Hi all. I apologize for not posting the last two weeks. Things got busy with main client the first weekend and then this past weekend was spent preparing for and then moving downtown. I also didn’t have internet at the new place for a few days. So it took me longer to download my bank account transactions to my personal finance software, run my reports and do my usual monthly analyses of spending, expenses, etc. One day I will write a post about the process and tools I use to keep track of my money. Today, however, I will give an update on my debt reduction progress as of the end of last month and my life in the new digs.
Since I last posted, I paid off the last of the student line of credit (LOC)! Yay!
So that’s one more debt erased! Or rather squashed – haha. Next step is to focus on the b-school loan since it has the higher interest rate!
By the way, I realize that I have been zigzagging between the avalanche method of debt repayment (where you pay off the debts with the highest interest rates first, in descending order of interest rates) and the snowball payoff strategy (where you pay off the smallest debts first in ascending order of debt size, to get emotional wins). To be honest, I wasn’t really consciously following either one. I made sure to pay off my credit cards first because they had the highest interest rates AND they were the smaller amounts. Then I needed the emotional win of paying off my student line of credit (it’s been 11 years since I’ve had it!). And now I am back to focusing on the debt with the highest interest rate because the saved interest payments on my massive b-school loan will be a lot of money.
Alright, back to my progress…I didn’t get to throw money at much else besides the LOC because I didn’t have as much money coming in this past month. A couple payments I was to get in May have been late. And I didn’t want to put too much money towards the debt without for sure knowing I had a certain amount in my savings (planning for uncertainty remember?). In addition, besides the extra expenses of rent and living expenses, I am planning to spend a few thousand towards much-needed dental work before the summer is out. I will write about them later but my teeth issues are depressing 😦 . The point though is that, thanks to those mentioned things, I was more conservative this month in the money I threw at debt.
As for my life and last month’s spending…
If you remember from my last post, I told you all that I planned to temporarily move from a rent-free situation with the ‘rents to downtown living for the summer. That time arrived last weekend! Last Saturday, I moved into a condo for the three full months of summer!
It is a pretty nice, centrally-located condo with lots of amenities. The complete opposite of my living environment at home. And it is in a totally different type of neighbourhood from where my family lives. I got a really good deal on this nicely furnished luxury condo. It was listed at a price I could not afford so I emailed the owner and asked for a greatly reduced price, with the offer to pay all 3 months upfront. He initially said no. But then he emailed later saying that though he had others willing to pay more he liked me (he probably checked the links I gave him and googled me to make sure I was legit). After some back and forth we agreed on a price. I met him, saw the place and it worked out!
Basically, I negotiated the rent price (protip to saving money taught to me by my parents: negotiate on everything!).
Nonetheless, I will also confess that, in securing this sweet pad, I went over my monthly rent budget quite a bit. However, by renting for only 3 months instead of the 4 months I had been thinking I’d do, I will end up spending the same amount of planned money on rent. A shorter stay in uber-convenient, swankier digs was a price I was willing to pay. Best believe that I will be using as many of the amenities as possible. And, since I have no flatmates, I achieved my goal of having a place where I can finally host visiting friends, without worrying about flatmates. Also, I figured that since I will be able to walk to many places I will be able save on transportation costs.
And as I feared, downtown living, with fun and temptation within easy grasp, started out proving to be rough on the wallet. As part of my birthday celebrations, I went proper clubbing for the first time in many years. And was simply reminded why I don’t really like the clubbing experience. It is time-consuming and expensive!
Club night was the day of my move but I unexpectedly had to help my parents with something so I spent all day driving them around. This had me moving in and getting ready two hours later than I intended. I was going to a nice club with a dress code (clearly not my choice) and my company was to include at least one girl I knew was going to go all out with dressing up. She is one of my new friends. We had gone out the night before to a stylish event and she had come dressed to turn heads, while I basically just flung on whatever clothes I could grab. I didn’t want to disappoint her again Saturday night. She hadn’t said anything Friday night but I definitely
felt imagined her disappointment.
Most of the time, I try to avoid comparing myself to other women. But sometimes I can’t help it. Like when I know I am going to a club where most of the women will be dressed to kill. So I spent a lot of time on Saturday getting ready – deciding on a nice outfit, doing my hair and doing my makeup. Then because I started getting ready late, by the time I was ready to leave the apartment, it was after the time I should already have been at dinner with my friends (dinner was to be our first stop before the club). I had been planning to take public transportation to the restaurant, 15 minutes away. But I was late and in super high heels and a cab would take 7 minutes and only cost me $10 versus the $3 bus ride, i.e. $7 more. So I took a cab.
After dinner we briefly went into a pub and then went to the club. By the time the night was done I had spent $70, including dinner! I know that’s a small amount for clubgoers and high rollers (of which I count many of my former b-school classmates) but it was a big amount for me, especially since I had also gone out the previous two nights and had spent $40 each of those nights. That was a $150 weekend just for entertainment alone! I justify it a little though, because last year when I became 30 life was pretty depressing for me. So I tell myself that that big spending on just food and drinks was ok because it was my birthday, I didn’t do anything for my 30th last year and I don’t spend on myself like that often.
The cab spending is what I will have to watch out for…I live near enough to everything that it shouldn’t cost me more than $10 to take a cab anywhere, which is pretty cheap. However, public transportation is cheaper and runs 24/7 near enough to me that I can take it late at night. As long as I am not in heels. This is why I will try to avoid clubs/dressy lounges this summer and if I take a cab I will try to have at least one friend with me so we can split the cost.
On the bright side, this week I have already saved on a few round-trip transportation costs, because I walked to events/meetings. So cheers to that!
I will continue to keep you posted of my spending. As of now, here is a summary of my debt situation.
|Name||July 31, 2013||May 31, 2014|
|B-school loan||$96,800 USD ($105,503 CAD)||$95,807 USD ($104,420 CAD)|
|Ontario Student Assistance Program (OSAP) loan||$20,931 CAD||$19,351 CAD|
|Student Line of Credit (LOC)||$9,678 CAD||$0|
|TOTAL||$150,888 CAD||$123,771 CAD|
That means that so far I have paid off $27,117 of my debt, which is not bad and still keeps me on track to my $30K payoff goal by July. However, I also have a goal to put at least $2500 per month towards debt, preferably $3000.
At the end of April my debt was $126,370. With May’s end of month debt balance being $123,771, this means that last month I put $2599 towards debt. That’s a little short of my $3000 per month goal. But I’m actually surprised. In a good way! With all the spending I’d been doing and few payments towards debt, I thought I only paid off $2000 at most (low expectations all the way).
This month of June I will again be spending extra on living expenses AND also have to put aside money for future dental treatment so I don’t know that I will be able to put $3000 towards debt. Hopefully, I will! Please check back in a week or two to get an update from me!