Scare Tactics

Scare tactics are effective on the elderly

One of the most remarkable things about writing a financial blog is how open people become when talking to me about their own financial struggles. Listening to other people’s challenges and successes gives me a lot of reassurance as well as tons of hope that I can continue to get ahead with this process. A common theme in the discussions I have with people who still carry debt is that most don’t have any idea how they can get their debt paid off. Fortunately I have tons of ideas to help them out. The part that usually baffles me though is how long people are willing to wait to pay off their debt in full.

For example, when I look at my current “repayment plan” for my student loans, my lender projects that I still have another 89 months (7 years and 5 months) of minimum payments to go before I will pay this off entirely. Not only that, the amount of interest I will end up paying is $1,837.78. I hate dumping any of my hard earned money onto interest payments so when I hear about people being comfortable with paying off a small amount of debt over such a long amount of time, I want to smack them over the head and tell them to wake up. I get it, we all feel entitled to the best of the best, and since we work hard, we should be rewarded. The problem is that if you keep resorting to credit to buy everything you want, you could end up with nothing when the debt gets quickly out of control.

If you were like I was, teetering on the brink of financial disaster, you need to stop and take control of your situation before it gets unmanageable. There are some major signs that you should be weary of such as: not being able to make more than the minimum payments on your bills; not knowing how much debt you have; living paycheck to paycheck; having no savings; creditors constantly call you for payments; you remortgage your house every other year; and the list goes on. I recently read an article (I’m sorry I can’t remember where) where most financial advisors said they wished that people would have come and seen them sooner to deal with their finances rather than later because most of the time, they are too far gone to be helped and they have to file for bankruptcy. This couldn’t be any truer. If you are like I was with my money, look for something that will motivate or inspire you to get your debt repaid. For me, I can think of a lot of things I would rather do with $1,800 other than use it for interest (like a mini vacation), and not to mention how less stressed I get as the debt numbers go down. Debt repayment is work, but when you build a strong support system like I have, it is completely possible to do.

  

Canada's Debt Clock!

Ok, so you may be wondering what is with the scare tactics/pep talk? In one of the conversations I had recently with someone who I don’t even really know, she told me about Canada’s debt clock at debtclock.ca. This site has a scary tracker of Canada’s ever-rising debt total. The site claims that by March, 2012, Canada’s debt will have skyrocketed to over $585 BILLION dollars. According to the site, “That’s $61,454 per minute, $3.7-million per hour, or $88.5-million every day!” Right now that means that on average, every Canadian is carrying $16,000 of debt. Now, with spending projections this holiday season, we can only expect this increase to rise even further.

But what can we do to reduce this number, right? We can’t be responsible for other people’s neglectful spending, but we can certainly do our part to encourage others to start spending money smarter, especially over the holidays. In a country where we buy everything we want on credit, I find it surprising that people have anything left to buy for each other at Christmas that they don’t already have! Just like last year, I want to emphasize that there are so many ways that you can save money this year during the holidays.

Make a shopping list like Santa!!

When you are out shopping, be like Santa and make a list. Making a list when you shop will help keep you on track with what you want to buy for your loved ones. Try to keep the list as specific as possible, and write down the items that you want to buy even for the stores where you know what you want to buy and put a price limit on how much you want to spend. If you want to go the extra mile, look for deals online for items that you want to buy and save yourself even more money (as long as the shipping isn’t ridiculous). If you can stick to a list, you will have an easier time staying on budget.

Leave the credit card at home. This is a general rule for me everyday, but it’s even better to put into practice during the holidays. You shouldn’t have to go into debt just to buy everyone you know a gift, and nor should they. Don’t ever feel bad about giving a friend a card or simply asking your family to do a gift exchange instead of buying each of them a gift. And if you’re doing a gift exchange with friends, think doing what my friend Gigi does and have everyone re-gift something that they don’t use! This idea is not only a great way to recycle, but it is also a hilarious way to spend time with your friends during the holidays!

Be thoughtful with your gift giving. Can you think back to 5 Christmases ago and remember everything you got? Even better, can you remember all the things that you bought for your loved ones? I find that the gifts I remember the most are the ones that were made by someone.  I remember one year when my brother blew up a picture of us as kids working with my Dad. He was so moved by that photo, which it really made the whole day a wonderful and memorable experience for us all (and no, it wasn’t even Christmas day). I can’t tell you what I got for the past few years other than maybe some money but I don’t even remember the amounts. What I do remember are the fun times that I had with my family which I guess is why I go back home year after year.

