My Journey to Eliminate Debt

After a few days of attending meetings almost non-stop I am looking forward to a day of paperwork today at work. I have mountain of reports and files to update before I leave and just need some uninterrupted time to get at it. The problem is that people want to meet with me about projects and issues before I go, which is good, but I'm running out of time!. After work I charge off to the office and see new clients so it's about 7-30 when I get home each night... only a week to go...

The other thing I am looking forward to is getting my studies started. I only have a couple of units left to get my second bachelors degree, and a couple of units to finish a grad dip. I had been plodding away at these for a couple of years and when dad got sick it all fell off the rails. One university has been great. If I get the work done this year I can complete. The other university I'm still talking with. Anyway all my course info arrived for the bachelors degree and I need to get stuck into it ASAP as this is my last chance. If I finish that this year I will try and finish my grad dip next year if they'll agree to it.

So I know what I'll be doing this weekend, paperwork for tax, business monthly accounts and uni assignments!


Spending:
No spend day yesterday

Today was a really busy day and I've just got home after working late. Things really are just falling into place. So although my numbers for this month will show an increase in debt, but it is only temporary and I expect to see a turnaround in the next few months. So here's all the good things that happened today:

Overall it's been a good week! I now have an office to use in the second location. It's a nice set up, affordable and with other people in the same type of work which I prefer. I don't plan on taking a break when I finish at this job. I will start up in my new location straight away and I am already seeing new clients after work and on my day off as the business comes in.

Yesterday I got a phone call from some one who heard I had resigned offering me a job. They have two different positions, I can do whichever I like and could I start ASAP.

After much discussion I have told them I will work a couple of days a week for them for 6 weeks and then review the situation. They are interested in me doing ongoing work and are happy to be flexible.

This means the cash flow problem I was expecting in the first two months of establishing the business is essentially solved! Phew!

So for the first 6 weeks I will be working a couple of days for myself and a couple of days at a job. I'm relieved, very excited about the work as it is a new area for me and a fantastic learning opportunity. 

I also picked up another new client, so I have reached my target of 8 for the month and submitted another bid on a contact. I'm smiling!!!

Handing in my resignation went really well! I just kept it short and sweet and resisted the urge to get stuck into my boss. We all said the 'right' things and I just didn't get into the reasons. It's not worth burning any bridges. As soon as I'd done it I felt SO much better. Now I'm just excited!

I spent the day cleaning out filing cabinets whenever I had a spare moment. I want to get both offices cleaned out by the end of this week. Then I can concentrate on finishing up on paperwork.

I used to listen to Tony Robbins tapes years ago and he had a saying "life rewards action!" Well after resigning yesterday I got 4 new clients! So it's all happening!

I'm also keeping track of my spending and I'm going to track it on my blog each day to keep me accountable. My son went back to university yesterday. It cost $109 in petrol, and $67 for food/ toiletries & stuff. He had bought/ borrowed second hand textbooks which will save a lot of money.

He also urgently needed new shoes and a coat, we bought it all on sale and got 3 pairs of shoes, a coat, 4 pairs of socks, two long sleeved t shirts, two long sleeved cotton shirts for $158. Luckily there are sales on everywhere at the moment, so most things were half price or less. I don't think I'll ever pay full price for clothes again.

Well todays the the day I resign. I will be glad to get it over with. Then I can get on with finishing up my work and packing up my office. I will be finishing in three weeks.

We've have been looking at how we will manage financially on a variable income. I've been crunching numbers for the business projections. We are going to sit down and re do our budget next weekend. Here's what we are thinking of doing, any suggestions are welcome.

Our plan had been to pay our tax returns and my payout (about $3000) off the credit card. Now I am thinking of parking it in the ING account and using it to cover that first months expected low cash flow.

Business goals: 2008

August: invoice $2000
September: invoice $5000
October: invoice $7000
November: invoice $9000
December: $9000

At the end of each month I will put enough to cover business expenses in my business ING account and transfer enough to cover our living expenses (including debt reduction) to our personal account. The remainder will be transferred to the mortgage account and I will withdraw the tax payment from this when it is due each quarter.

I have a colleague who does this and she is reducing her mortgage quickly. By parking the business profit and tax in the mortgage account it will reduce the mortgage faster, but I will still have access to it if needed.

So long as I can bring in > $5000 a month then we should be fine. My goal is to be averaging $12,000 a month in the next financial year (08/09). To replace my current job income I only need to book 11 billable hours of work a week. Once I go above that then I'm increasing our family income.

I'm going to track my business goals in the sidebar, and more of my spending / budget. I'll set it up some time this week. Any comments or advice on budgeting when self employed is welcome.

