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Discussion Starter #21
great progress in a nothing of time!

but we could already see from the first post that you had taken the all-important first step, which was to face up to the debt & Deal With It.

hope you`ll be patient while your profile morphs gently from red into green. Then you`ll be saving in earnest. Did you say you`d put your first $50 into a TFSA? good idea, those TFSAs. In a future chapter your wife should have one too.
Yes, opened a TFSA to use as an emergency fund. We'll be contributing $50/week to it. This money will not be put towards any debt repayment etc. It's really just to be used if something really bad happens.
 

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Yes, opened a TFSA to use as an emergency fund. We'll be contributing $50/week to it. This money will not be put towards any debt repayment etc. It's really just to be used if something really bad happens.

afaik there's no such thing as a spousal TFSA so if one exists it has to belong to yourself or else to your wife. Would there be a reason for making conjoint contributions to a one-person TFSA?

as it happens though i feel it's too early for TFSA. It doesn't make sense to shelter funds in tiny startup TFSA while paying 19% on credit cards. Better to pay down CCs, then LOC interest rates. By this way of thinking it will be a year or more before you can launch a real savings investment plan.

from my POV, all that a TFSA does while investor is paying 19% on credit card is increase the period of time it will take to get that CC paid off

.
 

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A number of good thoughts and recommendations. I have only one additional comment on expenses. $282/month ($3384 per annum) seems a lot for insurance for 2 vehicles even if both are listed as commuter vehicles and one as a work vehicle. May be a region specific issue, but a thought to shop around for perhaps $200-500 savings there.
 

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Discussion Starter #24
A number of good thoughts and recommendations. I have only one additional comment on expenses. $282/month ($3384 per annum) seems a lot for insurance for 2 vehicles even if both are listed as commuter vehicles and one as a work vehicle. May be a region specific issue, but a thought to shop around for perhaps $200-500 savings there.
Yes, unfortunately I've got the cheapest possible insurance. In Manitoba, auto insurance is public, so MPI (Manitoba Public Insurance) basically does whatever they want with insurance rates, and you're stuck with it. There's no competition. I've even got my vehicle listed as "pleasure use" which means I'm not allowed to drive to work more than 4 times a month with it (saves about $30/month). Every year I go without a claim, I go up a "driver safety level", which usually gives me an additional 2-5% savings the following year. Unfortunately, MPI has recently been raising the rates each year at a higher rate than the annual safety discount you get. It's a little ridiculous. You go up a safety level, but still pay more the following year.
 

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It's not something I use for various cities, it's the same location in one particular city that I am based out of for work. The person basically rents out bunks in each room of their rental property for transient tenants like myself. I pay them $250/month, and I get my own bed in a room. I can come and go as I please, use the kitchen, laundry etc. There are 2 beds in the room I stay in. I've never seen the other person who has the other bed in the room. There's a floor to ceiling divider between the two beds, so there's a reasonably level of privacy.
That's very neat, thanks for sharing!
 

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Discussion Starter #26
Just picked up 13.5 hrs of OT($908) over the next 3 days, plus $183 of non-taxable meal allowance (which I won't spend). :D
 

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If I were you I wouldn't focus so much on cutting back "unnecessary" expenses. It doesn't sound like you're living extravagantly by any means and you still wanna live a decent life with your wife. Getting rid of the rental condo sounds like a good idea.

I bet a lot of people would jump at your setup. Unlimited OT at a decent paying job and a crash pad nearby? That's how you pay off debt without impacting your family. Especially if you're gone for days at a time anyway... it wouldn't impact them whatsoever unless you start spending more time away from home than usual.
 

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Discussion Starter #28
If I were you I wouldn't focus so much on cutting back "unnecessary" expenses. It doesn't sound like you're living extravagantly by any means and you still wanna live a decent life with your wife. Getting rid of the rental condo sounds like a good idea.

I bet a lot of people would jump at your setup. Unlimited OT at a decent paying job and a crash pad nearby? That's how you pay off debt without impacting your family. Especially if you're gone for days at a time anyway... it wouldn't impact them whatsoever unless you start spending more time away from home than usual.

Very true! I'm definitely thankful to have a decent combined income with stable work. Getting rid of the condo will relieve some stress and give me an extra $175/month.

Just got credit card #2 paid off and cancelled as well as picking up 17.5 hrs of OT!
 

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Discussion Starter #29
I opened a TFSA, where I am putting $100/month away. Over the next year, it will be worth over $1000 and I won't touch it unless there's an emergency. We also opened a high interest savings account, where we are putting away $200/month. This will just be general savings for random things we might want to save up to buy down the road. We will try to always keep over $1000 in that account. Also opened an RRSP where I will contribute $100/month in order to pay off my HBP installments and help my tax return.

Next month, we will get over $1000 more than our budgeted income, because I have been picking up OT. I plan to keep doing a minimum of 12 hrs/month of OT(did 17.5 this month) in order to build up some savings and pay off our debt more rapidly.

