Another Kick in the Pants

Gal-pal and BFF, Gail

When I went to the book store today to buy my book for the book club, I saw Gail’s book “Debt Free Forever” at the till and I instantly gushed to the teller about how that book had changed my life. Can you believe the progress that I have made? I’m really enjoying 2012 so far and I can only see things getting better! As of now I have less than $20,000 of debt left to pay off and it’s only been 1 year and 3 months since I started this process. That figure is truly mind-blowing for me being the guy who could have spent that kind of money in one year normally to become the guy who is giving financial advice at parties. Thank you so much Gail Vaz-Oxlade!

A nice kick in the pants!

This week has been full of great conversations and activities. On Wednesday I met with my friend ‘L’ for lunch which she graciously paid for. She and her husband were in a similar situation as I was with debt up to their eyeballs but they managed to find a way to get back on track and fix up their credit. Listening to her story was a great motivator for me to keep this up and to continue to look for ways that I can save. Not only do she and her husband manage to stay out of debt, on top of it all they raise two adorable children without trying to keep up with the Jones’. I feel like she is a great example of someone who figured out that you need to step back and really look at what it is that you need and try to live within your means. That lunch was certainly a nice kick in the pants.

I’m continuing on with my resolution to not drink for the month of January and it has definitely been a challenge. It’s so funny how people got used to me being that guy who always had a beer in his hand at a party and how they react to me as a result. I think that some people think that there may be something wrong with my health, but I’m here to tell you, there isn’t. The biggest motivation to quit drinking is to get myself back into shape, which it is definitely doing (hello flatter stomach). Secondly, I am getting to save a lot of money from my entertainment budget. I was at the bar on Friday and I spent only $12. That’s pretty ridiculous for me since usually a few beers will bring me up into the $30-$40 range. Since I am on the subject of being sober at the bar, I’d like to ask all the non-drinkers how they do it! Sure, I had a great time being with my friends and dancing to horrible remixes to horrible songs, but I couldn’t believe how much people make out – and with multiple people! It was really quite astonishing and disgusting.

Crayon Art - Cheap and Beautiful!

Speaking of entertainment, I want to share some great low-cost ideas with you that I have participated in recently. The first was a really great idea to make artwork using crayons and some canvas from the dollar store. My friend Eric hosted me and some friends to make some crayon art by melting crayons onto canvas and it turned out really well! The best part is that it was really inexpensive and a super fun idea. Search the internet for some how-to instructions and go to town! The next cheap as free activitiy is to get out and enjoy winter. Yes, I know that it’s colder than a witch’s tit out there, but when you strap on (lol) some skates and hit up the rink, you get to have some fun for free and enjoy winter at the same time. Yes, the winter can be $hitty sometimes, but as with all things, sometimes you just need to say “eff it” and make your bad situation into a good one.

I have really noticed lately that I am becoming more positive with my outlook on life. When I get asked how I am doing, I don’t even flinch when I say that I am truly doing well and I think that my healthy financials are living proof of this. Looking back, I always sort of had an understanding of how money works and I don’t recall being taught specifically how savings, RRSPs, loans, credit cards, and all what all that other financial jargon meant, but I took some initiative and got myself informed about finances. Now I know that there are some of you out there who are pledging to get your debt paid down this year, so if you are struggling, take the time to get informed because the resources are plentiful. My methods are not going to work for everyone, but there is a way to go about this if you just commit to working hard at getting on track. Trust in yourself and there is no limit to what you can do in this world. 

Lost and Found

Whoo! Saskatoon!

My past 2 weeks of vacation in Saskatoon were phenomenal. Finally I think I can say that I was able to almost completely remove myself from thinking about work and really taking some much deserved time for myself. While I was away, I think I ate (with the exception of Christmas dinners) all of my meals in restaurants and the bills averaged out to around $50 per meal (adding in the booze and everything else). What really blew me away was the generosity of my family and friends during the holiday season. I think that almost all of my meals were paid for, in fact I went to one restaurant 4 times and only paid once after insisting on covering the bill for my friends. In the end I spent on average what I normally would in a week on expenses. I couldn’t believe my eyes when I got home and had over ¾ of my paycheck still in my bank account AND today was payday which is always an added bonus.

