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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First 2008 Goal Achieved – Check!

I took the plunge and increased my pre-tax superannuation (retirement for the non-Aussies) contributions to 3% today, checking off one of my 2008 financial goals.

This means I now have a total of 11% of my salary going into superannuation, once the governments 9% superannuation guarantee amount is factored in as well.

This may seem a controversial decision for some, as I’m still carrying such a high debt load, but I’m single, almost 39, and rent. I need to start looking out for my future today, to maximise any compound interest benefits I can while they can still make a difference. Even waiting 2-3 more years will make a big difference at this point in my life, so I’m going for it.

As the money is coming out pre-tax, it doesn't have a have a huge impact on my life today, however every bit will help at the retirement end of things. I wasn't aware we had a ceiling on the pre-tax contributions you can make to your super, but as of July 2008 it’s $50,000 (indexed) into your super account each year, to take advantage of the lower tax rate on retirement savings. Anything over that is taxed at 31%.

I guess that’s why I had no idea; I’m not even close to contributing that amount, even at the higher 3%!

In reading around the blogosphere about retirement options, plonkee's post on planning for retirement really struck a chord with me. It was short, sharp and to the point, and definitely worth a read. I’m glad to know I’m following those three steps myself.

It also seems louise at My Journey To Eliminate Debt is also looking to boost her retirement savings, and Matt at Frugalize just used his annual pay rise to boost his; a really smart idea if you’re living comfortably at your current income.

Do you actively contribute to your retirement funds pre or post tax? Or at all?

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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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Closed The Door On The Real Estate Issue

Everything has been resolved with the Real Estate finally.

We agreed to disagree and I’m paying the $297. It seems the cleaners I hired did a pretty ordinary job in terms of end of lease ‘standards’, and because the real estate waited so long to tell me about it (I had to submit the bond request you may recall or I still wouldn't have heard from them!) there was no way the company was coming back to fix anything.

So I was stuck between the two groups and copped the brunt of it financially from both of them. There’s no ruling against me so I’m not on a bad tenant list anywhere (nor should I be!), it’s all quite normal and not a bad revenue raiser I suspect.

I still got over $700 back from my bond money, so I’m writing the $297 off as experience and moving on from here. I like my new place so much better, so it’s a silver lining situation really.

I've also made sure to take photos of every single mark, ding and scrape in my new apartment to cover myself when I move out some time in the future.

I will also be a far more demanding tenant than I have been in the past, for my own sake. I've always let things slide, to not make waves with agents and owners, but not any more. I loathe real estate agents with a passion now. They’re sweetness and light getting you in, ignore you while you’re there, and then treat you like rubbish when you’re moving out.

So that money will be paying for the car service that I couldn't afford in January due to the repairs, and towards my registration and pink slip (which may involve two new front tyres) in May. It will be nice to be able to pay cash for all that lot this year!

One step forward two steps back, at least it’s two steps forward and one step back at the moment in my case, so forward movement overall!

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