Hi fellow Mustachians,
My name is Eleanor. I have been reading frugal blogs for a while. I have become more and more interested in frugal/simple living in the last several months. I have had a very difficult time last year because I am living beyond my means, have been all my adult life, and want to change that.
My story...
Starting with the bad...I recently moved back to Europe from New Zealand (where I lived for 7 years). I didn’t have much cash to spare at the time and couldn't really afford such an expensive move. I soon found myself homeless - I hadn’t banked on not being able to find a rental place because I was a returning expat and landlords were asking for 6 months rent in advance as my income and references were overseas ones.
I didn’t have 6months rent in advance. At the same time, I was making some updates to my online business (installing a new shopping cart and email subscriber system) and it went horribly wrong – I hired the wrong person to do it, lost a lot of money as a result, and had a website (my source of income)that wasn’t functioning properly and no means to fix it. It was a mess.
Luckily the website is now fixed :)
I now find myself homeless, living in a variety of substandard Airbnb accommodation that doesn’t meet my needs, in debt and with no savings or emergency fund. I am very annoyed at myself for being in this position and I am currently working on saving up for the 6 months rent in advance so I can get into a rental place.
The good:I have a profitable online business that on average has made me $70,000 US annually after business expenses and before tax. I don’t normally work more than 2-3 hours per day and much of my income is passive, with great potential for making more.
**************
My debts are as follows:
$26,000 in business loans (15% interest)
$5000 overdraft
$2000 owed to the IRD
$41,000 in student loans
No emergency fund or savings. Living pay cheque to pay cheque.
I am 32. My lifelong dream has been to own my own house. As a tenant I have been asked to move on frequently as landlords want to move themselves/family members back in or sell the house. I have had very little security or stability these last several years and would LOVE the financial peace and security that comes from knowing no-one can give me notice to move out once I own my own home.
I would also like to own a modest second home in another part of the country for when I am visiting family.
Here are my goals:
1. Save up 6 months rent in advance
2. Build up an emergency fund of $1000
3. Pay off the debts one by one(Dave Ramsey’s snowball method)
4. Save for a home down payment (this will happen concurrently to goal 3)
5. Save up for second down payment
I am expecting this will take me around 6-7 years.
Here are the ways I plan to do this. Please don’t laugh at me if some of these steps seem really basic to you!
1. Start consulting on the side
I can typically make an extra $65,000 per year if I do this 40 hours per month, every month.
2. Cut grocery bill down to $140/week. I am currently spending way more than that.
3. Go to public yoga and pilates classes instead of private ones, which I had done in the past, and community acupuncture, instead of private sessions
4. Cleaning my own house
I may get a bike too. I am not sure on that one yet.
I could also trim my monthly budget of $850 discretionary spending (for toiletries, entertainment, stuff for house etc.) But don’t want to be totally miserable. I don’t know anyone where I’m moving to, and work from home so making friends and getting a sense of community is important and I don’t want to trim my budget so much that I find it harder to do that.
Things I am already doing right:
• Haven’t bought any new clothes in the last 12 months
• Bought a reliable used car with cash so no car payment
• Negotiated my virtual assistant for my online business down to half of her hourly rate
Thanks for reading and look forward to seeing you all around the forum!
-Ellie :)