Wednesday, December 31, 2008

Moved in

We are almost completely moved in, and about half unpacked. The new place is more than great and Bean really likes it too. I was afraid he would be slightly traumatized moving from the only house he can remember. but he seemed ok playing with some fridge magnets in an empty house while I packed up the last of the kitchen yesterday. Happy new year from me, the Bean, and our cell phone!

Monday, December 29, 2008

Moving Day!

I might be offline for a few days while I get settled in. Wish me luck!

Sunday, December 28, 2008

Grateful

Gratitude List:

1) my friends: oh man, I am still laughing about our visit to karaoke last night. You guys rock, literally!

2) my strength: without it I don't know how I would get through all this packing. Moving day is tomorrow!

3) my spirit: now that I'm looking after it I can see the rewards. Everything is going to be just fine.

Saturday, December 27, 2008

The great big house sale

Well, the house is sold, and I'm here for two more days trying to get everything organized for the move on the 29th. These are the REAL boxing days for me. I wanted to get out today to pick up some more empty boxes - the ones from the liquor store are the best - but it's pouring rain and I prefer to putter around the house amongst my clutter. Putter with my clutter, ha. I heard thunder about an hour ago, which is just crazy for this time of year.

I wanted to post the figures that the real estate agent was using to sell the house. This stuff blew my mind really. Her calculations said that a 20% down payment would generate a mortgage payment of $560 a month. How incredibly inexpensive. I was paying $900 a month for rent, but like I mentioned before, I didn't have to pay property taxes or any maintenance costs. However I did have to spend a lot of my time looking after the lot: mowing the 200 foot lawn in the backyard, and shoveling the ice/snow at the end of the driveway. I will not miss having to do that.

Anyways, here's the chart:























The agent had the utilities listed at $50 per month which only made me LOL, and I changed it to $250, which is more realistic. So the Annual Income Required figures should probably be increased a little.

Since I am working part-time while Bean is little, my salary is under $30 000. This chart showed me that, without a down payment, I would have to be making a minimum of $40 000 a year to be able to afford a house. It's hard to believe that I managed to keep up for almost eighteen months on my little bit of earnings. It's something of which I am quite proud.

Friday, December 26, 2008

Fighting temptation

It's Boxing Day today and I'm tempted to get out to a couple of stores to see what's on sale. I have my PC gift card from my Mom, my credit at Canadian Tire, and a fifty dollar bill burning a hole in my wallet. I even have a scratch card that won me $2 that is trying to pull me out of my warm house.

As much as I complain about excess consumerism and the blight of the sweatshops, I do have a small wish-list of my own. In no particular order ...

A stainless steel kettle

because heating plastic scares me


One or two CD/DVD books

to help with my space-crunch in the new apartment


A fire-safe

to store my important documents and ID


A CD alarm clock

because my current alarm clock is terrifying to wake up to


A stock pot

for making my yummy frugal soups


and a pair of skinny black jeans

because my blue ones are looking a little worn



ETA: I just looked out the window to see a whole lotta white stuff, so I guess my shopping list for black-coloured goods will have to wait a while longer.

Wednesday, December 24, 2008

Vacation message


The Bean and I are heading off today to visit my Dad and his family. In case I'm not back online for a few days, I wanted to wish you all a safe and happy holiday.

Tuesday, December 23, 2008

Hare Krishna Dollarama

Well it's the day before the day before christmas, which means a lot of us are probably going to make the last-minute mad rush to the dollar store for gift wrap and stocking stuffers. I can only imagine the line up at the stores today.

I used to be a huge fan of the dollar store. I remember being thrilled when they started accepting debit cards. I went beyond buying practical things for my kitchen, such as dish sponges and plastic wrap. I decorated with things from the dollar store. I remember going for a beach theme in one of my apartments, and I put sand, river rocks, and shells in glass containers (all purchased from the dollar store) all around my living room. I didn't have to travel to a sunny place to be at the beach. And how could I afford to? I spent all my money at the dollar store!

