They say it's your Birthday!!

I have been neglecting my blog recently mostly because I have been preoccupied with today's event.

My 50th birthday!

I have been feeling sorry for myself as I realised two thirds of my life has passed me by and I STILL have a mortgage and have accumulated far too much consumer debt. It makes me feel bad and am more determined than ever to get out of this situation as quickly as possible.

I must admit when I was in my late twenties and early thirties I spent all my money on travelling the world (not a bad way to spend money I must admit) and didn't need things or stuff - only what was required to travel comfortably like a sturdy backpack, money belt, a decent camera etc.

I look back on that time of my life and remember how simple it was. I had sold most of the possessions I had accumulated since starting my working life including car, furniture and ended up with only 2 tea chests of personal items I wanted to keep plus my vinyl record collection! Luckily a friend stored them in their garage for me. I knew I didn't need or want all of that stuff anymore as my goal of travelling the world was all I was interested in.

It was liberating to only own what you could carry on your back! Granted, I did put down temporary roots from time to time and collect keepsakes but always posted these items home (to be added to my tea chests) before setting off to travel again. Everything else was given away to other travellers. There were no bills, mortgages, insurances. You earned money and you spent it on LIVING and enjoying life.

I know I cannot return to living that way - life changes as you get older and have family responsibilities but we have accumulated so much STUFF over recent years and I KNOW we don't need most of it. We just WANT it don't we. Or do we? We are bombarded with images and advertisements telling us we MUST have this or item X 'is to die for' - eventually we give in and buy items we don't have a need for because we are brainwashed into thinking our lives aren't worth living without them. So the end result is we along with most of the western world have huge credit card and consumer debts. I am determined to change that.

So today as I celebrate my birthday I realise we have another year or so to get out of credit card debt. We can then concentrate on getting the mortgage paid off so we can start using our disposable income to return to what my DH and I loved to do when we met. TRAVEL!

I just wish I had realised this years ago and taken the appropriate action - I could have been retiring now instead of needing to continue to work. I will look forward to my 55th and 60th birthdays with the knowledge that we will be in much better financial shape.

Bring it on!

I'd love to hear your comments on this post

Medical Insurance Merry-Go-Round

Warning - Rant Alert!

On opening my mail yesterday I had the dreaded letter from my private medical insurance provider. This was to inform me our premiums where going to rise as of April 1.

Now before I go on - I just want to clarify. I REALLY hate the private health care system in this country. There, I said it. While I think Medicare is/was a great system, I am less than impressed with the private providers. I just don't think they give good value for money at all.

We as a nation are forced to join these funds or the government will slap you with extra levies for the rest of your life. Add this to the extra 1% Medicare levy if you are a high income earner (how $50,000 is considered a high income these days is beyond me) and the funds have you at their mercy.

What's the excuse for the rise?

Here is a excerpt from the letter:

Last year, xxxx paid $1.65 billion in Benefits to our customers, an increase of $109 billion on the previous year. To ensure that we have sufficient funds to pay for our customer's increased demands for health care, we are writing to advise you that it is necessary to increase your premium.

* bolding is my addition and I have not identified the provider so they do not get any free advertising!

I really want to send them a letter back saying, "Too bad, not my family's problem! We haven't contributed to your increased costs, in fact we should be eligible for a No Claim Bonus!"

You see, we don't have any kids and are in pretty good health. My DH and I are not fans of going to the doctor unless it is necessary. Now I know families with children or who have health issues are not to blame but a bit of incentive to people in our situation would be nice.

To add salt into the wound the skin cancer clinic I go to doesn't bulk bill anymore and charges a yearly fee of $70.00. And you guessed it, private health insurance doesn't cover it! (I will save the rant about the stupidity of that in a country with our skin cancer rate for another post).

How much is it going up?

Well the increase in dollar terms doesn't seem that much at first glance - from $187.00 to $197.49 a month which is $10.49 a month rise but it is higher than the reported 4.99% reported in the media. It is more like a 5.5% rise! It's another $125.88 a year that should be in my pocket but will now go to them.

Oh, did I mention it has already gone up once before in the last 12 months!

What do you get for the money?

Like most families we currently have a combined policy which includes private hospital and some extras cover. We get some dental, optical and physio for this. I won't bore you with the details of the rebate values as if you are an Aussie you probably have similar cover but they are really low! I don't know if it is worth having this extra cover anymore and have decided to do some research to get the premiums down a bit.

I looked on the internet last night and found I could get with other providers:

• basic hospital cover for $95.00 - $133.00
• comprehensive hospital cover for $127.00 - $162.00

both options a substantial saving on what we are paying now.

I would put the difference into an account to pay for our bi yearly visit to the optometrist and our twice yearly dental check up. Of course I need to find out what a dental visit will cost us to make a fair comparison.

