|Yes, this is our Australian currency. It's plastic. It can go through the wash and live!|
This week, Awesome and I have started our plan to become debt-free and live on what we have.
Inspired by this post at The High-Heeled Housewife, I started to do some more research in to what it would take for us to start paying down our debt and living on what we earn.
First things first. I think there are seasons for which having debt may be a necessary part of life. Studying at Uni, for instance, carries a relatively small amount of debt in Australia and for some people, carrying a student debt which is interest free is smarter than using your 15% interest credit card to pay off your "free" loan.
Debt can be important to cash flow. It can be necessary to have debt in order to ensure that bills get paid and that direct debits don't overlap and cause the headache of overdrawn accounts. In a given year, when I was single, I managed my money well and accounted for every in and out - after all, I was the only one who was spending the money. When I got married, I found it more difficult to keep track. In our first year of marriage I paid around $200 in overdrawn account fees, simply by not keeping on top of the ins and outs of our accounts. What a waste! If having some bills come out of a credit account in the short term and then paying them off the following week is what stops this from happening - then that makes sense to me.
Over the next couple of posts, I want to explain our problem, and our new system to you. I think that Gen Y particularly has a problem with budgeting and saving for the future. I'm hoping that our experience might be helpful for others!