Debt Repayment Goal Summary:
- Zero blanace on Credit Card - 29.5% ( 4 to 5 months left)
- Canada Student Loan - 25%
- Alberta Student Loan - 4.7%
Savings Goal Summary:
- Planned Spending/Christmas Fund - 7.5%
- Shares @ Work Fund - 28.6%
- Emerg Fund - 28.2%
- House Fund - 6.7%
- RRSP Goal - 18.2%
I'm happy that 2/5 savings goals are over the 25% mark and 2/3 debt repayment goals are at the 25% mark!!
Have a great weekend everyone!
I currently have a monthly budget set up, where I assume two payperiods a month. This would work if my bills and savings plans were also based on two pay periods a month, but every so often (twice in fact) there are three pay periods a month. For me that is May and October & all of my savings/debt paymetns are bi-weekly. I've read about this elusive 'extra' pay cheque - but that just doesn't work for me b/c of how my funds are structured.
Which brings me to the realization that monthly budget for a bi-weekly gal, just isn't going to work.
I would like to have a budget that isn't different every two weeks, but this may be the best course of action. Does anyone else have this problem? The fear I have with a bi-weekly budget is that there may be monies from the first two weeks, that I need for the second two weeks bills...
Below is an image of what my May 29 - June 11 budget would looke like.
On the left there is this weeks pay (no deductions this week, woohoo!), plus my current balance (which contains Jordan's portion of the rent). After the two 'pluses' I have all off the debits that will occur within the next few days. These are all of my 'fixed' expenses. The utilities is a guess, but it will be about that.
After alllll of that.. I'm left with $388.73. My car needs a tank of gas, and I think it's my turn to buy groceries. I usually budget $200/month for groceries. Assuming I spend that, I will have $138.73.
Yes, yes it is lame - but it's my fault that it's lame. Who's Visa payment is eating up a big part of what could be my discretionary spending? That would be my Visa.
So, what should I do with this $138.73?
- Do I hold on to it for 'in case I want something'?
- Do I put it on my visa to accrue that much less interest?
- Do I put it in planned spending/Christmas fund?
- Do I put it in my emergency fund?
- Or... is there something I'm forgetting...
What would you do?
I will answer those questions below:
1. Do you have a variable income?
No, my income is steady - I have an annual salary where I *should* receive raises at least once a year.
2. Do you work in an industry where employment is seasonal or erratic?
No, my employment is not seasonal.
3. Do you have the time and skills – and perhaps more importantly, the desire – to deal with home maintenance?
I beleive that I could find the time, and develop the skills for home maintenance. I know that I have the desire for it. Jordan and I often do things around my aunts and our parents homes for them.
4. Do you have extra money to pay for repairs or improvements, taxes, insurance, and larger utility bills?
Where we rent we have to pay for all utilies, so this is something I am accustomed too. In terms of have money to pay for repairs, renos, taxes & insurance - this will come. We are planning to buy in a few years so by then we will have saved up money and have a plan for these things.
5. Will buying a house wipe out all your savings?
It would if we bought today, but again - we plan on buying in a few years.
6. Do you move often?
I used to move a lot when I was going to university. I am now in a stable job and relationship in a city where I don't see myself moving for many years. I do not however; plan on retiring in this city.
7. Can you afford to own in an area in which you would want to live?
I beleive that we can, we are not pre-approved however.
8. Are you financially responsible?
I think that Jordan and I are getting increasingly financially responsible. I will soon have my credit card and student loans paid off. Jordan is working towards paying of his/our truck loan within the next two years as well as working towards improving his credit rating.
9. Do you love being able to write a cheque for rent and then not sweat the details?
I do love this (but i always sweat the details - about most things). There are still a lot of details to sweat in terms of renting (at least where I rent). There are three major utilities bills that I am responsible for collecting money and paying for. We are responsible for the basic maintainace of the home (mowing the lawn & taking care of the garden). As my landlord is kind of a putz, we often do other small repairs.
I just want to be doing repairs and maintenance to my OWN home.
An "unclaimed balance" is a Canadian-dollar deposit or negotiable instrument,
issued or held by a federally regulated bank or trust company. It can be in the
form of a deposit account, bank draft, certified cheque, deposit receipt, money
order, GIC, term deposit, credit card balance, or
traveller's cheque. '
When there has been no owner activity in relation to the balance for a
period of 10 years, and the owner cannot be contacted by the institution holding
it, the balance is turned over to the bank of Canada, which acts as custodian on
behalf of the owner.
