A Canadian Girl’s Quest to Be Free of Debt
Just got a message that this e-book is available for download FOR FREE. It is by Leo Babauta, author of The Power of Less. There are also a couple of podcasts on this website too, for those that enjoy that sort of thing. 
I haven’t read this yet, but I intend to and will try to write any comments or thoughts I have.
Enjoy!
Free Ebook: Thriving on Less – Simplifying in a Tough Economy
I’ve got to post an update on my No Spend Month for October and where I failed to keep to those goals, or where I succeeded, but I’ll have to do that once I tally everything up. I just haven’t had enough free minutes to do it yet.
In the meantime, I thought I would post a few goals I have for this month. Most are financial, since I’m trying to keep this blog directed in that realm of my life.
November Financial Goals:
- Make 50% of my Christmas gifts by November 30th.
- Decrease debt by $1000.
- Come under budget this month.
- Save money into tax account for small business.
There are only four goals, but I think I can reach them all. I’ve included making my Christmas gifts under financial goals because it really is a financial goal for me. By making my Christmas gifts, I am keeping out of the malls and stores and will be saving overall on my Christmas spending. I’ve gotten a bit sentimental in the last little while and making everyone individualized gifts really means something to me. I want my loved ones to have something thoughtful and useful as their gift this year. This season is about giving, and for me it is about giving time to our loved ones as well. Being together and cherishing the memories will be my focus for Christmas this year instead of the material items. Handmade gifts will hopefully have more meaning to everyone on my list.
This post got a little sidetracked from ‘financial goals’ to ‘Christmas’ but hey, there are only 50 days left!
Jenn at her Paying Myself is talking about getting a new computer. This reminded me I will be due for a new one soon too.
I’ve currently got an old Mac at home, and lurrrrrve it! But, the cost of a new Mac is simply out of my budget when you can get a perfectly good PC laptop for a LOT less. Like $700 less. $700 is a good chunk of change towards paying down debt. $700 is a lot of extra cash to save up just for a pretty Mac.
Especially when there are ideas around the interweb on how to run MacOSx on a PC! Yes. You heard right. Some snooping around found me these useful tidbits of info from Lifehacker:
Install OSX on your Hackintosh PC – No Hacking Required
Build a Hackintosh Mac for Under $800
Now, whether or not I do this is another question, but it is interesting.
Me, I’ll probably still get the Mac because I can use all my previously purchased Mac software on it. But will I buy it brand spanking new? Likely not.
Menu Planning – it seems to be a popular thing to do. Do you do it? I don’t.
But maybe I should start?
The few things I would need to overcome:
1. Our schedules are not regular. Like, at all. Hubby is away several days a week. We are often not at home on the weekends on sporadic events at friends places, etc, usually only planned at the last minute.
2. When hubby’s away, I rarely eat meat. But when he’s home, he works from home and will cook the meals, often on a ‘whatever-he-feels-like-having’ plan with frequent trips to the grocer with ‘pick-up-what-he’s-missing-for-his-meal’ lists.
I think it would be hard to follow any sort of ‘plan’ I make up on a weekly basis if hubby was throwing it all away when he decided he wanted to make a big roast on Thursday that week. What would I do with my fresh channa curry ingredients since we’d be out all weekend and not have a chance to make it? Would it all go to waste?
What works for you?
Maybe I will try it out for two weeks and see how things go. Maybe hubby will be convinced its a good idea once we get into the routine. I’m just afraid it will impeded his ‘creativity’ in the kitchen – he’s an AWESOME cook and I love when he whips us up an amazing dish. Mmmmm… hungry now!
A phenomenon in the blogosphere is ‘Menu Plan Monday‘. Every Monday I started to see posts titled Menu Plan Monday. I just thought everyone planned their menus for the week that day because the flyers came out and we knew what was on sale, or for some other unknown to me reason. I just did a search on my Swagbucks, and found out that I guess it is actually something that was organized by Laura at ‘I’m an Organizing Junkie‘. Here’s her menu plan for this week.
I’ll keep you posted on our Menu Planning progress. I’d love to hear how you plan out your weeks meals and grocery shopping. For our grocery shopping, we have a list we post on the fridge of our most commonly purchased items, organized in order by their appearance in the grocery store. When we notice we are out of an item, we check it off the list to make sure we pick it up next time we are out. It works really well for making sure we always have our staples in the house. Things like flour, eggs, butter, coffee…
One thing I haven’t addressed on this blog, and I think its because I’ve been focused on my credit card debt reduction plan, is my car loan.
Last year, I was just about finished paying off my previous car loan. The car was a 2002 sedan, and in great shape albeit minus a few things that went wrong frequently but nothing major – mostly just squeaks and vibrations. It did however have higher mileage on it since my job involved a lot of driving. On a whim, and really, it was a whim, I decided I wanted a new car.
MAJOR FAIL.
Yes, insert all the reasons why this is so wrong here. And yes, insert the typical reason so many people are in debt here. Ugh. I’m a textbook case. Believe me.
