April seemed to go pretty quickly.  Anna and I went to Sydney for Easter, which was heaps of fun and not very expensive since we stayed in a hostel, used the free tourist bus to get around the CBD, and made most of our own meals.

All in all, I’m pretty happy with how I did in April. Here’s the summary:

April 2012

Current student loan balance: NZD $19,307.43, down $665.62 from $19,973.05 last month.

Current net worth: NZD -$8743.99, up $366.32 from -$9110.31 last month.

Current monthly Student Loan payment: AUD $543.33 (NZD $692.54) (that’s an averaged value comprising AUD$500 per month plus AUD$10 per week).

Other savings this month: AUD $178 (NZD $226.88). I deposited AUD$630 from my pay and earned AUD$4.91 in interest, but needed to withdraw AUD$200 due to not having an adequate cushion in my day-to-day account, and then another  AUD $277 to cover my costs from a trip we took to Sydney over Easter.

Estimated net worth zero-date: 29th September, 2012.

Estimated Student Loan zero-date: 29th September, 2014.

Since getting back into full-time employment after an 18-month absence, I’ve decided I need to get my finances in order. I’ve set myself two simple goals to meet:

1. Get back to a net worth of $0 (i.e. save and pay off student loan debt until my assets and debt balance out).
2. Pay off the student loan completely.

1. I’ll quote all dollar values in NZD at the daily exchange rate on the day the numbers are sourced.
2. I can’t reduce my monthly contribution unless my financial situation worsens drastically (like I lose my job).
3. I don’t get to count any credits to my loan until they show up on my IRD account. This includes repayments, the 10% voluntary repayment bonus, and any tax credits.

March 2012

Current student loan balance: NZD $19,973.05, down $508.41 from $20,481.46 last month. I made a payment of NZD$635.50 on March 16th; I’m not sure where that $127.09 went, but the IRD’s reporting is confusing. Anyway, I’m excited to have finally broken the $20k mark!

Current net worth: NZD -$9 110.31, up from -$10 115.48 last month.

Current monthly Student Loan payment: AUD $500 (NZD $629.88), same as last month. I did put aside an extra AU$50, but forgot to add it to my payment, so I’ll add it to the next one. I set up a weekly payment of AU$20 per week into my savings account – that’s $10 towards the student loan and $10 savings per week, in addition to the lump sum that I save after my monthly pay comes in.

Other savings this month: AUD -$301 (NZD -$380.63). I saved AUD $561, but withdrew AUD $862 for a return ticket to Vietnam in October.

Estimated net worth zero-date: 29th September, 2012. 6 months to go! (I think; can’t be bothered recalculating right now.)

Estimated Student Loan zero-date: 29th September, 2014 (except it shouldn’t take that long, because once my emergency fund reaches $3000 (which would cover just over 2 months’ worth of expenses in case of emergencies), I’m going to slow down my rate of savings and pay off more towards my student loan. Also, there’s always the possibility of pay rises or freelance work coming along).

All up, not a bad month. I don’t expect any more big purchases in the near future, so things are looking good.

And yet, for ten of the eleven Februaries since little seventeen-year-old me moved from Nelson to Christchurch to start my adult life, I’ve found myself with less money to my name than the slightly-over-$4000 I had in February 2001.

Cruise control

I used to say I was “good at saving money, but no good at making it”. Eventually, I realised that was a lie I told myself to let myself off the hook. Working for money was no fun, and for a long time I survived on part-time jobs. The free time was great, but five years of part-time wages didn’t get me very far. And I wasn’t as great at saving as I thought; sure, I managed my expenditure well enough, but I could never keep my hands off my savings account for long. Whenever it rose above a couple of thousand dollars, I’d invariably find something worthy of spending it on. I knew it would be smart to put away a little money regularly and not touch it. I just never thought it was important. With the benefit of hindsight I can calculate that if I’d managed to save just $10 a week for the last 10 years, with compound interest at an average of 5%, say, I’d now have around $6500. Heck, even if I’d been hiding $10 a week under the mattress, I’d have $5200 by now.

The truth, as I see it now, is that I was applying exactly the same strategy to managing my money that I had to getting through high school and the first time around at university: put in just enough effort, attention, or time to avoid getting in trouble, and spend the rest of my energy and time however I liked.

A New Strategy

In November 2008, aged 25, I started my first full-time professional job. At the end of that month, I started keeping track of my net worth using a spreadsheet in Google Docs. I estimated the value of all my stuff, added that to the total of my bank balances, weighed that against my student loan, and came up with a figure of negative $25,283.27

For a while there, I was doing great. I saved $1000 per month, contributed to a retirement account from my salary, and paid about $200 off my student loan each month through compulsory payroll deductions. By the end of December 2009, my net worth was up to negative $2,985.37

As I was still living in New Zealand then, the interest was being written off my student loan, so there was no incentive to make voluntary payments. I kept about $15,000 in my savings account. Everything was going well, and it would have continued to go well if I hadn’t, just then, started making  a few stupid decisions.