Thank you to Jamie of Women in the Green Blog for her post called What's your Net Worth? for reminding me to update my Net Worth.
I have summarized his suggestions below:
- Cancel your cell phone plan - Possible yearly savings: $1,200 per phone
- Get rid of your second or third car - Possible yearly savings: $8,000
- Prepare more meals at home - Possible yearly savings: $2,000
- Wear out your clothing - Possible yearly savings: $1,800 per person
- Give up college room and board - Possible yearly savings: $9,000 per student
I disagree with the majority of his arguments for the following reasons:
- Cancelling your cell phone costs approximately $300 (depending on your provider). My cell phone bill is about $35/month. $35/month X 12 months = $420. If I cancelled my cell phone bill I would save about $120/year. Add to that the headache of changeing my contact number with EVERYONE - no thanks! I think that we can take steps to save money with phones by asking yourself the following questions: how many do I really need? how 'connected' do I need to be?. by asking myself these I realized that I do need a house phone and my cell phone - but I do not need voicemail on either phone.
- Public transit (plus parking) is $8/day * 20 days = $160/month. My car was $1500 and is paid for. Gas costs me about $50/month and my insurance costs me $155/month. Again - Not worth it to take transit in my city when you have an economical car.
- Most of my meals are prepared at home
- I havn't bought new clothes in a year (oh, how I need some new clothes!)
- I had to live away from home during the academic year b/c my family lived three hours away. I did however work two jobs every summer to save up for school the following year.
So that's what I thought about Yeager's money saving tips.
What are your money savings tips?
Since my loans went into repayment status I have left the amounts at their defaulted payment schedule which was:
I've known that small amounts can make big changes - but this actually surprised me. I have changed my repayment amounts to $75/month for each loan. This increase goes into effect for my June payment and is an effective increase of $15.01.
- This has shorted my repayment schedule by 28 months!
- 28 months is 2.3 years
- I will (hopefully) spend less money on food;
- I will spend less money going out because I am investing time weeding, watering and otherwise tending to my garden; and,
- I will spend quality time with my great aunt and with Jordan while gardening.
We planted, and I am fairly confident the following vegtables will grow:
We also planted the following - which i hope will grow but have less experience with:
- One tomoato plant (my brother has about 6 at our house)
- One pumpkin plant
- One hot pepper plant
- a blueberry bush (small)
- One cauliflower plant
Hopefully, everything grows! We split the costs of everything we bought (seeds and some starter plants) and spent about $50. I had some seeds I bought from last year that we used too.
1. The main change would be the mandated minimum 21-day interest-free grace period on all new transactions when consumers pay their balance in full by the due date. Currently, there is no mandatory grace period.
2. The new regulations would require card issuers to clearly display information about grace periods and interest rates in a summary box on bills.
3. The regulations would require bills to give a clear indication of how long it would take people to pay off their balances in full if they only made the minimum payments every month.
4. Card issuers would be required to give advance notice if interest rates were going to increase during the next payment period, and consumers would be informed in advance if a rate was set to expire or if a penalty for missed payments was to be imposed.
5. Card issuers would also be forbidden from increasing credit limits without expressed written consent of cardholders.
6. The new rules would require payments on outstanding balances to be allocated "in a way that is advantageous to consumers," Flaherty said.
7. The federal government also moved to prohibit over-the-limit fees solely arising from holds placed by merchants,
8. It would place limits on debt collection practices that financial institutions use in contacting a consumer to collect on a debt.
9. Financial institutions would no longer be allowed to contact customers outside specific hours on weekdays and weekends, for example, Flaherty said.
Do you think this will help or hinder the current economic situation. Comments left on the article from the link provided above seem to be torn between the two.
I have just finished reading about Edward Andrews Personal Credit Crisis.
If you have yet to read this article, it is a must read. It is the personal account of someone who should have known better about getting a giant mortgage he and his family couldn't afford.
