November Monthly Report – What’s Going On?

Hi all,

The news coming out of the US the past couple weeks have been depressing, especially as it concerns the Brown and Garner cases. Added to that is the fact that, after October, November was the month I took in the least amount of money since last year when I first started working for myself. So money is tight going into the holiday season. Also, the Canadian dollar is still struggling against the US. For these reasons, my mood going into the holidays is a bit somber.

With November being the second straight month of barely any incoming funds I was unable to put as much money towards debt. I cut down my expenses a little more too, as I am now on the path of spending as though I expect no income for 6 more months.

In fact, if I discount the money I gave my Mum and loan interest payments, in November I only spent $458 in total. Most of it was on health and dining out.

DINING EXPENSES

SEPTEMBER OCTOBER NOVEMBER
$440 $172 $133

I reduced my dining out by a bit. A good chunk of the dining spending above was work-related. The only non-work-related dining expense was treating my family to Popeye’s takeout one Saturday night ($55 fed close to ten people – there is a reason poor people eat a lot of fast food). I was lucky in that often my clients paid for lunch if we had a lunch meeting. However, sometimes I ended up buying my own lunch when my meeting was just before lunch time. A few other times I was good and packed my lunch with me when I knew my work meetings downtown were scheduled to be done at lunch time and I wanted to go work at the library afterwards. I may have to go back to packing my lunch more frequently if my situation continues as is.

ENTERTAINMENT EXPENSES (TRAVEL, DRINKING/PARTYING, RECREATION)

AUG SEP OCT NOV
$68 $0 $30 $13

That $13 was for a movie ticket.

If things continue as is I will have to suspend giving my Mum money and cut down further on dining as well as miscellaneous expenses, until I start receiving income again. For instance, no more delicious lattes every now and then at Starbucks – it will be all about the cheaper tea/bottled water during my meetings. Every little adds up when trying to cut down on spending! I had also been hoping to do a holiday trip (or rather, a January trip) somewhere but that doesn’t look possible at the moment.

On the bright side, since I am in the suburbs with my fam again, far away from the temptations of downtown living, and since it is cold again here in Canada, my desire to go out and spend money is much lower. So I am not yet really feeling the crunch.

Anyway, here is where things stood at the end of November:

NAME JULY 31, 2013 NOVEMBER 30, 2014
Mastercard $6,123 CAD $0 CAD
Visa $8,653 CAD $0 CAD
B-school loan $96,800 USD
($109,142 CAD)
$81,802 USD
($92,346 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,421 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $154,527 CAD $110,767 CAD

October’s balance was $112,940. So that means that in November I only paid off $2173, falling short of my minimum threshold of $2500/month. I am, nonetheless, thankful that I was still able to pay above the minimums for my loans (which combined currently equal around $1091), despite two low-to-no incoming cash flow months. And I’m very thankful that my situation is not so terrible yet.

In December, I hope I will be able to pay off enough to get to $45K paid off in 17 months.

October Monthly Report – Cash Flow Woes

Hi everyone.

My end-of-month report for October is due. So here I am!

October was a little bit of a rough month income-wise because I didn’t get any money coming in for the projects I am working on. One of the clients was late with payment, main client, but they have been late the last few times so I was kinda expecting it.

I actually had to dip into my savings to make payments towards debt. I felt comfortable doing so because my savings are still enough for now. Not one year’s worth like I want, but maybe enough that I could make the money in it stretch to last me 6 to 8 months if I get no income for a while, without reducing my debt reduction rate. Although I have a feeling that my cash flow will continue to be bad for the next month or so, here’s hoping it won’t come to the situation where I’m looking at 6 to 8 months without income!

Anyway, since I kinda knew I wasn’t going to have any money coming in, I limited my spending throughout the month. Glad to report that my spending for this month is the lowest it has been since February last year, a few months before I got my first contract. Back then I was on such a spending diet that my monthly spend for the month, minus credit card interest payments, was $400 or less. So this month my spending was the lowest it’s been in a year and a half. Definitely a record.

Granted the main reason my monthly expenses fell was because I cut back my spending, knowing or rather suspecting that I wouldn’t get any cash coming in this month. But it’s nice to know I can easily make $500 plus reductions in spending if really needed.

