Putting the Plan Into Action

Now that I've had some time to internalise everything that has happened last week, I'm ready to start putting our Action Plan into place. Hubby and I have talked and talked about what we can do to keep things on an even keel around here until I find somthing else to bring in an income. The way I figure it, we will have a reduced income until February 28th, and then after that, who knows? There is so much that is unknown and to tell you the truth, I'm a little bit scared. But now is the time to really prioritise what is important to us and what is just 'nice to have'. Even when we had gobs and gobs of debt, I wasn't as willing to let go of things as I am now. Knowing that there is *some* money in the bank to see us through is certainly helping me to sleep at night.

Here's a list of actions I'll be taking to reduce our expenditures:

• go to the bank and temporarily stop RRSP, RESP and House downpayment contributions.
• calling cellphone provider and reducing plans to something more affordable.
• make a freezer and cupboard inventory; we need to eat what we have to reduce grocery costs.
• inventory items that can be sold to list on Kijijii and other sites.
• list items on Kijijii; have already started with two.

As for looking for other work, I have an appointment on Wednesday to get some help from an employment counsellor. Also, I had an unexpected tip on a possible job lead kind of within my field, but not quite. However, I will be in contact with them to see if they are interested in hiring me. Fingers crossed.

I'll be going over my invoicing tomorrow to see how much money that I am owed from various companies, as well as making sure that I pay any outstanding invoices from my business. I'd like to get as close to a clean slate as I can, before we start feeling the pinch of living on one income.

Murphy's Holiday Visit

Christmas is over, and we are looking forward to 2013 with hope and enthusiasm. Part of the reason we are so hopeful is because we had an unexpected and unwelcome guest for Christmas: Murphy!

Christmas morning started a little earlier than I had planned. Cub was wide awake and raring to go at 5 a.m. We started the coffee, let Cub and DD2 open their stockings while we tried to wake up. At this point I had only been asleep for a couple of hours, so it was really difficult for me to get into the spirit. We opened our gifts, gave Cub something to eat and drink to tide him over, then headed back to bed for a little nap before we headed to Grandma's for breakfast.

Everything was going according to plan, and were packing all the gifts into the van when Murphy reared his ugly little head. An open rear van lift gate, and an overhang in the underground parking are not a good combination. Hubby was trying to move the van forward a couple of feet with the back open, and the rear wiper just grazed the overhang. This of course caused the rear window to shatter into about 3 million pieces. With nothing open Christmas Day, there is no way to repair it immediately. We pile us and our stuff into the car and arrive at Grandma's late.

Because the window couldn't be replaced until the 27th, I had to turn away about $500 worth of work and pay the $325 bill for the repair. :(

I get it replaced and all is well with the world again. Or so I think. I start working again and feel relieved to have that over with. Fast forward to December 29th. A very busy work day for me. Hubby is helping me get some stuff done so we can spend time at home relaxing.

But Murphy was hiding in the back of my van, just waiting to pounce! With a very large and important package in the van, we arrive to the place of delivery. Turn van off, unlock doors, get out to remove package only to find the back lift gate seized shut. Not good. Not good at all.

With difficulty, we remove delivery package, and head to Dodge dealership to get vehicle fixed. (By the way, we already have an appointment on Dec.31st to have a piece at the rear of the van replaced where a decal has a bubble.) They are extremely busy. We wait for an hour to be told there is nothing they can do for us right away. They have to order a part. I ask for a loaner. I'm told that because the van still technically works, Chrysler will not authorize a loaner vehicle. I lose it.

After some tears and an explanation of why our work vehicle needs to have a working lift gate, they provide us with a loaner. It takes two hours of our day, but we're finally back to work.

We're on call January 1st, so can someone else please take Murphy off our hands? Holidays are stressful enough without his help. Thank goodness there was enough in our savings to cover the additional expenses.

December Goals Update

1. Add $279.50 to any one of my RRSP accounts. This will round up my contributions for the year to a full $1200. $195 / $279.50.
2. Add $100 to the Emergency fund. Slow and steady wins the race. Done.
3. Add $50 to the Emergency Essential Expenses Account. $5 added.
4. Set aside $400 for the new van payment.
5. Pay $200 toward Income Tax owing. $50 paid.
6. Get $1000 RSP loan from bank. Applied, I think.?
7. Open TFSA account at CIBC for accelerating van payments and adding to house down payment fund. Done.
8. Get credit report and score so that I can do yearly update. Bank is getting this for me.
9. Add DD2's account to my 'bill list' to do online transfers for her savings account. Done.
10. Pay off $79  $231.76 owing on credit card by due date, Dec. 20/12. Paid $50.

