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Since 2010 things have gone south financially for my family. As a combination of loosing our jobs, wrong decisions (trusting the wrong people) and perhaps the economy we lost pretty much most of our invested money. I try to look back to this period without emotions but that is hard because financially we had almost reached the point that we could feel confident we could retire. But, we lost it all.

First of all, I read about people that have been in similar situations like this and I'm wondering how they picked up their lives again.


Currently we have LOC of $ 47,000, mortgage $ 147,000.00 (refinanced 1 year ago, 26 years to go), a DRIP and RESP for our 3 children. Income is monthly $2,800. My spouse and I just took the jobs we could find and no we try to manoeuvre around our kids school & daycare schedule. We try to be as frugal as we can by eliminating costs of cable television, drive one car, etc. Questrade TFSA $1,600.

The car that we have is lease that ends 01/2013. Obviously we need a new car but we don't want to take out a new lease. We can raise the LOC instead of taking on a car loan although a car loan would give us the car in the end.

We can sell the house and see if we can find jobs in Alberta, make more money there but the house we live in is perfect and we prefer not to do that.

Second, what would you do in a situation like this? Would you end the RESP and put that money towards LOC or use money to buy a car?
What other suggestions would you have? I would love some feedback.
 

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I can only address one of your ideas here, you should research the cost of housing in Alberta before giving anymore thought to that idea. The last I heard it was prohibitive even with the higher wages, and scarce. When I was there 6 years ago I saw a billboard from Walmart offering new employees a $200.00 signing bonus if they got hired and I read in a newspaper that MacDonalds employees in Calgary were the highest paid MacDonalds employees in Canada. Both of these things point out the high cost of living there(to me anyway). I hope things take a turn for the better for you soon, I just joined this forum and it looks like there are some very qualified people here that may be able to help you with your overall situation.
 

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I can relate somewhat as my job recently became obsolete due to outsourcing. However, considering that you have children in daycare you are much younger than I am - which has advantages and disadvantages. The disadvantages are that this has happened when you have a mortgage and a young family to provide for. The advantages are that you have plenty of time and flexibility to start over and once you come to terms with it, may even find that prospect exciting. You don't say what your skill sets are, but if you could land jobs in Alberta or another market, then I would definitely consider it. It would be advisable to try to obtain employment before leaving your current jobs, even if this means using your vacation for a trip to Alberta or wherever for interviews.

If obtaining suitable employment will mean moving, I would probably sell your home ASAP, pay off the LOC and mortgage and rent for the time being. This will give you the flexibility to move without the potential of having to sell your home on short notice - or worse not be able to sell it and have to continue a mortgage and possibly find suitable tenants when you will have enough on your plate with the move. You could use some of the proceeds for a newer car, if this is necessary.

You don't say the type or amount of RESP. There are sometimes penalties for early withdrawals. My tendency would be to leave it intact, if at all possible, as you will lose the grant portion by taking an early withdrawal. However, I would suspend any further contributions for the time being.

Other than that it appears that you are doing everything right - you've cut expenses down to necessities and are asking the right questions. I realize that this is a stressful time, but sometimes the opportunity to make a big change can be very exciting and present opportunities that wouldn't have otherwise been available if you hadn't lost your jobs.
 

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You don't mention what your monthly balance sheet looks like. With 200k in debt, I can't see it being positive.

It depends on what you really want, start fresh somewhere else, or stay where you are. Moving to Alberta is risky, it could work, or it could fail, could you handle that?

Both involve selling the house and renting/downsizing. Would that remove the debt?

A mode of transportation is required, buy something small and used when the lease is up.

Put the investing (DRIP RESP) on hold. Use the UCCB and the The Canada Child Tax Benefit to cover monthy bills if need be, that could be up around $600 a month.

Does that get you back to cash flow positive? If so, then there you are, then it's a slow slog back out.
 

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All I can say is that is you can't save your face and your *** at the same time. Your first priority is to stop the bleeding.

Now cutting expenses is valid but I have learned the to win you must have a good offense and a good defense. You must make more money and also keep it from leaving your pocket to create wealth.

