Award

My pal over at The Quest to be Financially Abundant listed my wee little blog in her list of 10 blogs that she loves. Thanks P! :)

I thought I would join along as it has felt like ages since I've posted. (No need to worry, just life getting busy on us.) So without any further ado, here is me playing along, for the fun of it.



10 Blogs that I love:

1. Gail Vaz-Oxlade. Just like I can't imagine starting my morning without a cuppa, I also can't imagine starting a day without a daily dose of Gail wisdom.
2. My Half Dozen Daily is the second blog I read daily. She's a SAHM who homeschools, and is currently trying to sell a chameleon so her teenaged daughter will come home, lol!
3. Over at When I get to Where I am Going , J udy is an avid knitter, who attends school, is paying off her debt, all while running a household of adult and teenaged kids, a husband, and her mother. Update: Judy has taken down her blog. I'll miss her posts. :(
4. Saving for Travel or SFT for short, keeps us up to date on her travel around the globe (I'm so jealous!) and is our gracious host for The Sealed Pot Challenge 2013. She hosts weekly updates on this for those who are interested.
5. Sharon at MidLifeMomMusings just recently moved to her own domain and Wordpress after deciding to commit to blogging. She always has something good to share.
6. The Warm Hands Network is a charity knitting blog that chronicles the yearly shipments of knitted good to some needy children right here in Canada. Not only do they take knitted items from a specific list, they also accept Canadian Tire money toward the purchase of boots for folks who live in an area where the temp can drop to -40 C (that's the same as -40 F).
7. $lay the Monster  is B-Kat's blog. She paid off her $148,000 mortgage  in ten years. Nowadays, she works diligently to keep out of the clutches of the Debt-Monster.
8. Jolie writes Shaking the Money Tree, and I love reading about her life.
9. I love to read alottastitches where Linda crochets one child sized blanket per week for children entering foster care. That on top of the knitting, sewing and other crochet projects she has going.
10. Sass writes about her life with Princess Penelope (her daughter) and her two pups, Thing 1 and Thing 2 over at Getting Us There. I love her pictures of her shopping trips.

7 Things about me:

1. I love to observe people. By nature, I'm kind of quiet, a little bit shy, and would much rather sit and watch people at a party or gathering than getting involved in conversations.
2. I am a member of the Bear Clan of the Oneida First Nation people. To me, this means that I have a strong connection to family (by birth or by choice) and will do most anything I can for them. It also makes me want to sleep a lot in the winter time.
3. My self-esteem has bipolar disorder, I think. I either have all the confidence in the world in my strengths and abilities, or I have the worst self-esteem in the world. Depends on the day, I guess.
4. I do have a strong personality with some very strong opinions on things. I find that people either really, really like me or they absolutely hate me. I have learned to live with this and not to worry about those who don't like me.
5. I'm learning a lot about myself through knitting. I used to think knitting was all about the end result, the item I made, but it's become more about me just doing the knitting and what occurs in my head while I'm doing so.
6. Some of my favourite music is fairly heavy. Like heavy metal heavy. I don't seem the type at all, lol.
7. I want to get a dog in the worst way, but until we are in an actual house and not an apartment, I won't do it. It wouldn't be fair to the dog.

Rules if you want to play.

1. post awards on blog
2. thank person that nominated you, that would be me, but your blog is thanks enough!
3. List 10 blogs you love
4. list 7 things about you
5. List these rules
6. tell people you nominated by posting on their blog

A Phone Call I Don't Want to Make

As you may remember a few short weeks ago, we were able to hit a financial milestone; we became consumer debt free. With things being what they were for bringing in an income, we decided to get a loan for a new vehicle. Some would definitely say this was incurring more consumer debt, and I suppose technically it is. However, my ability to earn an income is dependant on my vehicle of choice, so the decision to do so was a no-brainer for me.

I would love to say we have no debt at all, other than the vehicle, but I would be lying. On one of the side pages, Expected Debt Payoff Dates, you will see that we still have some lingering debt, none of which is considered 'consumer debt'; at least not by us.

