Archive for August, 2009|Monthly archive page

Vacation Fund

In Uncategorized on August 7, 2009 at 6:00 am

As some of you know, I believe that life has to go on even when you are debt repayment mode. So what you may not know is that I’ve also been contributing to a small vacation fund. I have two upcoming plans to travel that will need to be funded somehow.

Luckily, my side hustle keeps the extra income coming in, and some of it gets put into savings – divided between vacation fund, emergency fund, and long-term savings. The other half goes right onto my debt snowball as snowflakes.

My vacation savings is pretty small right now, but that is because we are taking small trips. And I mean small as in ‘small budget’ not necessarily short distance or duration. Each will be a week off.

It will be well-deserved time off for each of us as we work hard, and the summer is the busiest season for me in both my full-time job and my part-time job.

My Debt

In Uncategorized on August 6, 2009 at 12:00 pm

Some of you may be wondering what exactly my debt consists of. Well if you want the WHOLE story, there is a lot more than what’s listed here because I have a car loan and a mortgage as well as my student loan and credit card debt. Yep, up to my eyeballs in debt. This is my life.

My first goal in becoming debt free is to get rid of my consumer debt. First of all, credit cards. I started out with 4. One is a line of credit, and three were issued by banks. One has since been paid off entirely – whee! – and the other three are in the snowball. The line of credit has a better interest rate so it is last on my list to get paid off, though the amount on it is really high.

I’ve been toying with the idea of lowering all credit card debts to 75% of my limits so that my credit score will go up. Since it will be taking my three years to pay it all off, I don’t want my score sitting low while I do this. All of the other stipulations for having a good score have been met. If you are curious as to what contributes to your score in Canada here are the points:

* Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score.

I do this. Each payment is made when the bill arrives.

* Try to pay your bills in full by the due date. If you aren’t able to do this, pay at least the required minimum amount shown on your monthly credit card statement.

Always make just a little more than the minimum on all my debts, with the one being focused on getting the majority of my debt repayment amount.

* Try to pay your debts as quickly as possible.

Ha! Trying my best!

* Don’t go over the credit limit on your credit card. Try to keep your balance well below the limit. The higher your balance, the more impact it has on your credit score.

I am not over any credit limit, but all are close to maxed. This is where I think I can improve by lowering the balance on all until they are all at 75%. This would change my debt repayment snowball, but I’m not sure how else to do that…?

* Reduce the number of credit applications you make. If too many potential lenders ask about your credit in a short period of time, this may have a negative effect on your score. However, your score does not change when you ask for information about your own credit report.

I haven’t had any inquiries in quite some time.

* Make sure you have a credit history. You may have a low score because you do not have a record of owing money and paying it back. You can build a credit history by using a credit card. See the next section to find out how.

Oh, I have a history all right!

What do you think?

Budget for August

In Uncategorized on August 6, 2009 at 7:56 am

Well, July was not a great month for my budget. Luckily, I brought in a lot more income than I normally do – thanks to my side hussle – so it worked out. And I still contributed to my debt repayment so I am no worse off.

HOWEVER: the point was to stay WITHIN my budget not BLOW it!

But here are some reasons why the budget went over.

It was the month for our kitty’s veterinary checkup. This amount is an amount I put away for every month, so in my monthly budget it was not reflected since it came out of my savings but will get replaced in the few months to come by the amount I contribute every month to ‘my kitty fund’.

I had several weddings to attend in July. Not that I didn’t know in advance and plan for these weddings, but being out of town I of course forgot some staple toiletries that I had to pick up and this threw my ‘personal effects’ line off. *sigh* Luckily I can replenish this line with the coming months by refraining from buying any more toiletries or makeup and my clothes should be fine now until fall.

Speaking of clothing, I am going to be sorting through my closet and placing several of my fall items from a couple years ago on consignment. Hopefully this amount will be able to see me through any new fall clothing I need to purchase this year. The hope is to come out even. Since I only buy secondhand clothing or items on deep discount, this shouldn’t be a problem.

My goals for August are to track every expense weekly and to stay within my budget.

I’ve also come close to obtaining my $500 cushion in my chequing account so I will attain my goal of having $1000 emergency fund too.

As some of you know, my emergency fund is not to cover lost income if I lose my job, but to cover any unforeseen expenses that in the past would have been covered using my credit cards. This is to keep me from racking up more debt while I pay it off.

Eventually I would love to have an e-fund that covers 6 months of expenses, but right now my main priority is to eliminate as much debt as possible. Maybe once I am down to only paying off my line of credit I can really build up that fund.

Happy Thursday all!

To baby or not to baby…

In Uncategorized on August 4, 2009 at 1:49 pm

A lot of people have been asking us – when are you guys having kids? I’m not surprised by the question because we are in a position in our lives where that is the next logical step – starting a family.

However, my debt repayment plan is pretty strict to my current income and having a child would throw a big wrench into these plans. I’ve never put ‘Baby’ into a budget line. How much do you even add for said ‘baby’?

A recent blog post on My Negative Net Worth alludes to the dilemma in the PF (personal finance) world. There are two worlds of thought on the topic: a) put your debt repayment plan in place but don’t stop your life because you are in debt or b) get your finances in order prior to making babies.

I’m more of the first mindset – you need to live your life! Sure, debt is a big burden to carry and it should be dealt with as quickly as possible, but no matter how much debt you have, you still get older with each passing day.

I’m curious to know other people’s thoughts on my situation and considering a child in our lives:

* should that debt get down to a lower number first?
* should we give it a go now before we are into the age where fertility treatments may come into consideration?