The holidays can be the most stressful time of the year, or they can be the most exciting and memorable. With the debt counter climbing higher, take time to stop and think of ways that you can contribute to reducing your debt instead of augmenting it this season. The holidays will become less stressful if you plan ahead and use your own money, not the banks’. If you’re reading this and thinking, “well $hit John, it’s too late now”, then perhaps you should make it your new year’s resolution to put $25 a week into a special “Christmas Savings” account and by this time next year, you will have $1,200 to spend ‘til your heart’s content. 

Lordy Lordy, Look who's Forty (Percent Paid off)

Whoo! I'm cruising along!

Ladies and Gentlemen, I am very happy to announce that I have managed to pay off almost 40% of my debt now! Isn’t that incredible? It’s barely been a year! Not only that, I have paid off more than $11,000 in credit card debt! I am unbelievably happy about the way things are going with my repayment plan. Now that the interest payments are getting massacred, I am paying off more and more principle so MasterCard doesn’t know what hit them. What makes me even happier is that I bought 2 plane tickets home for the holidays for $700 each AND gave $100 to charity and despite having purchased $1,400 worth of stuff; I still managed to reduce my card to $3,558! Finally I am feeling more like one of the converted.

During this economic meltdown, I am becoming quite grateful that I started this process when I did. I can’t imagine what some people out there must be feeling with debt like I have and the possibility of losing their jobs looming over their heads. I think the message is becoming ever clearer: we need to plan better. Not everyone is going to agree with everything I say, but I think it’s about time some of us got a debt enema and cleansed out some of this $hit. I read an interview with my besty, Gail Vaz-Oxlade where she talks about getting rid of credit scores and eliminating credit card debt. She describes a generation out students that got duped into signing up for credit cards with high maximums and embarrassing interest rates.

Inspiration!

To make matters worse, the government’s student loan program has ridiculous interest rates and students are paying the price. To add to the frustration, it is getting harder for graduates to find a good enough job to even start to pay back their loans properly other than with just the minimum payment. The repayment plan is so lousy that they have people paying off their student debt for 10 years and accumulating thousands of dollars in interest. It’s no wonder this generation is not learning any positive lessons about credit. Now don’t go thinking that I’m going to be sitting in some tent somewhere protesting about the world’s inequalities and all the problems that causes (believe me, the list is huge), but I really just want to shake some sense into some people who think that it is sustainable to live the way they do and rack everything up on credit. Why do we always try to keep up with the Joneses when they are probably in just as much (or more) debt than us?

This is the part where I challenge you. In Gail’s interview, she is challenging everyone to live without using their credit cards for the week of November 13 to 19. Just one simple week and it’s so much easier than you think (believe me; I go months at a time). If you are one of the people who is automatically thinking, “no effing way John, I can’t live without my credit card, especially during black Friday”, then you probably really need to try this exercise. Really, calculate how much money you are spending every year on interest. On a card with 19.9% interest, your $100 item becomes a $119.90 item in a year. You buy a $1,000 item and that jumps to $1,199.00 for that item. In my case, my interest rate was 18.9%. I carried a $14,581.45 balance, which means that in one year, I would pay $2,755.85 in interest! It’s no wonder the credit card company kept increasing my limit; they wanted me to be able to carry more money on my card!

I think the sign is self explanitory

So here’s where I challenge you (see what I did there, it’s called role reversal); try to go a week without using your credit card, or better yet, go the entire month. Leave your card in the freezer, throw it behind a heavy piece of furniture, and just learn to leave the house without it. For those of you who are feeling extra ambitious, go the extra mile and calculate how to get rid of the balance on it once and for all.  There is a great debt repayment tool on CNN that allows you to enter as many of your debts that you have and it tells you exactly how much you will need to pay on each one of your debts. You can then set it the time you want to pay it off in and it will adjust the figures accordingly. Give it a go! You really can pay of the debt, it just takes a bit of focus but it is certainly possible.

Good luck with your challenge everyone!

John

Back from Saskatoon!

I'm cah-razy!!

Oh geez, Saskatoon had its way with my wallet! After the whole 4 hours of waiting in the airport ordeal, I finally got my meal voucher and get this – it can’t be used on beers! Honestly, I know how much of an alcoholic I must come across as in my blog, especially since alcohol was one of my biggest expenses before I started this whole rebudgeting thing, but when you’re at the end of a long week and stuck in a boring airport, you want a drink letmetellya! Anyway, I made the big mistake of bringing my credit card with me on the trip and since I was going into my Saskacation without any money in my bank account, I was stuck using my MasterCard to pay for a lot of stuff, I think it was something to the tune of $400!

