MyBudget on insolvency...

I've spoken before about MyBudget and how they have helped me to manage my finances since going bankrupt. Their blog this month seems pertinent so I thought I would repost it here...

Shop til you drop - or go bankrupt.

One good thing that has emerged out of all of this is my complete aversion to shopping. I can't stand the thought of wasting money on things I don't really need and I've learnt to be highly discriminatory about what I do need. Ikea gives me the heebie jeebies - all those products literally piled up makes me feel like I'm drowning in the landfill of tomorrow. Even Bunnings and Officeworks, with their warehouse approach to retailing just confuses me and I end up becoming overwhelmed by anxiety and leaving without buying anything because I keep picking up things that I didn't go there to buy! 

In the same way some people will only adopt a pet from an animal shelter, I actually prefer to acquire goods second-hand and nothing gives me greater pleasure than finding another home for the things that I don't need any more. And I'm obviously not the only one. There is actually quite a large movement against unsustainable consumption and people are organising themselves to resist the lure of marketing and create a new world order.

Freecycle is similar to craigslist, gumtree or trading post, except that every thing on Freecycle is, well, free. I've been using this for a while in my local area and so far I've managed to get rid of stuff that has been in storage for years and has no real economic or even sentimental value. I would have to pay to put it on ebay and probably not get any hits at all. Freecycle uses Yahoo groups, there are clear rules, the moderators are very good, so the system remains really simple - and it works. I love the fact that most of this stuff would have ended up in landfill through hard rubbish collections meanwhile the recipients would have been purchasing a brand new cheap import that only had a limited life and then also ended up in landfill.

Buy Nothing Day started as a protest against the crazy post-thanksgiving sales in America (similar to our Boxing Day sales) and has grown and been absorbed into the Occupy movement. The latest development is OccupyXmas which promotes the celebration of the Christmas tradition without conspicuous consumption. I really like the activities they promote for the day like the Zombie Walk and Whirly Marts.

The Compact was started by a group of ten friends in San Francisco who pledged not to buy anything new for a whole year This movement is quite popular with people adopting the rules of play for a full 12 months or just a month or a week. You can find lots of blogs of people's experiences weaning themselves off their shopping addiction.

It really is amazing how your perception of your previous behaviour changes when you stop shopping for the sake of shopping and start focussing on doing or creating. Many would relate to my previous behaviour of buying something off the rack on a "spree" along with a number of other items and then never actually wearing it. You keep it in your cupboard for years and yet pass over it every morning and complain that you have nothing to wear. These days, if I buy it new, I buy one item at a time and I try to lay-by when I can. It stretches out the anticipation of owning it and I can keep going back and making sure I really want it before I actually get it home. Research has shown that excessive consumption is fuelled by consumer "desire" not by the actual products being purchased. We all know that feeling when you're shopping and you see something nice, you imagine wearing or using it for the first time; it's exciting. Three months (or less) after purchase,  the feeling is gone. I'm trying to prolong the anticipation by buying things that cost more, last longer and are more versatile so I can create new applications for it and keep the romance.

I guess all of this helps to deal with my current financial crisis but I'm beginning to suspect that we will all start to reduce our consumption in the future. I don't  think I'll ever go back to shopping the way I did before, it's weird how it seems slightly obscene now.

On the home stretch now...

So, here we are. I have less than a year to go. It's so strange how I just forget sometimes but it still pains me when I remember that I am bankrupt. The other day, I was seriously considering a voluntary position on the board of a non-profit organisation and then I suddenly realised that it wouldn't be a good idea. My presence on that board could jeopardise the whole organisation. If they didn't have a policy regarding "fit and proper persons" for their board members, I would be exposing them to risk just through association with me.

On a happier note, I've saved nearly $5000 dollars toward a deposit on a house. By this time next year I will have doubled that which means I only have another 97 years to go and I might be able to buy a small flat in Dumbleyung. 

Although with inflation, that's probably a little unrealistic.

A girl with savings!