So if all you can find in your area is crap jobs that pay peanuts, it's time to leave. I come from a small town in Northern Ontario so I'm quite familiar with this scenario. I grew up across the street from a lake that our family had private use of. I suppose I could have got a nice job at the Country Style.

It's time to have a very real look at your finances, and let the unvarnished reality guide your actions. It does really suck but like ripping off a bandaid the faster you do it the less it hurts.
 

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Couple of questions:

Your ages and children's ages?
Do you have equity in your house?
How much of the RESP is contribution (money you put in vs. growth)?
Interest rate on the LOC and mortgage?
Have you run the numbers on buying out the lease early (maybe by with-drawling the RESP contribution and cash from the TFSA)
Are there jobs in your field available in Alberta? You should also explore the same thing in NL, NS and NB, (and yes I know how strange that sounds)
What is the cost of daycare vs what either one of you earn (is it worth the expense vs taking in other peoples children)?

So . . . going to school is expensive (by which I mean have you learn from this experience?) and time does cure all (by which I mean learn the lessons, put a plan in place, and don't stress in the short term, gains come from the long run). Many years ago, on the verge of becoming financially independent interest rate went from 11% to 18% virtually overnight, and bing botta boom . . . bankruptcy loomed . . . new plan required, planned and executed . . . moving to a lower cost province helped!
 

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Count on $3000 a month for rent in Alberta and I agree NL may be an option ,many jobs there and cost of living still lower than rent of country IMO.
 

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Depends on where in Alberta.

Rents in Calgary are NO WHERE near $3000 per month even for a newish (2005+) 2400 sqft house with 3+ bedrooms and 2+ baths. You can easily rent a 2 bedroom apartment for anywhere between $1200-$1800 depending on size, age and location.

Fort Mac is expensive, but we don't know what field the OP is in. An accountant or office worker should move to Calgary or Edmonton, a labourer, safety officer, or rig-pig, Fort Mac.
 

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There are lots of little things you can do which will not make much of a difference, but should help (ie stop RESP contributions).

With that income and an already fairly frugal existence - I think you have to be prepared to tread water for a while until your costs drop significantly (ie daycare) and/or your income increases.

I don't see how you can put together any kind of meaningful debt repayment plan at the moment. Just pay what you can.

The two big things I would do if in that situation are:

1) Try to increase income - work more hours, keep trying for better jobs. Keep at it and eventually you should be able to make more money.

2) Keep in mind that your daycare costs will go down over time. At that point you can take some or all of the savings and start a reasonable debt repayment plan.

Don't give up - I don't think your situation is that bad and you just need a break (ie increased income) and you will be in good shape.
 

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One other point is that I don't know that Alberta should be the only option. The OP doesn't say what their professional backgrounds were or where they currently reside - but there could be work in their field in other provinces than Alberta. Important to keep all options open. I also agree that the house shouldn't necessarily be sold unless moving looks inevitable.
 

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Ditto Mall Guy.

Are you in a positive cash position or sinking.
The car when the lease is up I would pay cash for what I need in a replacement nothing more.
You need to stop the DRIP & RESP for the time being.

Are you aware that LOC can be cut if the bank deems your risk has changed, so if your worse off than the last time you talked to a bank be careful.
 

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It is quite amazing how misinformed some GTA people are about rents, wages, and job opportunities in Alberta. As someone else said, rents in Calgary, Edmonton are no where near $3000. Why provide absolutely incorrect data to someone who is trying to make a life changing decision? As for wages at MacDonalds....they are actually higher in BC than they are in Calgary or Edmonton. Check out Alberta's minimum wage..it is shamefully one of the lowest in Canada.

I strongly suggest that if you are serious about this, go on the web and do some research for yourself. Do not depend on the opinions of people who perhaps 'know someone who has a friend whose uncle moved to Alberta' so to speak.

Fort McMurray is indeed very expensive but NOT representative of the entire province by any means whatsoever. Wages are very high in |Fort McMurray.

We have lived in Alberta for the past 12 years and I have been doing business hear for the past 15. We have lived in Montreal, Ottawa, Toronto, and Vancouver. Alberta is by far the best place that we have lived. It is a great place to raise children. We have just retired and have no desire to leave Alberta notwithstanding that all of our close relatives are in GTA or Vancouver.
 