I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense. It's just a mental thing for me. I want to only spend money from now on that I have in hand saved up. I find it's way easier to spend money on a line of credit than it is to spend money you have. So even though it doesn't make logical sense, I think it will be worth it just in the sense that it will make me more frugal.
 

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I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense. It's just a mental thing for me. I want to only spend money from now on that I have in hand saved up. I find it's way easier to spend money on a line of credit than it is to spend money you have. So even though it doesn't make logical sense, I think it will be worth it just in the sense that it will make me more frugal.

if that's how it'll work for you ^^ then go for it

i hadn't thought of OT to pay down debt but still ... it'll be harder to work OT once you start having kids & become a family, so might as well develop a few habits now that will help to curtail spending in the future
 

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I opened a TFSA, where I am putting $100/month away. Over the next year, it will be worth over $1000 and I won't touch it unless there's an emergency. We also opened a high interest savings account, where we are putting away $200/month ... I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense.
Maybe I misread ... but unless what seems to be a taxable HISA is paying a large enough rate to beat the TFSA, after taxes (which may vary with OT), won't you be further ahead to max out the TFSA?

TFSA withdrawals can happen at any time (unless you locked the money away). The only down side is that putting the money back in the same year means other TFSA contribution room gets used up. The withdrawn amounts need the calendar year to change to become contribution room that is added to the annual amount granted.


Keep in mind that you can have multiple TFSAs so you can setup a cash deposit one for the "buy down the road or emergencies" and a second TFSA at say a discount brokerage for longer term stuff or different investments. The contribution limits have to be respected across all of one's TFSA accounts.


Cheers
 

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^^ he already posted his reasons for building the TFSA/HISA accounts while paying down debt at the same time ... see post No. 29 just upthread

evidently the combo works for him & that is what matters after all, no?
 

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Discussion Starter #33
Alright, here is my first monthly update!

Overall, it was a good month. I failed to budget for the fact that there were three biweekly SUV payment in December, instead of two. We went about $100 over budget on Christmas gifts, but we were way under budget for restaurants, entertainment and a few other variable budgets.

December Income
$10 124 (including $1600 from selling my boat)

December Spending
Fixed Expenses:
$5673 - Over original budget due to 3rd SUV payment and quarterly water bill that I forgot to budget initially

Variable Expenses:
$1671

Total spending - $7344
I also paid off Credit Card #2 completely and closed the account.

I did 17.5 hours of OT which will be paid to me on my mid Januay pay cheque. I expect I will be able to do at least 20 hrs of OT in January.

January Outlook:
Income:
At least $8545, maybe a couple hundred more.
Fixed Spending:
$5211
Variable Spending:
$1605
Total Spending: $6817

I reduced the gift, restaurants, entertainment and alcohol budgets.

Should have at least $1728 left over for credit card repayment.
 

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Discussion Starter #34
An update on accounts:

Liabilities
Condo Mortgage: $136 178
House Mortgage: $235 780
SUV Loan: $27 583
Car Loan: $5300
Wife Student Loan: $6000
Student LOC: $8023
LOC: $49 500
Credit Card: $2400

Total Liabilities $470 764

Assets
Chequing Account: $1616
Non Registered Work Savings Account: $7500
TFSA (work savings plan): $500
LIRA: $15 000
Condo: $155 000
House: $270 000
Total Assets $449 616

Net Worth: $(21 148)

I didn't include the value of our two vehicles as assets this time. I plan on selling my motorcycle in the Spring, and expect to get about $2500 for it. One thing I'm proud of is how fast we are shredding credit card debt. We have cut our spending way back, and have paid off and cancelled one credit card, and have nearly cut the last one in half. I expect by next month, it will be paid off. My Wife and I are doing more free activities around the city like going for more walks in the park with the dog, playing games at home etc.

Another thing I have been doing is going through all of our excess crap in the basement that will never be used again, and putting things for sale on kijiji. It's freeing up a lot of space in our house, and giving a few hundred extra dollars to pay off the credit card. It's also helping to keep me in the mindset of only buying things that are going to be useful in our every day lives. I don't want any more items that are going to sit in the basement for eternity.
 

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Hey, Good Job ! being frugal and productive can be a real drag. By doing fun free stuff your excelling at it !

Before you know it the debt will really start to melt away - if you stay disciplined.

You will be way better off - you will sleep better knowing that you are getting ahead of the game !

I am assuming your plan is to pay down the highest interest items first and let the student LOC be last - I think there is a tax credit for the interest you pay...

Good Job !
 

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Discussion Starter #36
I'll give an update on accounts by mid month, but here's a recap on January's spendings/earnings.

Income: $8770 Net
Spending: $6595 (budgeted spending was $6817)
We made $2175 more than we spent.

Breakdown of spending:
Fixed Expenses: $5244
Variable Expenses: $1351

We were able to scrape $250 off of our variable spending budget. One thing I noticed is that because we almost completely stopped eating out, we are having to buy slightly more groceries as a result. With that being said, it would have been very hard to meet our $400 grocery budget. We spent $487 on groceries in January, while still managing to eat quite well (although a lot of repetitive meals, cooking in big batches for leftovers etc.) I expect to have our last remaining credit card paid off in full by mid month.