First and foremost is the money owing to The Tax Man. I have been having difficulty for the last three years determining how much income tax I will owe because my income fluctuates from year to year. Part of the problem in the beginning was that I never gave any thought that I would owe money, therefore I never saved any to give to the Tax Man. Gosh was that dumb!

Fast forward to yesterday. I get a nice letter in the mail from CRA saying they have tried to contact me with regard to my outstanding balance. (For the record, I haven't had any contact with them No phone calls, no voicemail, just my regular statements in the mail.) It seems that the Tax Man has just about run out of patience, and wants me to make a deal with him to get my taxes paid. Just in time to add on the 2012 taxes owing too. Woo hoo, am I excited! (If you didn't catch the sarcasm there.....)

I know that when I do call them, they will want me to commit to a repayment plan that will have all outstanding debt paid off in 12 months. Truthfully, I have absolutely no idea how I'm going to manage adding an additional $1000 per month payment to my already difficult budget. I don't know how to even incorporate an additional $500 payment to our budget. I guess its time to go back to the basics, look over the budget, and trim, trim, trim. I'll have to put every extra dollar not already earmarked for something toward this debt. The alternative is rather scary, to say the least. Do you have any idea what CRA can do to someone when the demand their money? It sure ain't pretty, I'll tell you.

I will call them and see what we can figure out. Hopefully, they will take it easy on me until I can get this mess sorted out.

About the New Van

If you read my December mini-goals post, you'll have noticed that we bought a new van. Brand new. Less than 50 km on the odometer when we drove it off the lot. The 2013 model. Really, really new.

So here's the breakdown.

The total price of the van before financing, but after trade-in allowance, deposit and discounts, including taxes and assorted fees, was  $31,775.25.

It is financed at 4.9% per annum over a period of 96 months. The total cost to borrow is $6104.43.
That leaves the total amount to be paid as $37,880.64.

We had to sign that we would be making monthly payments of just under $400 ($394.59 to be exact) but really want to split that into bi-weekly payments of $200. We can do this, but have to wait until after the first monthly payment has been made.

The good news is, the loan agreement does not have any sort of penalty for paying the loan off early or for making any additional payments over the life of the loan.

With the current/original repayment schedule, it will be fully paid for in November of the year 2020. I'm so not OK with that.

If we put an extra $600 per year (that's $50 per month) toward the loan, we can have it paid off in November of 2019, which is 12 months early.

If we pay an extra $1200 per year (or $100 per month) toward the loan, we can have it paid off in February of 2019, which is 22 months early.

Hubby and I will be spending the next couple of weeks figuring out how and when we will be paying down the loan faster than the original schedule. I know that paying it bi-weekly will also pay it down faster, but I'm not sure how to calculate that. Can some one recommend an online calculator that can do that? Now that I've had a taste of being consumer debt-free, I want to be back there.

My reasoning for incurring new debt is because a van is necessary for producing an income for me. My justification (rightfully or wrongly) is that the difference in fuel costs alone should be enough to meet the new payments. I still have to find out what the difference in insurance costs will be.

After the end of this month, I will be setting aside $1000 (already budgeted for) as a buffer in the account that the payment will be coming out of. That way, if we are having a difficult month (or two) we have enough already set aside to meet our obligation. I cannot see this happening, but one never knows, right?

December Mini-Goals

Here are some things I'd like to accomplish financially to round out 2012.

December Mini-Goals, 2012

1. Add $279.50 to any one of my RRSP accounts. This will round up my contributions for the year to a full $1200.
2. Add $100 to the Emergency fund. Slow and steady wins the race.
3. Add $50 to the Emergency Essential Expenses Account.
4. Set aside $400 for the new van payment.
5. Pay $200 toward Income Tax owing.
6. Get $1000 RSP loan from bank.
7. Open TFSA account at CIBC for accelerating van payments and adding to house down payment fund.
8. Get credit report and score so that I can do yearly update.
9. Add DD2's account to my 'bill list' to do online transfers for her savings account.
10. Pay off $79 owing on credit card by due date, Dec. 20/12.