When I was back in Saskatoon, I got to be reminded of the way that I used to spend every day. It really woke me up again and lit a new fire under my a$$ to get back in financial shape. Not only does it serve as a reminder of how I used to spend, it gives me something to look forward to when I am debt free. It’s not going to be hard to get by once I have no debt to pay for and I’m really looking forward to being liberal with my money again.  It’s incredible how much simply removing yourself from temptation can affect your spending. Being back here in my apartment typing this entry I can’t help but feel incredibly optimistic about my upcoming year. In a month from now I will have completely paid off my MasterCard and that feels incredible. Not only that, my other debt balances have each dropped by more than $1,000.

I love me some Gail time!

This month will be just what I need to get me back on track again. As of now, I am on full-time French training (yes I am procrastinating on my “devoirs”) so I am back into a manageable routine. Believe me, routines are the best thing for staying on a budget because it reduces the amount of surprise expenses such as meals with colleagues and I don’t have to always worry about bringing a lunch. Now I am able to leave school for lunch at the same time every day and the school is really close to where I work which means that I can eat all of my meals at home and catch a few minutes of Gail time! Today I got to eat delicious leftover lasagna and tomorrow I am going to make myself a scrumptious sandwich. What makes me even happier is that I finally have some time to go to yoga classes again. I’m telling you, all this wonderful routine time has definitely got my gears going toward having a schedule like this in the future. If I can manage to get my French levels for work and not have to do anymore after work classes, I am going to be so very happy.

Now for some random, but exciting news! While I was away, I received a package from Canada Post with a letter attached that reads as follows:

Dear Customer:

The enclosed item containing your identification was found loose in the mail stream. It may not have been intended for the mail, but merely dropped in a street mail box without a wrapper or postage.

As a courtesy, Canada Post Corporation is returning this item to you free of charge.

Found! So amazing!

The attached item was my lost wallet! How lovely is that? Thank you to the person who took the time to drop my wallet off for me. I never imagined that I would see this thing again since it has been several months since someone stole it from me. The best part is that the person who took my wallet only took the cash and my MasterCard, leaving me with all of my ID cards so I can rest a little better knowing that someone isn’t out there trying to steal my identity. The $hitty part is that my wallet is a little, well, disgusting and looks like it has been run over by a car. But that’s not what the focus is on here, it’s the fact that someone, somewhere decided to be kind and return something to its rightful owner, me. I feel great starting a new year with a feeling of hope in my fellow man and I can’t wait to yet another fantastic learning experience.

Happy New Year everyone!

xoxo

$10,000 Paid off in Less than 10 Months!!

$10,000 used to be a big deal!

Can you believe it?! It’s not even been 10 months and I already have paid off more than $10,000 of my debt! What a great feeling to know that I am doing this process right. I just imagine all the wonderful things that I could do with $10,000 and I want to kick myself for not doing something about all my debt sooner! $10,000 would put me so much closer to having a nice down payment on a condo, I would have a new computer, and I could take a trip to just about anywhere in the world for $10,000. Imagine how I’ll be feeling when I have $37,810.51 (I have this number memorized) paid off! Just imagine what I could do with that kind of money. That dream is closer and closer to coming true and does it ever keep me inspired to push on with this process, only $27,694.78 to go!

I’m also happy to report that I have been staying on track with my New Year’s resolution to write a blog entry each week and the response has been overwhelming! I now have over 5000 hits on my little blog and from what I’ve heard this is a pretty big deal for someone who doesn’t advertise anywhere. Soon enough Gail will admit that she’s an avid reader and we will finally get a chance to meet and she’ll bring me along on all 3 of her shows as her sassy sidekick! Oh I can dream…

Now, sometimes I get some stupid and some smart comments, on my blog and I never realize it until many weeks later. The latter is the case of a comment from my friend Andy who is currently travelling the world like a madman and still having time to write about it! He writes: “Hey John! I love that you're only spending 1% of your income on transportation. If only we could convince the rest of the world! I'm confused about your new spending breakdown and how it affects your every day spending. You say you went from 19% to 21.5% for 'life', but from 20% to 18% for rent. This tells me that you already factored in the raise. Can you put the breakdown in dollars again? If only just the every day stuff? Like, what is the breakdown for food and clothes and entertainment. That was my biggest interest before (mostly because I thought it wasn't sustainable, and when you did it, I was inspired!) How much are you cheating by adding money to 'life'? :P xoxo Andy”

Now let’s keep in mind that Andy is travelling the world and has been able to budget to spend $1 a day to stay in a beach resort so we’re kind of in different budgeting situations, so the fact that he still reads my blog at all is a feat in itself, but nevertheless, what a marvelous comment Mr. Andy. His comment gave me an idea about what to write this blog post on, and believe me, some days I am stretching for ideas as I am sure you can tell from some of my past more questionable entries.  