I liken my shopping addiction to a spiritual crisis. I was so lost that I had to spend and accumulate. I studied International Development in university, so I had a pretty good understanding of the holistic nature of the global economy and how consumerism in the North affected the livelihoods of the South. But I was disillusioned with my life and felt I had nothing to believe in, and was content to identify myself as Collector of Ceramic Elephants, or whatever kick I was on that month.

Have you watched Story of Stuff? It takes just a few minutes to get a basic understanding of what our consumerism is doing to the rest of the world. And Andrea of My Big Fat Italian Life recently posted about the horrifying conditions of the sweatshop. I know it's not in the christmas spirit to think about the sad events of the world we share, but I think these are issues that are important to think about everytime we pull out our wallets throughout the year.

We already know that the global economy is not sustainable in its current condition and that drastic changes have to be made. I don't think it's too late to be saved. Saying "dollarama, dollarama" ten times fast may sound like "Dalai Lama, Dalai Lama," but going there is not food for our soul. And neither is mass consumerism. It's time to make a change.




Monday, December 22, 2008

Recycled Gift Card Box instructions

Because I was so impressed with the greeting card gift box, I did a google search for instructions and decided to share them here. The box I received from my friend was made in true origami style, without any tape or glue.

Kaboose.com


Clifford Morris



allfreecrafts.com



Craftypod.com



ehow.com



kid-at-art.com


Sunday, December 21, 2008

Gratitude List

It's gratitude day today, and I may seem a little repetitive when I list my son, my Dad and my job, but here we go:

1) My son is just so beautiful and brilliant. I took him to the Winter Solstice celebration with the Universalist-Unitarians (the church I attend) today, and he was such a good boy. He played so calmly and nicely in the nursery while I attended the service in the sanctuary, and he was quite entertaining during coffee afterwards, running across the big stage with the bigger boys and playing the piano gently and nicely. I am so grateful to have such a special little boy.

2) My Dad just called worried because each time he called the past few days, my phone was turned off (not for any particular reason). I am truly grateful that he is always there when I need him, providing me and the Bean some stability from some two and a half hours away, and that he makes the effort to check in with me every few days to make sure everything is going ok.

3) We just returned from a get together with people from work. There must have been five or six kids there for the Bean to play with. We shared a fantastic buffet and enjoyed great conversation. It's been a long time since I worked somewhere where people could socialize together outside of work. I'm grateful that we were invited, and that we had such a great visit.

Saturday, December 20, 2008

The True Cost of Things - Melody Beattie

From the book More Language of Letting Go by Melody Beattie:

The cost of a thing is the amount of what I will call life, which is required to be exchanged for it, immediately or in the long run.
--Henry David Thoreau

Consider the young man who was doing great in his high school studies, then suddenly started to fall behind. One day, a teacher pulled the young man aside and asked him what happened. The student told him that he had asked his father for a car, and the father told him that if he earned the money, he could have one. The student, being industrious and hard working, went out, got a job, saved the money, and bought the car. But then the car needed insurance, gas, and maintenance, so the student kept the job to keep up the car. The job took up more and more of his time, until finally he began to fall behind in his studies.

"Why don't you just get rid of the car?" asked the teacher.

"Get rid of the car?" came the reply. "How would I get to my job?"

How often we feel that if we just get that new car, that new boyfriend or girlfriend, that promotion, or the condo in the good neighborhood, we will find happiness and contentment -- only to discover that the thing just brings with it more pain, more costs, and more bother than it's worth. The new sports car runs only half the time, the new partner needs more care than your dog, the promotion eats up your weekends, and the new condo won't allow pets.

Things don't bring true happiness. Instead, they often sap your strength and leave you emptier than you were before. Think about the true cost of a thing before you pursue it in time, lifestyle changes, energy, maintenance and money. Can you really afford the amount of life that the thing will take from you in return for the happiness it brings? Are you willing to pay the price?

God, help me be aware of the true cost of the things in my life.


