Looking Back

Don't be a sucker!

I am still trying to wrap my mind around the fact that I will finally get a chance to speak to the one and only Gail Vaz-Oxlade on September 10th! It still feels a bit surreal to me. My last post had the highest readership of all time and in the past month I have gotten well over 1000 views on my blog which means that a lot of people are reading what I have to say and are watching my progress.

Even better are all the in-person conversations I am beginning to have with friends and strangers about how to get their finances on track. The yoga studio has really brought me into the spotlight to a whole new audience. It is so important to have a dialogue going about debt. Once others realize that they are not alone in paying down their debt, they can begin to see that there is a light at the end of the tunnel, no matter how dire the situation may seem. Even though I am doing very well in my repayment, I still learn so much from the people I talk to about how I can cut corners and stay on track. Sometimes I need reminders that what I have accomplished is really quite incredible.

When I began this process, I really had no idea where it was going to take me. Part of me was scared that I would fail and stay stuck in the hole that I had dug, another part of me was excited to take control of something that had completely derailed me. When my friends had left for a trip around the world using the savings they had, I realized that my spending was awful and my savings were nonexistent because they were both making the same salary as I, but they had so much more to show for it. I needed to come to terms with the fact that I wasn't as good with money as I had always believed. More importantly, I needed to see that I had become everything that banks and retailers wanted - a sucker.

Do you remember that when I started this process I was paying $314.06 PER MONTH on interest payments? Now that figure has been reduced to under $40 , which is still $hitty, but it's a massive improvement. Can you see now why paying things off rapidly is so important? Think about all the money that you could be saving if you can pay off your debt in under 3 years. The banks take enough from you in fees, so why let them take your money in interest as well? What is the point in having savings at less than 2% if you are going to pay interest at 19.98%? There are so few things that you actually need to pay for on your credit card, and using your own money is so much more rewarding.

If you take control, kill the debt and build your savings, the banks will start paying you! You could be the one collecting $314.06 in interest per month, and you SHOULD be in that situation eventually. Few of us want to work for the rest of our lives, so we need to plan ahead and be realistic with where we see ourselves in the future. We are expected to live longer and longer, so we need to have savings that last longer and longer as well. Pension plans are great, but they won't keep you living at the high standards that you may be accustomed to, so start now, try to live with less, and you will gain so much more happiness for the rest of your life. 

Another One Bites the Dust

Suck it Line of Credit! 

I can't help but feel an immense sense of pride when I get to enter the word PAID next to another one of my debts! Despite going on a major spending spree in Montreal for my 4 year maniversary, I have managed to completely eliminate my line of credit and raised my total percent paid off to almost 60%! At this point I was only expecting to have half my debt eliminated, so for me to be 10% ahead of the game makes me feel pretty darn special.

Lately however, I have been feeling the other kind of "special" and doing silly and forgetful things. Maybe it's something to do with the season? After locking myself out of my apartment for an hour and a half yesterday, I finally got around to doing my income taxes and (yay) I am getting a $1,000 refund! That's going to go right to my debt repayment for sure (pay attention people). This year, I was able to do my taxes much faster than most other years because I finally have some stable employment and an employer who actually takes off all the right amounts of deductions. Filled with excitement that I wasn't going to have to pay more income tax like I did last year, I put all of my receipts, T4s and whatever other forms and receipts I had and then I sealed my envelope. Now lucky for me (depending on how you feel about it) I have a tax forms drop box down the street from where I work so I opened the mail slot and dropped my envelope in the box. At that moment, something hit me - I didn't sign the freaking forms. I really hope that they will come back to me soon, although I am not too concerned since the money is all going right to debt repayment anyway. Sure I could netfile or call someone to see if I can fix this error and get my refund quicker, but the reality is that I just don't give a $hit.

This is what has dawned on me; my "aha" moment, if you will. I am finally in a place financially where a delay on a cheque for $1,000 dollars doesn't even make me blink an eye. I am truly getting to the point where I can be comfortable with what I have in my bank account enough so that I don't need to be worried about this. When I was at the beginning of this process, the things I would do with that $1,000 were numerous and I would be so thrilled to get that money to buy a new computer or take a little trip somewhere, but now it's not even important.

My perspective has really been changed over the course of this past year and a half. A couple of weekends ago, I spent a day relaxing at a spa that cost $50 for a day of relaxing in their mineral baths and I thought, "if I were to have done this when I had my first job, I would have had to work 10 hours to afford my entry into the spa". I cannot help but feel incredibly fortunate for everything that I have right here and now. I am constantly learning that I truly can have anything I put my mind to if I keep a positive attitude and include the people I love in my journey.

Happy Maniversary Baby!

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