I met with my rep at the bank this week to apply for the RRSP loan. I could just make a $1000 contribution, but I want to do it as a loan for a couple of reasons; the bank has a promotion going on that if you have three of the qualifing products, you get a reduction in bank fees across all your accounts - the only one I don't have already is a mortgage or loan, so I opted for the loan. Tax reduction is self-explanatory, and saving for retirement/home down payment are bonuses. :)

I also opened a TFSA account with CIBC so that I could set money aside as a buffer for the van payments. However, using my online banking, I am not easily able to transfer money to this account, so I will have to check to see how I am able to do that.

I'm only $84.50 away from my yearly RRSP contribution goal that I set for myself so long ago. I want to hit this goal in the worst way!

I'm adding to many of our savings accounts now while I am able to. There is already $100 in the account for Christmas 2013. The emergency fund has been added to. I've put money in both of the kids bank accounts. Money is set aside for upcoming auto maintenance and licencing. Vacation account has a little something to get that one started. I've increased the monthly contribution amount for the kids RESPs.

I also paid some bills before I went shopping. Oh shopping, how I love thee. But that's a whole post for a different day.

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?

Murphy Strikes Again!

I knew that our van wasn't feeling so well. She'd had a few hiccups over the last little while, so I knew that I had to take care of some things sooner rather than later. While working yesterday, she suddenly and unexpectedly stopped working altogether. Darn you Murphy! This was going to be the month of putting away extra savings toward our goals, not shelling out every bit of money I have on repairs and a rental!

I have no idea what's wrong with the van. It just won't start. Insert key, turn, and hear awful clicking sound. I'm no expert, but I'm fairly certain it's not a battery thing. Nothing that simple ever happens. At least not to me. Call a tow truck. $60 - something just to tow the thing to the mechanic who won't be in until Tuesday morning. Give me strength.

I call the car rental place. I need a mini van, and I need it now. Preferably a Dodge with Stow 'N' Go seating. All the locations are already closed ( it was Sunday afternoon already) and only one is opening on the holiday Monday. I book a rental (it better be the one I want) for three days. Cross my fingers that it long enough to repair my poor van. The agent tells me I will have to give a $750 deposit and bring in my insurance paperwork, not just my pink slip, otherwise I'll be paying an additional 25% for insurance. I can already hear my bank card crying.

We beg a ride from our MIL back to our place to get our working vehicle, drive to home of colleague who has allowed us to borrow his van for a couple of hours. Take borrowed van to do work, and then drive it back. I'm already 4 hours behind schedule now. Please pass the Advil.

Needing to start the next part of work, I realise I need to eat something or I'm going to be sick. The burgers we had at this little pub on Richmond Street was the highlight of my day. They were delicious!

I finished up working somewhere around 10 o'clock last night. But there is more to be done over the next couple of days, and I have to go pick up a rental.

Towing costs, rental vehicle costs, and likely a hefty repair bill. Thanks Murphy. Just thanks.

Who wants him next?

Where I'm At Today

Didja see the new progress bars I added to the side? ------->

Trying to stay focused on several things at once is difficult, and my wee little brain gets all swarmed with things I'm trying to remember. Thank goodness I write mostly everything down and/or put them on my blog so I can see them every day.

So this is where I'm at today with some goals:

• 10 pound challenge: I've lost 1 pound. I have eliminated almost all salt from my diet, increased fruit, veggie & water intake. But I haven't exercised. Let's see if the 1 pound stays lost or it finds it's way back home to my rear end.
• Emergency Fund: with only 39 days to go, I'm unsure if I'll make it to the $500. With $63.00, I'm 12.6% of the way there. Money will find it's way into this account if it kills me. :)
• My sealed pot is collecting little bits of change here & there. I'm actually hoping to fill it.
• I did start an Etsy shop, but am procrastinating putting anything in it. Must. Do. Soon.
• I printed out my Big Book, and have started filling it out. Lots of info to compile still.

My biggest stress right now is about our housing situation.I'm not comfortable sharing the whole situation, but suffice it to say we could be moving at the end of next month. We could have some very rocky times ahead of us.

My girl has a PD day today, so I'm bringing her with me and Cub to playgroup this morning. We have a bunch of running around to do after, so it should be an exciting day.

How are you doing with your monthly goals and challenges?

Little Ways To Pad Your Emergency Fund

An Emergency Fund is an essential part of a solid financial foundation. It is a cash cushion that you have accumulated over time. It should be easy to access, and to be used only for an emergency.