Notes:

1. Must keep adding to my RRSP. I have no company pension available to me when I will be ready to retire, so I have to do this for future me.
2. I can focus on the emergency Fund now with other things off my plate now.
3. This is our 'Life Backup Plan' if Hubby or I were to lose a steady source of income. It needs to have a lot more money in it.
4. Yes, we bought a new van. It's pretty, and beautiful, and shiny and new. And expensive.  And necessary. No regrets.
5. I will get this bill down every month and pay it off. I'm aiming for 2013 year end.
6. For credit history improvement purposes. I know I can borrow this amount and pay off within a year. :)
7. Already done. :)
8. In the works.
9. Need to do this so I can transfer her monthly allowance to her own account.
10. Start the new year off without any CC debt. :)

Do you have any goals for December?

We're getting there!

Today, we reached a milestone.

 

I came home from working, and Hubby asked me to see what he had written down. It was a list of the bills that he had paid.

Added to the list of bills I had paid off Friday.

 

We hugged and cried together.

 

 

 

 

 

 

 

 

We are CONSUMER DEBT FREE!!!!!!

 

 

 

 

Wow, does that feel good to say.

 

We're not done yet, but we are making progress.

In 2008, we were approximately $60,000 in debt.

Today, that total is approximately $15,000.

 

We've paid off two vehicle loans.

We've paid off three extremely large (for us) credit card balances.

We've paid off two store credit cards.

We pay our bills monthly, and on time.

We have money in our savings accounts.

We are setting some money aside for retirement and our children's post-secondary educations.

We are saving for a down payment for our forever home.

 

What a great day.

Thanks to all of you who are sharing in our success.

 

 

Coming Back and New Goals

I have missed the blogging community greatly. I felt like I was part of something, and then I was missing out on the friendship and sharing. But it had to be done. I had so much to say, but I was under wraps for awhile (self-imposed). I know me. I have trouble keeping my mouth shut, lol. But now, I can talk a little more freely about what has been happening.

The big news is that the company I work for has opened an office location right here in London. I'm still working part-time hours, and if all goes well, I should be out from under my probationary period in the next week or so. This will enable me to serve my client families more efficiently.

My goals for working with this company are to become a full-time employee, to gain status as a managing director, and eventually be able to 'buy-in' as silent ( Ha- who am I kidding? I'm never silent!) partner for this location.

In anticipation of major changes ahead in the next few years, I'm forging forward with personal and financial goals also.

Toward the beginning of the year, I opened yet another RRSP account at my bank. I put a small deposit in, and left it be. No further deposits to date. After thinking about it for a time, I realised that I could use this account as my 'Home Down payment Fund'. Using  the Home Buyers Plan, I can 'borrow' my own money from my RRSP, up to $25,000 toward the purchase of a home. Meanwhile, any deposits I make will count toward my RRSP contributions for that year, giving me a small break on the amount of tax I will owe.

Still with me this far? Good.

I will still have to 'pay that money back', but since it's mine, there won't be any outrageous interest fees associated with it (at least none that I am aware of). Just a repayment schedule that the government defines.

So off to the bank I went, and signed a paper to say that they could take $25 per pay out of my chequing and put into the 'House RRSP Fund'. I know it will take me a hundred years or so to save up a down payment at that rate, but it's a starting point, ya know?

Seeing as I've hit the big 4-0, I've been thinking lots and lots about where my life is headed, where I am right now, and where I want to be in the future. I want to have a home of our very own, however modest it may be. I want to have money in the bank should the day ever come that I want to semi-retire. (I'm pretty sure if I ever fully retire, it will be due to health reasons only.) I'm putting away money to help partially pay for my kids post-secondary educations. Our debt is almost gone...Can you say U-RAH to that!!!! We've finally gotten that consumer debt monster down to something manageable.