Friday, December 19, 2008

Once upon a time I was good with money

There was a time ... no really, I used to be really good with my little bit of money. Sometimes I tell myself that I am still good with money, but that I had a few "bad years" where I just wasn't being myself. But there were "good years" and I will call on them for inspiration as I move us into our new budget lifestyle.

I went out on my own when I was seventeen years old. Back then a monthly social assistance cheque was just under $700 and included medical benefits. I rented a three-room apartment just outside the big city for $435 a month plus about $20 for hydro. My basic phone bill was just under $20. I didn't have cable television, and back then, there was no internet. I found a store in Chinatown that sold cartons of cigarettes for $25, and I bought one a month and rationed. I had a boyfriend who loved to cook and kept me well-fed with big, cheap, vegan meals. This was also the days before debit cards, so when I did spend money, which was a rare occasion, I used cash. I had an excellent habit of keeping my dollar coins and quarters in a cash box, and within a year had enough saved up to buy myself a bass amp so that I could play in a band.

When I was nineteen I got a job in a retail store that paid about $7 an hour. For a couple of years I lived on less than $900 a month. I shared a two-bedroom apartment in the heart of downtown Toronto, and my roommate and I paid $450 each, utilities included (that apartment is probably about $2000 a month now, twelve years later). I lived on the "envelope system," long before I had even heard anyone else speak of it. It just made sense to me. Every two weeks when I got paid I cashed my cheque and divided up the money into five blue letter-sized envelopes which I kept in my bedroom: one each for rent, food, phone bill, transit pass and spending money. My only spending weakness (besides cigarettes) was an almost daily visit to the sub shop to have a sandwich for lunch. If I wanted to buy something, like a purse, I would forfeit my subs for a few days until I had enough money to buy what I wanted. I continued to save coins, which I would roll up from time to time and deposit into a savings account. In one year I saved over $1000 which I used to rent recording equipment to make a demo tape for my band.

It was at the age of twenty-one that I decided to apply for a student loan to go to college. I don't know why I didn't try to save up to go, but I wish now that I had. I think I was afraid that I would never have enough to pay for school, and having the loans meant I could start my education immediately instead of having to wait - and work - a few more years. I think as well it was this first loan that started to change my mind about money, because it was so easy to get, the amount was so substantial ($7000 - more money than I had ever seen all at once), and I believed that it was "good debt." I knew I would be in school (and in debt) a long time, with my academic background, but I was thinking of becoming a teacher, and I assumed I would make a lot of money and would be able to pay back the student loans quickly.

Now, more than thirteen years later, I am not a teacher, but a secretary. But I have been taught a lot. I know now that it was my lack of self-awareness that let my mindset about my finances spiral out of control. I have learned my lesson just in time, so that I can now teach my son very valuable lessons about money.

Thursday, December 18, 2008

How cute is this?

It's just like me put in a rant about gift cards, and then find something a little magical to make me eat my words.

It's this:


A sweet little gift box, filled with love, that I received from a lovely friend yesterday. It's made out of an old greeting card, which I think is just fantastic. Especially since I'm one of those people who can't throw out a single card I receive.

I'm actually going to pull this little box apart to see how she made it, and then when I get all my old cards together, I'm going to get to work and make a bunch myself (after I move of course).

Just think how excited I'll be to purchase gift cards now that I'll have a cute little homemade something to put them in. And recycled at that.

Wednesday, December 17, 2008

The great gift card cop-out

This is not the first year that we are exchanging gift cards as gifts. While I try not to let it bother me too much, I can't help but think of how ridiculous it is.

My Mom wants a gift card for Future Shop.
My sister wants a gift card for La Senza.
My nephew wants a gift card for Stitches.
My Gramma wants a gift card for Chapters.
And myself, begrudgingly after some badgering, agreed to a gift card to any grocery store that sells President's Choice.

Call me Scrooge, but I just don't understand the exchange of gift cards. There is absolutely no thought involved in this purchase. I don't see why we can't save our money and spend it on ourselves. I know what I want and need, so why don't I just get my own stuff? Or better yet, why can't I save my money and put it towards my debt?

