Wednesday, October 20, 2010

Confession (Debt Rut part two)

I did it. I said I wouldn't, but I pulled the trigger.

I bought a netbook. Actually, more than a netbook. About $300 more.

I put in some overtime hours and instead of putting the extra money onto my debt I used it to buy myself an early birthday present. A $600 early birthday present. A little laptop, that had all the specs I had been researching for the past six months. I tried to wait another month to see if the price would drop for xmas, but I gave in.

It's an Acer Aspire Timeline 1810T. I'm going to write a proper review for the Future Shop site and I'll copy it here too.

So far, a fun little toy.

Please don't judge me :)

Seriously, Karissa

PS: I also bought a new winter coat for $89. It's goose-down. Hopefully it lasts the season. It has been years since I bought a proper winter coat. PAID OFF.

PPS: I also bought a gym membership for $40 a month. So far I've been going to yoga twice a week and it's totally worth the money spent. Deducted from payroll each month.

Tuesday, October 19, 2010

I'd be rich

Recently my sweetheart and I had a conversation about lotteries. I told him that all I wanted was one million dollars. It's a ton of money for my purposes but really on the grand scheme of things it's not much. Think about it, all you have to spend is one cent and you're no longer a millionaire.

Anyways, if I won a million dollars - which I wouldn't, because I don't buy tickets - I would spend it like this:

$400 000 - one good piece of property to live and retire in. It doesn't even have to cost that much, but I would like to put aside a cushion for utilities and maintenance.
$40 000 - pay off every last cent of my credit card debt and student loans
$60 000 - take a trip around the world with my son and my sweetheart

That's only half. The other half I would put into trust funds for charitable donations, maybe a bursary at my university, and of course savings for my future and Bean's too. It's really not that much but it's a fortune to me, and hopefully I'd find a trustworthy financial advisor to help me out.

I would keep working at my current job or find another suitable part-time position that I enjoy, in order to keep cash flow in for everyday expenses - not rent of course, because I would have a house!! paid off!! My current position also pays into a pension and comes with medical benefits so it's worth sticking around. Like I said, a million dollars isn't really much in the grand scheme of things, but it sure would make a comfortable life for me!

Seriously, Karissa

Monday, October 18, 2010

Debt Rut

The dreaded debt rut. I think I'm in one.

I recently posted that I switched my focus from paying the credit card debt as quickly as possible to building a proper emergency fund, which I expected to deplete either if I went on strike or if I got the car repaired.

I didn't go on strike, but I did get the car repaired. Yet my EF still sits at just over $1000. The thing is, where recently I thought having savings would be detrimental to my aggressive debt repayment schedule, instead I decided I liked the look of a nice four-figure number in my bank account. I changed my mind, and that's ok. The debt gurus would be proud, because I now have a minimum EF.

So not only had my debt sat at $6500 for over a month, it's now actually increased to $8000, because I decided to use my line of credit to pay for the car repair, so that I could keep my little EF intact in my savings account.

The other thing I have decided is to re-visit the "Debt Diet," which I think Oprah was endorsing a few years ago. I watched her show a few times when I was home on mat leave in 2006, and I recently came across some notes I took during the show.

The Debt Diet tells us to create a spending plan as follows:
Housing 35%
Other living expenses 25%
Transportation 15%
Debt 15%
Savings 10% 

Modifying my budget to follow this chart means I will pay only $400 toward my debt each month, clearing it off by July 2012 (given I don't accrue more debt in the meantime). Meanwhile I should be able to save around $300 a month, which makes me feel pretty good about the future.

Seriously, Karissa