Tag: loans

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Are you someone who is in debt?
the chances are that you’ve answered yes – most of us are – to some extent or other.

Whether its a $750,000 mortgage, or the $750 outstanding on your bankcard at the end of the month, an overdue power bill, or even wondering just how you’re going to afford your next meal – we all know (or have known at some point) the feeling of overwhelming panic and oppression, of not knowing how we’re going to afford the next expense on what-ever-it-is that needs to be paid for…

In the last couple of years, I have managed to pay off over $25,000 in personal and credit-card debt.
Alas, when I only had another $5,000 to go, we had an unexpected ‘cash-flow’ problem, and added another $5,000 back on to that debt. 😐

Paying off debt is rarely a straight-forward process.
Some weeks/months you can pay down a little more than others.
Other weeks/months, you’re flat out trying to scrape together enough funds to cover the minimum payment.

I get it.
i SOOOO get it!!

I’ve been there.
Numerous times.
And just like the other times that I’ve managed to get it all paid down, this time around I’m still doing the dance of four steps forward, and two steps back!

The difference these days though – is that I have some strategies that I didn’t have in my younger years, and I’ve learnt a thing or two about priorities along the way…

Obviously, as we’ve just wracked up an unplanned $5,000 debt that we didn’t have the cash-flow for, those strategies aren’t fool-proof.
Mainly – in my case – because I prefer to use the money to pay down the debt as quickly as possible, rather than having some cash tucked away “in case”.
Its a considered and calculated risk I’m willing to take…

But as I said earlier, I’ve managed to pay down $25,000 in the last couple of years – so I’m certainly doing something right! lol

Firstly – you need to look at where you can possibly and reasonably cut expenses.
Some things you might want to look at – which I’ll go into more detail about later – could include the following:
– cable tv
– mobile phone plan
– electricity
– water
– internet costs
– grocery shopping
– clothing
– takeaways (food/coffee)
– movies
– cigarettes/alcohol
– car expenses
– magazines
– meals
– hairdresser / hair products / mani-pedis
– social events
– growing-your-own

Now – before I go in to detail, I am the first to say that I don’t do everything i possibly could be doing to reduce my expenses; and therefor have the ‘spare’ cash to use to pay down my debt.

I could definitely be doing better most weeks, but some weeks I’m a bloody ROCKSTAR of thriftiness!! lol

I also am not a big fan of ‘deprivation’.
I find that deprivation often leads to rebellion – which is not a good place to be in, when you are trying to achieve the goal of debt reduction.

I also believe in working smarter – not harder!

I regularly tout my Simple Life philosophy – so working all the hours I have available to me, for someone else, in a job I hate, just to make some extra money – welllll, it just isn’t my idea of a healthy way to spend a big part of my life.

But I also understand that for some people, taking on a second (or even third) job, for a given period of time, to get their finances to where they are manageable, is their preferred option – so that they can (hopefully) pay their debt down faster.
If thats for you – then go for it, I say!!

Just remember to take into account the extra travel expenses, childcare fees if applicable, clothing & washing, energy-drain, lack of sleep, and the time away from your those whom are special to you, to work out whether the trade-offs are worth it in the end.

OK!
Lets get down to some nitty-gritty….!

And just as a caveat – please remember that the following examples will be based on either my experiences, or the ‘average’ costs in Australia.

Cable TV:
The cost of the basic big-brand cable tv package, is currently approximately $50 per month.
If you join up with something like ‘Netflix’ – the cost is approximately $9 per month.
Thats a $41 per month saving right there!!
Yes, I know that you need internet to watch this type of service – but as I’ll discuss later – there are some good very cheap ‘unlimited’ service providers out there, for a decent price.

And yes, I know that there are shows on cable that you won’t get on some of these services – but it doesn’t need to be forever, and I’m pretty sure that no-one ever died from not watching one season of Carsguide or Housewives!!

There is also of course the option of turning off that TV set altogether, other than for ‘special’ occasions!!
(eg: planned movie nights)

Read a book – theres millions of them you can borrow for free at the Library!!
Play a board game, have a bath, play lego with the kids, do a puzzle, write a letter, play cards, do some gardening, talk to a friend, talk to your Spouse, SLEEP!
The list of other-things-to-do is endless, and doesn’t have to be boring or energetic.

Mobile/Phone:
Do you have a landline?
Do you need it? Really?
Could you disconnect it and save some $$s?

Do you have a mobile?
When was the last time you looked at what ‘deals’ are available, that will give you all that you need?

Just as an example, as to what a bit of research can do: I changed my plan last year – which I’d just been routinely paying each month – when i realised I had been paying $89 a month for a service that was now being offered for $49 a month!!
Another $40 each month toward debt reduction!!

I will be looking in the future, to going to prepaid instead of a plan, as I don’t use my phone for outgoing calls much at all, and the majority of my usage is in text and data, and theres some seriously cheap options going at the moment, and for what I need, Im thinking it would cost me about $20 a month at most.
That would be a further saving of $29 dollars on top of my already $40 saving!

Electricity:
When was the last time you gave even a passing thought to your electricity consumption – other than when the latest bill came in, and you had a big whinge about how much it was?

