All aboard the m$ney train

So there were a few breathless moments when I thought I'd be made redundant the other week. Thinking ahead of times of stress and having no cushioning under you is a horrible feeling.. anyone in debt knows that feeling of tightness in the chest! So it's with great happiness I found out that no, I wasn't getting made redundant - and in fact I had such a good performance review that I got a nice litle pay rise : )

First thing I did when some extra $$ landed in my bank account was to pay off the American Excess credit card. DONE! No more debt on that card!

Next thing I did was to build up my $1000 emergency fund. DONE! It's a good feeling to have some money in there for a rainy day. Cushioning, it's nice to know you.

Next thing I did was pay a weeks extra rent. And then I put some extra payments onto my loan - which is now under $10 000. DONE!

I thought about paying extra on my rent, to know that I have payments taken care of.. but then I realised it would be silly of me to pay money into my landlords bank account and let him earn interest on it, when I could keep it in my ING account, earn interest on it myself, and put that towards my 3-6 months living expenses.

The Dave Ramsey baby steps to getting out of debt that are relevant to me right now are:
1. Save an emergency fund of $1000
2. List your debts from smallest to largest and make the minimum payments on all but the smallest - throw everything you can at this smallest one, get rid of it, then move onto the next smallest one, putting all the payments from debt 1 that you have now paid off onto debt 2... thus creating a Snowball Effect, getting bigger and bigger with each payment.
3. Up the emergency fund to contain 3-6 months of living expenses.

(The remaining 4 of the steps talk about retirement, education, home, investing)

So right now I'm onto Step 2, and only have the one loan repayment now. Minimum loan repayment is $275 each month. What is my goal when I'm out of debt? HOME baby!! My own home. There is no inheritance coming my way, it's all going to be done on my own, so I'm looking at saving 6 months worth of living expenses and then looking at options. Interest rates at the moment are FAB so if a market looked like it does today, I'd go in 100% borrow rate. How the hell are you meant to get into the market otherwise? But seriously, that day is years away and in the meantime it's about getting things on track.

It's good to have paid off that pesky credit card tho and see the end in sight.. it might still be a while off but it's visible : )

Gratitudes : )

1. *****
2. Angela
3. Lovely family
4. Beautiful home
5. Job I love and am good at
6. My car
7. My heater, on frosty mornings
8. Laptops to while away the hours
9. My health, includin no colds so far this winter : )
10. Friends

"The art is not in making money, but in keeping it."

Isn't the above proverb great? But while I can enjoy it, I sitll feel a bit sick in the tummy to think that a redundancy could happen at any time. However, I have to keep reminding myself that life only throws at you what you can handle. Seriously.

And today, right now, I have a job. A job I love.

In preparation for 'rainy days' though, a question for you, dear frugal readers:
Currently my debt stands at 10 713 (personal loan) and 1300 (on a work credit card). In this undertain economic time, would you be inclined to continue paying off all you can on the work credit card, and paying minimum repayments on the personal loan?
OR
Would you start throwing all those extra payments onto advance rent payments, and paying just the minimum on both credit card and personal loan repayments?

Reader, I am a massive fan of Dave Ramsey. I love his idea of debt snowballing and the baby steps. With this in mind, hit me with your thoughts.

x

PS - and YES I know how awesome all of this will be when I don't have debt to pay off anymore, but can be ahead in rent with no worries ;)

Blogs I'm reading today: Budgets Are Sexy, How I Save Money, Wise Bread, Dave Ramsey

Money can be Seksi

Yes, money is HOT when you've got it, or when you have enough of it to go around. When you don't have enough of it, money is definitely, oh so most definitely NOT seksi.

Let me say that both times I've been made redundant from jobs in the past, things have turned out so much better than expected. The universe works in wonderful ways.

But still, it hits you hard when life throws you a curve ball.

Me, I have a job I really really enjoy, and a job that I am good at. Actually, a job I'm great at. I'm great at my job and I love my job. But it's a shaky economic time and who knows how long I'll have a job for. My friend at work got made redundant today and it's horrible. But what's more horrible is that I am not in a financially fit position so should something (like a redundancy) come up, the not so fab experience would be made even worse.

Life happens, and let's face it - crap happens, things fall apart. But imagine being in a position to bounce back with the least amount of drama and negativity possible.

I have received a bit of $$ lately (rental bond money, tax return, Rudd dollars) and it's been so damn hard and painful but I've put it directly onto my debts. Gosh - imagine not having debt!! So it's been a good wakeup call for me to start getting real with my money.

Because seriously, I've been banging on about how I'm in debt for a good few years now and I've not really committed to getting OUT of it. I've still eaten out A LOT. I've still bought new clothes. And while I have not bought any big ticket items, I've wasted the same amount of money by purchasing magazines, and books, and way too many little instant gratification items.

It's like an addiction! And I know all about that.. since stopping drinking I've just been eating up a storm like there's no tomorrow. Tired? No worries, I get takeaway. Can't decided what to have? No worries, I'll buy up a fridge full of food so I can change my mind.. and then let it all go off and get takeaway again. So there's alcohol, there's food, and there's money (or rather, buying).

So it's time to commit properly right now. Here we go.

Dave Ramsey, I heart you!