Batting Down The Hatches

With the reset, I feel that I should start over with some, if not all of the frugal things that I have experience with. Then I can add in new ones that I find. First off, budgeting.

I prefer to call it a Spending Plan instead of Budget, but the truth of the matter is, if I don't have one, I don't do very well over the month. I don't mind if we go over in a particular category, say grocery spending, because even if I do, it saves us money in the Restaurant/Ordering Out category. But, without the Spending Plan mapped out in the first place, I spend all willy-nilly and next thing I know, we're behind in the cable bill again. It's not perfect, and the income minus expenses are at an all time negative right now, but it is my starting point.

I've added up all the debt we owe. It's disgusting. I should be ashamed, and I am somewhat, but I've reset, so it also becomes our starting point. It will get a wee bit worse over the next couple of months while I re-juggle the spending plan and get back to work and whatnot, but it is what it is.

One thing that I found really, really helped us in the past was having a meal plan. I put up an empty weekly dinner sheet on the fridge and get the family to put in requests, or at the very least, help fill the thing in. Then I have a much clearer picture of what I need to buy when I am at the grocery store. I haven't taken an inventory of our cupboards lately, so maybe I'll do that too. Throw out old, outdated stuff that is never going to get used, and see what I can use up to lower the grocery spending this week. I'll definitely need to replenish the freezer meats (we are out of or nearly out of everything), so I will be keeping my lids peeled for deals on meats until we can save up for another freezer meat order.

Upcoming in August:

DD1 has a birthday coming up. I have already decided what I would like to gift her. It should be around $50 so that's not too bad.

DH's brother is getting married. DH is in the wedding party, so there will be a tux rental (ugh) and a gift to be bought for the newlyweds. I'll also have to find something appropriate to wear, like a dress, and we'll have to spend a small amount of money at the reception I suppose.

Then there is back to school shopping. Kids will need new shoes, there will be fees, and probably a few school supplies will be needed. I will have to keep this spending down to as little as possible.

Hockey fees; These are due by the end of the month and I'm just not sure where this money is going to come from.

All of this along with our regular monthly bills, the little bit that we are behind in rent, the amounts we are behind in some of the other bills and the debt. Oh the debt.

I'll have to adjust and readjust the debt payments as I move forward in this, but for now I've started small automatic payments just to get things going in the right direction.

Wish us luck. We're going to need it.

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.

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.

 

 

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. ;)

How Do You See Your Debt?

Debt. We all have it (ok, most of us have it). We all loathe it. That's why we read one another's PF blogs. To keep one another motivated to get rid of it once and for all. To learn to live within our means. To appreciate what we do have and keep one another accountable for our actions. It's what we do.

A debt is an obligation owed by one party to a second party but the term can also be used metaphorically to cover moral obligations. (from Wikipedia)

Debt is a means of using anticipated future purchasing power in the present before it has actually been earned. It is spending of funds we have not yet worked for.

When we use debt (a credit card for example) most folks think of it as a source of income. "I have $500 on this credit card that I can use to buy that thing-a-ma-jigger that I have been dying to get." But the truth is that the $500 credit limit is actually a loan, or a debt. It is a company saying that they will let you spend their money, at a cost.

I was reading another blog the other day and something struck a chord with me. $12 a day AND a baby on the way had posted about one of the many things she is eliminating from her life in order to achieve debt freedom and financial independence. In a bold blue, she wrote " If I owe someone anything at all, then until it's been paid back, my money isn't really my money ."

How true is that in our lives?

The level of my debt means that all the money I earn in the next two years effectively does not belong to me. It belongs to others who have extended credit or to whom I owe a moral obligation to repay. Two years. That stinks!

We have been downsizing our lifestyle and pinching pennies for so long, that I feel we have actually amended some of our bad habits of the past. We no longer frequent Tim Horton's, but with Candy Cane hot chocolate coming soon, that may change for a brief time. We no longer spend gobs of money on clothing, shoes, toys and other non-essentials. I, in particular, have learned new cooking and baking skills, learned to stockpile items on sale from the grocery store, taken on extra work whenever possible, and tried to be content with what we already have.

I hope that this is now the new 'normal' for us.