Same Money, Fewer Problems

A lot of people are still asking me how much money I have saved since September.

It’s not a lot.

I think what they really want to know is how much less money I have spent. I don’t really have an answer for that since my recreational spending wasn’t a constant before.

My monthly obligations are largely unchanged, although I have cut back on anything I consider to be discretionary, like gas and food (food is necessary; filet mignon is not).

A few months back, I set myself some general financial goals for this year. I think it is time to update them a bit.

I revisited my budget recently. I use an online envelope system, and it was very helpful at tracking my spending back when I was doing a whole lot more of it. Now, I mostly use it to determine how much of my monthly income can safely go towards paying down my debt. It also has pie charts, which are enlightening.

I have not been able to maintain a minimum balance in my chequing account, so I have decided to take that goal off the table. It was getting in the way of making progress in other areas. I now have $1,000 in a savings account, acting as an emergency fund. I plan to leave it there and top it up as needed. Otherwise, no more of my income will be allotted to savings until this debt is gone.

Credit Line

The limit is $10,000 and it was very nearly that when I began in September. No minimum monthly payments. Interest is around prime-plus-one. Current balance is $8,000. My goal is to clear this balance by August 31, 2015.

Bank Loan

I took this out in November of 2013 to clear up a bunch of credit card balances and close out another credit line with a higher interest rate. Initial balance was $27,700 over a five year term. I can’t remember the interest rate. I have only made the monthly payments so far ($546, automatic withdrawal) and the current balance is $22,044.80. Once the credit line is gone, all the money that frees up will go toward paying this off early. My goal for this is December 2016.

Car Loan

I financed a smallish portion of a new car last summer. I have weighed new versus used and I know what Dave Ramsey has to say about it already. I wanted the new car so I bought it. Bon. I have no idea what the balance is now but the interest rate is 0.99%, four year term. I am making only the monthly payments ($273, automatic withdrawal) and will continue to do so until the bank loan is gone. With those two larger debts out of the way, I should be able to clear this up lickety-split.

Credit Cards

I have four dedicated credit cards (travel, gas, groceries, miscellaneous) and they all have zero balances. The argument could be made that I don’t need all of those cards. There’s an Amex that I got for a points promotion, but that’s already served its purpose and I think I will cancel it. If oil prices stay this low, I can see cancelling the gas card too. The points don’t accumulate quickly enough and I drive a sub-compact, so… maybe better to focus on the grocery points.

My initial plan for the year was to pay off an additional $10,000 in debt, over and above my regular monthly payments, and I am currently on track to do this. My debt obligations are about 22% of my total spending. Devoting an additional $500 per paycheque to paying it down makes debt repayment more than half of my spending pie. And I’m not even including the mortgage. That’s another piece of pie entirely.

We have done a fair amount of travelling over the years, and I still think that most of it was worth it. I am struggling to come up with a list of stuff I have to show for spending all this money. It is embarrassingly short. My relationship to stuff is changing as I work my way through this experiment, and I expect to end up with much less by the end of it. I think my brain chemistry has changed.

You know when people spend a lot of money on school and then can’t get a job when they graduate? At least those people have degrees. All I had was a lot of purses. And now I don’t even have those. I’m glad I seem to have kicked the shopping habit, but it sucks that I’ll still be paying for it years later. Maybe I won’t buy anything for TWO years.

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3 thoughts on “Same Money, Fewer Problems

  1. Thought-provoking and honest- likely my favourite post yet. I started saving around the time you started the experiment- aside from the savings account Christophe and I share. I, too, am around 1000$. Thanks for the constant inspiration. #SugarFreeClub

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  2. Inspiring for me – thank you for your candor! I am in the process of deciding whether I should stay in Swaziland even though I would be incuring debt. I was leaning towards a ‘no’ and this is helping – I have a bit of existing debt that I do not want to increase. Blessings to you!

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  3. Money can be such a taboo to talk about, so kudos to you for sharing. It sounds like you are on the right track on paying down your debt. Just think, once you have your debt paid off, (and if you keep to the same-ish lifestyle), you can put all that money that right now you’re putting towards paying off your debt into long term savings and… yay!

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