tuesday, 13 November 2007
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?
Thursday, 8 November 2007
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!
Monday, 1 October 2007
The Ugly Truth - Day 31
The Ugly Truth
- Personal Loan - $23,868
- Credit Card 1 - $4934
- Credit Card2 - $7268
- Credit Card 3 - $5461
- Credit Card 4 - $7120
- Credit Card 5 -
$0(paid off in full!) - Credit Card 6 - $4113 (oops, went up $113)
- Credit Card 7 - $3170 (oops, went up $170)
- Emergency Fund - $0
- Savings - $0
Total = $55,934
Debt reduced from last month = $788
Debt reduced from Sep 2007 = $788
I didn't actually use my cards this month, they were charges from August that came across after the 1st September, so it was a surprise, but not something I'd done this month.
Friday, 21 September 2007
Big Win Number 1
I have to say I’m pretty chuffed with myself. I paid off my first credit card today, woohoo
Credit Card 5 - $0 Paid in Full 21/09/2007
It was both my lowest balance and my highest interest rate, so regardless which snowball method you follow it’s all good. It was even one of those pesky store cards.
So the $345 that I was paying every two weeks on that one will now roll onto the next focus card, Credit Card 7.
Saturday, 1 September 2007
Day 1 - The ugly truth, and a plan
It's really struck me lately just how much debt I've managed to acquire over the last few years.
The Ugly Truth
- Personal Loan - $24,105
- Credit Card 1 - $4947
- Credit Card2 - $7317
- Credit Card 3 - $5499
- Credit Card 4 - $7177
- Credit Card 5 - $677
- Credit Card 6 - $4000
- Credit Card 7 - $3000
- Emergency Fund - $0
- Savings - $0
Total = $56,722
Yes 7, count them 7 credit cards! What was I thinking? No wonder I'm 38, in a well paying job and don't have a home of my own. As today is the first day of Spring here in Australia, what better time to 'spring clean' my finances, and put that debt on a diet once and for all.
The Plan
- I'm running with the snowball method of paying off my debts, from smallest balance to highest, as I know myself well enough to realise I need the gratification. I've managed to find an extra $700+ in the budget for the snowball per month, by actually creating a budget!
- I'm keeping the current minimum balances fixed at this month's amount on the debts ongoing, maintaining those payments even as balances go down.
- I've set up automatic payments to come out each pay day on each of the debts.
- I've taken the cards out of my wallet
- I've set up $100 a pay transfer to start building my emergency fund.
Based on the snowball calculator I used, I should have eliminated 6 of the 7 credit cards by my 40th birthday in May 2009, and completely debt free by May 2010.
Now, to work the plan in reality.