"As I walked out of the settlement office with my loan papers, I couldn’t shake the sense of having just done something bad . . . but also kind of cool. I had just come up with almost a half-million dollars, and I had barely lifted a finger. It had been so easy and fast. Almost fun. I couldn’t help feeling like a high roller, a sophisticated player who could lay his hands on big money at a moment’s notice. "
My household is a little more unique in that I live with my partner Jordan as well as my brother and his girlfriend. We split common bills such as utilities (satellite, TV, & heat/gas/water) as well as rent. All of these are managed by me. As such I have very large influxes in and out of money.
Jordan and I were talking about amalgamating some of our finances and when the best time to do this would be. Due to the unique situations of having many roommates and many bills to split, we though now is not the best time.
That said, we will continue to save for large items together (such as our house fund right now). When you save as a team, it can happen so much quicker then if you were to do it on your own.
Once we are in our own place (probably 2-3 years away) we will start by having one joint account where all of the bills will be withdrawn from (utilities/mortgage ect). Once this works for us and we are comfortable with the change it is likely that we would join our finances in other ways as well. I do like the idea of knowing how much I can spend without having to check with the other person (especially at Christmas). So if we did put all of our money together eventually, I would want to keep one separate account each (above and beyond emerg funds, rrsps ect). This would be our ‘fun’ money. Our ‘personal’ spending funds. It might only be a few hundred dollars a month – but it would be a good way to save for surprises for the other person and what not.
I’m curious to know, how other couples – new to navigating the joint financial world – have combined their finances. What worked? What didn’t?
The House Fund may also turn into a renovations fund or continue to be the down payment fund - depending on how financing works out.
I've made a spreadsheet (I have so many spreadsheets) with organized lists of all of the items we would want to buy to improve the home. Most of the things on the list are needs, very few are wants. For example we would need to gut the kitchen and bathrooms (two) and buy all new major applicances/fixtures for them.
This afternoon Jordan and I spent three hours or so at home depot exploring some of the possible renovation situations that we could encounter at my great aunts place. We took my spreadsheets, wondered the isles and priced out some of our needs (fridge, stove/oven, dishwasher, bathtub/shower, sinks....ect).
It was prety overwhelming, and I got worn out. Going forward we are going to price one room at a time so as not to become cranky with each other.
Once I have all of my sheets updated, I'll post some of the numbers we come up with.
My next payday is May 29th. That is when I will see how much money I can throw at my visa in addition to the $250/biweekly payment. Until then, there is no sense in stressing about it because I have no money currently to buy anything (whether that's groceries or debt repayment). Thankfully J get's paid on Thursday and it's his turn for groceries.
Spend Less, Eat Healthier: The Five Most Important Things You Can Do
Check it out and let me know what you think :)
So, I no longer have to pay the $129.60 they wanted from me, and they will stop threating to send me to collections. It took a little better then a month of fighting with them, but it's all sorted out now.
anyways... I now owe $2552
the breakdown goes something like this:
Current Owing $2082 (including recent car repairs)
Unidentified Owing $ 54 (can't remember what this is for, and it hasn't been posted to my account yet)
Un-billed $416 (i mailed in what was owing for two parking tickets and a failure to display my car registration ticket)
Okay - enough mopeing - more planning.
I set up an automatic withdrawl for $250/bi weekly for 10 payments.
Also, I'm giving my credit card to J to remove the instant temptation of using it.
Lets see if my plan works this time.
That may sound a little harsh, but here is where I am coming from.
I have recently had quite a few hiccups in my plans. In part because I have bought a few things, but largely due to some unexpected expenses that I wrote about previously. I had my credit card debt down to about $1300. I then had about $300 in car repairs, $300 in new tires, and bought a fishing rod. Now my credit card debt is right back up to $2000.
I also have to pay off two parking tickets, and a failure to display my registration ticket still. Don't know where the money will come from for those.
I do have plans now that would have paid for these expenses if they had occurred next year, and nothing between now and then had happened.
When you first start saving and making plans for expected expenses down the road (like car repairs), it’s really hard to meet your savings goals if you have some expected/unexpected expenses before you get there…
So I had a great chat with my mom last night, and I realized that it’s okay to take a step back and work on my goals slowly. That way, when something happens I don’t have to rush out to use my credit card.
I’ve topped up my emergency fund to $1000 and put contributions on hold. I will resume them in a few months once I feel like I am in more control of things. I have also changed my visa debt repayment from $300 plus every two weeks to $250/bi weekly.