On the other side of the coin, it looks like we will be shopping for a newer vehicle this year. Well, we have been looking for awhile, and I have absolutely nothing saved up for a new van, but we will need to replace it I think. A van is vital to my employment, so hopefully we can get a good deal on a 1 or 2 year old used one. I'm hoping for a Dodge Grand Caravan with Stow-N-Go seating, but we will see. I will not be taking out another 7 year long, $28,000 car loan, that's for sure.

One of these days, I will get around to updating my reading list. I've read a ton of books over the last little while, which has certainly helped my keep my shopping habit under control. Speaking of shopping, I'm working at the couponing again to keep our grocery costs down with budget limits. I think this is the first May in the last 5 years that we have stuff in the pantry, cupboards and freezer and I don't feel like an unfit parent. I'm anticipating what we will need over a given period and stocking up (not extreme couponer style) some of the things that we regularly use when its on sale.
I'm feeling good about life these days. I hope it lasts.

What are you feeling good about today?

Month End Report

I didn't do this last month because I was in such a depression over our finances. It hasn't been, nor still is pretty, but we are slowly figuring it out. Here are the numbers.

TFSA/ EEE Account $41.71 (down $418.83)
Xmas Fund/Car Fund $50.02 (down $1553.70)
RRSP Savings Acct. $160.07 ( up $52.88)
Vacations Account $4.01 (down $44.64)
RRSP MF Acct. $1,757.93 (up $70.18)
RESP MF Acct. $1,529.47 (up $157.72)
Emergency Fund Account $24.51 (up $15.57)
House Fund $10.04 (up $5.01)
Biz Savings/5 Categories $50.90 (down $78.17)
Canada Savings Bonds $1,745.00 (up $140.00)
B's Savings Acct. $19.69 (down $39.41)
$5 Bill Laptop Fund $0 postponing this for now


Personal Loan: $6,120.50, up $465.00
MBNA Card (27.98%): $1,063.16, down $150.57
Capital One Card (19.8%): $2,809.19, down $138.96
CIBC Visa (19.99%): $346.70, new account
Overdraft 1: $621.32,down $27.26
Overdraft 2: $396.99, up $396.99
Tax Owing: $9,692.82, up $6,501.56 (correct as of Nov.21st)

Our current total Debt owing: $21,050.68

Total Debt owed January 1, 2011: $23,861.01
Difference since January 1, 2011: $ 2,810.33
Difference since last report: + $ 7,393.46

YIKES!

That is a huge difference in only 60 days, but we knew it was coming. The reality is, in the past I have not been setting money aside for tax obligations, and now it is catching up with me. I have incurred more debt by means of a new credit card (to start rebuilding my credit), using my overdraft again (I know, not good at all), and reborrowing from the 'personal loan'. All the work we have done to pay down and off our debt has come to a screaching halt. It looks as though all we have paid off in 11 months is a mere $2,800. But we are determined now more than ever, to see this thing through.

In the last 60 days, I have cut back on the household spending, cancelled services, stopped pre-authorised withdrawals for RRSP & RESP (until our cashflow can handle it again), and reduced the daycare expense. In the coming week, I will try to reduce our cellphone bill (again) and pledge to put something into each of the savings pots.

Our expenses for December far outweigh our income, so we will absolutely do our best to pay what we can and make a gameplan for 2012. We are considering RRSP catch up loans. I will talk more about that in an upcoming post.

So that's it in a nutshell. It isn't pretty, but it's all ours. ;)

Month End Report - September

Let's review:

September goals:

1. $75 for the pager; this will pay up the account until June 1/12 No
2. Continue making small-ish deposits to Emergency fund, EEE Account, House fund, Vacation fund, car fund, and laptop fund. Sort of.
3. Start 2 new funds for Business Equipment and Dental Work. No 
4. Our Insurances are coming due. Pay off #1 & #2. 1 of 2 paid
5. Catch up with all paperwork for business. o_O Halfway accomplished.