Next month, I expect the following for our budget:
Income: $8545 (Give our take a couple hundred)
Fixed Spending: $5211
Variable Spending: $2000 (hopefully less)
 

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One thing I'm proud of is how fast we are shredding credit card debt. We have cut our spending way back, and have paid off and cancelled one credit card, and have nearly cut the last one in half. I expect by next month, it will be paid off. My Wife and I are doing more free activities around the city like going for more walks in the park with the dog, playing games at home etc.

Another thing I have been doing is going through all of our excess crap in the basement that will never be used again, and putting things for sale on kijiji. It's freeing up a lot of space in our house, and giving a few hundred extra dollars to pay off the credit card. It's also helping to keep me in the mindset of only buying things that are going to be useful in our every day lives. I don't want any more items that are going to sit in the basement for eternity.

spectacular progress, félicitations!

the leisure activities sound like fun. "The best things in life are free," they say.

not acquiring marginal items in the first place is also a great policy.

i'm still dwelling on the idea of NOT using overtime as the best single solution to debt. So sorry if it sounds like nagging, i don't mean it so.

still, linking increased overtime pay to continued conspicuous consumption means running faster & faster in the treadmill, no? whereas what you are doing is applying corrective measures in every direction. Looking good!

btw keep in mind that OT is income taxed; whereas $$ saved by not buying version 5 of that expensive widget have zero tax

.
 

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btw keep in mind that OT is income taxed; whereas $$ saved by not buying version 5 of that expensive widget have zero tax
"A dollar saved is two dollars earned". The modern version of "A penny saved is a penny earned", due to inflation and taxes. Plus give it a few more years and no one will remember pennies.
 

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Discussion Starter #39 (Edited)
Update on accounts:
Liabilities
Condo Mortgage: $135 750
House Mortgage: $235 119
Wife Student Loan: $5900
SUV Loan: $27 136
Car Loan: $5000
Student LOC: $7970
LOC: $49 200
Credit Card: $200

Assets
Chequing Account: $1400
Savings Account: $250
Non Registered Work Savings Account: $7600
TFSA (Work savings plan): $2100
LIRA: $15 300
Condo: $155 000
House: $270 000
RRSP: $100
TFSA: $150

Net Worth : ($14355)

An increase of $6793 since last month. I don't expect next month to be quite as fruitful, as I am starting to feel burnt out from all the overtime, and I have been away from home a little too much the last few weeks. It is definitely nice to see the results of our hard work though. If we can keep it up for another year or so, we should start to notice some dramatic results. Thanks for following!
 

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Discussion Starter #40 (Edited)
Well, February was a fairly productive month. Managed to get the credit card completely paid off, and got quite a bit of OT pay. As for the current outlook - We are about to go on a vacation to Mexico in a couple of weeks, but going to try to spend as little as possible while there. We booked our room and paid for it for 5 nights about 4 months ago (before we were really passionate about getting back on track). I am able to get flights very cheap, so hopefully we can get away without spending too much. If we could go back in time, we wouldn't have booked this vacation.

I am starting a course at work next week, where assuming I am successful in the training, I will get about an 80% raise. If all goes well, I will be starting in that position in May or June.

Also, because of my foolish lack of RRSP planning throughout the year, I owe about $2500 in income taxes. This is because I live in Manitoba where taxes are fairly high, and I work in a province where taxes are low, and the payroll department deducted taxes based on the tax rate in the province I work in. Also, this is from my rental property. This year, I will plan my RRSP contributions accordingly so I don't take a hit next year. Thankfully, the money I have in my non-registered account through my work savings plan will have been vested for a year, and I will be able to take about $2500 from that account to pay my taxes.

Anyways, here's where things are at:
February Net Income: $8918

Fixed Expenses: $5234
Variable Expenses: $1217
Total Spending: $6451
Original Budget: $6731
= $280 under budget

Income of $8918- Expenses of $6451 = We made $2467 more than we spent.

Accounts:

Liabilities:
Wife student loan: $5000
Student LOC: $7915
House Mortgage: $234 406
Condo Mortgage: $135 287
LOC: $49 100
Car Loan: $4720
SUV Loan: $26 689
Credit Card: $0
Total Liabilities: $463 597

Assets:
Chequing Account: $1410
Savings Account: $453
TFSA: $200
RRSP: $250
RRSPL: $15 459
Work non-registered, RRSP and TFSA combined value: $9886
House: $270 000
Condo: $155 000
Total Assets: $452 658

Net Worth: ($10 939), an increase of $3416 since last month.

Projections for March:
Budgeted Income: $7550
Budgeted Spending: $7310

This budget includes a $300 limit for spending in Mexico, as well as our airfare, however, I'm optimistic we can do it much cheaper.

Thanks for following!
 
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