Some so-called experts will say that you should have 6 months worth of salary in your Emergency fund. Others say that having only $500 to $1000 set aside is a good start. You have to decide what amount is right for you and your family. I am rebuilding my Emergency Fund after having to use it this past fall. I’m starting small, with a goal of $500 by the end of February.

Here are some Microsavings tactics to help pad your Emergency Fund:

·       Automated transfer $25 from your paycheque. You have to start somewhere.

·       At the beginning or end of the week, transfer the last three digits of your bank balance over to your E-fund. (If your balance is $542.68, transfer the $2.68.)

·       Save your pocket change. 50 cents a day can add up over a couple of months.

·       Sell something and put the proceeds in your fund. Kijiji is my personal favourite to sell unwanted items.

·       Add government cheques like GST/HST or your income tax refund.

·       Add amounts equal to your ‘spending – savings’. If you buy groceries and reduce your out of pocket expense by using $7.50 worth of coupons, transfer that amount to your Emergency when you get home from the store. Same goes for your loyalty rewards points accounts.

·       Have a No Spend/Low Spend month to reduce your variable expenses and deposit the difference.

·       Round up your budget categories. If you spend $146.50 on cable/internet, budget $150. At month’s end, sweep remaining funds into your emergency fund account.

·       Replace one bad habit with a good one: If you smoke ( or whatever your vice is), smoke one less cigarette a day, and put $0.30 into your change jar. At month’s end, deposit into your E-fund.

·       Make something you can sell; sewing, knitting, woodworking, and card making are all viable types of side income for boosting your e-fund.

·       Do some babysitting, pet-sitting, house sitting, snow shovelling, attic cleaning or whatever to earn a little extra funds to pad your account.

·       Reduce your consumption of meat for a week or a month. Whatever you would have spent, add to your E-fund.

·       Skip a take-out meal or two (or a month). Save your money instead.

To have a fully funded emergency fund, you have to start somewhere. I am a firm believer that having an Emergency fund is part of a healthy financial plan. I won’t tell you how many months worth of expenses you should have, only that you should have an Emergency Fund. So should we.

Here’s to starting over, in a new year, with renewed hope, and renewed focus. 51 days to $500.

Are You Talking To Me?

" You cannot save $10,000 until you have $1,000. You cannot save $1,000 until you save $100. You cannot save $100 until you save $10. Getting from where you are now to where you want to be requires that you do something differently. Do you have the guts to change?" - Gail Vaz - Oxlade

I was flipping through Debt Free Forever to find the answer to a question posed by Sam. In just reading a couple of paragraphs, I was amazed at the amount of inspiration I was getting by reading just a wee little bit. I always hear her voice in my head when I'm reading something she has written, so that part didn't surprise me.

What did surprise me was that it felt like an epiphany. Gail was reaching through the internet, via Sam's question, that made me grab her book so she could speak directly to me.

And I hear you loud and clear, Gail!

In two days time, I will begin a new chapter of my Life Journey, that starts with some of my most ambitious savings and financials goals of my life. (See page entitled 2012 financial Goals.) To truly focus on putting together all the skills I have acquired in the past couple of years, and to focus on attaining my goals. To have some money to retire on one day. To have some money to give my kids when they venture off to college. To find some balance in my life, financial and otherwise.

Here's to the first $1 of the first $10 of the first $100 of the second $1,000 of my first $10,000. Here's to taking control of my money and my life.

My Focus in 2012: Living Within Our Means

Gail posted a great article found here that can help you determine if you are living within your means. Some of her benchmarks are as follows:

• Are you saving 10% of your net income?
• Are the balances on your credit cards or lines of credit rising?
• Are you missing payments on bills?
• Are you taking cash advances on your credit cards?

I know what my answers are to these questions, and it ain't pretty. We still have two cancelled credit cards with balances that we are paying down. Then there is the enormous tax bill I owe to Revenue Canada. That pesky overdraft has got to stop also.

For the most part, I'd like to think that we live within our means, but when gauged by someone else's measuring stick, maybe not so much. So I think what I need to do is to define 'Living Within Our Means' for our family. You know, the personal in personal finance.

I've set some financial goals for 2012. I would love to be completely out of debt in the next 12 months, but that is highly unlikely. I'd love to have saved up enough to buy a newer used vehicle, and to take my family to Disney World next winter, but I'm pretty sure that's out of reach too. Maybe if I can just make through to next Christmas with having put some money in my RRSP and being able to keep current on our bills, that will have made me feel like I've accomplished something.