OK, so I didn't accomplish much this month or so it would seem. I did pay the contents insurance on our apartment for the year, and I did get the dreaded Income Tax filed (finally). I so dislike doing that. Of course, the result wasn't favourable, which is probably why I dislike doing it so much. Everything seems to be on hold until I can get a grip on the finances. Paying out an additional $600 per month for childcare is something that is hard to get used to. If I don't start getting more work soon, I may have to pull him from daycare.


Ok, on to the Month end report:


TFSA/ EEE Account $460.54 (up $23.70)
Xmas Fund/Car Fund $1603.72 (up $0.10)
RRSP Savings Acct. $107.19 ( up $25.08)
Vacations Account $48.65 (up $2.80)
RRSP MF Acct. $1,687.75 (down $20.84)
RESP MF Acct. $1371.75 (down $24.11)
Emergency Fund Account $8.94 (down $991.46)
House Fund $5.03 (down $114.99)
Biz Savings/5 Categories $129.07 (down $2291.07)
Canada Savings Bonds $1605.00 (up $140.00)
B's Savings Acct. $59.10 (down $184.41)
$5 Bill Laptop Fund $60 (up $35.00)




Personal Loan: $5655.50, down $160.00
MBNA Card (27.98%): $1,213.73, down $267.64
Capital One Card (19.8%): $2948.15, down $125.93
Overdraft 1: $648.58,down $260.86
Auto Loan: $ 0
Tax Owing: $3191.26, up $8.73 (correct as of Sept. 19th)


Our current total Debt owing: $13,657.22


Total Debt owed January 1, 2011: $23,861.01
Difference since January 1, 2011: $ 10,203.79
Difference since last month: $ 908.49


The auto loan was paid off, finally. I got my credit card balance under $3k, and hubby's credit card balance is approaching 3 digits instead of four.It is going to be a rough few months for us if I can't get more money coming in. Hopefully, October will be a good month income-wise.

Sometimes I Just HAVE To Run The Numbers

Capital One sent me my monthly statement. I received it in the mail today.
I looked it over and thought, I cannot wait until this will be paid off in 14 months!

Then I remembered, I've been paying more than the minimum payment, with a couple of lump sum amounts thrown in here and there. I wonder when this puppy will be gone.

I ran the numbers at a Credit Card Payment Calculator.

If I only pay the minimum amounts, it will take 4 years and 2 months to be rid of this thing. Not bloody likely!

If I continue to pay $150.00 per month, it will take 2 years and 1 month for it to disappear. Better, but still crappy.

If I pay $200 per month, it will be gone in 1 year and 6 months. Better still, but not quite on my timeline.

So I sat down with a pencil, paper and calculator and did the numbers and payment amounts that I can live with.

Barring any unforeseen complications, I should be able to beat this into submission in exactly 14 payments.

Not ahead of the schedule that I had already figured out, but still on my timeline. Maybe, just maybe, I can find an extra dollar or two to add to my payments along the way.

I'm still on track, and that is just fine with me. :)

P.S.: I tried to run the numbers on Hubby's single remaining credit card, the MBNA. I know what the annual interest rate is, but I cannot for the life of me figure out how they get the monthly interest amount. I read all the fine print on the front and back, but still can't get numbers that match. Any suggestions? For the record, his interest rate is is a ridiculous 27.98%. The balance was $1481.37 and the interest amount charged was $32.44. Can anyone help me please?

Double - Dipping

This article about double dip recession got me a thinkin'.

I want you to think back to 2008 - 2009, and what your life was like then. Think about your debt situation, your assets, everything that happened to you when the recession hit.

Now think about where you are financially and emotionally today. Are you better off now than you were back then? Did you get your consumer debt paid down or off? Have you set aside money for your Emergency Fund in case of a job loss?

The article states that :
Meanwhile, the Canadian household debt-to-income ratio has since risen to a record of 150 per cent as consumers take on more debt and see their incomes squeezed.

That means Canadians owe $1.50 to banks, credit card companies and other lenders for every $1 they earn.