There is a very good reason for why I leave my credit card at home and why Gail cuts them up on her show, they’re just so goshdarn sexy, you can’t say no to them! You just can’t wait to whip it out and swipe it and get whatever you want. I am all about balance though, so as soon as I got my paycheck, I threw $900 onto my MasterCard. Happily, I can say that I have paid off more money than I owe on my MasterCard! How cool is that!? There are still two more paychecks coming my way this month and then I have my birthday coming up right after this month ends, so I am really psyched about that too! I’ll be turning the coveted age of 29 and I know that I’ll be stepping into my 30s looking good and right on track to getting rid of all my debt!

Saskatchewan - so flat, but so beautiful!

My trip to Saskatoon did cost me a lot more than I usually spend in a week, but you know, when you’re on vacation, it’s pretty lame to tell everyone that you’re just going to sit around and do nothing because you’re on a super tight budget. Sometimes you just need to loosen up the purse strings and get wild and crazy, which is what I did. What was really awesome though was that my friends and family really helped me out in paying for a lot of my expenses and I think that this trip to Saskatoon was one of my favorite in a long time. There are things about s’toon that I forgot how much I miss; like how inexpensive going out can be! I think the one night that I went out I might have spent $20 and I definitely got my party on. I was drinking champagne and dancing on stripper poles (clothes on surprisingly) and just having a blast. I can’t remember when I was able to let loose like that. It helps that I have a pretty awesome group of friends back home and not to mention that my family is just a wild and crazy as I am. Really though, it’s remarkable that 5 kids can all get along with each other so well! I sure am lucky to have such wonderful permanent fixtures in my life.

Beautiful day and beautiful couple! xoxo

Now, speaking of permanent fixtures, I have a new sister in law! Yes, my littlest brother is now married and they’re wedding was a blast! They reminded me that there are ways to still have lots of fun and not overspend your money. They kept the wedding small and adorable! My sister in law made a lot of her own decorations and they looked so amazing! She used simple cute flower pots and put some dried baby’s breath in them and used pieces of odds and ends from fabric to make simple and adorable decorations for the wedding. My brother even used his carpentry skills to make them a beautiful arbor to get married under and now it’s something they can keep forever and put into their yard as a memory of the most beautiful day of they’re lives together! It’s true that some of the simplest weddings seem to become some of the most memorable because what we all really focus on and remember is the couple themselves and how happy they are. It was the same for my other brother and his wife’s wedding, I remember how happy they were more than anything so if you’re planning on doing a big event like a wedding, think about ways that you can keep it simple, and have an amazing time.

Anyway, this post is going to be short and sweet because I have been on the go so much since I came back from my vacation, but I owe you guys and extra post soon since I totally missed out on last week’s post entirely! All in all, things are going really well, I’m happy, I’m healthy, and the debt is getting under control. I learned a lot from my vacation though; leave the credit card at home; take the time to get to a bank machine so you spend cash, not credit, and plan your events with simplicity and remember that you don’t have to spend a fortune to have a great time as long as you’re surrounded by people you love! 

Surviving the Summer!

DFA made all my dreams come true

This entry is going to be a bit all over the place, and I apologize in advance if you lose track of what’s going on, but I just have so much to update you on! The first thing worth mentioning is that I survived Bluesfest. No, not because the main stage collapsed and nearly killed some people, but because I made it through financially! Normally, I easily spend about $500 on this summer music festival and this year I spent well under $100 total. The festival is a 2 week affair and I managed to only go on two days (the best 2 of course) and only buy 2 beers and one bag of the best freaking popcorn EVER.  The tickets are normally $40 each if you don’t buy them in advance, but I was so lucky to have some friends who kept their ears open for me and I got each ticket for $20 and $25 dollars respectively! It was practically two for the price of one! The beers on the other hand, well they were a bit pricey at $6.50 each (I think, I honestly don’t really remember since I was drinking before the show too) and the popcorn was a steal of a deal at $5 for a bag (I’m telling you, this popcorn is un-freaking-believable) – total comparable savings (this year to last year): $437 – WOW! I realize that I did pretty darn well in saving this money, but I think that it’s safe to say that the one thing I miss most from my past spending habits is the amount of concerts I used to go to. I really love music and I especially like to support independent artists so I really try to stay out of the loop when bands come into town. The major aspect I miss about not going to shows is that now I see some of my friends a little less as a result, but they understand and now that I have proven myself with my frugality, they seem to get it. I did get to see the Black Keys, DFA 1979, and Mother Mother with my friends, so I think I got a heck of a deal for what I ended up paying overall!

Apparently this is what a cakewalk is...