It was my anger of my debt that started my search for a new car. I wanted to sell off the old one and buy an old clunker for cash. But, a shiny new car was just so much more appealing to my shallow, ‘money-doesn’t-matter’ side and since I hadn’t reached the stage where I HATED MY DEBT, it was easy to get convinced. My monthly payments would be the same! My mileage would be better in a newer, more efficient car! This one was more utilitarian because I could fit more in the trunk! … and so on with the excuses.
Now, I would give anything to go back and slap myself. What was I thinking?!?
My new (used) car loan is at an 8.9% interest rate! But I don’t know enough about car loans – can you even re-negotiate the rate? I just took what the dealer gave me (just to add to the MAJOR FAIL). My budget works for the payment, but I know I am overpaying in interest in the long run. It would be pretty sweet to not have that car payment and just be stuffing that cash into a high interest savings account for when my old clunker broke down. No such luck now.
Am I going to trade in the new shiny one? Unlikely. I really like having a reliable car. *sigh* But the question remains… SHOULD I?
Is this something I should think about once I’ve got my credit card debt under control? I just don’t know what to do about it. Sometimes it does keep me up at night.
I’ve been obsessed with crafty blogs lately. I will start adding the ones I follow to the sidebar for anyone that might be interested in what I read.
There are a ton of things on my ‘to-make’ list, especially since I decided to make this a Handmade Christmas. This means I am making ALL of the gifts I will be giving this year. As a result, everyone will be getting more thoughtful and heartfelt gifts. But since I am the ever-practical person, I can’t just make people ‘crap’. If I am making them a gift, it must be useful and appropriate for the receiver.
Here are some amazing and useful crafts I’ve got on my list so far:
Decorative Jars (for another gift I’m making, but won’t post it yet!)
Here are some I plan to make just for myself:
Renewed Filing Cabinet
And these are things I could make to have on hand for things like housewarming gifts and hostess gifts:
Crochet Dish Scrubbers
What are some of your thrifty craft ideas?
In our cold climate, most people winterize their homes without even thinking about it. But if you are consciously making the decision to make sure your heating costs are the most efficient, there are cost-efficient ways that can make sure this happens.
1) Thermostat Programming (FREE)
This is your easiest method to save heating costs and requires no manual labour. Program your thermostat to come on only during hours you are home. The rest of the time, set it low (you don’t want to turn it off – pipes freeze here in Canada!). We set ours to 16 when we are not around, or when we are sleeping and it comes on to 19 (Celsius of course) when we are home. The most important to remember is when you are away for the weekend or on vacation – set it down to a low temperature for the duration of your stay away.
2) Foam Insulation on your outlet covers ($5)
The next least labour intensive activity is to insulate your outlets! Drafts can come in through these holes in your drywall – if you have a place like ours, you can often feel the chill coming through on your outside walls. Buy some foam insulators from your hardware store (like this) take a screwdriver and put the insulator underneath the outlet cover. Easy peasy.
3) Drafty Windows No More ($15 for film, $3 for caulking)
If you have an older home, the windows can often be older too. Some of ours are single pane windows with wooden frames – now that’s old! There are two ways to tackle this: caulking (here) or plastic film (here). The best option is to update your windows, but lets be honest – not everyone can afford to do this in time for winter. Our solution until we have saved up our ‘new windows fund’ is to put the plastic film on them. It significantly decreases our heating bill and makes our place cozy!
4) Furnace Filters ($20 for 6)
We replace our furnace filters very frequently. This not only makes your furnace more efficient, but it keeps your air clean. We don’t invest in the expensive ones because neither of us have allergies, and we change them so frequently it makes sense to buy the ones that come in bulk at a better cost per filter. We buy these ones or whatever is on sale when we go. Once a month works well for us since we only have our furnace on from October through to April. We also make sure we have our furnace serviced once a year. It is an annual checkup and maintenance cleaning they do. It is $100 but it will catch any issues before the season starts, eliminating any need for emergency furnace repairs which are often very costly due to the urgency of the situations in our Canadian winters.
There are lots of other ways you can improve the heating efficiency in your home. Adding insulation, having new windows installed, using water heater blankets, and making draft stoppers (a great Christmas gift idea for you crafters) are all ways you can save even more energy.
The great thing about using the window film is it forces you to clean your windows inside and out before winter comes. The better to see the birdies at the birdfeeder, I say!
It would be wonderful if I had a job that provided a maternity leave top-up, but currently where I work they do not offer any top-up. I’ve come to understand that this is the norm and most people seem to make do without getting much income while on their maternity leave. I presume most people are not in debt when they have kids? I am sort of at a loss to how this will work for us unless we save a big nest egg for my Mat Leave. I would be able to take my leave, but I would only be bringing in the usual EI income.