Well it's 12 months today since I decided to not buy any clothes for a year. It was a good experience, but I'm glad it's finished. I take a lot more care of the clothes I have, I mend things now and I will really think carefully about what I am buying and why in future.

Over the last few days I went through my wardrobe ruthlessly. I gave away all the old clothes that I don't wear and all the clothes that don't fit me now. I've lost some weight over the last year and I still have some to go, but I need to dress for the size I am right now instead of keeping lot's of clothes that are out of date as well as the wrong size.

The only things in my wardrobe now are the right size, right colour and ready to wear. There's not a lot, but it all fits and looks good. I have worked out what clothing pieces I actually need to build up a good basic wardrobe and I have written a list. So from now on I will be budgeting $20 a week for clothes, hair and shoes and shopping only for specific items from my list.

I also went and got my new haircut / style yesterday, it really looks really, really good and worth every cent, (only $30!). I always wash it and dry it myself so that saves a few dollars, and some time. But I have a new appreciation for the talents of hairdressers after the last year of doing it myself. It is a seriously hot haircut!

My husband had his interview and will hear back this week about the job. It will make all the difference to our debt reduction if we have two incomes. We will live off one and use the other to pay off debt.

I also got offered some casual work yesterday. It's work I'm very interested in, very different to what I do in my current job and a really good opportunity to learn some new skills. It would also help with the finances over the next few months while I am setting up my business. I will contact them this week and get the paperwork.

I'm now on holidays for 2 weeks. The third week got cancelled unfortunately. I've been busy working on business set up tasks. I have to admit that I move between feeling really confident I am doing the right thing and feeling really worried about the cash flow. I would feel much better if we had big emergency fund cushion for the first few months, but it is fast disappearing.

I need to get my hair cut and coloured this week. I know this may seem like an extravagance but it's not. In my current job I work with teenagers mainly. It's fine to wear jeans to work and cutting and colouring my own hair is good enough. But I think it's important to look professional in my business and part of that is good haircut and colour and good wardrobe.

My progress so far:

• still looking for rooms in town B
• 2 new clients ($2000)
• 2 new contracts for regular work at a really good rate (3.5 x my current hourly rate)
• almost finished setting up my templates and transferring documents to computerised system
• working on getting my 07/08 tax ready for the accountant
• I designed and printed my brochures at home, they cost $1 for picture from istock & $7 for a ream of paper, they look really good!

And my husband got a letter saying one of his job applications has been moved to the next stage so I am really hoping he gets an interview.

There is a lot to think about when deciding to work for yourself. Millionaire Mommy Next Door has a really great post: How to create lasting wealth via self employment that pretty much covers it all.

I have done most of the things in her post except having the financial cushion. So I'm taking a gamble, and trying to stay focused on the positives!

28 years ago I left school bright eyed and bushy tailed, and headed off to start my working life in a career I'd always dreamed of. Within a few weeks I had teamed up with four other girls and together we shared the trials and tribulations of of the next three years and then we went our different ways.

Over the years we have all stayed in touch, sometimes with years between our get togethers, some of us closer to others. But when we see each other it's as if we only talked yesterday. One of those 'girls' is my oldest and best friend, let's call her Beth, she lives in the same town as I do and our kids went to school together. She's who I consider to be my family and the person I call at 2am when there is a crisis in my life. The others live quite a long way away. It's about two years since we were all together.

So last week I called Beth up and we went and saw Sex in the City (which was great!) and that made us really nostalgic, so we called our other friends and arranged to get together yesterday by all travelling a couple of hours to meet up. It was wonderful!

Here we are more than 28 years on, all heading towards 50. We've been through marriages, divorces, affairs, kids, cancer, sickness, good times and tragedies, all the stuff you never think will happen when you're young, but when your older you realise it's just all part of 'Life' and thank God there are friends to see you through it.

Amongst other things we talked about finances and retirement it was interesting to see how we are all doing now compared to what we were like when we were 18 years old! Here's a snapshot.

Beth was always sensible with money, she married a no-hoper who happily spent everything she earned on drink and drugs. After 8 years and two kids, one with a severe disability, she kicked him out and really struggled for the next five years as single mum in living in public housing. Then she married again and built a home, and thing started to improve financially .

About 4 years ago Beth and her hubby took a big gamble. They sold their house, rented and started building units. We were all worried sick that she might lose everything! But we were wrong. Beth and her partner will have enough income to retire comfortably in about 2 years. I'm really glad it worked out, she has really had to struggle and work hard to achieve this. And she has had the hardest life of us all.

Sue was always a 'live for the moment' kind of person, "if it feels good do it"! She was always the life of the party. Sue married, had four kids and has always worked. For the last 6 years she has worked two jobs, her day job finishes at four, then she works an afternoon job from 5 - 11pm. Her husband works a lot too, they argue and Sue drinks too much.