First of all, I haven’t readjusted my budget to reflect my future income, I’ve simply reworked it because I noticed that my average income has become stable now that I am a permanent employee and I’m not doing contract work anymore. For instance, before I was averaging about $150 less per check than I am currently bringing in. Yes that’s right, I’m bringing home more bacon, or tofu bacon for you veggies out there. In a week from now, I’ll be bringing home even more moolah! Talk about sweet! The only downside is that I’ll need to rework the budget again. So there’s that Andy, it’s not a projected budget, it’s just a reworking of what I am currently bringing in and spending.

Gail would be putting on the celebratory tiara!

Now the second thing that’s changed is how much my rent is. There was a month when I started doing my new budget that I was paying an inflated rent of $825 instead of my usual $556 which skewed the average amount I was paying for rent rather considerably. I was short a roommate that month so instead of splitting the money 3 ways, I was splitting it 2 ways. Therefore my percentage of my income going to rent was much higher and I was uncertain how much my rent would work out to be so I kept it budgeted rather high. But now, in comparison with the money I am bringing in, I found that my rent only works out to 18.5% of my budget since these days I bring in about $3,000 a month ($4,500 on the triple check months like the one coming up in August – whoo!). This figure is well below Gail’s recommended spending on housing so I’m pretty happy about that!

Now to be fair, I should be factoring my hydro bill into my rent, but I don’t. Hydro is really cheap here since we’re all pretty good about not leaving lights on or running a lot of electricity on the non-peak time so each of us only pays about $10 per month each for hydro. I could also add in another $21.75 a month for my internet bill (yes that’s for each of us, we use a lot of internet) and then there’s my phone bill from Rogers who likes to bend me over and have it’s way with me for $90 each month – really Rogers, how do you sleep at night? Anyway, enough talking about all the figures, why don’t I just break it down for you here:

Income: $3,000

Breakdown:

Savings: 15% = $450

Debt: 45% = $1,350

Transportation: 1% = $30

Life: 20.5% = $615

Housing: 18.5% = $555

I always squish my Transportation and Life costs together because it just makes more sense to me. So my life expenses now become $645 or about $21 per day for life. Now, that doesn’t mean that I am out spending that money on eating out at restaurants or betting on the strippers, but I could if I wanted to budget for it. Now taking that $645 that I have each month to live on, I take out my regular expenses ($21.75 for internet, $90 for phone, $10 for hydro) and I am left with $523.25. Now, I take that and divide it by the weeks in the month and I am left with about $130 for the rest of my life. That’s broken down like this:

Life: $130.00

Life Weekly Breakdown:

Groceries and Personal Care: $70

Clothing and Gifts: $10 (almost never use this)

Transportation: $10 (almost never use this)

Entertainment: $40

Want to save money on transpo?
Get a bike like Jake here, AND stay in shape!

Now, I bring in a little more than $3,000 per month and so everything just seems to balance out. I found that because I was working out more that I needed to eat more food since I was burning off so much energy, so it only made sense to me that I spend more money there. If I end up with leftover money, I spend it on the things I want to spend it on or simply just move the money to my debt or to my savings account. It always seems to work out just fine every month and it’s clearly better than the clusterfudge that my spending was when I started this process. Keep in mind that I was spending about $100 a week before on life so having $130 is making a world of difference. Nowadays I really want to just get this debt destroyed so that I can start spending my money on the things I want again. I can’t wait for that day! Good luck to you all on the debt destruction journeys you are all on! Imagine, if you only have $10,000 of debt, you could get rid of it all in less than a year! How cool is that?!?

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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6 Months Later...

I love Happy Socks!!

Can you believe that it has been 6 months since the start of my departure toward becoming debt-free forever? I am really amazed at how much I have learned, not only about how to spend my money wisely, but how much I have learned about myself. Okay, yes, there’s that cheesy line that we hear in just about every reality TV show, even from the stupid contestants that get kicked off in the first week: “I learned so much about myself, like how people are threatened by how beautiful I am, and how big my breast implants are…”, but I really do mean what I said, this experience has been eye-opening.