In other exciting news, I just got back from my first day at my new job and let me tell you – I think I’m going to do really well! I’m definitely feeling optimistic about how this new job is going to work out for me. I’m extra excited to see what my new paycheck is going to look like, i.e. how much faster can I get this debt paid off! There are always so many deductions and now I’ll be in a new income tax bracket, so I’ll just have to wait and see what happens I guess. Truth be told, the money is nice, but I will miss my old job; the team that I worked with really got my sarcastic sense of humour and they were just all around smart, friendly, and attractive group of people. It’s tough when you find a job you love but you plateau because there are no other opportunities available in your office; but I definitely feel lucky to have opportunities present themselves to me instead of having to go out and look for a job like so many others in this $hitty economy. Although, right now is just the honeymoon phase of my new job, so I am still a bit apprehensive about getting into the mindset that it will be a cakewalk. If it doesn’t go well, you know you will hear me bit¢h about it on this blog!

In case you have been wondering what has been happening with my whole lost/stolen wallet fiasco, I am happy to report that I finally have all my cards back. The police called me last week to tell me that since the amount of money that was actually stolen from my wallet and the actual cost of the contents of my wallet was so insignificant that they were closing my case – which I totally agree with. There really was no reason to keep the case going and waste police resources, but I’m still glad I filed a report in the event that someone did eventually get caught with my precious deer wallet and $2 bill! I learned a couple more interesting things about the loss of my credit card though. The first was that it takes forever for them to send a replacement card. I got my credit card weeks later than my health card and drivers license. The second thing I learned was that you can still make payments to your MasterCard using the number of the old account; they just keep a linkage to all of your past numbers and the payments go through like magic. However, there is no way to purchase anything with your credit card until you receive a physical copy in the mail. This is obviously a smart idea otherwise some jacka$$ could call in and jot down your number and start spending away all willy nilly. Oh, and remember that special ‘limited time offer’ that they gave me to increase my credit limit? Well they made the same offer again. It was really annoying! I can’t wait for when I get to call them back and have the amount lowered to $5,000!

My debt doesn't wear pants.

Now there’s a bit of crappy news. My savings account has been decimated! Since I was unable to access my credit and it took forever for my boss to approve my vacation, I had to spend over $700 on a return flight for my brother’s wedding. Let’s just say the service better be excellent and freaking sexy. My savings has plummeted down to a pathetic $400, but my new action plan to boost it back up seems to be right on track. Instead of the measly 10% I contributed before, I now have 15% to play around with, and it certainly makes a difference. I also forgot to mention that I still haven’t even filed for my medical costs and I have three paychecks coming in August! That could really be a kick in the pants for both my savings and my debt repayment. Alright, I am now sitting at 26.83% of my debt paid off and I only have 6.17% to go before I have 33% paid off! My goal was to be at that percentage by the end of October, but I think I am about ready to blow that figure out of the water! Wish me luck! 

Hold on to Your Butts…

Going off the rails!

There’s a storm a-brewing and it’s headed right for me. Many debt distractions are making their way to throw me off the rails of this crazy train. Although I am doing incredibly well with my debt repayment I am going to be encountering some may-jah changes to my regular schedule. The key over the next few weeks will be to focus, focus, and focus. What in the world is all this excitement John? What, oh what, could be your kryptonite? How is it possible that the latest and greatest debt detonator could ever face such perils that he will be taken so far off course from his debt repayments? Now that you’re on the edge of your seats with excitement, I encourage you to sit back, relax, and read along as to what variables are going to attack my spending. Oh boy, it looks like I may need to redo my budget again.

Do you remember a little while ago, back in March when I told y’all that I got a permanent job? The great news about all this is that I have benefits coming my way starting at the end of June. I’m talking about the whole shebang; dental, optical, rectal, you name it, I got it. Where the challenge begins is that now I have to pay things like death insurance, medical insurance, union dues, pension, and all that wonderful stuff that I’ll probably be stuck with paying until I’m 65. Yes, you heard it here first kids, I don’t think my generation is going to get that “freedom 55” ticket that our parents are getting. With added (but wonderfully exciting) expenses such as these, my gross pay is going down. Only by about $100 mind you, and since I got a raise anyway, the effects of this should all be minor.

If it’s so minor John, why even mention it? I’m getting to that part you guys, geez Louise! Because I worked for 7 years through various contracts with my current employer, I am now able to purchase back all that time that I put in. In other words, I can buy back all that pensionable time in order for me to get out of the workforce sooner, much much sooner. I have calculated how much time I can purchase and it works out to be about 723 working days or the equivalent of 3 years! These years come with a price tag of about $4,000-5,000 (or so I estimate) in order for me to purchase them back. Now I’m no fool, I am all over buying this time back, and it’s cheaper to do so now rather than when you’re making more money in the future. The added bonus is that I can retire 3 years earlier when I’m approaching retirement. Now with buybacks, you can opt to have this amount slowly paid for through deductions from your paychecks, and that’s what I’m going to do. The pickle that I’m in is that my gross pay is going to go down while I’m doing this, and those of you who have been reading along in the blog know that I am not one to run away from paying off debt anymore. I think the best approach will be to find out what the interest rate is on this repayment and then squeeze it in accordingly to my debt repayment process.