We spent $2244.00 on premiums this year and honestly I really feel ripped off. I know medical insurance is a necessary evil these days but "I'm as mad as hell and I'm not going to take it anymore"

In fact, they have done themselves a disservice with this rise from my prospective as it has made me look into exactly what I am getting for the money I pay them. Their greed has backfired on them as I will either drop my cover with them or take my business elsewhere. Either way they lose.

What do you think about the rise and rise and rise of private medical insurance these days. Do you have it or are you thinking of dropping out of the system completely?

I'd love to hear your comments on this post

photo credit: Dean Jenkins

Holiday Long Weekend Round-up

I thought since I hadn't posted since Friday I would do a weekend round-up today instead.

This weekend was a long weekend where I live so we had an extra day off today. The weather has been hot so it was a great time to enjoy the last days of summer and get out of doors and away from the computer! Here is a run down of some of the things that happened this weekend from our finances point of view.

Visit to Library.

I requested Dave Ramsey's book "The Total Money Makeover Workbook" for our local library. It came really quickly which was great from me as I have been able to start reading it this weekend. There is something comforting about reading a book! I don't know what it is but from my prospective the internet would never completely supercede books.

In any case, I have read a few chapters so far and have found it:

• easy to read
• thought provoking
  
• a good source of discussion ideas for this blog

I haven't got to the meat & potatoes yet but I am looking forward to reading more during the week. Although the content is understandably geared to a US audience, the main ideas and concepts can be applied to any country. I will do some research on how his ideas can be adapted for use here in Australia in the coming days and weeks. After all saving money and getting out of debt is universal isn't it?

Is eBay worth it?

The budget was in need of an injection of cash so I thought why not list a few items on eBay and make a few bucks. Ha! I can still hear myself saying, 'Yes, that's a great idea. I can declutter the house and pay off some of my debts at the same time."

That was LAST weekend. THIS weekend it's a different story.

My listings have ended and I have sold 2 items out of 9! Break out the champagne!

I have managed to collect $9.48 including postage and spent $6.40 on eBay & Paypal fees including listing fees for the unsold items. That will leave me with $3.08 and I still have to post two parcels which will cost about $3.90. Now I know I am just selling some old comics that I didn't want anymore so I shouldn't have expected a huge return but why is it when you research your stuff, everyone else is getting great money for those same items?

I now have less money than when I started and to rub salt into the wound I don't have the items. Not to mention the TIME invested in the exercise! This was a bit of a trial run before I listed some of my more valuable items such as my English porcelain collections. I must say I am in two minds now...

I will look into a couple of other options to sell items that don't take such a big slice of the pie but eBay seems to have the traffic so let's hope my other items attract more interest.

Stayed on budget for the week and weekend

I am extremely please to say I was $17.40 UNDER the grocery/food budget this week! How very exciting! I have decided to drop the budget by $10.00 to $70.00 in light of that result and see how I go. After all, we are only 2 adults and 2 cats ( who don't eat that much) so really it should be adequate if I stick to meal planning.

We also stayed under our entertainment budget as well. While we did go to the pub to meet some friends we stuck to our guns and only took our predetermined cash amount and once that was gone we said our farewells and came home. Dinner was already prepared so it was a successful evening from all angles. In the past we would just go to the ATM, withdraw more money, drink more than we needed, spend money on takeaway food and wake up with a hangover and a big dent in our pocket! Well, that didn't happen this time so the benefits were many. Saved on Panadol as well!

Today we walked down to the Yarra River where the Moomba Festival was in full swing. We are lucky to live very close to the city so the walk is easy as well as a good way to get some exercise. Anyhow, we took some filtered water from home and filled up the bottle at the water fountains provided once there as the cost of drinks at these outdoor events are always highway robbery. But the greatest rip off I saw for the day was in the fairground!

A new ride which lasted about 20 seconds was $30.00 per person! No, that's not a typo, 30 bucks! It was basically a car for two people suspended on an elastic band which was released from ground level and then bounced a couple of times until it lost momentum. Don't get me wrong, it looked like great fun but c'mon it wasn't worth $30.00. Most of the other rides were $10.00 - $15.00 a ride and lasted a lot longer. That's still a LOT of money. How do families afford these prices? I do feel for you if you have young kids these days it must be really hard...

I'd' love to hear your comments on this post

Think you can't save money on groceries? Give Aldi a try.

I have mentioned in an earlier post my grocery budget. It's not that high at $80.00 a week especially with the cost of food going up so much these days but I would like to get it down a little further. With only two of us I think I can do better.

After reading other blogs ( Cheap as Chips blogged about it here) and a forum I am a member of, Aldi seems to be popular as a cheaper alternative to regular supermarkets.

