May 2017 Finance Update – Liabilities

Alrighty, 2nd post of my blog, and my first update of my finances. As the first update this will be a longer post than normal outlining my mistakes, and how I am fixing them.

So to get down to it:

Liabilities (debts)

  • Car Number 1 – $27,160.27
  • Car Number 2 –  $14,636.28
  • Credit Card  – $4,848.90
  • Total – $46,645.45

Well this is kind of like confession time, so here goes. Car Number 1, which was mistake number 1, I bought this to rid myself of memories from my previous car. It had to go, things in my life had changed. So I traded my car in, on a loan I was close to paying off, and made a silly decision to buy a bigger more expensive car. This was purchased mid 2016 and in all honesty is a regretful purchase and with the beauty of hindsight I see how poor of a decision it was. Now everyone is reading this going WHAT THE HELL! He has two cars (which means two loans). The second car, is not a regret. It is a great decision, but one that is still working out. My partner and I have purchased this car together. I am teaching her to drive on weekends, and using this car Mon-Fri. Been a smaller car and I mean small, it is very economical with Petrol and is saving me roughly $40 per week then using the other one.

Reading this, you are probably wondering how a second car, going into more debt was a good decision. Well your right going into more debt is not good, but I have not told you what is happening here. With the purchase of the second car, I am now selling the first car. The aim here is to sell it for what is owing if possible or even taking a loss on the loan (selling it less then what I owe, and then using my savings to pay the balance). By selling Car Number 1 I am one step closer to been debt free. Having substantially lowered my liabilities to $19,485.18 (this is still a lot of debt, but I am working on it). So the plan at the moment is to have sold this car by the end of June 2017.

Step two of my plan to reduce my liabilities will be to “snowball” my credit card. Not only meeting my minimum monthly payment but paying this debt off. This is going to be a little bit of a challenge, as my health this year has not been so good, and since mid March have been unable to work, thought I got good news and as of Monday this coming week I am cleared to work 4 hours a day 5 days a week, and will be resuming work. Thankfully I still have a job to go to. As soon as I am able to work full time I will be so happy. Anyway, all my extra funds will be targeted for sometime to kick this debt out of the park. The goal been November 2017 to have no debt on my credit card, make the call to cancel the card, and then throw a cutting up party. Also with Car Number 1 out of the way (once it is sold) I will be able to allocate the money that was servicing this loan to my credit card thus paying this off quicker.

After this I will only have Car Number 2. This car is been jointly payed for with my loving partner. We are both working hard, and this will be paid for beginning of 2019. Having been really careful when working out our loan terms, we opted for a 2 year loan. We are able to pay this off early but there would be a fee, this fee equates to more then the interests pending on how early we were to payout the loan.

Well, this is probably my hardest post yet. Admitting to how much debt I carry, but at the same time sharing that burden lessens it.

On a positive note, I have a plan, I am sticking to it, and I can see I will be debt free.

5 thoughts on “May 2017 Finance Update – Liabilities

  • May 11, 2017 at 6:30 am
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    Glad to hear that you’re better and hopefully fully recovered soon 🙂

    No-one will have a perfect financial history and at least you have put yourself on a good path at a young age! Not only that, but you’re working on it with your partner which is the best thing to do. I’m sure in a year, 2 years, 5 years from now you’ll thank yourselves.

    Mr DDU

    Reply
    • May 11, 2017 at 6:37 am
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      It is not our mistakes that define us, it is the lessons we learn that show our true character. I think that this quote truly represents my thoughts at the moment. How I move forward and react will define me.

      I certainly agree, future me is going to look back at mid 2016 and smile.

      Reply
  • May 11, 2017 at 11:40 am
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    Debt is a hard thing to pay off. Stick to it and you will pay it off in no time. I will be following your journey, all the best. Cheers

    Reply
    • May 11, 2017 at 10:52 pm
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      Thanks Buy, Hold Long
      I have a plan and will be sticking to it, I welcome you for the journey and thank you for the support

      Reply
  • May 12, 2017 at 2:45 am
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    Good that you’re physically feeling better – being unwell for long periods is tough. And awesome that you’re selling the second car… It might be worth calling your credit card company and asking for a reduced interest rate – I spoke with AMEX one day about the reward flights etc they had and out of the blue they said they’d actually be happy to reduce my interest rate as well, from 21% pa to 3.99% pa for 6 months.

    Looking forward to see you build some serious wealth Pat.

    Reply

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