This is absolutely frightening to me. I took a look at our own personal numbers, and I'm pleased to report that we do not fit that statistic. Which likely means that some other couple who fit our demographic has twice that amount of consumer debt.

We were all warned in the last recession to get our financial houses in order to protect ourselves. For the most part, I think we have accomplished that here in our own family. We still have debt that we are paying down, but not at the crushing level it was in 2009. We took the steps necessary to make things better so we could breathe a bit easier. We've paid off about $50,000 of debt since January of 2009, and have built up some assets. We started saving for retirement and our kids education.

By no means are we perfect examples of a family who has completely done the right thing, but I know we are definitely on the right track. Some of us will take longer than others to reach the goal of Debt Free. But we do alright.

If another recession hits soon, I still think we can handle it and beat this monster debt into submission. Others will not have had the foresight to fix the broken pieces of their finances.

How about you? If we are faced with a second recession so soon after the first, will you be able to weather the storms brewing? Have you done what you could to protect yourselves from financial disaster?

Month End Report, August 2011

TFSA/ EEE Account $436.84 (up $100)
Xmas Fund/Car Fund $1603.62 (up $50)
RRSP Savings Acct. $82.11 ( up $25)
Vacations Account $45.85 (up $25)
RRSP MF Acct. $1,708.59 (down $50.33)
RESP MF Acct. $1347.64 (down $16.46)
Emergency Fund Account $1000.40 (up $347.69)
House Fund $120.02 (up $25.01)
Biz Savings/5 Categories $2420.14 (down $5321.94)
Canada Savings Bonds $1465.00 (up $140.00)
B's Savings Acct. $243.51 (up $18.50)
$5 Bill Laptop Fund $25.00 (up $25) New Fund



Personal Loan: $5815.50, down $80.00
MBNA Card (27.98%): $1,481.37, down $166.38
Capital One Card (19.8%): $3074.08, down $141.00
Overdraft 1: $909.44, up $463.04
Auto Loan: $ 102.79, down  $202.47
Tax Owing: $3182.53, down $408.88


Our current total Debt owing: $14,565.71


Total Debt owed January 1, 2011: $23,861.01
Difference since January 1, 2011: $  9,295.30
Difference since last month: $ 535.69

-----------------------------------------------------------------------------------------------------
Notes:
So this is where the money is at for the end of the month. I didn't wait until the 31st for the measly interest payments on our savings accounts. I'll just add it all up next month.

Good things:
~ Still adding to the EEE account, and seeing all the same numbers add up over time for the savings/planned spending accounts
~ Having $1000 in the Emergency Fund
~ Starting the Laptop Fund with $5 Bills

The Bad:
~ Mutual Funds accounts going down, despite still adding money to them
~ Chipping away at Personal Loan, CC's, and Tax Amount owing

The Ugly:
~ Despite my best efforts, I cannot get Hubby to NOT use his overdraft...suggestions anyone?
~ Using money from Business Savings Account that had little to do with business; probably to the tune of $1500
~ Our Rent Account has been essentially depleted now, and will have to start paying rent out of cash flow starting in October (exactly what I didn't want to have happen)

Our Net Worth is back in the negative, which is no surprise. Insurances have to be paid by the end of September again, and we will be scrambling to figure it all out. Dear God, what have we done??

Oh yeah....overspent.

(Please be nice with the comments. I'm already beating myself up huge over this month's report.)

But What Can I Do Today To Improve My Situation????

Back a couple of years ago, when we started out on our Journey to Debt Free Forever, I started searching the Internet on ways and means to reduce our expenditures and/or increase our income. Not realising how much hard work was involved, I was looking for a quick fix to make that "OMG, We're going bankrupt!" feeling go away. I never did find it.

Some folks who are just starting out on their journey may be asking, 'What can I do today...right now?'
If you are looking for one big thing, with a lasting impact, you may be thinking about this all wrong.

In my experience, it's lots of little things, small savings, all added together that make a difference. You also have to have a shift in the way you think about money, and your things.