I haven't really shopped at Aldi before except in the mid nineties when I was in Austria. It seemed a bit haphazard to me at the time so didn't bother when it came to Australia a few years ago.

Well, today I went shopping at Aldi for the first time and was pleasantly surprised. I decided this would just be a reconnaissance to see what their product range was like, how many choices they had and of course, were the prices really lower.

The result was I found some of the staple items such as pasta were a good deal cheaper than where I usually shop. Fruit and vegetables were much cheaper and I was able to stock up on the vegetables we used most often in our regular meals at a substantial saving. In fact, I spent $26.40 and got twice as much in my trolley than I did at my regular supermarket earlier in the week for the same money.

The downside: it a car trip so I am using petrol and leaving a carbon footprint when I go there. This also means parking costs may come into play if I cannot get a free parking spot. Aldi doesn't have everything I would need each week so would still need to go to our regular supermarket for those items.

The jury is still out whether the savings are worth the drive and parking hassles. Our local is convenient as it is an easy walk for me albeit with higher prices.

Time will tell...

I'd love to hear your comments on this post

Had a Win Today

Well, it's not very often you have a win at the supermarket but I did today!

I was flipping through the local supermarket's special brochure this morning and realised the cheese I normally buy was on special at about $1.20 off the normal price. The trouble was, I had already purchased it yesterday and hadn't been given the special price! I thought 'well that's a pain' but decided it was worth going back to the supermarket and asking for a refund. This is worthwhile here in AU as the supermarkets have a code of practice on incorrectly scanned prices.

It works like this. If the price you are charged at the checkout is higher than the price on the shelf you get that item free. Yippee! You have to diligently check your dockets each time you do a shop to pick this up though, so most people would miss it.

Anyway, the assistant checked and told me the item didn't have a special price on the shelf! Upon showing her the brochure they were a bit red faced and gave me the refund. The item was $5.96 on the docket so I got a 6 buck refund - plus the cheese. How good is that?

Now the thing that worries me about this is the special was not being passed onto the shoppers at this store at all. The specials started on Monday and it's Thursday today! I can't believe I was the first person to pick up on it. It just goes to show people these days are so busy and rushed they don't check their dockets when they buy things and are being overcharged all the time.

The moral of the story?

You need to check, check and double check when you go grocery shopping. These companies make multi million dollar profits each year and pricing are rising every week. We need to be sure we are not giving them any more of our hard earned cash than necessary.

Does this make me a tight bum?

Well, when you only have $80.00 a week for groceries a $6.00 refund is a bonus. Every cent counts! So no, I don't think so. Would I do it for a lesser amount? Too right I would as you get the items free so it is so worth it.

What do you think? Would you bother going to get a refund? Do the supermarkets have this type of policy in your country?

I'd love to hear your comments on this post

Missed a few days...

I have missed quite a few days posting to my blog. This is not the best thing to be happening for a brand new blog I know! What is my excuse you ask?

Well, my DH and I were away for an extended weekend to attend a wedding. This is the second wedding we have had the pleasure to attend this year. How does this relate to a PF blog? Well, weddings as we all know are the single most expensive day in anyone's life. It's normally not the cheapest for the guests either!

While I budgeted for last weekends wedding it still leaves a big hole in the amount of money I can apply to our debts this month. The combined cost of attending 2 weddings including gifts, suit hire, accommodation/travel costs, meals while away from home came to $1,082.

We were committed not to add these costs to the credit cards and did a great job of it as well, except the gift for the first wedding earlier in the month. As the couple live in New York (they are Australians and got married here in Melbourne) their gift registry is in the states so we could only use a credit card to buy it. Luckily, we have an American Express charge card which we have to pay the balance off each month. We are treating this like a it was a cash transaction and have put the money aside.

Having said all that it sounds like I am complaining about the money, but you know I wouldn't have missed either wedding for the world. Not for anything. Sometimes you just have to decide what's important in your life and go with it. I also though we did a pretty good job keeping the costs down to the amount we did - it could have been a lot worse!

One thing I will say though, having this blog and committing to reducing debts does make you plan and decide what is a fair outlay for these events. Being in control of how much we spent on the weddings by using cash where possible is a great feeling. Not adding any more to the banks coffers. Priceless!

I'd love to hear your comments on this post

Mortgage Debt

The word "Mortgage" is derived from an old French word Mort meaning 'death' and gage meaning 'pledge or agreement'. So literally, death pledge or agreement until death.
source: WikiAnswers

Now I am sure most of you have heard this before, but it makes you think doesn't it? Beholding to the banks for most of your life to put a roof over your head. And to add insult to injury we are at the mercy of interest rate fluctuations of which we have no control.

