I’ve been looking over my finances and have decided to start paying off my HELP debt. A HELP debt for those of you playing at home is a student loan that is given to you by the government so you can attend university. In Australia you pay it back when you start earning a certain amount – at the moment the threshold is around $54,000. When I finished studying in 2012 my debt was at around $32,000 – this covered a bachelor degree, a graduate certificate and 2 subjects from another post graduate course I withdrew from. It also included all the interest I’d accumulate whilst studying.
I don’t earn enough to make mandatory payments but I can make voluntary repayments if I want and I’ve decided I’m going to. I finished paying my braces off last month so I have an extra $250 in each pay that needs to be allocated somewhere else. I already make extra repayments into the mortgage, my car is paid off and we re-financed in order to do our renovations (yay) which will be starting in April (hopefully). I did think about saving it for a vacay but we can usually find other ways to pay for holidays.
Due to interest my loan as of today is almost $41,000 which is a really scary thought. That’s a lot of money!
I worked out that if I pay $250 a month I’ll have the loan paid off in about 13.5 years. Unfortunately that doesn’t take into account the interest I’ll earn whilst I’m paying it off so looks like I’ll easily be 43+ by the time I finish making repayments. I’m sure once the wedding is over next year I can put more money into paying it off. But I think $3,000 per year is a good start anyway.
I’m also looking into growing my emergency fund. Right now it’s sitting at about $1,000 which covers one minor emergency but not really anything else. My partner and I do have about $30,000 that we can redraw from the mortgage if necessary but I’d like to keep that money in there if I can.
I really do wish I had started thinking about finances earlier. It kills me to think how much I could have saved whilst I was working and living at home with very minor expenses. It absolutely kills me! But its never too late to really start thinking about finances.
What is your focus when it comes to money?