I think that I may also have to look at my budget AGAIN. Because I handle all of the bills in a household with four roommates I have very large influxes in my bank account. So my $400/variables a month, may be more $100/first half of the month and $300/second half of the month. I’ll have to look more into when bills are paid, but I’ll write on that more later.
All of that said. I have about $50 to my name, AFTER I get paid on Friday and I still have to buy groceries. It’s going to be a tight month this May.
J and I asked that if she were to move, she consider us first when she goes to sell her home. Her home is in a beautiful area of the city. The home is 50 years old, her and her husband lived in it for about 30 years. There would be a LOT of work that needed to happen as there has been no updates to the home except for a new roof in all the time that they lived there.
She would like to stay in the home for at least one more Christmas but other then that isn't too sure how long she wants to stay in the city.
So - we hope, we will be able to buy her home one day.
All of that said, we were doing some yardwork for her this weekend and she brought me aside and said she had an idea. She wants to start paying J and I for doing yard work and various other things around her home that she just can't do anymore (she's in her 70's). She said she would have to pay someone else to do the work anyways and she would rather pay us. That said, she wants to pay us on one conidition. She wants the money to go directly to our house fund!
How perfect is that!
I have found that there is a significant number of my peers who feel they have the right, the need, or at the very least the desire to live the life that their parents do. There seems to be a disconnect in that our parents worked for twenty years (while we were being raised) to accumulate the wealth and ‘stuff’ to which our generation desires. The catch is that there are a number of 20-somethings who want to start out at the same point that are parents are leaving us off.
It just doesn’t work that way!
I am not sure where this misplaced sense of deserving comes from, but people seem not to understand that it takes time, work and energy to accumulate things. You can’t just have everything you want all at once. Let me correct myself. You can have it – if you want to live in a debt-hole for your entire life. By essence of you reading this blog, I can imagine that you likely do not want to live in debt, so please – stop buying things you can’t afford.
I do this sometimes; buy things that I can’t afford. I’m every so slowing weaning myself off of it. I’m not sure that it’s an addiction per say; however, it is certainly a challenge to change your habits - to just stop using that credit card. To save first, and buy later.
For example, this weekend I bought a new fishing rod. The rod, reel, and line cost me just under $100. The rod will probably last me a lifetime and I “Needed” this fishing rod because we’re going camping next weekend. I wanted to be able to fish with J and my dad without having to ask to borrow their rods.
After I bought it, I had instant buyer’s remorse. That would be my brain telling me a moment to late to stop buying things. Jordan and I actually had the idea of trading credit cards. We wouldn’t be able to use the other person’s but we could hang on to it to help remove that bit of temptation. We would have to ‘ask’ the other person before we could buy something which would challenge the need/want struggle.
It’s a thought.
I think however; that I’m not as bad as some people are. I’m not sure I like using the word bad in this case, but we’ll go with that for now. I mean that I haven’t bought a quad, snow machine, house, new cell phone, new wardrobe, new car…. Ect. I bought a $100 fishing rod (and last month a $200 patio set).
So yes, I need to continue to remind myself that it’s OKAY that I don’t have the means to have my parents lifestyle yet – it took them YEARS to amass the wealth and other ‘things’ that they have, that I want. Patience and it will come.
I found it a pretty interesting read, although I'm not sure how much I'm going to buy into it. I found a copy of the artical printed by the New York Times. The artical is called Tighten Your Belt, Strengthen Your Mind By SANDRA AAMODT and SAM WANG.
I think when you first start budgeting and planning you can start investing a lot of time. I review my budget, and tracking numbers at the very least each week. I’m hoping to eventually do it just on pay periods, and then eventually monthly.
I would estimate that I spend about 2-6 hours each week, thinking about, writing about, or talking about my finances. It is overwhelming to say the least.
So one of my new goals will be to let the plans that I have set up work, what I mean to say is to just leave my auto debits-credits and what not alone. Plans need to have time to work and mature. This will be hard for me, and probably won’t happen right away. I need to be confident that I have thought them through and I will pay of my debt, and reach my savings goals.
I need to remember to have a little fun, and talk about things other then money too!
So, how much do you spend on your personal finances?
