canadiandebtgirl

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Approaching 50% of Credit Card Debt Paid Off

In Uncategorized on November 4, 2010 at 8:00 am

A milestone is near.

I will soon be halfway there: halfway to credit-card-debt-free that is!

When I began this journey, I was more than $30K in debt. And that is if you only counted my credit cards. I also have student loans, a car loan, and a mortgage that don’t get included in my debt tally – yet. Once my line of credit VISA is paid off, you will see them added into my debt repayment plan.

In only 19 months (since May 2009) I have cut that number in half. The official anticipated date for paying off Credit Card #2 will be December 10, 2010, and I will be down to one credit card balance on my line of credit at a measly rate of 5.65%. Though the remaining balance is the highest, this card has the lowest interest rate. I’m looking very forward to seeing quick progress on its repayment once I’m paying more than the minimum.

I owe all of my debt repayment calculations and motivation to this Debt Reduction Calculator. If you are only just now beginning your journey to debt free, or would even just like to see how long it really will take to pay off your mortgage, I highly suggest you go download this free Excel spreadsheet now.

I’ve got some other things I would like to give credit to for my debt repayment plan working, but I’ll save them for a separate post. 🙂

Check Your Credit Score & Report

In Uncategorized on November 3, 2010 at 11:27 am

Today I invested in my credit rating. I bought my credit report and score online. Normally I request my free credit report in writing, or by phone, every year from each of the credit reporting agencies (Transunion and Equifax). I have them on a rotation so that I get a credit report mailed to me every six months. It keeps me feeling like I have a finger on the pulse of my credit. Fun! (and someone yells ‘nerd!’ from the crowd)

But today I spent the money and got my FICO Score. I haven’t done that in about two years. It is better than it used to be, but there were a few things I needed to attend to, and one thing on my report that I didn’t know was there!

An old joint account that had three missed payments! Eek! FICO don’t like 90 days past due. It was one of those annoying cards that add the interest even though you paid off the balance in full. Then they neglected to send us any statements for months. When I called to confirm that they received the payment they informed me that the account was still owing $6.11. I was so stinkin’ mad. I paid the stupid $6.11 and called immediately to confirm. I got them to not only mail me a letter but also to fax a written confirmation that it was paid and the account was closed. That account is closed, but now I just have to wait for it to drop off my report. Shouldn’t be long now..

The other housekeeping items I took care of were two things: one account that doesn’t get used and has been paid off for over 4 years. It was revolving credit, so I called them up and closed it. They are mailing me a confirmation letter. Check! The second item is to close off some of my paid credit cards. I’ve decided to close off Credit Card #1. As you may or may not recall, Credit Card #3 was dropped to a $500 limit. I’ve decided to use this one as my regular use card.

Here’s why.

It has no annual fee. It has only a $500 limit. They will give me 5% cash back on groceries and gas purchases for the first 6 months, then 3% after. Once my cashback credit gets to $50 they send me a cheque. Who can say no to free money? This works well for me as I’ve been using Credit Card #1 as my gas card. I charge all my gas purchases to it and pay it off right away (weekly). So I’ll just switch that habit to Credit Card #3 and cancel out Credit Card #1.

I will also be closing, or at least reducing the credit limit on, Credit Card #2 – the one I’ve had the very longest. It will be paid off in full in only three more payments. I can’t wait. At that point, I will be down to one credit card, or line of credit and will be just that much closer to my credit-card-debt-free life!

Adding to my Debt

In Uncategorized on March 16, 2010 at 11:18 am

Despite where the title of this blog post might lead your assumptions, know that this blog has primarily been about my credit card debt only.

Until now.

I love to play with my Excel spreadsheet “Debt Reduction Calculator” from vertex42. It has single handedly kept me motivated to stay on my debt repayment plan. To enter a few numbers and see the resulting debt free dates pop up gets me excited. Lame, I know. There is also a sheet that outlines the payment amounts to make to each debt every month until you are paid off. Its great! You can also enter lump sum amounts to any debt and it recalculates your payment schedule. Neato. And you can play with your plan by ranking your debts in priority order. You can snowball the payments, pay lowest balance first, or highest interest first. And you can play with the options and it spits out how much interest you will be paying in total over the lifetime of your debts. Trust me, seeing that number alone will get you motivated to pay everything down as quickly as humanly possible!

Up until two weeks ago I only had my credit card debts entered into the spreadsheet. This is because they are my primary focus right now. I am dedicated to them until they are gone forever.

I decided to go a little wild. I entered ALL of my debts. I entered my car loan, my student loans, and our mortgage. I put in all of the interest rates, monthly payment amounts, and the debt amounts. It was fun!