I Get in Trouble

After just a few months at my first ‘real’ job, I was so bored. The job was fine, but it didn’t inspire me at all, and I missed having unstructured time. I wrote songs on the theme of travel and escape. I read travel writing and researched travel gear.  I told myself I had to stay at the job for a whole year, and I did. Then I made the first stupid decision:

Stupid decision #1: Leaving a good situation without a plan

I decided late in 2009 to leave my job at the end of January 2010. I had plenty of good intentions for what to do next- work on my music, write, travel around New Zealand – but no solid plans for how to make an income. I did manage to score some tutoring work at my old university, which paid my living costs for the first half of the year, but only just.

Stupid decision #2: Taking on a higher level of expenditure at the same time as taking a big cut to my income

As the middle of 2010 approached, and the course I was tutoring came to an end, I decided I’d had enough of Christchurch and wanted to try living somewhere different. A guy I knew from uni offered me a place in the apartment he was renting in Wellington, so I sold off my furniture, packed everything I owned in my car, and moved.

The rent in Wellington was double what I’d been paying in Christchurch, and I was now unemployed. Also, I spent a decent chunk of my savings buying furniture and setting up my room.

Stupid decision #3: Not getting a damn job

I loved living in Wellington, but having money in the bank made me lazy. I  didn’t earn, I didn’t budget. I looked for work half-heartedly, but felt no sense of urgency about it. It didn’t help that the job market was terrible and I had no network. After two months, my savings were dwindling and I was drawing the unemployment benefit.

Digging Upward

Around the end of 2010, I decided to move to Australia to be near Anna. To do that, I needed to get some savings behind me. I moved back to my parents’ place in Nelson and got a job picking apples at an orchard I’d worked at in the uni holidays in years past.

I made a couple of grand there, which helped me to get set up in Melbourne. Not long after arriving at the end of April, I was working two part-time jobs and doing a little bit of freelancing and some occasional tutoring. And finally, after six months of that, I got a full-time job in my field, earning a similar entry-level salary to the one I’d given up almost two years previously.

Motivation

I realised that there was a good chance I’d be living in Australia for a long time…and that meant that I’d start accruing interest on my student loan, since the New Zealand Government only writes off your interest if you live in New Zealand for more than six months of a given year. The student loan was my only debt, and  it was only going to get bigger unless I started tackling it.

I’d love to eventually save my way into early retirement, but that’s a nebulous goal at the moment. I’m easily distracted and I tend to over-think things.  The goals that work best for me are ones that are very simple and clear. So, when it comes to my finances, I have just one big goal at the moment: get back to a net worth of zero dollars as quickly as I can.

(edit, 02/3/2012 When I first wrote this post, I confused zero-net-worth with paying off my student loan. They’re not the same thing, of course; I can reach zero-net-worth before the loan is paid off due to assets and cash offsetting some of the debt. So I’m adding a second stage to the goal: pay off the student loan.)

To keep myself motivated, I’ve decided to blog my way there. Which brings us to the point of this ramble:

Project Zero

Each month, until I get back to a net worth of $0, I’ll post an update of how much I’ve paid off, and how long I have to go. I’ll also do the same for my student loan.

Rules:

1. I’ll quote all dollar values in NZD at the daily exchange rate on the day the numbers are sourced.
2. I can’t reduce my monthly contribution unless my financial situation worsens drastically (like I lose my job).
3. I don’t get to count any credits to my loan until they show up on my IRD account. This includes repayments, the 10% voluntary repayment bonus, and any tax credits.

February 2012

Current student loan balance: NZD $20,481.46

Current net worth: NZD -$10 115.48

Current monthly Student Loan payment: AUD $500 (NZD $642)

Other savings this month: AUD $100 (NZD $129)

Estimated net worth zero-date: 29th September, 2012

Estimated Student Loan zero-date: 29th September, 2014

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I don’t expect anyone to have read this far – but if you have, post a comment to keep me accountable!

1. What did you do in 2011 that you’d never done before?

• Moved to another country
• Worked in food service
• Worked in a call centre
• Bought a fridge

2. Did you keep your new year’s resolutions, and will you make more for the next year?
I deliberately kept my resolutions vague to give me a better chance of keeping them. They were:

1. Move to Melbourne in May
2. Get a full-time job in Melbourne
3. Keep working on music and writing.

I did indeed move to Melbourne, and I eventually got a full-time job, although it took me almost six months.

I didn’t do any significant writing or music-making. I think I only picked up a guitar about four times after the last little show I played in Wellington in February.