My kick-a$$ new helmet!!

There’s so much more to this storm of spending other than this new buyback option. Like a fool, I assumed that I was getting about $600 back in income tax from the Government. However, like Mom always said, when you assume, you make and A$$ out of U and ME (get it? – yes I know it’s a lame joke). Anyway, with this assumption in mind, I’ve been a little more liberal in my spending – not crazy, but a little bit of my alter ego, Spendy Spenderson came out. The things I did buy were justifiable though. Finally, after years of bike riding, I caved and bought myself a helmet (on sale!). My luck has certainly been pushed on this, so I think it was a smart move. My helmet is pretty freaking bad-a$$ too, if you saw it you’d agree. It has little skulls on it which totally means that I am hardcore. While getting my helmet though, I decided to get some new handlebar tape, and that set me back another 25 bones. Add to that my 3-year anniversary with my partner and the $120 meal I bought for us which I thought my refund would cover as well. Needless to say, my Government windfall never came through. In fact I owe them $79.40. All the more reason I should be putting my money into a tax-free savings account. So that little curve ball is nothing to sneeze at, but either way, it did throw off my game a little bit, however I think my “crazy” purchases were totally worth it.

Big change is coming its way for my schedule. I’m not going to lie, having a boring and routine schedule has really made it easy for me to stay on track with my spending. Every day I get to come home and prepare myself a fresh home cooked meal. I recommend this to everyone – not just for your budget, but for your health. Did you know that I can almost see my abs through my former beer belly? Talk about exciting; now I’ll even have a washboard to do my laundry for cheap! The curveball is that I’m going back to school. Yes, I’m going back to school yet again. It’s not university or college though, it’s French language training. Every Tuesday, Wednesday, and Thursday, I’ll be spending 3 hours after work learning how to parler en Français. This is an incredible gift from my employer to spruce up my language competency; however it does throw off my schedule. After work, I usually enjoy an hour and a half of hot yoga and then I come home for dinner around 7:30. Now, I’m going to be doing French until 7:00, yoga until 9:00 and dinner around 9:30. I don’t think this is really sustainable, so I’m going to see if I can bring dinner to my French classes. I really hate making lunches in advance. I find that nothing ever tastes the same when it’s been sitting in a bag for 24 hours until the next time you eat it. I gets all soggy and tastes like plastic wrap, and then there’s that mess of lugging along those dirty containers – ew. I guess this will challenge me to go the distance on how I spend my food budget and we’ll see if I can resist the temptation to buy takeout.

Worst Place to go when you're in debt!!

Alright, now here comes the doozie - Vegas. Yes, in a mere 3 weeks I will be living it large and in charge in Las Vegas. I think that at this point, if I were on one of Gail Vaz-Oxlade’s shows she would slap me across the back of my head.  Why the H-E-double hockey sticks are I going to Vegas when I’m trying to pay down $38,000 worth of debt? Well, it’s for my brother’s stag party and I am in his wedding party, so I do feel obligated to go and I do have a bit of a game plan. Have you been watching my savings account climb ever higher? Have you also noticed that I have now paid of $5,000 on my credit card?! I’m so excited about that I could pee myself. I have made an executive decision to reward myself by taking $1,000 from my savings for spending to Vegas to cover me for the 3 days that I’m there. I don’t think it’s completely unreasonable for me to live on $1,000 for 3 days in Vegas. The real question is how much of the rest of my savings I can hold onto to pay for my trip to his Wedding in August!

So as you can clearly see, there is a storm a-brewing which will push my limits to crazy new levels. Will I survive the storm? Will I burn out from French and cave in to take out? Can any man only live on $1,000 for 3 days in Vegas? Stay tuned until next time kids on the next episode of John’s Fight for Financial Freedom!

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From Spendy Weekend to Savey Weekend

C'mon Irene!!!

Where have I been all week? Oh yeah, I was enjoying an amazingly laid-back long weekend and then got wrapped up in watching the Biggest Loser last night which made me completely skip my blog writing for the evening! Yes, it’s true, I am one of those skinny ba$tards that sits around and eats pizza and cupcakes while watching people who can’t eat those kinds of foods try to lose 50% or more of their body weight. Don’t get me wrong, those people are inspiring me to not become a lazy sack of $hit for sure, but something about that show makes me want to binge on junk food – perhaps part of me wants to be a contestant on that show. It didn’t help that the episode was super short, but thank goodness they got rid of that annoying Kaylee! And Rulon, do we really need an Olympic gold medalist to win a weight-loss competition – adios! Irene for the win!! After that I got wrapped up in TWO hours of “The Voice” which was “meh”. But c’mon, another singing show? Meanwhile my friends are travelling the world and I am contemplating the fate of reality TV losers.  Anyway, I am getting completely off topic here. The point of this blog is kind of about redemption from my spending fiasco that was last weekend.

