Monday, October 10, 2011

Monday morning thoughts

A few thoughts on this Monday morning ....

  • Not quite sure how I'm going to approach this blog - I think I will update my net worth each month, but record my expenses each week.

  • So far this month, I've spent too much money on groceries, and had a lot of medical expenses. November will also be a very expenses month for medical expenses, as I'm having surgery at the end of October.

  • I need to do my tax return. In Australia, taxes are due at the end of October each year. I'm due a large refund, so I really should get all my paperwork together - once I do that it really won't take me very long to do it.

Monday, October 3, 2011

Hakuna Matata - and why it doesn't work in real life

Last weekend was my birthday, and a friend took me to see The Lion King, which has recently been released in 3D. I’m not a huge fan of 3D movies – in the sense that if a movie is in both 2D and 3D, I will usually see it in 2D. But I’m a huge kid at heart, love Disney, and had never seen The Lion King at the movies when it was originally released.
One part of the movie that I love is Timon and Puumba, and the song “Hakuna Matata”. In fact, I had to promise my friend I wouldn’t spend the rest of the day bursting out in song.

Now, if you have seen the movie (and possibly even if you haven’t), you will know that Hakuna Matata means “no worries”. The first verse of the song goes like this:

Hakuna Matata!

What a wonderful phrase

Hakuna Matata!

Ain't no passing craze

It means no worries for the rest of your days

It's our problem-free philosophy

The problem with this “problem-free” philosophy is that it doesn’t work in real life. (And why should it – it’s a Disney movie!). But starting this blog, I realise how much I’ve been using this philosophy in regards to my debt. It’s actually very odd. I have always thought of myself as a worrier. On numerous occasions I’ve been told I’m highly strung, stressed out, anxious, a worry wart, etc. etc. And that is true. But my debt is one area where I’ve taken a “Hakuna Matata” head-in-the-sand approach. Some things I would tell myself: ·

I’ll pay it off eventually.

Really? How? So far every time I’ve started to make a concerted effort to pay of my debt, I go gung-ho for a few months and then stop, and revert back to my old habits of spending more than I earn.

As long as I’m making the minimum repayments, who cares.

Sure, this is great if I want to be in debt for years and years and years to come. And, it obviously isn’t working if each month I’m making the minimum repayment I’m also using the card to make purchases.

I have a secure job.

This is actually true. I have a good job with a decent salary (which makes the fact I’m in so much debt all the more concerning). But we can’t see the future. In the past year I’ve had quite a few health issues, and in a few weeks I’m having surgery. I’m lucky that I have still been able to work, and have a job that has excellent sick leave. But what would happen if my health got worse and I couldn’t work? What would happen if my Mum suddenly got sick and I wanted to take time off to take care of her? (She is actually much healthier than I am, but had me very late in life so is getting the age where health problems are to be expected).

Not facing up to your problems is not going to make them go away. It will just make them worse. Starting this blog is a way I’m trying to face up to my problems and to hold myself accountable for what I’m spending.

Sunday, October 2, 2011

Net (liquid) assets: 1 October 2011

1 October 2011

Assets: $4,183.48
Debt: $76,215.17

Net assets: ($72,031.69)

Friday, September 30, 2011

Assets: 1 October 2011

Assets - as at 1 October 2011

Cash: $24.35
Bank accounts: $1,712.46
Savings accounts: $426.67
Emergency fund: $2,020

Total: $4,183.48

Notes: The emergency fund will be largely depleted due to surgery I'm having at the end of October.

As this blog is focusing on my 'liquid' assets and my credit card debt, this does not include: a house I co-own (mortgaged but has equity in it), my superannuation (currently just over $30,000), car and personal effects.

The truth, the whole truth, the ugly truth (Debt: 1 October 2011)

This is the post I dreaded to write. I'm in debt. How much debt? More than I ever thought possible (considering this is credit card debt).

Deep breath, here goes:

Credit card 1: $24,767.86
Credit card 2: $22,194.71
Credit card 3: $10,173.35
Credit card 4: $9,826.36
Credit card 5: $6,970.48
Credit card 6: $2,282.41

Total: $76,215.17
This does also not include $2,000 I have borrowed from a friend (who is not charging me interest). It's funny, I'm almost more embarrassed about borrowing the money from the friend than the credit card debt I have.

An introduction ...

Last Saturday it was my 29th birthday. I have one year to go before I hit the big 3-0.

A lot of magazine articles these days say that "30 is the new 20" and "40 is the new 30", and I certainly don't feel as if 30 is "OLD". But on the other hand, it is a major birthday. When I was in highschool, I always thought of 30 as being the point where I would have "made it" ... a great career, married, kids or thinking about kids, etc etc. (Although I'm not sure how I thought I would balance all of that).

Well, 30 is rapidly approaching, and my life is no where near I want it to be. On the one hand, I have "made it" in my career - I'm certainly not at the top of my field yet, but I have a good job - which for the most part I actually enjoy, a very decent salary, and a clear career path in front of me.

I'm not married (or in a relationship) and I don't have kids. For the most part this doesn't actually bother me. I have always been more focused on my education and career, and don't even know if I want children. I'm not saying I never want to get married, but I don't want to marry the wrong person just so I can say I'm married.

The one place in my life where I feel a complete and utter failure? Money management. I am in debt. Serious debt. As in "how could I dig a hole so deep" debt.

There is no excuse for it. I will be writing posts in the future to try to explain how I accumulated so much debt, but the reality is, I bought what I wanted, when I wanted, and as long as a bank would give me a credit card, I would use it.
If you look at my profile, I originally "set up" this blog in January. At that point, being credit card debt free by September 2012 seemed achievable. Since then, what I have done? Added more and more debt to my name, and realistically, unless I win the lottery (which I don't play), I will not be credit card debt free by the time I turn 30. But, I'm going to get my debt as low as possible by my 30th birthday.

One important point: this blog is detailing my credit card debt.

I co-own a house with a family member. So I have a mortgage, but I know if we sold the house today, even in a fairly depressed housing market, we would have more than enough to pay it off. I also have "student loans", but I live in Australia, and our student loan program is very different from the US or Canada. It is through the government, the "interest" is only CPI increases, and is paid through increased tax payments. Once I tackle my credit card debt, I can then think about paying extra towards the mortgage and/or student loans.