As part of my reduced spending plan in October I went out less. Part of this was prompted by the fact that early on in the month, after a late night out and a few minutes waiting out in cold weather in clothes that were not meant for cold weather, I impulsively decided to get a cab home. That ride cost me over $40 as opposed to the $3 the bus was going to charge. I felt so guilty about that that I skipped going out at night for a couple weekends. I also hate cold weather. So the way I see it, my guilt was another excuse to not go out in the cold.

My dining expenses for October amounted to $172. Thankfully, that’s a marked decrease from the previous 2 months. The last time it was that low was in June.

DINING EXPENSES

AUGUST SEPTEMBER OCTOBER
$371 $440 $172

The $172 is close to my ideal of $150 or less and within my budget of maximum $250. So I’m feeling better about it.

My other big expenses excluding loan interest, for the next few months, will be health (mainly dental), gifts (including monthly amount I give my Mum) and entertainment. Health should be a fairly constant $250 – $350 for the next few months. Gifts will ramp up during the holidays. My family is thankfully not big on gifts, but I do like to buy presents for my friends and also treat my huge family to a few dinner/lunch takeout meals. Entertainment is the other regular expense. That includes travel, drinking/partying, recreation, etc.

I no longer really have a grocery bill. So from now on I will track entertainment expenses instead. In October it was pretty low, because I barely went out and my bus tickets for travel were bought in July. Here is a comparison of my entertainment spending the last 4 months.

ENTERTAINMENT EXPENSES (TRAVEL, DRINKING/PARTYING, RECREATION)

JUL AUG SEP OCT
$404 $68 $0 $30

In other news, the Canadian dollar keeps falling. Earlier this month I started feeling a bit of debt fatigue as I considered how the balance feels like it has barely moved the past couple months. And I felt a bit depressed when I considered how much longer the Canadian balance on my b-school loan is going to take to go down.

I am feeling a bit better now as I am focusing on small steps at a time (that by the way is great advice for life!). When all was said and done at the end of October, here is where things stood:

NAME JULY 31, 2013 OCTOBER 31, 2014
Mastercard $6,123 CAD $0 CAD
Visa $8,653 CAD $0 CAD
B-school loan $96,800 USD
($109,142 CAD)
$83,589 USD
($94,364 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,576 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $154,527 CAD $112,940 CAD

September’s balance was $115,652. So that means that in October I paid off $2712, meeting my minimum threshold of $2500/month but falling short of my real goal of $3000.

My US dollar amount is going down but, as aforementioned, my Canadian balance feels like it is not moving much. I think part of my sadness came from accepting that I am not going to be able to pay off $50K by the end of this year, a stretch goal I had. Perhaps if the dollar was not dropping so fast and the end of this year was not looking to be filled with cash flow worries…Ah well.

The MBA And The Greyhound: Traveling Frugally

Hi everyone!

I want to start with a story…

The other day I took a trip to visit a very good friend in NYC, also a b-school graduate. It was for a wedding actually. At the wedding, I chatted with some friends and acquaintances, all business school grads, most of whom are bankers. It was funny watching their reactions when I told them I took the bus from Toronto (and I had no qualms correcting them if they assumed I had flown).

I am certain that all the b-school grads at the event are earning well over six figures. And they know that I am also a b-school graduate, same year as them. We all attended top 20 business schools in the US. So I am sure they rightly assumed I was earning good money, maybe not as much as they are earning (since I’m not a banker) but decent money, even working for myself. With these ten-percenters and five-percenters, the Greyhound is not on their radar for travel options. I’m guessing they assumed I was the same. So whenever I mentioned that I took the bus and was planning to take it back, some of them were unable to mask their expressions: First expression, the bus? As in the Greyhound? Second, did she have to take the Greyhound because she is earning so little that she couldn’t afford a $300 plane ticket from TO to NY. Third, damn it must be rough for her.

Thankfully, based on my income alone, I could easily afford a plane ticket. So I didn’t feel the sting of their pity as I would have were I really in a rough spot. However, as you all know, because of my debt burden, I feel like I can’t really afford a plane ticket and felt very happy to have paid under $100 for my round-trip bus ticket. Because, as I have stated before, I am living as though I were a student, travel included.

That brings me to the topic of today’s post. Today I want to talk about saving money when traveling.

traveling

I am not the type of girl who is into clothes, shoes, bags, electronics, shopping or any material thing really. However, I do like to travel.