My seductive debit card!!

I’ve got to say it, I loved my time in Halifax, but it definitely distracted me from keeping my eyes on the prize – which is getting all this stupid debt paid off.  This weekend was a great time for me to buckle down and get my budget back on track; start saving up my pennies again; and get my repayments back in line. Since I knew I was going to be away for the weekend in Halifax, I never bothered to stock up on groceries, which left me eating lunches out for the past 2 days. I know you’re thinking, big whoop. But it is a big whoop! When I eat out for lunch, I get reminded of all my bad habits, like going to the delicious Thai restaurant across the street, or getting some delicious Indian food from the cafeteria downstairs – that’s about $20 for 2 lunches out of my $60 per week that I have allocated toward food.  Worst of all, I have been using my dastardly debt card which makes me completely lose sight of how quickly my budget disappears from my wallet. I think I have that seven-month itch and my debit card is calling to me from the pocket on my right butt-cheek: “Joooooohn, why don’t you hold me like you used to? Remember all the good times we had at all those stores? Or the way you would swipe me, firm and fast, in those interac machines and I would give you all your heart’s desires?”

That stupid debit card, seducing me with its lies! Luckily, I set a trap for myself in the event that something like this would happen. I’ve been using TD bank since I was 5 years old. Some days I really question why it is that I am still with them, but I digress. TD has this great feature on my debit card that whenever I use my debit card, money is automatically taken from my chequing account and placed into my savings account. You can set this amount from 50 cents up to $5.00. Being the reformed conservative spender that I am, I set this amount to $5.00  so that for every time I am tempted to whip it out and slap it down on the counter – um, my debit card that is, I get dinged for it. In the course of ONE week, I automatically moved $100 into my savings account – that’s TWENTY debit transactions for those of you who are mathematically challenged - ridiculous. Not to mention that I put $150 every 2 weeks into my savings account already. So, if you remember, back in January, I pi$$ed away all of my savings when I went without a paycheck. I am happy to say that now my savings account is at a wonderful $1,741.08! That’s more than 10 times what my savings was back in October of last year! Holy moley guacamole!

The long weekend really helped me reflect about my poor spending habits (both past and present). I realize that I think about my debt way more that any sane person should, however, in order for this process to work, it is imperative that I keep my mind on the money (and my money on my mind) – and maintain a positive attitude about it too. So what do you do when you’re in a situation like mine and you want to keep the spending to a minimum? Let me tell you. I was faced with a number of choices this past weekend, I could have gone out to the bar on more than one occasion, but instead I would buy a case of beer and share it with friends. It’s quite a simple decision for me nowadays. Heck, I even had some left over to take to “the crack park” and drink on the bench, yeah, I’m classy like that. On Thursday night, I had a friend over for some wine, made my own delicious and impressive veggie tray (if you thought I was going to say make my own wine, you are grossly mistaken – yuck) that was not only beautiful, but so healthy too! I even had plenty of leftovers to take to my volunteer job at the yoga studio the next day!

Which leads me to my next thrifty weekend point – find a way to do something you love that doesn’t cost you a thing! All the free hot yoga I am getting is certainly helping me (h)eat my time and lets me exercise for free, but since we don’t all have the time to volunteer and get free yoga, think about doing some other free physical activity. Spring is full of ways to get out and have fun without spending a dime and now’s the time to start searching the internet for local festivals, pack a lunch, and go have a great time in your hometown.

LOL, Google image search for "sexy brownie"
Not at all what I was implying! 

It’s no secret that I am a big fan of coffee shops, and there’s nothing I love more than to grab a book and get lost in it while sipping on a delicious latte at my local caffeination station, however, now that I’m a saver and not a spender, I have learned to avoid coffee shops like the plague. I know that I will easily spend $5 on coffee and probably buy that sexy brownie flashing its fudgy frosting like a 2-bit hooker on nickel night in a heartbeat.  To reduce the temptation and save my money, I got my own little reading nook that I can escape to with a cup of coffee and spend a wonderful rainy afternoon with my book. I don’t care if I look like a nerd or seem antisocial, part of this process is to learn that you can do things that you love without always going out and spending on yet another dinner out that really loses it luster when it becomes routine. I really challenge you to have a friend over for dinner, cook for them, and see how fun it actually is! Even if it turns out to resemble dog $hit on a plate, you’ll end up with a memory between friends that will last for a long time.