~ Learn to make do, live with less and in some instances, do without.
~ Question every expenditure and learn the difference between 'needs' and 'wants'.
~ Realise that your daily life and spending is mostly habitual
~ You need to figure out where your money has been going in order to develop a plan of attack.
~ Know that from the outset, that it is a long road, a lot of hard work, and almost nothing will happen overnight.

So my question to you, dear readers, is what advice would you give to someone who is just starting out on their Journey to Debt Free Forever?

Month End Report - July 2011

TFSA/ EEE Account $336.84 (up $50.60)
Xmas Fund $1553.62 (down $96.40)
RRSP Savings Acct. $57.11 ( up $25.04)
Vacations Account $20.85 (down $729.21)
RRSP MF Acct. $1,758.92 (down $7.87)
RESP MF Acct. $1364.10 (up $176.17)
Emergency Fund Acct. $652.71 (up $361.61)
House Fund $95.01 (up $32.01)
Biz Savings/5 Categories $7,742.08 (down $3872.93)
Canada Savings Bonds $1325.00 (up $140.00)
B's Savings Acct. $225.01 (up $70.01)


HBC Card (28.8%): Overpaid, credit of $31.00
Personal Loan: $5895.50, down $160.00
MBNA Card (27.98%): $1,647.75, down $157.03
Capital One Card (19.8%): $3215.08, down $54.46
Overdraft 1: $446.40, up $69.41
Auto Loan: $ 305.26, down $251.10
Tax Owing: $3591.41, down $470.35


Our current total Debt owing: $15,101.40


Total Debt owed January 1, 2011: $23,861.01
Difference since January 1, 2011:   $ 8,759.61
Difference since last month: $ 1,023.53

Our Net Worth this month is only a mere $29.85, but we could effectively be out of debt if we were to deplete all of our savings, which of course we are not willing to do.

The vacations account is down so much, because I have taken the money out of the account for our trip to the cottage. We will need to buy some food and drinks, so that will come from this money. We also have to pay for the cottage rental in cash the day we arrive, so I want to be sure I have the cash available.

The business account took a couple of big hits with paying off the amount owing for Small Claims Court settlement, as well as some spending. However, we are back on track for putting money back into this account to take care of future obligations.

The Xmas/Car fund account looks a little weird. I put money in to start saving for the lawyer retainer, then changed my mind about how I would deal with it. So I took the money back out. Then I put money in to start saving up for a newer vehicle. It's going to take some time to save up enough, but at least we have started.

As for the credit cards...well, at least we haven't used them. With the postal strike, and the weird cycle that both cards are on, it looks like we didn't make much headway even though we paid $200 on each card last month. Interest charges are another culprit, I'm sure.

I should probably add another column to our debt, even though it's only a debt to ourselves. We 'borrowed' $4000 from our rent account to pay the lawyer's retainer fee for my divorce application. But that will come after that emergency Fund Account gets back up to $1000. We're almost there.

How did you do with your finances this month? Is everything going according to plan?

June Month End Report, Part 2

I have so much to say about this month end report, I decided to do it in a separate post.

First....d'you see the difference in our debt from last month?? Almost $8,000!! Now, this is not going to be a monthly occurrence, or anything like that. But it was a good month! I like to think of it as my blizzard month, instead of just a few snowflakes, lol.

Can I get a cheer please? We paid off three, count 'em, three, debts since last report, and one small claims court settlement. All to the tune of about $9,000.00. Holy smokes! I can tell you that certainly has eased the pressure off our cash flow and allowed us to juggle some payments so that we can get our snowball effect started.

$18,994.22 vs. $16,124.93

This month end report also marks an important milestone for us with our finances. As of this month, we have more money in assets (various savings and planned spending accounts) than we have debt. Technically, we could use all of our available money and pay this debt off once and for all.  Of course that would leave us in a very precarious position, because we would have nothing to fall back on to pay for the upcoming bills that will be due in a few months time. We could probably do it, but I'm just not comfortable with it. So for now, it's enough just to know that we could do it.