I spent some time on excel and it looks like it will take about:
- Emergency Fund - 27.05 months
- House Deposit - 108.57 months
- RRSP - 106.35 months
- Planned Spending - 11.32 months
- Shares at Work - 14.73 months
I considered the current interest rates when I did the calculations, but I didn't count any extra funds I will get once my CC is paid off. As once that is paid off, the monies will go towards my student loans. That whole debt repayment process will take about a year and a half. That said, once that year and a half is up, most of that money will go into my savings.
I am also going to start reinvesting any tax refunds I receive in my RRSP's as well so this will help with that timeline. If I get any raises at work, I will also adjust my numbers accordingly. The house deposit timeline is a little deceiving because J also puts $300/month into the same savings account that I do. If I consider that it will take about 3 years (depending on interest rates).
So I think i'm fairly on track, but the numbers will defninatly deserve some re-vamping once my debt is paid off.
Do you have a plan to pay off your debt? Do you know if your plan will pay off your debt within a certain timeline?
This Hearth & Heart budget assumes that I am still employed. I have paid upfront for parking, which is why it and gas is still included. If I cancelled my cell phone I would be out $300, which is why it is still listed. I took out my Visa payment b/c I wanted to see how much $$ I would have leftover to put towards that.
- Hearth & Heart = $1,109.55/month
- House Fund & RRSP (which is my future Hearth & Heart) = $ 400.00/month
I could potentially put away $1070 in total on my credit card each month! This includes the current repayment of $600. That is an additional $470.This would mean giving up all personal spending, restaurants spending, my emerg fund, WOW, my 'other' fund, and my gifts fund. They would all go on hold. Until my silly CC is paid off and fed to a dog. A mean dog.
So... What do you think?
Below are a list of ideas I am tossing around for making more money. Keep in mind that I am up every morning at 6:30am and get home around 6pm (I'm done work at 4:30pm, hit the gym, and then have a 30-45min drive depending on traffice). J and I get home about the same time and then have to make dinner. So currently, our day runs from about 6:30am-7pm before we are finished for the day.
- A second job
A second job in the traditional sense doesn't work for me. Even as an evening waitress I would probably have to start shift around 5 or 6pm and then work until ast least 11-midnight but probably 2am on nights like Thursdays. I don't think this would work because the lack of sleep and proper eating (bad habits would develop) would put pressure on how successfully I can do my *real* job.
- Do odd jobs
I do a lot of Costco trips for my Great Aunt. I could perhaps expand this to do weekend trips for Lots of little old ladies/gentlement. I was thinking that I could do up a flyer (to leave at bus stops) and put an add in local community bulitans. I could charge $15/trip and do all of their running around. This could potentially expand to small odd jobs (my aunt asks us to do a lot of lightbulb changes, taking heavy trash out ect).
This could work b/c it could be done fairly easily on the weekends.
- Rent out a room
We recently had a roomate leave, and May was the first month we split the bills (utilities and rent) four ways instead of five. I am really enjoying the space, and quite, and stress free environment, but the pocket b0ok has definatly taken a hit. One of my other roomates is leaving for the summer, she is (awesomely) still going to be paying rent, but utilities will be split 3 ways instead of 4. This will *hopefully* balance out b/c bills are usually less in the summer (heating is next to nothing) then in the winter.
- Any other ideas???
Those three ideas are the best that I can come up with for my working-life situation. I don't want to take on something full time or that isn't flexible b/c I don't want to sacrifice my LIFE for my DEBT REPAYMENT. My debt isn't a huge mass of money, but it's this irritating little itch on my back that I just can't reach.
I did find an excellent deal!
I managed (through my boyfriend) to get 4 Hankook Mileage Plus II's for $322.06!! This is an amazing price... I was quoted as high as $560 to buy and have them installed. I bought them at the cheaper price, and J was able to install them at his shop!
So, it's wayyy less then I was expecting (I figured it I would have to shell out $500) but it's still not $$ that I have available right now. So, I put it on my credit card (not yet updated in the tracking bars). Further to this I recently received a ticket for not displaying my car registration properly (Grrrr to Alberta for having different rules than BC!). That is going to cost me about $300.
So... I have about $700 of unexpected costs this week. *sighs*
I am having troubles decieding if this counts as an 'emergency'. Do I use my emergency fund to pay for this? Do I use part of it? or - do I had two more payments to my credit card debt repament. I really don't want to do that.
or - do I spend less money, or do I make more money?
There are a lot of options here...and I just don't know what the right one is.