Oh, just one more thing, I got my credit card paid down to $9,972.84 today! I know that balance still sounds insane, but you have no idea how much this debt repayment journey is changing my life. I can finally look my debt in the face and tell it to go straight to hell! If you ever need someone to help you get on track with your debt repayment, I would be so happy to help you. That’s it for this week ladies and gentlemen. Thanks for reading!

xoxo

Report Card

Political Attack Ads always tell the truth

Today I did something that I have been dreading for a while; I got my credit report! Getting my credit report was actually the first thing I did today (well next to the getting out of bed). It was just like Christmas morning when you’re a kid and you leap out of bed in your pajamas and open your stocking; only in this case I leapt to my computer (in true total nerd fashion) and instead of pajamas I was wearing my tiny underwear and an open bathrobe, much to the delight of my neighbours across the street.  I wasn’t really sure where I was supposed to go to get my report and I was certainly weary of entering all my personal information into some credit site. If it were a scam I would be completely effed and my credit rating would nosedive into a steaming pile of $hit. I had heard about Equifax on the tee-vee machine so I figured if it’s on television, it’s got to be legitimate – much like a political attack ad - right?

So here I am, a sunny Sunday morning, sitting at the Equifax website and entering in all my personal information and after a few clicks of the mouse and several strokes (on the keyboard that is), I came to a screen where they gave me a number to call to speak to someone at Equifax. 9:30 am, waiting for someone to answer the phone and 20 minutes later, my phone battery is almost dead so I’m attached to the phone charger waiting for these Equifackers to answer their gosh darn telephone.  You’d think that most people wouldn’t be checking their credit history at 9:30 a.m. on a Sunday (apparently no one goes to church anymore), but alas, I wait and wait. Finally, someone answers and the line is so fuzzy that I can hardly hear what the guy is saying. Whoever he is, he has an accent, but that’s not the issue, I can totally understand what he’s saying, but I have to keep asking him to repeat himself. I could hear the frustration in his voice and I’m sure he thought that I was some racist making him repeat himself because he wasn’t speaking proper “American” but the reality was the awful static on the phone line. Our conversation went something like this:

Equifacker: Thank you for calling Equifax, how can I keeerssssssssssshhhhhhhh

Me: Yes, hi. I’m calling to verify my account so I can see my credit report.

EF: Certainly, no probkerrsssh. Can I get your kkkkkkkkkkerrrrrrrrrrrressssssssssssh?

Me: My what?

EF: Your neeeessssssssssshhhhhhhhhhh

Me: Sorry what?

EF: Name, your namssssssssssssshhhhhhhhh

Me: Oh, my name is John.

EF: Thank you. Can you please tell me you current shhhhhhhhhhhhhhhhhrrrrrrrsshhh

Me: This is going to be a long conversation.

This went on for a good 10 minutes, and that my friends, is why it took 20 minutes to get through to an operator at Equifax. In the end, he had an incredibly difficult time entering my address in the computer since I live at a “half” address which no computer anywhere seems to understand and the conversation always involves the poor operator running to ask their supervisor how to enter my address. Anyway, now my account is all set up, so I logged in to receive the news that I have been avoiding to hear for the past forever.

Equifax has a rating scale of poor, fair, good, very good, and excellent. Apparently 47% of people have an excellent credit rating according to them. I on the other hand have a better credit rating than 10% of the population. Yes, I am not good, I’m not poor, but I’m “fair”. I don’t know how out of all those options they were able to determine my skin tone, but I can’t say I am overly happy with my “fair” rating. Being told you have a “fair” rating is like being told you’re not quite the smelliest fart, but most people would still have to leave the room if you broke wind.

So what does this mean? Double Rainbow? Fair? Equifax tells me that my rating means that most lenders would consider me to be a high risk; that I may have difficulty qualifying for conventional loans and credit cards - and when I do qualify for credit, I may be charged high interest rates. Well no $hit Sherlock. I must say that it is comforting to know that most banks are not going to approve me for a credit card so that if I get into some money emergency, I can’t run to the bank and get some credit to bail me out. What I didn’t know is that because of my rating, banks may force me to pay higher interest rates. This makes sense to me though since the banks know that they can make a truckload of moolah from my interest since (until 6 months ago) I carried really high balances. The rest of my credit report didn’t surprise me with any other information that I didn’t already know about myself. I knew who was looking into my credit, and I knew where I had screwed up (like that stupid Ikea card for example). I was happy to see that my damaged credit is only going to be on there for 6 years (not the 7 that I thought it would be) so my history with Ikea will be gone soon. I was surprised to see that MasterCard was checking up on me to see my credit history which coincided with all the telemarketing calls and balance increases that I have been getting from them and Rogers and TD were just as guilty. It’s no wonder that I am all of a sudden getting all the special offers from these companies.