The image of it makes me cringe: we all get together, and exchange gift cards. No surprise, because we already know what we're getting.

Maybe it would be better if we all lived in the same city and could go shopping together. Then we could help each other with our shopping and show off our purchases over dinner at the food court. My Mom's flat screen, my Gramma's books, my nephew's clothes, my sister's lingerie, my groceries ... ?

This image replaces the cringe-worthy with one that makes me L.O.L. But I have a strange sense of humour.

I asked for a grocery store gift card because my 2009 budget allows only $200 a month for food for Bean and myself. I thought the card would come in handy if there is a month where I end up going over that amount.

So, what I can do then is keep the spirit of christmas going all year round. Each time I buy something with my gift card I can keep the packaging to show my Mom, or I can take a picture of it, edit a nice christmasy frame around it, and email it to my Mom, so she can see what nice things she got me for christmas 2008.




Monday, December 15, 2008

Sunday, December 14, 2008

Gratitude list

Today is the day I list three more things for which I am grateful:

1) my STUFF, even as it goes out the door to new owners, because of its usefulness and pleasure-giving capacity; and knowing that the accumulation of it does not have to determine my real identity

2) my capacity for love and honesty, and how I am willing to look for it in so many people and places

3) my friends, far and wide, who have brought me pleasure and helped me through pain; I hope to make the opportunity to do a lot of catching up in the coming months

Hope you're having a great day.




Saturday, December 13, 2008

A Busy Saturday

I think I got a lot done today but I still have so. much. to. do.

After coffee with a friend I did a little bit of christmas shopping. I noticed as I walked around a clothing store that I just didn't see much that I liked, whereas only a couple of years ago I would have filled a great big bag with clothing for myself. I don't know if my tastes have changed thanks to age, or that fast-fashion is just really ugly not nice these days. However, I did pick up two long-sleeved t-shirts: 2 for $10. I know they will get a lot of wear because I have the same ones in short-sleeved and I reach for them first as soon as they are out of the dryer. I also got a pair of knee socks for $2, and you can't go wrong with that price and with this minus 10 weather I know they'll be well-loved.

After my little shop I came home for lunch but had only a couple of hours to spare before the agent came with a prospective buyer for the house. This is a pain, especially as it's not my house, but I have to keep reminding myself that my landlord took over the utilities bills for the rest of the month to compensate for the inconvenience. Hopefully this will save me at least $100.00 plus I won't have to worry about any residual bills arriving at my new place in January, so I can begin my new budget free and clear.

I finally got around to organizing two bins of Bean's outgrown clothes and took them down to the consignment store. The sales lady accepted only one bin, but did inform me that I had $49 credit from the batch of stuff I brought in last month. I decided to keep it on file and have the new stuff that sells added to the balance so that I will have a nice amount to trade in for a birthday present when Bean turns three in the spring. Boy the news of that $49 made me feel really good. That's more than I expected!

After the consignment store visit I went to the grocery store and cashed in all my points for toys for my step-siblings' kids. Normally I use the points for toys for the city toy-drive, but this year I used them for my own family. Hopefully once I get my finances figured out and my new budget in place and working, I will be able to save up some cash to donate to charity. But that's a topic for another post :)

So today feels good. I'm going to head into the basement to figure out what is coming with me to the apartment and what is going out out out. Stay safe! Stay warm!



Friday, December 12, 2008

Dear Santa: Mama wants World Peace and a new pair of boots

Bean and I went up to the mall yesterday to visit Santa. We've been visiting the same little Santa hut since his first christmas in 2006. That year a professional photographer in the mall took the photos - $5 for one or 3 for $10 with all proceeds going towards a charity for animal welfare. Who could resist? The pics turned out really good too. Last year the photographer was a kid with a digital camera from Radio Shack-The Source-Circuit City or whatever that place is called now. The pics weren't as good but the price was still the same, so I didn't complain.

