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Spending habits that broke the bank
By Tammy Barton

Budgeting to kick bad spending habitsNicole, pictured here, works as an advertising sales executive in Melbourne. She’s an effervescent 27 year old who loves her job and is evidently very good at it. But despite having a good income Nicole found herself just scraping by with nearly $40,000 in credit card debt and spending habits that were pulling her under. But just one year after joining MyBudget she is now debt-free and saving for a house. Nicole’s secret? She made massive changes to her lifestyle. Nicole’s situation illustrates how fast a financial situation can be turned around when an individual becomes doggedly determined to make it happen. Nicole has generously agreed to share her story with us.

“I’ve probably always had a spending problem,” begins Nicole, “but the real troubles started when my ex-husband and I bought a house. I was 22 years old and our home loan came with a credit card with a $25,000 limit—a limit we didn’t ask for. I ran up the card to its limit and then refinanced the house to pay it off. Unfortunately, I did that twice. When we got divorced we sold the house, but instead of paying off my share of the credit card, I ran it up to the limit again by using it to furnish my apartment.”

Nicole tried reducing her credit card repayments by transferring half of her debt to a new card which was offering zero interest for six months. The tactic backfired—Nicole made only the minimum payments and charged her original card back up to its limit. She found herself with $37,500 in credit card debt and the bank chasing her.

“The bank helped by reducing my interest rate, but I kept living the high life. I had no savings and I was living week-to-week. I would think nothing of buying a dress that cost $1,000 and, if I couldn’t decide between the red and the blue one, I’d buy them both. Shopping and partying were my favourite pastimes.”

“The thing is,” continues Nicole, “I’m a super-organised person. I had made 50 or more spreadsheets of budgets, but I would get to the end of the week and wonder where my money had gone. It would just disappear. It was horrible. I was constantly stretching and juggling, and I was really embarrassed. I didn’t want people to know what was happening. I knew my mum would be disappointed because she’d always taught us to pay our debts every month. It was so stressful.”

When Nicole joined MyBudget we suggested that she needed to share her situation with her family and close friends so they would understand what she was going through. This gave Nicole the support she needed to make major changes to her life. By moving in with her mum, Nicole was able to give up her lease on a luxury apartment in the city. This move alone reduced her expenses by $1,600 a month. She cut up her credit cards, started taking her lunch to work and eating dinner at home. She toned down her going out habits and committed all of her commission cheques to reducing her debt and building up her savings. She stopped trying to keep up appearances with her work peers and put herself on a tight living allowance that she drew out of the bank in cash once a week.

“Once I started with MyBudget I finally knew where every penny was going and I learnt the value of money,” Nicole tells me. “Before MyBudget, I used to think that $1,000 was not a lot of money. I now look at a price tag and think about all the other things I can do with that money.” Most importantly, Nicole reformed her shopping habits. “I don’t go to the shops any more,” she explains. “I’m not a window shopper. I don’t want to look at things I can’t have. It doesn’t completely replace the thrill I used to get from shopping, but these days I get excited about saving for a house.”

“MyBudget has been really great,” Nicole continues. “The staff is amazing. I’ve been known to ask so many questions that I’ve kept them on the phone for an hour just shuffling payments and adjusting things, but they really don’t mind. They’re always helpful. I would never have thought that twelve months ago I would be in this position.”

MyBudget is only a part of Nicole’s success story. Nicole’s courage in confronting her spending habits and embracing major lifestyle changes demonstrate what’s possible when someone sets their mind to achieving a life that’s radically different from their existing one. Thank you for sharing your story, Nicole. Your situation proves that changes, big and small, quickly add up and turn things around.

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