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Eliminate-Debt: Time to Refocus & Review
At the moment I am focusing on reviewing where we stand financially and setting our goals for the second 12 months of this blog. A lot has changed since I set my goal to pay off my mortgage in 5 years. At that time our income was double what it is now.
There have been quite a few ups and downs, mainly health related, and compounded by a huge tax bill which pretty much stopped our debt reduction plans dead in their tracks. The fact my husband has been unable to find work and we remain a one income family has made it a tough year. Although I have a high earning capacity my ability to work is being affected by a few health issues am supposed to be 'taking it easy'!
The simple truth is that despite all the changes we have made we need to do more to increase income and reduce costs. We also need to be realistic and make plans based on our current circumstances.
I need to redo the basics of budgeting:
- save 10% of our income
- reduce our expenses
- increase our income
- spend less than we earn
- pay off all debt
- develop a passive income for retirement
So how are we doing on these basics?
Savings:
- 10% of my income goes into a superannuation fund for retirement
- our emergency fund is empty
- I have no investments at present other than super
Reducing expenses:
- we have really made a good effort with reducing energy costs
- our food budget needs reducing and we need to be more disciplined
- our expenses with Dad (visiting, debt, unexpected bills) keep happening
- this is the area that we can still improve on
Increasing income:
- I can't take on too much work for health reasons
- My husbands business is increasing but very slowly and income is reinvested
- I can earn money writing online to boost income fairly quickly
Spend less than we earn:
- this needs constant monitoring
Pay off all debt:
- we have not made as much progress as we would have liked
- this is the next big goal to attack the debt and get rid of the credit cards
Develop a passive income for retirement:
- currently we have approximately $140,000 in superannuation
- I am working towards developing a relatively passive online income
- we plan to start a share portfolio this year which I will track on this blog
- we need to track our net worth monthly
The other thing that we need to do more of is to communicate more about our finances. We do talk about our plans and our spending but I think I am the person more committed to 'making it happen' and living more frugally if it helps us reach our goals. We need to sit down together once a month and go over the finances.
I am also going to go back to the envelope system and using cash for everything and tracking every cent we spend. It's good to redo the budget and refocus, I feel quite optimistic about what we can accomplish financially in the next 12 months!
Posted at 2:47 AM | Labels: Budget, Goal setting |
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