The way it works is Maternity Benefits cover the mother for 15 weeks. After this time, Parental Benefits come into effect and cover the parent for a maximum of 35 weeks. This is a total of 50 weeks of EI coverage. The other 2 weeks come from your minimum vacation time per year, which I assume should be paid by your employer when you leave, or however you negotiate it since you do pay into it all year. Typically, since there is a two week wait for Maternity Benefits to come in from EI your vacation pay-out should help balance it out.
Hubby DOES have top-up, but since he can’t be the one who actually gives birth, I will still need to take time off work. But since he can take parental leave, he will take 4 months with top-up, and I will take 8 with no top-up.
This means we have to plan for the parental leave. 8 months of savings will be needed. I’ve done all the calculations so I know how much we need to save in order to take time off to have a child. Here is what I’ve come up with so far. If you see any loopholes or things I have not thought of, please let me know.
My items that need to be covered while on Mat Leave:
My half of housing costs:
My debt repayment amount:
My car and insurance:
My student loan payments:
My income that would be coming from while on Mat Leave:
The amount received from EI benefits (55% of salary, to a max of $447 a week minus taxes - I subtracted 22%, but maybe this should be more? If anyone knows the net amount that comes in per month in Ontario, it would be so helpful with my planning!)
Child Tax Benefit (which is pretty measly, in my opinion)
Universal Child Care Benefit (a taxable amount of $100/month)
Essentially, I calculated we need to save $12,046 to cover off my usual expenses for 8 months. If Hubby could cover the entire housing costs, we would only need to save $6,756!
We will need to discuss how this will work for us.
And hey, maybe by that time next year I won’t even need to worry about this because I’ll have a job with Mat Leave top-up and the amount needed to save will be much, much less.
How do people afford to have kids?
My calculations don’t even cover any of the extra things we’d need to consider with raising a child or having a baby in the house. Things like cloth diapers, any extra food, and clothing.
My plan is to have most things already purchased (or acquired is more like it!) prior to going on leave so they can be worked into the usual budget. Things like baby furniture seem kind of silly to me since so many people give this stuff away on sites like Freecycle and sell old (but still in new condition) furniture on Kijiji. Plus we’ll get a lot of hand-me-downs from the family too. I don’t think we’ll spend a lot on furnishings or the nursery. The main costs will be cloth diapers (I am 100% firm on this) and clothes.
Maybe I am totally unrealistic? Anyone care to share their thoughts on my plan?
Another motivation for getting to debt free: if I had no debt repayment amount, we would only need to save $6,045 and I would still be contributing my share of the housing costs! For me, motivation to repay debt comes from tangible milestones in my life. For example, being able to have a baby without worrying about my debt payments. Or being able to contribute more money to my RRSPs so that our retirement can consist of travel and freedom to not be worried about part-time jobs. Or living in a house that is 100% our own.
One day. 
My dates of debt repayment according to my current plan are as follows:
May 2010 – Credit Card #1
Feb 2011 – Credit Card #2
Jan 2013 – Credit Card #3 (LOC)
DEBT FREE DAY (D-DAY): January 2013
If I increase the amount I repay per month by $40, I can move the dates forward like so:
May 2010 – Credit Card #1
Jan 2011 – Credit Card #2
Oct 2012 – Credit Card #3 (LOC)
DEBT FREE DAY: October 2012
My hopes are that my salary will be going up in four months allowing me to increase my monthly debt reduction payment by $340 in total. This would get me out of debt by:
Feb 2010 – Credit Card #1
Aug 2010 – Credit Card #2
Nov 2011 – Credit Card #3 (LOC)
DEBT FREE DAY: November 2011
I’ve decided that I definitely need to move my debt free day up to November 2011, especially if we would like to start our family next year.
Now, keep in mind this payment plan does not include any snowflakes or additional payments I make. Every month I make additional payments on my debt from any income I bring in from my side-hustle (part-time small business). These make a significant impact on my debt reduction and every month I play with the plan (you can use the same spreadsheet as me, found here) adjusting the dates, interest rates, and balances. It is motivating to see the numbers change, the balances go down and the interest rates go down as I re-negotiate my credit card accounts and transfer balances as needed.
Well, I decided to tally up my payments to my credit cards since March of this year. Sadly, some of these payments are for expenditures on them in addition to my regular debt reduction payments (i.e. travel tickets and online purchases for my business) so it is not an accurate reflection of my debt repayments.
HOWEVER.
I was stunned to see how much money went through my hands and into their pockets. Ready for the total?
Since March 2009, I have paid $12,065 to credit card companies.
Yep, you read that right.
Now, in light of another blogger’s recent post over at Small Steps for Big Change, I asked myself the question: what would I do with an extra $12,065?
Well, I would have capped off my RRSP contributions for the year, and also made a big dent in my car loan repayment. I also would have stocked up my emergency fund and saved a lot in interest.
On a happy note, I guess, is the fact that I’ve updated the amount repaid to my debt on the side bar.
I have paid off $6,448.83 to put my new credit card debt amount to $23,583.64. That includes paying off one card in total.