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Didn't consider the 2 bedroom condo for $1200-$1800 a month , by the time you pay rent and the bills for a 3 bedroom house I won't be far off the $3000.I just spent the month of March looking for a house to rent in Edmonton on Kijiji...
 

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Marina - I'm not sure about Edmonton but in Calgary, you can easily get a 3 bedroom for about $1800, often much less, and utilities will be about $400-500. Our rentals, in decent areas of town go between $1000k - $1400 for 3-5 bedrooms. Our downtown condo with all utilities is $1200 for a 2 bedroom in a great area.

Usually $3000 is in the really nice areas of town, or executive suites. I think rents in Edmonton should be lower. It really depends on what you are looking for though.
 

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Since 2010 things have gone south financially for my family. As a combination of loosing our jobs, wrong decisions (trusting the wrong people) and perhaps the economy we lost pretty much most of our invested money. I try to look back to this period without emotions but that is hard because financially we had almost reached the point that we could feel confident we could retire. But, we lost it all.

First of all, I read about people that have been in similar situations like this and I'm wondering how they picked up their lives again.


Currently we have LOC of $ 47,000, mortgage $ 147,000.00 (refinanced 1 year ago, 26 years to go), a DRIP and RESP for our 3 children. Income is monthly $2,800. My spouse and I just took the jobs we could find and no we try to manoeuvre around our kids school & daycare schedule. We try to be as frugal as we can by eliminating costs of cable television, drive one car, etc. Questrade TFSA $1,600.

The car that we have is lease that ends 01/2013. Obviously we need a new car but we don't want to take out a new lease. We can raise the LOC instead of taking on a car loan although a car loan would give us the car in the end.

We can sell the house and see if we can find jobs in Alberta, make more money there but the house we live in is perfect and we prefer not to do that.

Second, what would you do in a situation like this? Would you end the RESP and put that money towards LOC or use money to buy a car?
What other suggestions would you have? I would love some feedback.
I'm sorry to hear about your situation. I know we were hit with some hard times when my second was born, and my spouse got laid off without a severance. We did have large cuishion, however, we hardly had to dip into it at all because we made some drastic changes.

Here are some of the things we did:
-Look for ways to cut out any expenses you can. If it's not truly a need, then don't buy it. We cut almost all discretionary spending, with the exception of childcare (our nanny) because we knew it would be short term, and that it takes a very long time here to find good child care. We called all our service providers and cut any services we didn't need or reduced them, any that we really needed, we called around to get a reduced rates and got our service providers to match them.
-We called our bank and got all of our mortgages reduced to the min amount (we were on an open variable, and paying extra before this, so there was no fee).
- Stopped all RRSP, RESP, and savings contributions.
- Both my spouse and I did whatever we could to make a few extra dollars. We delivered flyers early in the morning, babysat, mystery shopping, demos, ebayed, you name it, nothing was beneath us.
- My spouse is highly specialized, so there was nothing here. We did send him for away for 6 months to the US on contract while I stayed here. We would have had him stay in away as long as it took until there was job for him back here.

You didn't mention what kind of work you are looking for. Calgary is good, but its' not like it was before 2008, the work is picking up, but unless you are bringing in decent money it is expensive here. How old are the kids? Childcare is a killer here.

Is there any chance for you to be away from your family for a shorter term until things get better. I would just look at all the options, it will get better. For us, going through the tough times was a real eye opener and a humbling experience that has made us a lot better for it. It was actually because of our situation I started coming here to take control of my finances more. I would look for creative ways (legal and moral of course) to make more money first.

Good luck
 

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You need to share more ,do you have equity in the house?I mean we cannot tell you to sell and move if you will be broke once you pay out the bills.Check the lease buy out on your car and then price it on auto trader for same car that will tell you if you should buy it out or not.
 

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Discussion Starter #17
Wow :encouragement: tons of good advice, thanks so much people!!

I'll try to give a little more information: our kids are 8, 5 and 1. The two oldest go to school. For the youngest we found a subsidized childcare in the city where my spouse works. This means we only pay a top up fee.

Equity in the house is close to zero. When we refinanced we wanted to get a mortgage at a lower rate and the advisor 'adviced' to borrow more money so we could pay off a part of our LOC as well. That was stupid. But the monthly payment were cut from about $1200 to $770/month. And because we were both laid off we took that deal.