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, 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

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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.)

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?

I'm Stoked!!

Emergency Fund Daily Savings   

July 25: ??? / $800

As you know, I made my goal for the month of July to be all about the Emergency Fund. I talked about it the other day, saying that I would nickel & dime it to $1000 if I had to.
Here's how it's panning out so far.

I took the time to sit and roll the coins that were sitting in our 'penny jar' and to count them all. There was even a $5 bill stuffed in there. There was $74.00 sitting there, just waiting to go to the bank.

Add that to the $50 from my pay that also needs to go in the bank, it now becomes $ 124.00!

I also had a cheque in my wallet from someone that I had loaned money to. Add $42.50 to the count, and now the deposit being made tomorrow is $166.50.

For this week, I had decided to transfer over $35 for the week, instead of doing $5 every day. That turns my deposits for the week into $201.50.

So, as of today, there is $476.21 in the Emergency fund. Add tomorrow's deposit of $166.50 and you get:



Emergency Fund Daily Savings = $642.71

That leaves only $357.29 left to get the account to $1000.   

I think I can, I think I can, I think I can!

I'm so excited I could just burst. I want to have that $1000 in the bank by the time we leave for the cottage on August 6th. Hubby & I have agreed that if we can have it all in the bank by then, we treating ourselves to pedicures and 1 Tim Horton's coffee each before we hit the beach!

July Goals

Last month I only made two goals, to contact Bell mobility about lowering my cellphone account and to have $1000 in our Emergency fund.

I did contact Bell Mobility, and we don't qualify for new phones for a couple of months yet, so I won't be doing anything just yet. I'll renew the contract for a lower monthly amount when we can get new phones. Except that they don't have any phones that I like. They are all touch screen thingies. I do not want to move forward with the times with my cellphone.

As for the E-Fund, I fail. We did put money in it, to the tune of about $200, but not near having the $1000 baby emergency fund.

So my goal for July will be to snowflake/blizzard the heck out of the E-Fund!

One goal, one focus, one purpose. To get $800 into the account dedicated for emergencies.

I have an envelope in my purse that is marked for these snowflakes. I am going to aim to put $5 per day into this envelope, or transfer $5 per day via Internet banking. If I can only do $5 per day, it will take 160 days to hit the $1000 mark, or about 5 months. I'm going to do it this way because I've noticed if I aim for big numbers, I lose focus. If I aim for smaller number over a period of time, I get impatient, and end up doing more than what I'm aiming for.

$5 a day. We can do that.

July 2nd: $5/$800

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.

How to Build Your Emergency Fund

If you are a fan of Gail Vaz-Oxlade or a follower of Dave Ramsey, you are no doubt aware that the first important step toward having a balanced, healthy financial situation is to have an Emergency Fund.

The first step in getting that E-Fund is to define what they Emergency Fund will cover, what a 'true' emergency is to you. For our family, a job loss would qualify. A large insurance deductible for a collision is another for us. A $200 pair of pumps is not. Get the idea?

Due to the unique nature of our own personal and business finances in our household, we also had to separate and define between an Emergency Fund and an Essential Emergency Expense Account. No difference to you? No worries then. But for our family  the E-Fund is for things that cannot be planned for, and completely unexpected. Our EEE Account is for the specific case of loss of income, due to job loss or a period of continual low income. It's our own built in safety net.

If you are striving to save a DR $1000 Baby Emergency Fund, or several months worth of household expenses, you have to set aside money out of your budget, from one area or another.

How do you build an E-Fund?
One bit at a time.

In order to get $1000, you must first have $500. In order to get $500, you must first have $100. To get to $100, you must first have $20. And in order to do that, you must not spend and save the first dollar. That first dollar requires a change in your thinking. You have to acknowledge that you are not in the best place you could be financially, and that to get where you want to be, you must do things differently.

Ideas to build your E-Fund:

• cut back a little from each of your variable expense categories; even a $5 reduction in groceries per week could mean $20 to start out
• save your pocket change: a few coins could add up to a sum of $10-$20 over one month
• call your cable and/or telephone provider and see if you can temporarily reduce your monthly bill
• OR cancel your cable altogether for 3-6 months; you'll save on the expense and it will encourage you to find alternatively inexpensive forms of entertainment
• have a yard/garage sale: selling unneeded stuff from your home can bring in hundreds of dollars
• have one week where you replace all purchased beverages with tap water for your family, the 'savings' being put toward your fund
• ask for some extra hours at work, or find a temporary part-time job; all earnings go to fund
• make do with things you already have or do without (this one is very hard for most folks)
• challenge your family to have a 'no eating out' month; cook together at home and bank the difference

This list is not exhaustive by any means, but for those who are striving to get their finances to a better place, this is a good start on the Emergency Fund. The more you put in, more opportunities to 'save' will become apparent to you as time goes on. But it won't be without sacrifice. You have to do things differently in order to get a different result, kwim?

