Arghhh – having to pay interest on the credit card!
Filed under: Avalon's Money Thread, Cost of living, Interest Rates, Credit Cards & Mortgages in NZ
Well, for the first time in five and half years – I cannot pay off the whole balance on our credit cards, and we will be paying interest.
This is quite depressing.
I guess I should be happy that its only likely to be a few months where we have to pay, and that we have been able to organise our finances so well for so long that we haven’t had to do this thus far while we have lived in New Zealand. But still – its damned annoying.
Especially since the interest rate is a whopping 19.95%
So – from here on in – hard nosed budgeting and spending restrictions to get us back on track as fast as possible.
Why has this happened?
Some really big bills I’m afraid. Despite the emergency fund, which I still have some left of, we have had some really big expenses come through and no income. The emergency fund is coving our living expenses and top ups on the rentals, but it cant cover:
- Some large medical bills.
- Set up costs for Hubby’s contracting business.
- Legal fees
- Buying furniture for an apartment in the city. (and yes – even though we have 2 houses worth of furniture – it still turns out we need a few things – that was a depressing moment!)
Hubby has income coming in now, but almost all of it is paying the setup costs: new computer, travel, phones, internet bills, city pad – it all adds up.
And at least this time I actually know what I’m doing. I know how to work through the budgets, I know how to cut costs, and I know how to stick to the harder decisions. One thing I am sure of – that debt is not going to be there long. Ill be paying money into it as soon and as often as I can.
I’m just not sure how to cut my coffee budget
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- I’m a credit card tart and proud of it!
- Why are Credit Cards still charging such high interest rates in New Zealand?
- Getting out of Credit Card Hell
Comments
4 Comments on Arghhh – having to pay interest on the credit card!
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heaps! on
Thu, 1st Jul 2010 1:38 am
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Julie on
Sat, 3rd Jul 2010 8:00 am
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Avalon on
Sat, 3rd Jul 2010 9:57 am
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Avalon on
Sat, 3rd Jul 2010 10:03 am
Everyone has an off month, and if you never did you might not see the value of financial freedom and having no debt to worry about. You did mention that your credit card bills are not too high and that you would be able to pay it off rather quickly, so there is not as much stress about having enough funds in the future to pay off debt.
Having reminders such as this is always a way of forcing you to work out and flex those budgeting muscles. And in a few months when you do regain that freedom back (which I have no doubt that you will) you will appreciate it so much more.
With all the bills and expenses that you have, the amount of debt that you are in seems futile. Good luck with all your future payments. And don’t forget that you are in a budget so that you may get more out of life, and that you may enjoy all the things that you care about (whether that is vacationing, electronics, etc.)
Cheers,
Wahid
Bummer! We use our floating mortgage for ad-hoc emergency dips rather than paying credit card interest. It doesn’t happen often but being self employed means that cash flow can be a bit up and down.
Thanks Heaps 
I really do feel a lot less stressed about this than I have in the past – mostly becuase I have learned how to deal with it. A plan will be organised, and we will have more frequent “Budget Days”, and I will have to watch the coffee spending.
Oh – and I should ahve added to my list of large expenses – “need to buy a new car” but thats a story im in the middle of telling
DE – thats what I would normally do – but paying off the card would have used the last of the balance, and left me nowhere to move. This way I can control how much gets paid off, and still leave some emergency fund behind. By the time the next payment comes through from Hubby’s contracting – I think there will be enough to clear this months CC balance, so hopefully the interest wont be too high.
I think the cashflow should settle down by then – it looks like Hubby is going to have contracts rolling one after the other with just a few days break – but its all new so we really wont know for a month or two more.
Im hoping to build up a kind of “emergency fund” in the business, which means Hubby can be paid a salary even if there a quiet month with contracts – but that will take a bit longer.
Ho Hum – the joys of self employment eh???
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