How did I pay off $20 000 in 2.5 years?
- Started tracking my spending (I use Excel).
- Took advantage of balance transfers to lower-interest cards and line of credit.
- Moved into a small apartment, shared a bedroom with my son (the first year).
- Stopped buying coffee and a muffin each morning, and a cola each afternoon.
- Stopped shopping online and in stores for clothes and other distractions.
- Used a subsidized food box program once a month.
- Kept my appointments with social services for a child care subsidy. Also kept to their guidelines to keep the subsidy.
- Bought used car. Tried to keep up with repairs, but when it became too costly, parked it and took the bus.
- Let my sweetheart at the time pay for my outings (as a feminist, this was really hard for me, but it was the only way I could do anything that cost anything).
Why didn't I start riding a bike to work?
- I don't know how to ride a bike.
- But if I did know how, I would have to put my son in one of those trailer thingies to get him to daycare and school (at that time they alternated days). No.
- Canadian winters.
Why didn't I buy a house closer to work?
- Houses closer to my work are $50 000 to $150 000 more. I qualified for a $225 000 mortgage, which would barely cover a house purchase closer to my work, but the payments would have sunk me. The house I bought was actually further away than from where I was renting, but it cost only $150 000.
Why did I cash out my $8300 RSP account to buy a house?
- My intention for the RSP all along was a house down payment. It was never meant for my retirement. Knowing it was taxable prevented me from withdrawing it, I knew I could withdraw it tax-free under the Home Buyers Plan. If I had sent savings every month to an accessible account, I would have spent the money.
- I would have liked to have saved more than $8300 (which covered 5% down payment and lawyer's fees) but when Partner (ex) decided to move out, I had to make a tough decision. I could have continued to rent our house - if I could find a suitable roommate - or I could have moved us into yet another crappy rental. I chose instead to withdraw and invest.
- Yes, invest, because my intention is to pay off the house well before retiring so that my pension pay-outs do not have to cover mortgage payments.
Why did I buy a brand-new car?
- I had a list of what I wanted, and in the six or so weeks that I took to look for a car, I didn't find a car that fit into my list.
- I was so, so, so, so, so sick of car repairs.
- The interest was low (1.9%) for new, compared to used (4.9%) which made the monthly payments the same. Mind you, I had to add two extra years of payments to cover the whole cost of the new car, and trust me, I'm wasn't happy about it.
- Had I known I would be buying a house later in the same year, I would not have bought a new car. My partner (ex) did not discourage me, and he moved out six months after buying my used car from me.
Why aren't I power-paying off my debts?
- I'm a single mom, making just under $40 000 a year. It doesn't go as far as it could, if I were extremely frugal. But I'm not extremely frugal, just moderately frugal.
- Student loans are on Interest Relief (meaning the program/ government pays the interest); car loan is at 1.9% which works about to be less than a cup of coffee per day; mortgage is around 3% which is ok.
- If my interest rates were higher I'd be more anxious to pay off the debts. As it is, the budget is pretty tight.
Why do I work?
- I like my job. I like the people I work with. I like the workload.
- I work 9 - 3 (28-30 hours a week) Monday to Friday.
- I'm pretty much unsupervised, which means I can take time off when I need to and I rarely have anyone breathing down my back about anything.
- It's low-maintenance, meaning I don't have to dress up or look corporate. I could probably go without showering and still keep my job, but I wouldn't do that.
- I have two offices, one for each of my part-time positions. No cubicles here.
- Medical and dental 100% reimbursed, plus pension contribution from the employer. Makes it hard to want to leave!
- I didn't train for anything specific; my degree was in Liberal Arts. The positions I hold I think are perfect for me.
Why don't I have a side gig?
- I made baby steps to start my own business in 2013; at exactly the same time a part-time job was posted at my place of work; I was encouraged to apply and interview for it, which I did, and I accepted the job offer, thinking that steady income would be better than the precarious income of a new small business.