My goals for 2012 are a bit more specific:

• Stick at my current technical writing job.
• Pay off at least AU $7000 of my Student Loan (or more if I get windfalls or unexpected savings).
• Besides that, keep saving as much as I can.
• Do fun things, like classes and travel, to keep myself sane.
• Come up with a plan for 2013 that includes transitioning to a career I’ll enjoy more.

3. Did anyone close to you give birth?
My sister had a son; he is great. I met him a week ago.

4. Did anyone close to you die?
No.

5. What countries did you visit?
Australia; New Zealand.

6. What would you like to have in 2012 that you lacked in 2011?
Last year I wanted to make more money, so that I could start paying off my student loan and saving for the future. As it turned out, I didn’t make a lot of money; what with moving to another country, working part-time for most of the year, and then moving in with Anna; I ended the year, by my reckoning, about AU$1000 poorer.

In 2012, I think the main thing I want is stability. Specifically, I’d like to have the resolve and motivation to earn and save a bunch of money. I’d also like to have a sense of stability in my personal life – last year, I did really badly at making friends and finding fulfilling things to do outside of work; I had a lot of part-time jobs and spent a lot of time commuting.
I also want a vege garden, which is underway. And I want to learn home-brewing and some other fun skills; maybe pottery or knife-sharpening.

7. What dates from 2010 will remain etched in your memory, and why?

• April 28th: moved to Melbourne.
• September 18th: my one-year anniversary with Anna, which we spent in Brisbane, where Anna was performing a show in the arts festival.

8. What was your biggest achievement of the year?
Personal-growthy-relationshippy stuff.

9. What was your biggest failure of the year?
Not making any very close friends; not making much progress financially.

10. Did you suffer illness or injury?
I had my first experience of food poisoning, which was interesting. If you come to Melbourne, I will point out a deli from which you should never buy a chicken sandwich.

11. What was the best thing you bought?
Plane tickets home for Christmas; some good kitchen gear.

12. Whose behaviour merited celebration?
Mine. Anna’s.

13. Whose behaviour made you appalled and depressed?
No-one’s, really.

14. Where did most of your money go?
The usual suspects: living costs, travel, food.

15. What did you get really, really, really excited about?
Not enough in 2011. I aim to get excited a lot more this year.

16. What song will always remind of you of 2011?
I can’t think of one for 2011; it was a pretty un-musical year for me.

17. Compared to this time last year, are you:
a) happier or sadder?
Sadder, I think, but more contented, if that makes sense.

b) fatter or thinner?
About the same.

c) richer or poorer?
Slightly poorer, but with better prospects.

18. What do you wish you’d done more of?
The same as last year! Creative stuff, meeting new people, having deep-and-meaningful conversations, working for money.

19. What do you wish you’d done less of?
Buying takeaway food; commuting.

20. How did you spend Christmas?
In Nelson, with my family.

21. Did you fall in love in 2010?
If you define that as feeling infatuated with someone: yes, a few times, and always with the same person.

22. What was your favourite TV programme?
Community.

23. Do you hate anyone now that you didn’t hate this time last year?
No. I still don’t see the point in hating people.

24. What was the best book you read?
I read a few books early in the year, and then there was a bit of a hiatus, and now I’m back into reading. I enjoyed the two Kurt Vonnegut books I read.

25. What was your greatest musical discovery?
I didn’t make any.

26. What did you want and get?

• A room in a good flat with good flatmates.
• Enough of an income that I was never in financial trouble.
• Life experience.

27. What did you want and not get?
Enough of an income to start getting rid of my student loan and saving for the future.

28. What was your favourite film of this year?
I’m just going to go with the most recent great movie I saw that I can remember: The Guard (an Irish film starring Brendan Gleeson and Don Cheadle).

29. What did you do on your birthday and how old did you turn?
Had a picnic with Anna and went to the Tutankhamen exhibit at the Melbourne Museum. Twenty-eight.

30. What one thing would have made your year immeasurably more satisfying?
Mo’ money (wow, I’m starting to sound avaricious here).

31. How would you describe your personal fashion concept in 2009?
The same.

32. What kept you sane?
Cooking, reading, homesickness.

33. Which celebrity/public figure did you fancy the most?
None I can think of.

34. What political issue stirred you the most?
I was too wrapped up in my own affairs to think much about politics.

35. Whom did you miss?
Matt, Kat, Christina, my family.

36. Who was the best new person you met?
Probably my flatmate Dave.

37. Tell us a valuable life lesson you learned in 2011.
In 2010 I learned that everything I need comes to me eventually. In 2011 I learned that this happens more smoothly when I involve myself in the process.

38. Quote a song lyric that sums up your year.
I’m usually too lazy to answer this question. Today is no exception.