Six months ago, it was actually a challenge for me to go more than a week without spending my money on some kind of “thing” for myself that I really didn’t need. Whether it was a $15 pair of socks (that were really awesome btw) or another new shirt (because it was such a good deal and who cares if I already have 45 other ones) or even just a $6 cup of coffee (which, although delicious, has zero added nutritional benefit), I felt that I was justified in spending that money to reward myself for the hard work I had put in at my job. The reality is that the things I really need are food in my belly, a roof over my head, and friends to share my successes and struggles with.

Clean tank = happy fishy!!

Yesterday, I tackled a task that I had been putting off for far too long – cleaning out my fish tank. To be honest, I don’t remember the last time I had given it a good cleaning. It didn’t smell bad or anything, but the water was getting a bit murky and I couldn’t stand to see my poor little fishys swimming around in their own toilet water. Those of you who have had fish know that sometimes things can get a little funky with fish tanks, so I took out the filter to reveal what was like the equivalent of 100 dirty fish diapers – that’s right my friends, lots of poo. With a strong stomach, I got all the $hit cleaned up, changed the water and now my fish are swimming in a clear-water paradise.

This got me thinking about how in many ways, my debt had become that filter full of $hit that I had been neglecting for far too long; it got to the point where it was unavoidable. Managing my debt became something that I felt had gotten so out of hand that I was getting to the point of no return. I would let myself believe that by once or twice a year, throwing $1,000 on my credit card was actually accomplishing something, but the reality was that nothing had been changing except how large the problem had become. If I had kept avoiding cleaning my fish tank, I could have ended up with some stinky dead fish and a pile of regret for not having done something sooner.  This is so much like my debt. If I just keep avoiding it and waiting for something to happen in my life to make it go away on its own, then I will get nowhere and feel more hopeless. The only one who can help me out of the debt-hole is me.

So it’s been six months, and I am very pleased to tell you that I am right on track to becoming debt-free within three years! The numbers don’t lie; check out the figures for yourself at the side of my blog. With a sixth of my journey to financial freedom complete, it was time for me reconnect with Gail and have a heart-to-heart. I checked back in with her to make sure that I am following my plan and to remind myself of anything I’ve forgotten along the way in my road to debt-recovery. Gail reminded me that every few months you need to check in and see if your budget is still working for you. There is no reason that you should start alienating your friends and not doing activities you love for the sake of staying on schedule, what you really need to do is change your behaviour and attitude and get there when you get there. When you’re embarking on a financial transformation, you will absolutely feel the pressure of changing your spending habits, which is why you need to review your budget to fit your life.

Don’t get frustrated and give up on yourself simply because you didn’t meet your goal in the timeline that you had set up for yourself. Annoying lines of regret have come out of the mouths of so many of my friends: “when I was 25, I was supposed to have 2 kids” or “I should have a house by now”. Gail has said it best, “you can have it all, just not all at once” which has become more and more evident has I progress in my repayments. It takes a lot of time to get to where you want to be, especially when you’re working with one income. This brings me to another fantastic quote from a former boss. She was in her 40s and had just enrolled to go back and get another university degree. Her friends and colleagues were critical and told her that she was starting too late in life and that by the time she finished she would be 50! To which she replied “who cares? I’m going to turn 50 anyway, at least this way I’ll be 50 and have another degree!” That phrase has stuck with me ever since. Not everything always happens within the timelines we set for ourselves, so why let it stress you out or bother you?

Taking Gail’s advice, I did a little reevaluation of my budget to make sure that it was still working for me. Realistically, living on $100 a week has been pretty freaking difficult sometimes; especially when I have anything to do that falls outside of my typical week (birthdays, repairs, and any other random thing that pops up). The part that I find most difficult is living on only $40 per week for groceries; so I have changed my weekly allowance to $120 per week, making my food budget $60. This has enabled me to add a bit more pizzazz to my meals. For example, now I can add some grilled vegetables to my pasta sauce, or put some sour cream on my perogies and even splurge on some beers every now and then! If I want to go to a restaurant every couple weeks, it is something that I know I can afford to do. The bonus is, since I know that I am capable of living on $40 per week for groceries so that if I ever want to increase my saving for something, I can cut back one week and be just fine!

All the pictures are happy this week!