I actually wrote this blog a while ago and since then the ANZ has ceased offering First Home Saver Accounts.You can read about it here. 

I’ve set up a First Home Saver Account with the ANZ. I started by putting $30 a week into it and over the past few months I’ve increased it to $110 a week. I’m going to work toward getting my credit rating reinstated – assuming this is possible. 

The First Home Saver Account is a special account that the Australian federal government initiated in 2008 to assist first home buyers to accumulate a deposit. The government contributes 17% per annum over four years if you save more than $1,000 per year. This tops out at $950 so if you can save $5,600 per year, the government will kick in a total of $3,800 over four years. At the end of four years, that would give you a deposit of $26,200 plus any interest that has accrued. That’s probably half way to a deposit on something live-able…? 

Anyway, I thought if I set it up so MyBudget allocate it directly from my pay, I won’t even notice it. At the end of my seven years of bad luck, I’ll have quite a nice little pile of money for a deposit on a little cottage in the country or something. Must focus on the future and all my new financial habits, not dwell on past mistakes, right? 

There’s a lot of conditions associated with this type of account, and it’s only available in Australia. You can read more about it here on the ATO website and there is also some good (but a little dated) information on savings.com.au. 

Latest balance on my account: $2,745 - it's a start...

Christmas and taxes

Sorry to keep dumping here whenever I’m feeling especially bankrupt but that was truly the purpose of this blog, if I am honest with you.

I finally got my tax assessments done for financial years ending 2010 and 2011 and HOORAY! a return of $2,463.42!

Except nearly all of it relates to earnings I received before I went bankrupt.

Knowing that this means that I probably won’t get to keep it, I dutifully sent my assessments off to the Trustee. I received a letter yesterday to say that I am “required to forward cheque to the Official Trustee in Bankruptcy for the amount of $2,173.21” so hooray! I still have $290.21 left over to help pay back my parents the debts I accumulated over Christmas.

Except that I forgot that the accountant was extracting their fee of $220.

I received a cheque from their trust account today for the amount of $2243.42 so (hooray?) I have $70.21 remaining.

Had one hell of a Christmas, though!

Quick update... I rang the trustee and asked if I could deduct the accountant's fee from the amount I was sending to them and they told me that because that would bring the total amount owing to them under $2000 I could keep the WHOLE THING!!! 

Putting some aside toward my 40th birthday/bankruptcy discharge party - happy days!

68 weeks to go!

Actually 68 weeks sounds quite long. It's one more year and 16 weeks. I am well over half way. 

I hate thinking about my bankruptcy. I hate the permanence of it. I have two tattoos and a bankruptcy, I regret at least two out of the three but the bankruptcy feels the most indelible.

I had lunch with a close friend the other day. He has a chronic illness and has suffered financially for it. He’s 42 and in a similar situation to me ie. No assets, living with his parents, very low income. He said to me: “There must be a reason I’ve messed up so bad. This can’t have happened for no reason.” I can’t believe he thinks he messed up! He isn’t to blame for his life going off track. He was physically disabled and unable to care for himself. My situation is the opposite. I was entirely capable of making the right decisions. I was even aware of it at the time. I made completely wrong choices – against my own better judgement! So maybe he has some really good karma coming to him, maybe he will go on to be stronger and better than ever once he is well, and he’ll really appreciate his health and wealth and all the things we take for granted when we have all our faculties. For myself, I have to wear my scarlet letter B for three years and then hope the memory fades in the years to come. And perhaps I even got off too lightly. Probably, in the minds of my creditors, I did. It’s just so depressing to think about. So I try not to. But it comes up periodically. I panic when I start work with a new client. Don’t get me wrong, I have great confidence in the value of my work, but sometimes companies have policies about contractors that require them to declare that they are not bankrupt or disqualified from being a Director. It hasn’t happened yet but I live in constant fear of having to turn down a job without giving a reason.

Just have to keep going and see what happens. Nothing bad has arisen lately but the anticipation of it causes a lot of anxiety.