This year it was another kid and he told me to pick up the photos from Staples this time. The price was even better: 3- 4x6 pics for $5 or 2- 5x7 for $10. I only planned on buying one photo, as I did last year, because when I get home with it I scan it, photoshop the year in, and send it to Photolab for wallet-sized pics to go in my christmas cards. Sure beats having to buy one of those ridiculous packages from a studio. I did that for Bean's first christmas and I swear at least half of those pics are still in the envelope they came in. Not to mention the cost!

My kid was a little shy at first but he warmed up to Santa pretty quickly. He kept sticking his tongue out at the photographer the way he does when he's acting shy, but I'm pretty sure the pic has his tongue tucked in. I told him to tell Santa that we wanted World Peace this year for christmas.

And speaking of those boots, I saw them in person (on person?) today, and I actually stopped her to take a good look. Man, they are nice boots. She said she found them on sale last year after christmas and that I should wait for the boxing day sales. I could, but I doubt I would find them for cheaper than $250, and I am not moving into a one-bedroom apartment so that I can afford to buy those boots!



Thursday, December 11, 2008

The keep your receipts / de-cluttering dilemma

I used to keep all my receipts for everything, and then went to the other extreme and started recycling them as soon as I took them out of the shopping bag. Lately I only keep the credit card receipts, so that I can match them with my statements, but I so rarely use credit cards now that I'm fanatical about frugality.

Almost a year ago I purchased two high-quality furnace filters and ended up using only one of them. Of course, the receipt is long gone (or buried in a clutter-box in the basement) but since we're moving out of the house at the end of the month I decided to return the one unused filter.

Now I know I paid about $30 for it, but because I didn't have the receipt with me I had to accept the last sale price, and on a credit note at that. So now I have an $18 credit at Canadian Tire. I think I have a couple of months to use it, so when I go through those clutter-boxes this weekend hopefully the original receipt turns up, and I can return to Crappy Tire and get all my money back, and then turn around and spend it again on a Christmas gift.

Oh, the joy of de-cluttering. With me, like with most things, it's one extreme or the other. I throw it out without thinking or I keep it forever. Like those clutter-boxes I mentioned. I can think of at least three that I have to dig out, empty out, and hopefully throw out. I can't take all this stuff with me to the new apartment, where I'll be in a bit of a storage crunch.



Wednesday, December 10, 2008

These boots were made for layaway


I had a few minutes to spare a couple of weeks ago after a coffee date, and wandered into a local shoe store "just to take a look." Immediately I was drawn to these beauties. Black leather, form-fitting, beautifully-detailed, weather-proofed and made in Canada. *Drool*

The price tag was about $350 and I knew if I wanted them it was either save for months and months, or reach for the credit card.

According to several web sources, layaway is making a comeback. I guess I could exercise this option, but with my budget, I don't know if my local shoe store would be willing to hold these boots for, oh about twelve months.

Maybe Santa has a thing for boots too, and will find me on his Good Girl list this year.




Tuesday, December 09, 2008

If I only had a house

I just got off the phone with the real estate agent. I guess when I gave my sixty days notice on the rental house, my landlords searched their souls and decided they just didn't want to try to find another reliable tenant. Apparently they've had some real characters rent this house before I came along (not that I'm not a character, but I'm a pay-rent-on-time-and-don't-wreck-the-property character).

A very small part of me wishes I could buy this house, as I'm sure it won't be too expensive, but even if I did qualify for a mortgage I don't know if I could keep up with all the payments. Plus I'd be responsible for all sorts of other fees, including property taxes, and if anything went wrong I'd have no one to call on to get it fixed, at their expense. Nope, looks like I'm going to stick with my plan to move into the one-bedroom apartment and get the consumer debt paid off in two years. Then I can begin saving for a house and all the extras that go along with being a property owner.

In the summer of 2007 I went a little house-crazy. I was renting a really horrible apartment and just desperate to own my own place. I didn't know how I would do it, but I was sure that my good credit had to be good for something. I thought if I found the right banker they'd be able to suggest a good plan for getting my own house, quick. Instead I was told that my debt-to-income ratio was pretty dismal, and that even though I never miss a payment I was still considered a bad risk, and that I should return and talk to them when I had a full-time job. I tried again with a credit union a few months ago, this time to get a debt consolidation loan, and was told the same thing.