Doing a reassessment should come every time that you have a change in your financial status as well. For example, if you get a raise, buy a car, gas or food prices increase, your kid joins a little league, and so on, then sit down and re-work it, gurl! It is important to remember that life doesn’t stay constant and neither does your budget. So, go back to your budget and reevaluate what your goals are and whether or not you are on the right path toward achieving them (don’t stress about the timeline). I cannot emphasize enough how important it is not to get stressed out by your budget. Checking in every couple months will reinforce all the great work you are doing and before you know it, another six months will come to pass and you’ll be even closer to your financial freedom!

Thanks again for following me in my financial journey. If you like what you’re reading, share this with a friend and encourage a dialogue on debt. Let’s take ourselves our of consumer debt together!

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. 

My New Roommate, Gail

Somewhere between spending money on the gym, the spa, concerts, booze, restaurants, music, and all that other crap, I would tune into one of my favourite reality shows: Til Debt Do Us Part. For those of you not familiar with the show, the premise is based on the fact that one of the most popular reasons for divorce is money. I don’t know about you, but I remember money definitely being the source of more than one argument around my home growing up, and I even see a pattern emerging in my current relationship from time to time. Each episode follows a couple who carries a $hitload of debt and usually has no plan to get out of it, and no savings to speak of. 

Gail Vaz-Oxlade will change your life!

Enter: Gail Vaz-Oxlade, Canada’s Financial Guru - and my hero. Gail uses a lot of tough love and shows people how they are spending their money, how much debt they are carrying, and where they are going to be financially in 30 years. The results are always astounding. Some people had the potential to be $750,000 or more in debt in some episodes!

Now picture me lying on the couch eating a box of Triscuits (with cheese of course) and thinking, man these people are stupid! And how can you eff up your finances so terribly? I thought I was in such good shape because I never did a rent-to-own system, and I only bought things I really needed – or was I? I started to do a “budget” back in April. Basically all I was doing was keeping a list of what I had paid that month to ensure that I had covered all my expenses. I calculated that I had only $1,500 of expenses every month. That figure included everything – Rent, Cell Phone, Power, Gym Membership, etc. That left me with lots of money to spend on whatever the hell else I wanted. I was paying more than the minimum payment on my debt, so I was doing fine - right? After 5 months of this and seeing my credit card continuing to climb higher (maybe I should have stopped using it for starters) I had a mini freak-out.

What was I to do? Who could I turn to? I don’t know anyone who actually wants to talk about how much debt they have. It’s so funny how we can boast about all our ‘stuff’ but the reality is that in comparison to my debt, I really don’t own anything I have. I wouldn’t even come close to $40,000 if I added the value of what I own. And then it dawned on me; Gail must have a book to help me out of the money manure pile - and she did!  I picked up her book – Debt Free Forever. The title alone promised me everything that I was looking for. Debt-free AND forever; how great is that? So headed down to my local Chapters (because it’s cheapest there) and picked up my new bible. It’s a bit embarrassing to shop in the “self-help” category and lucky for me it wasn’t there! I grabbed my book from the business section and headed down to the cashier. “This is my last frivolous purchase” I said in my mind.  When I handed the book to chubby cashier, hair adorned with the loveliest scrunchy you’ve ever seen, she looked at me and said, “this book is amazing.” She didn’t have to tell me, once you go Gail, you never go back.

With Gail in hand, I was ready to get cracking on my new debt-free life. However, I wasn’t quite prepared for what I was getting myself into. Gail makes you work your a$$ off! My first experience was the adding up my debt process. I had always thought that I was sitting around the $30,000 mark when I finished school, but it wasn’t until I sat down and actually added it all up that I realized I was actually $37,193.12 in debt!! This was an especially harsh realization since I had quit drinking a day or two beforehand (for medical reasons, not by choice) and I didn’t smoke or even drink caffeine for that matter, and I really needed a fix of something after that! I went downstairs to my roommates proclaiming my shock and horror and told them Gail was officially moving in because clearly my budgeting approach was total weenuk (cree for dirty balls).

Now, don’t start thinking, oh, you’re doing the self help book thing? That’s lame, I’m not actually going to learn anything from you that I couldn’t just learn in her AMAZING book. But you’re wrong! Everyone struggles through their debt differently. My stories will help to inspire you, I promise. Up next, my spending analysis - get ready for more OMFG moments.

John