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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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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I Have Too Much Stuff

The last few days have been an epiphany. Everything in my life is connected and changing one thing eventually drives a change in everything.

After months of half baked efforts to get my house in order I finally had a line drawn in the sand with the rental inspection this week. Then last weekend my best friend called and asked if he could come and stay with me for a few weeks while he sorts out a UK Visa (he’s an Aussie living in Hong Kong). He’s arriving on Thursday night! I was actually able to say yes. I’m so excited to get to spend this time with him.

Anyway, back to the topic at hand, too much stuff. My apartment was (and still is to a much lesser extent) stuffed to the gills with junk, clothes, books, DVD’s, handbags plus numerous other bits and pieces. I realise now why I haven’t been able to sort it all out. There’s just too much of it! I’ve been buying more and more stuff in an attempt to feel better, but it’s trapped me, reduced my choices in life and made me feel worse:

• Financially – this one speaks for itself, over $55000 in debt!
• Emotionally – I’ve been depressed for years now (actually diagnosed), I’ve always thought it was just chemical, but I now see how my environment has encouraged feeling as low as I have.
• Socially – I never invite people over to my house. I love to cook, especially for others, and I haven’t done that in months.
• Physically – The stress of living this ‘double life’ has really taken it’s toll, I’ve stacked on the kilos over the years from comfort eating, and the stress of it all has impacted my sleeping patterns for a while now.

The universe is really trying to show me something here, i.e. "you need to change and get your act together girly!" and I need to pay attention and act on the things I’m being shown.