Ok, well seeing my debt free date get pushed back 15 years (due to mortgage amortization) wasn’t fun, but I loved to see where I would be in 3 years, 5 years, 10 years, you get it.

I took the mortgage off the calculator though because we don’t know how long we’ll actually be in this house and we consider the mortgage better than rent. Plus, our home value is higher than what we paid so let’s just pretend it doesn’t exist right now, okay? *sticks head in sand*

Anyways. All of this just to say that I’ve added 4 more debts to my repayment plan and the outcome looks good.

Credit card debt free by July 2011.
Car loan debt free by February 2012.
Free and clear of all my student loan debt by April 2013.

And that does not include any extra payments I make, any future increase in salary, or interest rate renegotiations. Which I do regularly – about every 6 months I review what interest rates are at various banks/credit cards and call and ask for consideration to lower, or an opportunity to transfer balances.

So in at max three years I will be completely debt free except for our mortgage. Hurray!

Making More Money

In Uncategorized on March 15, 2010 at 12:59 pm

One of the things Gail Vaz-Oxlade always insists on when she helps people on her show Til Debt Do Us Part (my long-time TV show crush) is that to help get yourself out of debt, you need to make more money.

I’ve known this for as long as I’ve had my debt repayment plan in place. It makes sense. You want to pay off your debt as soon as possible, as fast as possible, so you pay the least in interest and get to your DEBT FREE DAY sooner.

Well, I’ve done it!

I will be contributing an extra $400 a month to my debt. My income increased!

It just goes to show that you CAN get what you want, but you do sometimes have to suck it up and ASK for it. I sucked it up, and I asked for it, and I got exactly what I wanted.

My salary is substantially higher now, and it fits into the bracket I was at 2 years ago when I left my old job to start a new career.

Two years to climb back to where I was? Not bad!

If you recall, I posted about my D-Day back in October 2009. Back then, I was hoping I would be getting this raise, and with those hopes in place, the plan I had would have me free of debt by November 2011. You’ll see below that I have moved my debt free day up to August of 2011: a whole 3 months sooner than planned! This was as a result of the aggressive payments I made to clear Credit Card #3, and the negotiation of a lower interest rate for Credit Card #2 (from 18.5% down to 11%), and now the increase in my salary.

Credit Card #2:
Old Repayment Date: January 2011
New Repayment Date: August 2010

Credit Card #4:
Old Repayment Date: October 2012
New Repayment Date: August 2011

Old Debt Free Day: February 2012
New Debt Free Day: August 2011 – less than 17 months away!

Shopping on the Cheap

In Uncategorized on February 2, 2010 at 10:18 am

I’ve been saving up and bookmarking all sorts of cheap online shopping places. Part of it is so I can start to ‘think’ about what I might need for a little baby one day, and others are just because I love to find amazing deals when I am shopping for new things.

For the most part I shop vintage and used. Two reasons: I hate the packaging that new things come in (think for example all those boxes and styrofoam electronics are packed in!); and, I want to keep stuff out of the landfill. The third and most selfish reason is because it is often cheaper. Frugal, frugal!

But sometimes a new item is just a pure act of spoiling. And everyone deserves spoiling sometimes. If I do buy new, it is often online, on sale, and with free or cheap shipping.

Here are some places I’ve kept an eye on in the last few months:

Beyond the Rack: think Winners, but ONLINE! You need to sign up to get the bargains.

Zappos: shoes out the wazoo! Very good deals on sale items, some really good brand names. I like to get my runners here and cute summer sandals when I need them. They ship to Canada for $10USD flat rate so buddy up and combine your orders!

Baby Half Off: Daily deals!

Green Baby Bargains: for eco-friendly baby stuff!

Mama Bargains: More than one deal a day, so check often! Looking for something in particular? You can suggest it to them!

Baby Steals: great finds on this one, you just need to act fast as its popular!

Eating ‘Clean’ and Frugality

In Uncategorized on January 27, 2010 at 8:00 am

We are trying out a new fad around our house: eating clean. We tossed the idea around of trying a detox, but they seem just a bit too extreme for us. Our bodies are made to cleanse themselves of toxins, I’m not sure I need to drink only cayenne pepper and maple syrup in water to help that along!

From the Eat Clean Diet website:

Eating Clean is eating the way nature intended. You eat the foods our bodies evolved to function best on, and that makes you feel – and look – fantastic. When you Eat Clean you eat more often. You will eat lean protein, complex carbs, and healthy fats. These practices keep your blood-sugar levels stable and keep you satisfied. The best part is that if you need to lose weight it will happen almost without you having to try. And yes, you can have a treat now and again.

Best of all, Eating Clean keeps you feeling great and full of energy. In fact, you can forget all about the days when “dieting” meant feelings of hunger, lethargy or deprivation.

