Wednesday, December 1, 2010

Two Months On ~ Debt down $4000 with smart change(s)...

Blooming colour after the rains

Well, we knew changes had to be made - lots of changes. How we worked, shopped, spent and (hope to) saved. We figured changing some of the beliefs, rules and habits we had with 'everything' could only cause a difference and we could make it positive one over a negative one.  Well done family ~ we've made sensation in-roads On Our Mission ~ now to keep up the pace, improve the activity.

Thought we'd make some change in the first few months ~ taking the opportunity to really make some savings, pull in some 'regular' spending habits, incorporate new budget limits and reviewing the effect has been rewarding! With over $35k in debt, there had to be changes made which would allow us to get 'it' together. This debt did not count the mortgage ~ it was not the scary part.

A quick 'then' and 'now' of the key amounts at the start of recording our Mission and its debt reduction journey reveals we've made about $3500 of change to our debt and spending habits.

The VISA - $5836.33 - now $4828
 ~ down : $1008
The Personal Loan - $4057.94 - now $3482
 ~ down : $576
The Line of Credit - $21,764.21 - now $23040
 ~ up : $1276
The NIVA - $3000 - now $1000
 ~ down : $2000
The Refrigerator Rental - $650
Outstanding Accounts Total - $3930.63 - now $2838
 ~ down : $1092
$  870.00 - HomeCare Services - $863
$  106.00 - School fees - $34
$  390.00 - Dental account - $350
$  249.90 - Magazine subs - $49
$  800.00 - Electricity and Gas - $570
$   92.28 - Water arrears - $43
$1421.40 - Collections - $1297

Our debt has been reduced by $4676! Even adding the interest accrued on the Line Of Credit, we brought our debt down a massive $3500 in two months. Some reductions to our monthly outgoing have come about through negotiating or applying discount entitlements. Plus we 'analysed' where our cash went and began stopping 'usual luxuries', finding a cheaper or free alternative, or simply not buying something 'we always did'.  The other part of freeing up money from the budget was to use the items purchased, especially those from a mark-down.

No point getting 3 lettuce for $1 instead of 50c each if you are only going to use one. Six snack tubs of yoghurt will not be eaten by tomorrow, even for $2 instead of $7, but will if its $4 with 3 days to go. However 4 trays of marked down meat will fit in the freezer and be used over a month, even two if used sparingly. *grins* Having the most wonderful steak sandwiches, hamburgers and chips from The Green Parrot once every six weeks instead of every Friday made takeaway 'special' and free'd up over $100 a month - we have put $200 on the VISA. Catching up on news online or reading magazines instead of buying the newspapers, computer or women's magazines has free'd up $10 each week, reduced the rubbish and given us a free activity out. SmallBoy loves the library! We borrow books, not buy from the Opshop, sales, anywhere. The library is free, SmallBoy and I can swap books if we finish ours before the due date. We've put $80 on school fees.
The Readers' Digest survived the cull ~ we all read that on the couch, in bed, at the loo...

We asked the power company to reassess usage against payments, which were due to increase to $240pm. With the changes of the past 2-3 months, we use less than historically, increasing the amount going toward the debt therefore we had the increase removed. Husband and I continue discussing the value of savings with turning off stand-by appliances, lights, washing times ~ one night the lounge won't glow a blue/red hue and either I have succeeded with my convictions, or we've been robbed.

The big one was getting our Credit Card interest reduced over 10% and the no fees on all sorts of things from our other accounts. No monthly fee on any banking account, including the mortgage. Changing the rate meant we did not need to repay at $380odd a month to meet the minimum, it lowered to $170 and extra was coming off the due balance, lowering the amount to calculate interest. Each month an extra $130 is paid by us on the minimum.

Same with the phones and Internet. No $2 for a paper bill to be sent ~ but still getting the paper bill because its the only way you can then say 'hey, I made 8 calls from my mobile costing $30 while my home phone was unusable, cover me please' and provide the 'evidence'. If there is an amount of transactions fee-free, we arranged all usage under a plan arrangement, without the plan. One mobile is not on contract but gets the features of a $69 contract/cap special plan on the $49 plan being paid. Saved $4 being paid, gained higher usage limits, features and access.