So, one-bedroom apartment, here we come. Only 20 days until Moving Day.






Monday, December 08, 2008

What do you think of credit counseling?

A couple of years ago, when I was home on maternity leave, and my credit card debt was somehow about half of what it is now, I called a credit counseling agency to see if they could help me manage my debt.

Despite all my silly mistakes with my overactive spending habits, I always managed to keep my head above water. I always made my payments on time, minimum payments at the very least. I was (and still am) obsessive about checking my balances and watching due dates and paying attention to any promotions that come in the mail for my credit cards. With a lot of love and hard work, my credit score was, and still is, quite good.

The credit counselor told me that I have something called an R1 rating, and the advice he gave me was to stop paying my credit cards for a few months. When the red warning letters started coming in, I was to contact the credit counseling agency again and let them handle it from there. He told me, after much questioning and prodding on my part, that this course of action would immediately bring my R1 to an R7. When I told him I didn't think this was such a good idea, he told me that within three or four years my credit would be back up to an R3 or R4, and from there I would have nowhere to go but up.

I was doubtful, but I accepted the email application and told the counselor I wanted a few days to think about it.

A quick search on the internet didn't help, because of the huge number of these types of agencies, which only make it look like a good thing. I called my Dad, who has experience in bankruptcy and consolidation, and he didn't know what to tell me. I slept on it for a few days, and my gut told me that I shouldn't jeopardize my excellent credit, something I had worked so hard to keep no matter what was going on in my life.

Even though I can't yet buy a house and I require a co-signer to get a loan or extend my line of credit, I know I am now better off for letting the credit counseling go. It was a hard decision, because I was so tempted to just not make the payments and put the money away instead. I really want to save up for a down payment for a house. But I will need my excellent credit for that big purchase, and I will never purposely jeopardize that.

What do you think of credit counselors? Do you think I made the right decision?



Sunday, December 07, 2008

Sunday gratitude list

It's Sunday, and I'm skipping services to drive about an hour and a half to visit a dear friend and her family. I'm nervous about driving on the highway without snow tires, but the sun is shining and my mp3 player is loaded and ready to play. All I need is a bite to eat and a coffee and I'm good to go!

Today I am grateful for:
1) my beautiful son, who picked me to be his Mama and came into my life at the perfect time
2) my family: Dad who tries so hard to help me out, my sister cheers me on, Mom who makes me think, and Gramma who supports me no matter what, my brother who always lends an ear and my nephew for being awesome.
3) down time! Now that my course (and degree) is complete, I have my weekends to myself again. There are so many things on my list to finish, and start. I'm grateful that my life is one that affords me quite a bit of leisure. I will do my best to use this time wisely.

Happy Sunday!



Saturday, December 06, 2008

Will someone please bail ME out?!

Twenty thousand dollars. No matter how I spell it, I owe $20 000 in consumer debt. Sometimes it's all on my one "low-interest" credit card, sometimes it's spread out amongst three to capture low-low interest offers. I don't know the exact figure but I think my combined credit limit is about $50 000, and that includes the line of credit my bank offered me last month. So, I'm using less than half of my available credit. That's good, right?

Like most people with credit card debt, I can't even tell you how it got this high. I'm pretty sure that when I began working full-time after getting my B.A. in 2002 I owed only about $1000 on my credit card. Then the cheques started coming and I started to really live beyond my means. I was getting my hair done once a month. I smoked a pack a day. I frequented a couple of bars and clubs two or three nights a week. I bought a used car, and the Wal-Mart was suddenly that much closer to my house.

I struggled to quit smoking. Every time I would go a day or two without a cigarette I would reward myself with a purchase on ebay. Ebay became a serious addiction for me. Online shopping replaced my trips to the mall. Then I decided to go to Thailand for eight months and even though I received a generous student loan I also used my credit card quite a bit while I was there. I made only minimum payments for months and months. The compound interest snowballed.