We have no cell phones and we ended the cable television (enough garbage with bunny ears).

RESP = family RESP, value $8,500 but actually invested is $5400.

We don't necessarily need to go to Alberta but the idea came up. We live in NB now and the unemployment is killing. My spouse and I both worked in the non profit sector, both as executive directors. Working as exec directors wasn't our first choice though, my spouse is a teacher and myself worked in logistics and warehousing as account manager. I took a job at a call center recently just for the benefits and the pay. I plan to go to school myself in September to improve my chances, have a N.B. certificate (we both went to university and were told our 'skill & knowledge' would be no problem in Canada but as an immigrant that is going to be your number 1 problem). Going to school also depends if my spouse can find a better paying job.
If we were to go to Alberta - or any other province - than we would look for a teacher's job for my spouse. Me myself, I have had so many jobs, but I liked the executive director position a lot. I wouldn't mind working in a prop shop for an investing company but I'm not sure what it requires to get in.

As for the lease: it is our only car, a Mazda3 with 62000 km on it. If we would buy it at the end we would need to pay $8400 but cars sell for more on Kijiji with that # km's, so we are kind of contemplating buying & selling it at the end of the lease - if of course we could raise the money. The buy out is $8 less per month than the current lease amount, and because it's the only car we decided to keep it for now.

@Plugging Along: we are looking into getting work for one of us some place else. We haven't had much experience in doing this and are wondering if there is a good way to do this. But yes, we would do that.

@Daniel A.: we no longer make payments into DRIP & RESP, we have about $300/month left after living expenses. We need this money to keep up the house, the lawn mower broke last summer, the deck needs staining as well as the drive way, that kind of thing.

I would love to go back to the situation where I could trade every day – I dreamt about it last night but I guess without a well paid job this isn’t going to happen fast.

Thanks!

P.S. How do you get in an electronic trading room for a job? Except the Warren Buffet way. What would it require to get in?
 

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I would definitely hitch my wagon to the teaching job and search the entire country for positions. If you are even more adventurous, I would even check out international positions. A cousin of mine has had several positions at international schools throughout the world where she teaches mostly expat children (diplomats kids, etc.) I've heard that she is doing extremely well. Sooner or later all these baby-boom teachers are going to have to retire so if I was your husband, I would concentrate on maintaining skills and gaining teaching experience.
 

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I would definitely hitch my wagon to the teaching job and search the entire country for positions. If you are even more adventurous, I would even check out international positions. A cousin of mine has had several positions at international schools throughout the world where she teaches mostly expat children (diplomats kids, etc.) I've heard that she is doing extremely well. Sooner or later all these baby-boom teachers are going to have to retire so if I was your husband, I would concentrate on maintaining skills and gaining teaching experience.
I agree with this advice.

As far as the perfect house goes - it's not going to be perfect for long if you can't afford to maintain it or enjoy a decent life in it. There are plenty of houses in this country (and others) that will be just as perfect.
 

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I'm new to this thread - but still amazed at the advice given by some experienced, knowledgeable people. I am a teacher workling in BC - I see that you do not list BC as a destination - (a good thing given the horrendous house prices here) -

1. What steps are you taking to find work? - are you net-working etc and using all of the technological gadgets to find prospective employers? Most teaching positions are filled or filling up now for the next year.
2. Spidey's advice was right-on. Look for teaching positions internationally - I think I saw some advertised in Papua NG (New Guinea) for teaching at an International school in the weekend G&M. I wouldn't look for a job in the city (Vancouver, Toronto etc), but I would look in the burbs. Make sure you do your own DD, Use the internet - more importantly, use your contacts.
3. Have you considered going North for a term? Not always a popular choice, but given the cost of things in cities and the lack of opportunities in some cases, a reasonable one to consider. More kids are found the further north you go! - seems strange, but true. Alberta is OK, but Saskatchewan is better IMO!
Pluggingalong had great advice wrt stopping payment on all but essentials. My focus, however, if I were you would be to make finding that next job, a job in itself. Network and put as many contacts out there as possible - research as much as you can.
Just my 2 cents
 
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