I recommend that you get a credit score to find out where you’re at with your credit. It is a useful tool when you’re embarking on a debt repayment journey to show you the whole picture as to why you’re in the position you’re in but don’t take it too seriously. You might be surprised to see that you are one of those 47% with an excellent rating. If you’re in the “poor” category or even in the “fair” category like I am, don’t panic. Your credit score is not the only tool that lenders use to determine if you are a high risk for a loan. Depending on the lender or the type of loan you are looking for, other factors come into play such as your income, marital status, and so on. Now, Gail hates the credit score system, but she does recommend that you check your credit score at least once a year, so in her blog and in her awesome book “Debt Free Forever” she has her own scoring system to help you understand other factors that can affect your rating. The more “points” that you get, the better you’ll fare with the banks. Some of this information may come as a surprise to you so get a pen and paper and let’s do your score à la Gail (with a twist of John humour).

MATLOCK!!!!!

One of the first rules is not to lie about anything. If you’re lenders catch a whiff of your bull$hit, they’re probably not going to believe anything else you tell them either. If you’re under 21, you don’t get any points – and why should you? You can’t even rent a car or drink in AMERICA! If you’re between the ages of 24-64, you get a point because odds are; you’re working at a real job (unlike those under 21s who are probably all drug dealers and prostitutes – so untrustworthy). If you’re over 65, you don’t get any points either because you’re old and probably going to spend the entire bank’s money on prune juice and Matlock VHS tapes.

If you’re single, you don’t get a point. If no one else will marry you, so why would the bank, right? If you’re married, you get a point. Apparently you know how to commit to something – congratulations. Divorced? Who cares? Not the bank anyway – zero points.

You don’t have any kids – well then you don’t get any points. As Gail mentions, you’re probably some party animal who spends their nights out drinking and dancing at the clubs instead of being responsible and taking care of the baby. You also don’t have any ties to bind you to your home so you’re considered a flight risk since NO ONE would leave a baby behind – riiiiiight. If you have 1 to 3 mouths to feed, then you get a point. You’re a responsible, baby making citizen and you’re making future debt holders. If you have more than 3 dependents, you don’t get a point. Can’t you keep it in your pants? How ever will you stay out of debt with all those people depending on you to survive?

Where do you live? Are you still mooching off your parents? Are you living in some tornado-ridden trailer park? If this is case, no points for you! Are you one of those incredibly sexy individuals renting an apartment – you get a point! Own your own home with a gi-normous mortgage – you get 3 points! Woohoo! Own your house, but don’t have a mortgage? We need to talk about how you got there and give yourself 4 points for being so freaking perfect! Where did you live before and how long were you there for? If you only lived at you current address for less than 5 years, you don’t get a point. Your life is clearly too exciting for a lender to trust you to stay put. Have you been in the same spot for more than 5 years? Well lucky you, you can add on another point to the tally.

How long have you been stuck with pleasantly content with your employer? According to Gail, the longer, the better; and I thought you ladies said that size doesn’t matter?! Less than a year with your current employer gets you a big, fat zero! One to three years will snag you another point; four to six nabs you another 2 points, seven years or more, you’re probably ready to throw your computer out the window, but don’t fret, you get 3 more points – and you thought all those years of service were for nothing!

Not so surprisingly, banks do keep track of the loans that you pay off with them. If you have paid off a loan in full with your bank, you get five more points! Wowsa! If you have a good record with your other lenders, you might just grab yourself another 2 to 3 points! The more money you make, the more credit you get. If you have a checking or savings account with a balance over $500 then you get 2 more points.

Here’s where I was surprised, having a landline in your home actually will earn you 2 extra points. This is because when the banks call you and you answer, they know exactly where you’re hiding. Looks like my iPhone was a wasted investment!

So there you have it. The higher your score, the better you’re going to do when asking for money from the bank. Remember that these factors blend with your credit score when lenders are considering you for credit. If you need to get a loan to pay for school or something else that actually makes sense to take money out for and you can’t get a loan, you can get a cosigner. You have to make sure you’re paying this off though otherwise you’re not just effing up your credit history, you’re effing up the other person’s credit too. Checking your credit report is a good way to see what’s been happening with your credit and who’s checking up on you and it lets you know what you need to do to get your rating out of poor and into excellent! Right now my credit rating is 636 out of 900. A year from now I’ll check it again and I hope that I’ll be at least in the 800s!

Thanks for reading this super long blog entry. I now know that length does matter. Thank you, Gail.