Before I left for Thailand I gave almost everything I owned away, and stored a few things at my dad's and brother's. When I returned to Canada I had to start over again, but because I wasn't working I had to use my credit card. I started taking cash advances, which are just brutal in terms of interest.

Then last year I took some really bad advice (from someone planning to be a financial advisor - yikes!) and consolidated all my debts onto one credit card. The compound interest accumulation was/is phenomenal. I have been making the minimum payment of almost $400 a month for almost a year now, and managed to scrape only $1000 of the balance. Then my old car decided to act up and I used the credit card to pay for the repairs, bringing my balance right back up again.

So how do I fix? I'm currently re-spreading the one credit card balance over a couple of other cards that have low-interest offers. I'm going to put as much money as I possibly can on these cards, but when the offers expire in June I'll have to move the balances again. I have the line of credit now, so that will probably absorb some of it, but I don't have a high enough limit to take the whole debt load.

It'll all work out. I just have to be more strategic, and incredibly vigilent with my budget.



Friday, December 05, 2008

My Student Loan

Yesterday I wrote my last test for my last course for my Honours Bachelor of Arts in International Development and Cultural Anthropology.

I started this degree in 1998. I studied for two years full-time, and then two years part-time and graduated with a General B.A. in 2002. I was hired at the university six days after my graduation and have been completing the course requirements for an Honours with a tuition waiver that is available to members of the union to which I belong.

So you can imagine how relieved I am to have this degree finished, and I look forward to receiving the parchment so that I can frame it and put it up in my office next to the one I received in 2002.

I borrowed a lot of money to start and continue this degree. My first student loan was a shared-risk loan through a Big Bank, prior to the creation of the National Student Loan Centre, for a year of college in 1996 that qualified my entrance to university. The Big Bank gave me two more years of loans for full-time university studies before the Student Loan Centre took over. Then I found a loophole in the system that gave me almost full-time funding for part-time studies, and received two more years of loans before graduating in 2002.

Typical of a person accruing huge debt, I didn't think ahead to the repercussions of my actions. I wanted to go to university and I wanted the maximum amount of money to do so. I decided to worry about payments later, when they became a reality. I also made the mistake of ignoring the six-month "grace period," even though I was working full-time six days after graduation and making pretty good money. When the grace period was over, I consolidated my loans and made the minimum payments as suggested by the National Student Loan Centre. I didn't even question the re-payment system. I just allowed them to take the amounts they had pre-determined from my bank account each month.

Then in 2005 I took a leave of absence from my job at the university and applied for another student loan, so that I could attend university full-time for eight months in Thailand, and earn the remaining credits for my Honours degree (I didn't end up getting the credits I needed).

Six years of student loans = about $34 000.

Plus I accumulated a massive credit card debt during the years of 2003 to 2007, because I had the poor mentality of "I already owe so much, what's another 1-2-3-4000 dollars!"

But I have worked hard to change that mentality. I am grateful for my education, and my job at the university. I tell myself that I did what I had to do to get to this point. This debt reduction is just another challenge for me to overcome, and I'm excited about it.



Tuesday, December 02, 2008

Suggested Strategy #1: Increasing Income

A couple of days ago I mentioned two strategies that are commonly suggested in order to tackle a debt burden. Strategy #1 is to increase income, and strategy #2 is to reduce expenses. As I've already dedicated a couple of posts to reducing expenses, today I am going to muse about increasing my income.

See, my hands are a little bit tied here.

I went back to full-time work when my son was ten months old. As a single mom (with very good timing) I was eligible for a city daycare subsidy, and I managed to find a space in a daycare centre at the other end of town. Leaving my son there each day was torment for both of us, and I could hear his sad wail as I left the building, and it would haunt me all the way to work.

A job posting came up for a position that offered a higher hourly wage, and reduced hours. I submitted a resume first, and then spent days making lists and agonizing over whether I could afford to take a decrease in pay of about $350 a month.