We have a mortgage and in Australia you are considered lucky to have one, due to the ridiculous price of real estate in this country and the difficulty getting a foot on the property ladder. We jumped in head first and while we can afford the repayments, I often wonder if it's the wisest choice.

Plenty of financial commentators have advocated renting instead of buying property and investing the savings made as a viable financial choice. The idea is save and/or invest the difference between a mortgage payment and the rent payment. Nothing new there...

But according to a recent news report Australians are the worst savers in the world. IN THE WORLD! So unless you are diligent you can end up in retirement with nothing, and possibly be in debt. This to me is a scary thought.

The report does go on to say interest rates are up for debts but not for savings accounts in this country at the moment, but that is a topic for a future post.

Most Aussies tend to view the dreaded mortgage as a form of forced savings, a necessary evil. When we retire we (hopefully) have the mortgage paid and (again hopefully) have a huge amount of equity in the property so you can downsize and use that money to enjoy the twilight years... that's my hope anyway.

As I mentioned, we have a mortgage and paying through the nose at the moment with Australian interest rates on the rise, but plodding along regardless. I will be writing about our plan to dispatch the mortgage shortly.

So what about you? Do you think a mortgage is a good thing? Do you have one? What's the consensus where you live?

I'd love to hear your comments on this post

The Dreaded 'B" Word - BUDGET.

It strikes fear into the bravest of us especially when we have been living outside our means and racking up the credit card balances.

I am trying to put together a workable budget to achieve our goals. It's hard!

We get paid monthly so monies hit our bank account on the 15th of each month. Luckily, my DH is in a vocation where he can earn extra money freelancing.

This is what I have got so far:

Monthly figures

• credit card payments & snowball amounts $700.00
• food/groceries $350.00
• entertainment $200.00

This is the discretionary spending I have some control over and can save a few bucks here and there.

The rest of our income goes toward mortgage repayments and utility bills. These are fixed costs which I cannot change at the moment.

We have stopped putting anything on our credit cards so everything is strictly cash. No cash left - can't have it! Tough love alright but I am determined to do it. DH is on board as well so makes life so much easier when we are both moving towards the goal together.

Any amounts left over at the end of the month and any extra income coming in will go directly towards snowflaking the CC debt.

I am not going to disclose our income at this stage as my DH would be mortified if I did, even though I am writing this anonymously. He's funny like that...

I'd love to hear your comments on this post

Plan Going Forward Part 1 - Snowballing!

Hopefully it's as much fun as snowboarding but I highly doubt it!

Once I made the decision to get out of credit card debt once and for all, I started surfing the net and found some interesting personal finance (PF) blogs which got me inspired.

One of the earliest ones I began reading was "I've Paid For This Twice Already..." - the name really struck a cord with me as I had just finished looking at the interest change on one of my credit card bills and had a similar 'ah haa' moment myself.

Anyway, paidtwice wrote about "Snowflaking" a method of debt reduction advocated by a fellow named Dave Ramsey. I had never heard of this before but it seemed perfectly reasonable to me and I have decided to use this method to whittle away our debts as well.

I have created a personal snowball calculator at "What's the Cost" another of paidtwice's recommendations. I have opted to pay out the smallest first. See my post about my current situation.

For any of you out there who haven't heard of this method before I strongly recommend you read the article written by paidtwice. She explains it much more succinctly than I could.


I'd love to hear your comments on this post

How much do I Owe?

This post is just to get the figures out there. I am trying to get the credit cards and loans paid off as quickly as possible.

There is a mortgage and quite a sizable one at that but I have a different outlook on mortgage debt and will write about it in a future post.

Here is the list from the smaller debt to the largest as of:

Saturday, 23rd February, 2008:

• Visa Credit Card $ 902.75 16.25%
• Amex Credit Card $1885.32 16.49%
• Line of Credit $3000.00 14.75%
• Master Card $9829.02 20.39%

That's a total of $15,617.09

By paying the minimum payments plus an extra $305 a month these debts will be paid in full by June 2010. That's 28 months but I would like to do better if I can and get the time down by about a year.

So having these paid out in 18 months instead of 28 months will be the goal I will aim for. Wish me luck!

My Debts and I are Parting Ways!

How did this happen?

One day we were humming along nicely - paying off our credit cards at the end of each month with no debt other than the mortgage, next thing we are thousands of dollars in debt. BAD debt at that!

It happened because I got complacent, thought I knew it all, made some bad decisions and lost the plot completely.

Well, reality came knocking on our door ( not literally) and gave me the wakeup call I needed to really take a long hard look at our finances and DO something about it.

So this blog was born. I am committed to paying off our credit card debt in the fastest possible time and this blog will help me stay on track.

I have been reading some great PF blogs over the last couple of weeks and they have really inspired me to get my house in order. Hope you can join me for the ride.