There is no longer a set shopping day, but every Sunday we organise a weekly menu plan (plus a few extra or options) based on what is in the house already. If milk is needed tomorrow, that is not a reason to do a $50 shop. Only milk. Making a trip in the car for one or two items made it expensive every time. Always looking for specials and mark downs that could not be stored, thus forming waste not savings. Now, SmallBoy and Husband ride bikes up to the shop to discourage additional spending - and save petrol. The shop cost has reduced significantly, sometimes allowing for treats like chocolate, cola and even a magazine (once) to be purchased. We have found $200 for a fortnight is saving $100 from the usual shopping budget, using $150 in 'rich week' and $50 or a Simple Savings $21 Challenge in 'poor week'.

Any doctor appointments are no longer made and paid as a private patient. Saving $90 a fortnight to get required necessary prescriptions, it's now a three-hour wait in line to see the preferred doctor (not just first available) and this is bulk billed with no gap requirements. As the pain medications are now at the lowest level, a double fill or repeat can be written making only a monthly visit necessary. That's saving $180 required while rehabilitating. This free'd up $250 to put on the VISA.

The eBay de-clutter has been going slowly - but the first $30 went on the VISA debt. More has gone up on eBay this week - it's all Tupperware at the moment, but about to put up some cute little boy and girl items we'd rather get a $1 for than continue to take up space in this cluttered mess we call 'home'.  We hope to sell about 30 items this month, and receive $200 for our stuff.

The Line of Credit increase was interest applied as the funds kept transferring over to the NIVA account. With this now at $1000, removing $2000 from our budget's requirements, moneys going into the LOC actually stay there and not be taken in interest while 'on hold' for the next few months. We put $25 in every fortnight for the water and the bill, plus the new balance, is almost covered. Once paid, we will keep putting in $20 each fortnight.

While we have been making changes the loan and debts like dental, homecare and collections have been getting the regular teeny amounts.
Grown from a 5cm cutting

It's not always about the income...
Another part of the changes have happened at the out going end too ~

$ 522.13 pf ~ Mortgage (min) - this will be going to LOC 1/12
$ 200.00 pf ~ Food, groceries and sundries
$ 117.92 pf ~ Internet, land line, mobiles
$ 100.00 pf ~ Gas + Electricity payment plan
$ 57.07 pf ~ Insurance – House, contents, life
$ 75.00 $52.55 pf ~ Council rates, water rates, registration
$ 90.00 pf ~ Doc Appt; Meds
$ 5.00 pf ~ Microsoft Gold fees – connects XBox, Wii for me, Skype
$ 50.00 $20.00 pf ~ Savings
$ 100.00 $60.00 pf ~ Fuel – petrol, wood (was $400pf)
$1317.12 pf
$1133.67 pf

Our income is $1362 per fortnight, that's $680 per week, and there is more than $100 available in the cash-flow currently being used to pay outstanding money, $5-$10 weekly extra for the mortgage and emergency fund plus any eBay sales and reader gifts move to either the VISA or the Line of Credit as they get the added bonus of lessened interest to consider.

Reader contributions have been more than expected - seriously. A total of $54.50 has been received over the past two months and $50 has been put onto the VISA, because it can only go there from PayPal. All the comments are supportive and encouraging, it's amazing how more accountable we feel knowing people read our entries. We are asking for help from every reader - please ask two others to read, follow, support and 'like' because changes on the stats make it easier to feel 'worth it'. There may be a lesson learnt, tip discovered or incident to chuckle at while shaking your head in disbelief! 

Knowing reporting on some of our Mission has made others enforce their own change is just so encouraging ~ some of our declutter adventures have helped others, a few did call and ask for lower interest rates on their credit cards - the success of that challenge was awesome there.  

Original Debt Amount was : $ 35,369.49
We've reduced this by : $ 4,676
Unfortunately interest applied adds: $ 1,275

Current Debt Amount is : $ 31,967

Join us, help up, encourage us as we move onward and upward (or downward as the case may be :D)



  1. Well done Mands. You're doing so well!

  2. Well done indeed~!
    I know it's not always easy or fun going without and making do but look at the difference it is making.



  3. Well done, Mands :)

  4. *grins* Thanks heaps for the cheers all!
    SmallBoy, Husband & I get just so much from the posts :D

  5. So why keep deleting mine...