This year on The Thrifty Issue, we are following 4 people’s journeys out of debt, helping them to clear their debt, save money and succeed with their financial goals.
One of our four people is Elli.
Income $48,000 before tax
Elli lives in Australia, is in her twenties and recently split with her partner. Her pets are still there and she pays for their needs. Meanwhile, she is taking the opportunity to housesit, pay down her debt and increase her skills and talents to enable her to travel the world.
What are your goals for 2016, particularly finance goals?
My goals for 2016 are to get out of debt! From there I want to be able to save to be able to travel the world, something that I never thought would be possible as I sadly accepted that debt would be with me for the rest of my life
What debts do you have?
I currently have $15,400 of debt, this is one personal loan, an interest free card and a credit card. I also do have an overdraft of 2k which isn’t listed in this debt amount.
How did you accrue those debts?
These debts have been accumulated since I was 18. When I was 18 I got a personal loan for a car, then for some silly reason I thought a credit card would be a good idea. I got a credit card with a $500 limit. One day at work I heard a girl talking about her awards through her credit card and I wondered why I did not have rewards.
Soon enough I had applied for my awards card assuming that it would replace my $500 credit card. The bank did replace my credit card but one with a $8000 limit! I told myself that I would call and reduce the limit and then it just got forgotten about and slowly I kept on spending more and more money until soon enough I was maxed out.
I then heard about balance transfers and I wanted to go on a holiday so I thought I would do a balance transfer and then I could put the holiday on my credit card. The balance transfer went through, I went on my holiday and then soon enough the card that was transferred was maxed out. I completed around 4-5 different balance transfers over the years. Then I had a mini meltdown and thought to myself I’ll get a personal loan and consolidate all my loan, oh and I managed to have a few other personal/car loans in this period.
So I got the 10k personal loan to take care of all my little debts. I paid them all off and kept one credit card as an emergency card which had a $2000 limit. Within a couple of months I had convinced myself to use the card for a fitness program I had been dying to do. I promised to pay back the money and not use the card for anything else…. and again soon enough maxed, so I just kept on increasing the limit. I was up to $6000!!!
It was in June 2015 that I had a full on melt down about my financial being. A friend helped me set up a budget and since then I have been obsessed with paying money off and I haven’t touched my credit cards since!
What skills and interests do you have?
My biggest interest would be photography, I absolutely love taking photos and I would love to complete my studies in photography and pursue a career travelling the world and taking photos.
Is there anything you aren’t willing to do to achieve your goal?
The only thing I wouldn’t be willing to do is giving up my “pocket money”. I give myself $180 per fortnight for pocket money which covers, clothes, makeup, dinners, lunches, entertainment etc
Elli’s budget (amounts are per fortnight)
Car Servicing $15
Office 365 $3.50
Insurance Health $24
Insurance Car $35
Insurance Contents $15
Personal Loan $126
Pay Back Sam $50
Credit Card (GO) $20
Personal debt $30
Go Mastercard $25
CBA card $500 (paying extra to clear this asap)
Pocket Money $180
Elli’s plan to start with
1.) Continue paying the extra into the CBA card to clear by June
2.) Compare insurance policies to see if she is getting the best deal
3.) Elli can’t get a balance transfer or consolidate at the moment, so debts stay as they are
4.) Learn more about photography, potentially do a course and look at ways to make money with photography
5.) Build reputation as a house sitter and pet minder to earn a side income from
6.) Split any extra income into 50% debt, 50% investing in business/herself
What tips do you have for Elli?