What say you, readers? What are your suggestions on building an Emergency Fund?

Payday

I went to my business post office box yesterday and was pleasantly surprised to see not one, not two, but three cheques inside. I smiled and thought, Yay!
Then reality set in. There is so much to do with this money, and I couldn't possibly accomplish it all with only this amount. I grab my pen and paper, and get down to brass tacks with budgeting for this money.

What I'd like to do with this money:

• buy new tires for the van and get an oil change
• stock up on some household items that are on sale this week
• take hubby out for sushi dinner
• put some into my RRSP and Emergency fund
• set some aside for an upcoming cc payment

What I have to pay with this money:

• Rogers all-in-one bill
• Business Cellphone bill

The amount of the cheques isn't enough to cover everything if I take 20% off the top for savings. The savings is non-negotiable.
Looks like sushi is out, as is putting some aside for the cc payment. The oil change will have to wait as well.
I'll pay Rogers and the Cellphone, buy new tires, divide savings into 4 different categories/accounts, and if there is any left over, I'll stock up on the great deal that No Frills has on t.p. this week.


Looking it over as if it were someone else's decision, here's what I see.
Savings is priority number one.
Keeping current with monthly bills is the next priority.
What about the tires? Is that a need or a want? (The tires have been put off long enough. It's becoming an issue of safety now.)
What categories are the savings going into? ($100 - RRSP, $30 - EEE Account, $40 - RESP, $30 - Xmas fund)

If my calculations are correct on the cost of tires, after I've set aside various savings, and paid the bills I mentioned, I'll have about $23.00 left to buy t.p. and veggies. Ha, ha, ha!
I would like to see a debt payment in there as well, but I would have to get behind in the bills or compromise my savings. Hmm.

What do you think? What does this way of dividing my pay tell you about my priorities?

Emergency Essential Expenses Account vs. Emergency Fund

I have always thought of our Emergency fund as just that. Money in the bank to handle emergencies. As we have been working on digging ourselves out of the financial abyss of debt that we created, I happened upon the blog of Gail Vaz-Oxlade. She suggests that one should have an Emergency Essential Expenses account, similar to the good ol' Emergency Fund. What the heck is the difference?

Well, in our home, the difference is for things expected and unexpected. Our Emergency fund is available for when something arises that we couldn't have forseen happening, like needing to fly to another province for the funeral of a family member. It's for having to pay costs up front for cleaning when the water heater blows up, and soaks everything in the basement. (Not that we have a basement. I'm just trying to make a point here.) These types of things constitute a true emergency.

So what is an EEE Account for? For someone, like me, who is self-employed, having money set aside to pay our essential expenses, like rent and groceries, if or when the time comes that my income isn't suffcient to do so for a length of time. For someone employed by a company, it could be a life saver if they unexpectedly got laid off due to a company closure.

One thing that has become apparent in the last few years, is that no job is totally secure, and we all have felt the crunch during an unstable economy. Yes, people still need the services of others in many industries in down times. But companies cut costs wherever they can in order to keep said company alive and viable.

I took a hard look at our budget several months ago, and devised a gameplan of what to do if either B or I were suddenly without work. It scared the bejeepers out of me to see the income side of the budget take a nosedive. We would have to cut out many of the comforts that we enjoy now. But it also taught me that saving for something that is a very real possibility is something that everyone should do, and not wait for something bad to happen first.

Our Emergency fund is there to take care of expenses that we can't imagine yet. But knowing there is something there helps me to sleep at night. Our EEE account however, is an entirely different creature, growing slowly and steadily toward the goal of providing us with six months of expenditures on only our essentials, just in case the ka-ka hits the fan. Included in that is rent, telephone, cellphone & internet service (needed for my business), groceries, insurance, and a lowered transportation amount. That's it. I'd likely cancel our cable, and cut many other things from our budget like entertainment, dining out, childcare and spending money.

If our situation were to change suddenly and drastically, I wouldn't want to have to worry about where the money is coming from to pay the bills. I definately wouldn't choose to put our life expenses on credit, to be paying them off with interest over the next 10 years.

How about you? Do you have an Emergency fund or an EEE account, or both? Is there a difference for you?