Its time to take a wander around your home – into every single room – and assess whats sucking up all those dollars!

How many computers are plugged in, turned on, and left running.
How many TVs are around your house? Even on standby, they suck up unneeded power.
How many air conditioners / fans are running with no-one around.
The same for lights – how many rooms have lights on that aren’t needed?
How many fridges / freezers do you have running?
Do you own and use heaters?
A radio/stereo?
Clocks?

We pretty much only use two lights at our place.

The one in the kitchen/dining area lights up most of the space we spend the majority of our time in, in the evenings.
We also have an external sensor-light, and we only activate the switch for that from about 7pm – so that it only comes on if we go to the outdoors area, or if the dogs go out for a toilet break, and it automatically goes off if theres no movement after a certain amount of time.
We turn back off the activator switch about 10pm, when we go to bed.

We don’t use heaters – we have those old fashioned things called jumpers, socks, slippers and blankets 😀

We use a battery operated radio- which runs about 12 hours a day, most days – that has a rechargeable battery.
It also has bluetooth, so can be used to stream music / podcasts etc.
It takes about ½ – 1 hour to recharge the battery every second day – as opposed to running the radio directly off the power for 12 hours a day!
We’ve had that radio for a couple of years now, so the small savings all add up.

You can do the same with clocks.
Use rechargeable batteries.

I admit that my biggest electrical ‘weakness‘ is either fans or an air conditioner.

I can not bear to be overheated – and we get some seriously hot weather where we live.

I also can’t sleep if its hot – which does not make for a happy or productive HouseSpouse.
And just to top it off, I tend to get very bad nausea – to the point of vomiting – if I get too hot for too long, which leads to lying in a sickly heap, and getting nothing done.
Frustrating, unpleasant and an incredibly annoying waste of life and time.

So – a fan or aircon it is – when the weather heats up!
As I said – I don’t believe in deprivation just for the sake of it, and if I don’t stay cool-ish, I get sick and can’t get anything done – so its not worth taking that one out of our equation.
(having said that though, they aren’t on just for the sake of it – only when needed!)

Water:
Are you water-wise?
In most places – there is a fee to be paid for the amount of water you use, so it pays off in the long run to see if there are savings that can be made about your home.

And let me reassure you – you don’t have to be some radical hippy who only showers every second week, to make a decent dint in the water-saving department.
Use a square or round bucket (depending on the shape of your sink) in your kitchen, laundry and bathroom sinks, and use the collected water for garden-beds and lawns.

You’d be amazed how much a bucket popped down by your feet, on the floor of the shower ‘unintentionally’ collects, just from the run-off and overspray.
Better on the garden than down the sewer!

Use a cup and bowl to clean your teeth, rather that leaving the tap running, and wasting all that water down the drain.
Once you’re done, and your teeth are all sparkly – toss the water out on the plants.

Is your washing machine close to a door or window, so that you could connect a hose to the water outlet pipe and run it onto the grass?
If you do this – make sure that a) you use detergent that is safe for your plants and the ground, b) that the water doesn’t pool leaving a stinky quagmire, and c) that you move the hose around regularly to different parts of the yard.
(Caveat: some councils get shitty if you get caught doing this 😀 )

And I’m sure it goes without saying – but I’ll say it anyways….if you can install a water-tank, it will pay for itself in next to no time!!

Internet costs:
Search around for the best deal, that preferably isn’t on a lock-in contract.
We use wireless at our place, as we don’t have a phone line in to our home (by choice!), and thus cable or adsl isn’t an option.

We are currently on an unlimited pay-as-you-go plan, that is about $70 per month, and we stream all our tv viewing, movies and netflix, as well as our phones and computers through it, and have never had an issue outside of when a huge storm is in full swing.

Grocery Shopping:
A lot of savings can be made here!!
Buying fresh, in-season foods is always cheaper. (especially at road-side stalls)
Buying meat in bulk and freezing meal-sized portions saves a lot too – and means you don’t need to buy anywhere near as often.

The majority of store-brand goods aren’t the horrible quality that they were only a few short years ago – and on staples like pasta, rice, sugar, flour, sauces and bread, you can easily save 50% over buying name-brand products.

The same with tissues, paper towel and toilet paper.
You’re wiping up gunk of some kind or another – so if you dont want to use hankies and dish-cloths that are reusable, to save from having to buy them in the first place – then buy cheap – your throwing them away anyways!!
You don’t need scented, pretty toilet paper with flowers on it – you’re wiping your bum and flushing it – not using it to decorate yourself for a job interview!!

In Part 2 of this discussion on debt – I’ll talk more about the other things on the above list: clothing, takeaways (food/coffee), movies, cigarettes/alcohol, car expenses, magazines, meals, hairdresser / hair products / mani-pedis, social events and growing-your-own.

If you’d like to contribute some of the ways that you use to save money and pay down debt, please drop a comment in the “talk to me” box below.

 

 

 

Obviously, its ‘best-practice‘ not to get into debt in the first place.
And the old adage of only buying something if you can afford to pay cash for it, holds a lot of truth and wisdom.
However – theres that little thing called ‘real life’, and sometimes we do things that – when looking back with the clarity of 20/20 hindsight – turn out to be not the smartest of choices… 🙂