They have lots of 'stuff', travel a lot and have a lot of debt. But Sue telld me she doesn't care anymore, she just charges what she wants on credit and figures it will sort itself out someday. She told me she might as well enjoy herself on credit than not enjoy herself at all.

When I see the lovely stuff she has, hear about all the holidays, sometimes it's hard not to see her side. But I would hate to work that much just to pay the bills, and I wonder how happy she really is, maybe if she stopped working, her marriage would be over.

Jo will always tell us how broke she is and how she has no money. This was always a bit a laugh for the rest of us, because Jo is loaded! She's Daddy's little girl, even at 49! She always pulls out $50 & $100 notes, travels overseas every year and has expensive wonderful hobbies. She works part-time and she has a lot of health problems now from too much good living and red wine!

When we were young Jo always had more boyfriends than we could ever keep up with! She has been married 3 times, divorced three times and is in 'another' serious relationship. She has a heart of gold and will always financially fall on her feet. Her life is drama filled, and she thrives on tumultuous relationships!

Finances will never be a 'real' problem for her, except if she can't keep up her lifestyle. Jo was fortunate to come from a wealthy family and was given her first home and car by her parents so, it's a different world to the rest of us!

Anne was always the sensible, voice of reason when we were young. She's a logical person, hard working and in my book the clear winner amongst us financially. Anne didn't graduate with the rest of us, she failed. And so while we all flitted off and got great jobs, and got more qualifications and then pay rises to go with them, Anne left and got a basic, blue collar job that she still has today.That's right she has been in the same job, no promotions, for 26 years.

Anne just paid off her mortgage a few months ago, she has always paid into her superannuation and, unlike the rest of us, left her money in the State Super Scheme so it is worth several hundred thousand now. She has an investment property that has tripled in value and a share portfolio. They take an overseas holiday every second year.

Anne lives comfortably, her husband just got a redundancy after 32 years in his job so they now have a very nice sum to invest. Anne is planning to work another 10 years. Her husband is looking for another job. They have a great work ethic and are the most decent, down to earth people I know.

When I look at Anne I see someone who was sensible, disciplined and followed that basic principles of money management. Her and husband are good, hardworking people who just get up every day and do what needs to be done to provide for their family and be financially responsible. I think we can learn a lot from Anne, who never got to have the 'dream career' that the rest of us did.

Of the five of us, Anne, is the least qualified, earns the least money, and had the least opportunities in life. When Anne failed she didn't turn it into a chip on her shoulder. She just went out and got a job and got on with her life, and she was disciplined with her money. She's a lot of fun as well, and she sure is going to retire with a VERY, VERY comfortable lifestyle!

... and me, well I'm doing my best to get my act together financially ASAP!

... so 5 friends, five different financial situations 28 years later...

This morning I checked my adSense account and I couldn't log in. Then I found the dreaded email in my inbox. "While going through our records recently, we found that your AdSense account has posed a significant risk to our AdWords advertisers. Sincekeeping your account in our publisher network may financially damage our advertisers in the future, we've decided to disable your account. Please understand that we consider this a necessary step to protect the interests of both our advertisers and our other AdSense publishers. We realize the inconvenience this may cause you, and we thank you in advance for your understanding and cooperation"

My account has been banned, I have no acess to check on the clickthroughs and traffic from the sites. I can appeal, but since I don't know any details, and they won't give me any information there is little I can do.

So I'm considered guilty of something, they won't tell me what it is and if I can explain how it happened they will consider my appeal. That sounds like a fair trial to me!!

Less than 1% of appeals are successful. I think my chances are 0 - none.

So after having worked hard on my different sites, written all original content, taken a lot of time to work out the best ad placement for each site, and doing the right thing I have lost about half my online income just like that.

I am angry, but I also realise that I am wasting my energy trying to get it my account back and ranting and raving about it and it won't achieve anything.

The financial year ended yesterday and I for one am glad that a new year starts today!!. I am nowhere near the financial position that I had hoped for when I started this blog just over 12 months ago.

When I started we had two incomes. In September we started living on one income, my 3 day a week job. By the end of October I had gone full time and my estimated income for the last year is about $55,000.

I also had a tax bill to pay of almost $10,000. Most of this was pre-paid tax for the current calendar year, on an income that I am not earning as I had to shut down my business due to the demands of caring for Dad. Eventually I hope to get a lot of it refunded.

We have had 5 mortgage interest rate rises in the last year!

August: 7.7% $1114

November: 8.2% $1170

February: 8.6% $1213

March: 8.95% $1250

May: 9.10% $1266

So while we didn't meet our financial goals, I still consider the year as a success. Why? Because as Debt Dieter points out: