This is the right track to take, yes?

[Arimeh]

Ok so we have some money in our redraw facility - my stepfather gave us a bit of money as a xmas present a few years ago - and its still sitting there. Its not huge - but its ok.

Problem is - we've not been keeping a track of our money - because this money was FAR too easy to access - so we've just been dipping into it - and if we haven't - whatever we wanted has gone on the credit cards.

Now - we have two FULL credit cards - about $6,000 each (don't hit me )

So now I'm going to get serious about our finances and we aren't going to spend any money that we don't have.

So the first thing to do would be to pay off the credit cards with the redraw money, yes?

[LaDeeDa]

I don't have any financial background but I would assume that with the interest rates on 2 cards you would definately be better off to get rid of them asap.....

[Danni]

I'm not a financial advisor, or an expert, but I would say yes.
The money in your redraw facility is saving you interest on say, approx 6%.

Your credit cards are COSTING you interest on more than double that amount.

So as far as I know, the best thing to do is always wipe out debts that are costing you the most interest.

Hope that helps!!

[squidipa]

So the first thing to do would be to pay off the credit cards with the redraw money, yes?

hey sweet


yeah look if it was me i would pay off credit cards as they are a liability and cost you more. then i would focus on your spending log it ask ya self do i REALY need this. Avoid shopping shop in bulk. Also make a list and stick to it.

Find out what is your MINIMUM amount of money you can live on... then save every dollar above that figure, putting back all that money you paid on to the credit cards creating another savings amount IYKWIM. thats my thoughts sweet!


we spend only to save, example this week was NOT my shopping week but coles had cornflakes onsale for 4 dollars so i bought 9 packets as i know in the end it will be a saving. The money i spent will be subtracted off my food bill.

[The[cookie]Doctor]

Definitely! Better paid off than paying interest!

What use is the money in the bank if you are only losing more while it sits there?

[~Trish~]

I would say, yep, that is a very smart thing to do. Clear as much debt as possible so you aren't paying additional interest.

Well done for being wise with your money . It's not too hard to live within your means, but it can take a little getting used to! My DH is very good with money and the only debts we have are our mortgages (our home loan is nearly paid that off thanks to his clever money managing ). When we first got married I found it so hard not to spend, but DH wouldn't let me LOL! It was hard at first, but once I got used to making sacrifices it wasn't that bad after all, especially when you can actually start to see the benefits of having extra money.

Good luck!!

[Salsa]

$12,000 of money owing plus the interest & other fees on that - yes, I think you should use what you`ve got elsewhere to pay them/it off.
Its such a drag to see that money dissapear, but reality is you dont really have it anyway.
When I was a student my gran gave me some $ for something in particular which I knew I was not going to end up doing for a number of years (if ever), so I used the money to pay off my student loan. It sucked to see the money go, but was also great to know that I was even stevens with my money and did not have any, but did not owe anymore either.

Well done on deciding to get serious about finances and being active towards it.
This past week (all the talk of inevitable recession I suppose ) I have decided we really need to get more $ savvy and make specific cutbacks. I have never had a set grocery budget for example, but now I am going to work one out and stick to it.

[Arimeh]

Thanks guys

And I know I have to stick to it. I can't even stick to a budget of $250 per week of grocery shopping!!!! On saturday I did pretty well though - got to under the $250 but usually its around $300 (for a WEEK!!)

ANd yes - very much going to suck having that $12,000 slip away from our redraw .. boohoo!!!

But yes, now that I'm a SAHM for 4 days - we REALLY have to do something and stop living like I'm working full time.

We only owe $2,200 on our car, so I wasn't going to worry about paying that one off.. thats wayyyy tooo much money for one day.. LOL

[squidipa]

i own a credit card but i make it work for me (learnt from my previous marriage and experience with debt) i put slightly extra on it so eg: its a 3000 card i put an extra 200 on it making it 3200 so i have the convince of the card but save by spending my own money lots of banks have cards now where ya can do this with your won money not banks. Not only that but when the internet gets subtracted from it or insurance i am still paying with MY OWN cash....I love my card cause it enables me to buy cheaply from other countries therefor investing back into mys elf. I also look at things like i could spend 20-30 dollars taking the kids to the movies or invest that back into our selfs as a family eg: but arts and crafts and spend the the time i would have at the movies playing with the kids in the end we always end up with so much more stuff and more hours MORE of fun.

[MantaRay]

And once you've paid them off, cut at least one up Best not to have the temptation there!

[Arimeh]

Thanks Squidipa

Thanks for the tip Mel - we'll probably just keep DH's business one.

[Aimz]

Yep - pay them off!! No point in paying any interest if you don't have to!

Cut up one of them and reduce the other one. We have an "emergency" card and the limit is only $1500. That's enough to pay for airfares to get somewhere if a family member is sick etc. or if the car suddenly blows up. It's manageable and can be paid off within the 55 day interest free period.

Don't feel bad about the limits - we once had a..... wait for it..... $15,000 limit and it was maxed

We had it consolidated into a personal loan with our car and we are STILL paying it off!!

[Arimeh]

Holy crap Amy!!!! LOL Ok, now I feel "normal" and not so much like a freak.

Geez this redraw is going to get a battering - we have HEAPS of bills that I want to pay as well - just start afresh. We won't have anything left in the redraw - but we can build on that I suppose....

[squidipa]

yes u can build on that mel dotn forget to treat ya self every now and then to when u are saving so much to get to your goals. have small goals and work form there.

[~Trish~]

We as a family of 4 manage to spend about $100 - $150 per week on groceries ($150 is a bad week for us LOL) by shopping at Aldi. It seriously cut $50 - $100 off our grocery bill once we started shopping there (I used to shop at Safeway each week).

[Rivlas]

Once you have handed one back, don't just cut it up as they will keep charging you yearly fees if they don't know you don't want it any more. Also ask for the limit to be reduced if you don't need that amount.
We have a credit card with $500 limit so you can get them with low limits if need be.

When I had trouble getting the budget correct I started a spread sheet on the computer, before that I used a book, and it really helped as it was there in black & white what I was spending. It really helped to see where the money was going.
The best part was the saving column I started and enjoyed watching it grow bit by bit, sometimes only $5.00 a pay but it was still an encouragement to save.

[LimeSlice]

Just out of interest, what interest rate are you paying on your car loan? Who is it through?
It may be worth looking at paying out the rest of the car loan at the same time, if you have the funds in redraw.
By paying an extra 4K off our car loan last year we saved soooo much money in interest!
And it is only another $2200, iykwim. I would knock them both off at once if you can.


Anyway, good luck mel, hope you can get them gone asap!!

PS - I have only 1 kid and I stll spend $300 a week on groceries! you can take the Chef away from work, but cant take the good food away from the chef!! lol

[Arimeh]

Yeah I'll have to look at getting a book or something... thats a good idea.

Alexis - our car loan is 8.99% - so its pretty low - as far as car loans go.

I'll have to do some sums - see how much we can afford to pay off everything!!!!! we don't have THAT much in the redraw (plus I'd like to buy more stock for my shop!! lol)