Eating Clean is not a fad; it’s a way of life. When you Eat Clean your body will react by losing weight if you need to lose, maintaining a healthy weight if that’s where you are, and even gaining weight if you are too skinny. But regardless of whether you want to lose, maintain or gain, you will feel better than you ever have before.

What I wonder is how cost effective this will be to our grocery bill? We don’t spend a lot on food because we are excellent shoppers and love to cook gourmet meals on a budget. I think we are successful at this. What I’m interested to see is how we’ll do with the prescription of foods offered by the Eat Clean Diet.

Has anyone tried this? Or does anyone follow it and have recommendations on what to keep in mind while we try it out?

What I Did with Credit Card #3

In Uncategorized on January 22, 2010 at 3:12 pm

For the time being, I’ve left Credit Card #3 open and decreased the limit to $500. The thought behind this is to keep the amount of credit available to me at a minimum without closing the account entirely. Once I’ve paid off Credit Card #2 to 75% of its limit, I will cancel Credit Card #3.

I’m really hoping that come May when I check my credit score it will be in the higher bracket. I don’t have a number to compare it to as I simply just order my free credit reports annually from Equifax and TransUnion and they don’t come with a score. But once I do get my score, I will keep track of it yearly to watch it slowly climb up higher.

Savings Update

In Uncategorized on January 18, 2010 at 8:00 am

I’ve got just a couple of savings accounts for short term goals. I’ve yet to start my RRSPs, I know, I know, so this is what I have so far. My savings sits as such:

Emergency Fund is at $579.37 of the $1,000 I would like to have set aside.

My Baby Fund (a new fund I started) sits at $155.87 of the $2,500 I’d like to have set aside.

My goals are to have the Emergency Fund maxed by April 2010.

The Baby Fund should be funded by January 2011 – its a slow process, with only $25 a month getting deposited automatically and extra money will be added as it comes in as gifts, refunds, etc.

The Baby Fund will be used for topping up my EI benefits while I’m on mat leave. I’ve calculated what I will need to have in addition to what EI brings in during my time off if/when we are expecting our little one. The reason I’ll be topping myself up will be to stay on track with my debt payments (both credit card and other) while off on leave.

If between now and then I happen to somehow land a fantastic job that will top me up, I will use the fund as an RRSP contribution. Until then, I need to have this amount fluid enough that it can be accessed for regular transfers into my chequing account for those 8-12 months off work. I’ve got it all calculated so I’ll add a picture of the spreadsheet soon.

Yearly Expenses

In Uncategorized on January 16, 2010 at 8:00 am

There are some infrequent items that are just hard to account for in your monthly budget. Things like your annual car registration, birthdays, Christmas, annual vet visits, car maintenance (oil changes and miscellaneous), clothing and hair aren’t monthly occurrences.

For 2010 I decided to contribute to an ‘Annual Expenses’ Fund monthly for these line items. Here’s what I have:

Whenever one of these budget items comes up, I pay for it out my normal chequing account and then reimburse myself with a transfer from savings out of this dedicated fund.

So far it is working well. I will adjust amounts as needed, but so far these ones are fitting the bill.

My Credit Cards

In Uncategorized on January 14, 2010 at 8:00 am

You’ll notice, if you ever visit the actual blog and scroll way down to the bottom, that my credit card total amounts have changed slightly.

Credit Card #1 was paid off back in May and is now just used regularly for gas purchases paid monthly.

Credit Card #2 is a VISA, and the card I’ve had the absolute longest.

Credit Card #3 is my newest card, and was opened to transfer some higher interest debt on a balance transfer offer of 1.99%. Unfortunately, that ran out in December 2009 and it still wasn’t paid off. I still had $2,899 left. I don’t want to pay their insanely high regular interest rate of 19.9%.

Credit Card #4 is actually a LOC and is last on my debt repayment plan as it has the lowest interest rate.

For months prior to December, I was calling Credit Card #1 to see if they had any balance transfer offers I could use. Nadda. I really REALLY don’t want to apply for ANY NEW CREDIT if at all possible, so new balance transfer offers on new cards or any LOC’s are not an option.

This left me with a balance transfer to a lower interest rate card that I already have.

This means the new debt on my Credit Card #2 is now what was remaining PLUS the transferred balance from Credit Card #3. This will actually save me about $300 over the life of the balance versus just leaving it on Credit Card #3. Figured it was the best option I have available.

BUT, this means I can now close Credit Card #3. Hurray! (Maybe?)

Question: should I cancel Credit Card #3 now, taking a temporary dip in my credit score, or should I lower the limit to the lowest possible and wait until I can get my two other cards to 75% of their limits (which increases your score) before cancelling it?