As I was contemplating making the change, I realized that by continuing to work full-time I would no longer qualify for Interest Relief and that the NSLSC would soon be demanding a monthly payment of about $350. I did the math and realized that if I accepted the part-time job I would still be eligible for Interest Relief. This to me was a temporary solution to a large debt that I hoped I would be better prepared to deal with at a later date (the usual rationality of a person in debt).

Accepting a position with reduced hours (and reduced pay) also kept me in a lower tax bracket, meaning that I would receive a larger Child Tax Credit and GST rebate.

Ultimately my decision was not made on finances but on how much time the new position would give me to spend with my son. To me, time is worth more than money. Reducing my work hours gives me at least an extra two hours a day with my son, and also means that his time spent in daycare is for about six hours a day rather than eight. And since we got a spot in the daycare at my work, I can also be there whenever they call, like when he had a fever of 104 last month, or when he got stung by wasps last summer.

So, long story short, it's very difficult for me to increase my income. I sell a few things here and there on ebay, and I take Bean's outgrown clothes down whenever the consignment store will accept them. I'm thinking of renting a table at the local farmer's market to sell a product that my Dad has developed, and I hope to blog about that at a later date.

Any other suggestions for me to help increase my income?




Monday, December 01, 2008

Reducing Expenses, Part Two - the Forbidden

I mentioned in a previous post that I am on a mission to reduce expenses. Besides the obvious, such as turning out the lights and turning down the furnace during the day, I have made some big changes that affect how much money I put out to expenses.

The first thing I did was tackle the urge to shop. I cancelled all of my email subscriptions that screamed LAST TWO DAYS TO SAVE! HURRY! While de-cluttering my inbox it also reduced the heartstopping insane chatter of "OMG I have to order this RIGHT NOW OR ELSE!"

I also made a habit of throwing out the shop flyers as soon as they reach the mailbox (poor trees, I did put a sign on the mailbox, but the carriers do not read it). I put a blue box directly under my mailbox, and when the flyers arrive they are immediately pulled and tossed into the box. Once in a while I might pull out the grocery store flyers to look for reduced prices on chicken, but I do this seldomly.

The biggest step I took to reduce my expenses was to put a ban on one of my favourite stores: the drug store. Because I moved so often I kept a P.O. box at the drug store, and my daily mail check was an excuse to look at the flyer, visit the sale section (conveniently located next to my P.O. box!), wander up the cosmetic aisle and down the snacks aisle. I was susceptible to the BOGO (buy one, get one) sales and was forever giving away bottles of soon-to-be expired vitamins. I had a bathtub lined with bottles. They were hiding behind mirrors and under the sink. I moved a microwave stand into the bathroom to hold the spillover, and its top was full of products. Moving was a hassle because I would have to pack three or four boxes labelled "BATHROOM."

Since I had my son in 2006 I made a big change to my routine. I cancelled my P.O. box. I stopped going to the drug store. I stopped colouring my hair (who has time to keep up with roots when you have a wee one?). I rarely wear cosmetics and make do with one lipstick and one tube of mascara. I buy my shampoo and conditioner from my step-mom's hair salon at a reduced price. And for some reason, I receive at least one bottle of body lotion each year for Christmas, so I have a surplus. Recently online I came across a coupon for a FREE bottle of body wash, so I emailed for it, and am looking forward to trying it when my old bottle is finished. I buy face wash and moisturizer maybe once a year, and usually from the local health food store.

My son is young enough to not require a lot of expenditures. I used cloth diapers for the first year (hydro was included in my apartment so I didn't have to pay for loads and loads of diaper laundry) and since switching to disposables have found a generic brand (yes, at the grocery store) that works well and is pretty cheap. I never did bother with the vaseline/lotion/powder routine, and found one excellent tube of diaper rash cream that lasted for more than a year.

So my advice, if anyone is asking, is don't go there. Just stay away. Stay home. Go to the library. Stop shopping! Start saving!