On my Financial Goals Page, we have made progress on nearly every single line. All that is left to start working on are the 'wish list' type items. A buffer in the bank account and vacations. Items that we will start working on once we have made significant progress on the Emergency Fund and the EEE Account. Our Debts Paid In Full page has been filling up which makes us very happy!

And how are we going to celebrate our successes from this past month? We're going to a house party for Canada Day and buying a barbecue. Grocery shopping is going to be fun this month!

As always, your comments are appreciated.

Budgeting Day

I finally got paid for the work I did last month on one of my side gigs. Pay total: $718.60. Total hours worked : about 18 hours.

Holy smokes! That's an average of about $39 per hour. Considering there are no source deductions as it is considered trade work, I have to take out money for tax liabilities and my RRSP (which I consider my pension).

Here's my breakdown of what I'm doing with this money:

$140.00 to RRSP
$15.00 to EEE Acct.
$35.00 to Lawyer Savings
$130.00 to Business Savings, for Tax Liability
$200.00 to Shortage in Rent Acct.
$50.00 to Debt Repayment (Credit Card)
$50 cash for Transportation
$95 cash for Life (groceries, pull-ups, etc.)
$3.16 remaining in chequing account
----------------------------------------------------
$718.60 Total

This is my newest method of budgeting. I don't have to factor in next month's rent, because the money is already in the savings account for it. I can focus more on things that we want to achieve, like Debt Acceleration and Savings. If I need money that isn't already in the budget, I can 'borrow' from the rent account ( like I will be doing for the Lawyer retainer funds) and repay with every pay cheque I get. I can set a budgeted amount in cash for transportation and groceries, personal care, etc. and when the cash is gone, I stop. No pulling money from bank accounts with debit cards, as that money is already earmarked for something. I save for Tax liabilities as I go along, and by depositing to RRSP, I'm hopefully reducing that tax liability somewhat while saving for future me.

I figure I'm forgetting some things, but they will get implemented into next month's budget as they crop up.

Tell me what you think of this method of budgeting.

Edit: I also managed a $20 parking ticket yesterday during the celebrations. Considering the cost to park downtown, I think it's actually cheaper than parking under City Hall for 6 hours.

Debt Reduction Program - Part 1

If you Google the words "debt reduction", you're going to get back about 11 million results.

That tells me that: 1) There are lots of people writing about debt reduction  and
2) There are lots of people struggling with their debt.

Part of becoming a financially healthy family is to consider a debt reduction program, or just getting your debt paid down.

You don't need fancy spreadsheets, or pay a company to make a debt reduction plan. All you really need is some paper, a pencil and eraser, a calculator and some motivation to put your plan together.

First of all, you need to know where you are. Be honest with yourself. Get all your statements together, and write down all that you owe to companies or people. It all counts. Steel yourself, because the number may be much larger than you expected. Be sure to write down the minimum payments that are due, and the rate of interest you are paying for each debt.

On another sheet, write down all the money that is coming in, from all sources. Include your pay cheques, your child tax credit, Gst/Hst rebates from the government, everything. Adding this all up will let you know what you have to work with.

On a third sheet, you need to write down what you pay out for rent or mortgage, utilities, cable, cellphone bill, gas and oil changes for your car, insurances, and everything else you can think of. Don't forget to include occasional expenses like programs and expenditures for your kids school or extracurricular activities. This is also where you write down gift expenses for birthdays and the amount you typically spend for Christmas. Include savings amounts for retirement, post-secondary education and your emergency fund as well.

Start out with an annual number. If your annual after tax income is not enough to meet your obligations, you're in trouble financially speaking.

When we did this exercise, we were shocked at the amount of money we owed. Especially to credit card companies. The worst part was, we couldn't even remember what we 'spent' all that money on!

If you haven't already done this exercise, I urge you to do it this week. Make a commitment to yourself that you will set aside an amount of time every day to get your financial house back in order.

You'll be glad you did.