Doing the sums

If my husband and I were to try to buy a house today, the banks would laugh us out of the door. I just did a quick budget analysis of our expenditure and one thing is absolutely clear: our discretionary spending is way out of control. Our travel, our lifestyle and our expensive gift giving is over the top. Last year, for example, we together travelled overseas twice (once in NZ, another time in Europe) and separately twice. Each time the cost to me has been enormous, although the cost to Scott has been rather less horrendous as his work pays for much of it. We give each other gifts that are way over the top. We go out to dinner at restaurants we can’t afford.

We are hoping to buy a house and renovate. I think I’m done with the over the top costs of gift giving and travelling. I think the world can do without my rampant consumerism. So I think my pledge for this year, which is a necessary one, is to stop travelling overseas, to stop giving enormously expensive gifts and to stop going out and spending huge amounts on dinners. I worked out that if we are strict, if we don’t travel, if we calm down with the gift giving, then we have about $2000 per month for discretionary spending. Now this spending actually includes paying off credit cards. This discretionary amount drops even further when they are factored in. So. What to do? We have about $15000 in savings, and about $40000 in credit card debt. Paying off the most expensive card will still leave us with $25000 debt. Now this is not translating very well with my current figures. We cannot pay down all our credit cards this year, it appears. But! If I am very careful, if Scott and I pay off $1500 per month off these cards, we will have paid all but $8000 by December this year. (This includes the interest bill). We will only have about $500.00 per month for discretionary spending. It may be very hard. I think we can do it – we are not overly bad with clothes buying, and there is fat that I have not included through the business which may ease the pain a bit – actually, I could pay myself more and we could probably have a bit more for the fun parts.

But it will hurt. Probably a lot. However, I think we will need to do this if we are to manage our affairs better and have a house we can call a home to build equity in. It’s a thought.

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