When I was younger, I would save up my money to go live for months at a time in new cities or new countries. Money I saved on clothes or eating out in my home city were put towards my travel fund. I have lived in a number of countries and traveled to quite a few others. I like thrusting myself into new cultures, especially ones where the majority speak a language that is not my native language. I like meeting new people, wandering around in a new city and learning about a place through firsthand experiences. I sometimes practise extreme frugality in certain areas in order to be able to take once-in-a-lifetime trips. Mainly thanks to this quote.

Charles Twain - Twenty years from now

I like all those aforementioned things but I have always been frugal. So I was a frugal traveler, especially once I got to my destination. However, nowadays I have cut back on the ticket prices to my destinations. So my travel destinations the past 3 years have been contained within North America. Thankfully, there are still many cities here for me to discover.

Traveling on a budget – the frugal traveler

Below are a few of my frugal traveling tactics and my travel stories.

Tactic #1: Try to spend as little as possible to get to your destination

Debt Squasher - transportation options train plane bus suitcases

  • Be sure to check out fares by bus or train and compare with the cost of flights and travel time to see if something else could work for you. I use the Greyhound (including the Ne On bus) and Coach Canada (including Megabus) more often than the train or plane when traveling within North America. Sometimes I take the bus partway to a cheaper airport.
  • Ride-sharing is an option to get someplace too. From Craigslist to Ridejoy to other newer sites, you may be able to find someone going where you are headed and the cost of chipping in gas money could be cheaper than any other means to get to your destination.
  • Car rentals and peer-to-peer car lending such as RelayRides are also options to check. Be sure to include gas costs in your calculations to do a better comparison with other options.
  • If you are going to fly, check nearby airports for cheaper flights. In my case, the Buffalo airport is often significantly cheaper than flying out of the Toronto airports. So I will take the bus to the Buffalo airport then from there take the plane to my US destination.
  • Some years back, when I lived in Europe, I took many a trip to other cities and countries. From the beginning, I made sure to use comparison sites to check airfares and often went with the low-cost carrier rather than the airline with all the (unnecessary) frills.
  • Protip: Another trick I discovered was that, if you check out an airline/plane/bus site as if you were from your destination city then you sometimes get cheaper tickets, i.e. try to navigate a website in the language of where you are going or with your country set to the destination country. For instance, when I was booking a train from Paris to Rome I checked the train sites based in France and the train sites based in Italy. And when I was on the Italian train site, Trenitalia, I set my language to Italian. Whaddya know? The fares were cheaper on Trenitalia when I set my language as Italian!
    Note that I don’t speak Italian but I knew a little Spanish and could figure my way around. Plus, forms where you enter your departure and arrival cities and times are pretty standard in most languages, at least the Latin-based ones. And Google also came in handy for those words I didn’t understand and couldn’t guess. When I was going to Spain, I put my country as Spain on Ryanair’s site (Ryanair is a low-cost European airline). Bus to the Netherlands? Didn’t speak a lick of Dutch but I set my language to Dutch and fumbled my way through in order to compare prices.
  • Avoid booking tourist packages, such as the ones that include hotel and transportation to different places. In my opinion, those things are money traps. You can create your own package by booking your flight/bus/train yourself, booking a hostel/Airbnb/hotel yourself and setting up your own itinerary.
  • Sometimes you just want to get away and you don’t necessarily have a destination in mind. Or if you do, you would be open to other places. In this case, look for specials to get you out of your city and use the cheapest destinations as your starting point for where you want to go. More than once I have taken a trip to somewhere I’ve never heard of or thought about, mainly because fares to that place were cheap.

Tactic #2: For accommodation, look into alternatives to hotels

I can safely say that when I have traveled on my own and paid for it (i.e. almost all the times I have traveled), I have never stayed in a hotel.

Oh you fancy huh

Some alternative options to a hotel are:

  • Couchsurfing – I am a proud member of Couchsurfing. When I first started traveling, couchsurfing proved a great way to get to stay in a city for free, meet cool people and better learn about a city. Couchsurfing is an online community of travelers, many of whom welcome others into their homes. Guests get a free place to sleep, the opportunity to interact with locals and better learn about a city. The host gets the chance to learn about a different culture or practise language skills. Everyone gets to make new friends!
    You don’t even have to stay with a couchsurfer to meet up with him/her. You can also schedule a time to meet up for coffee/drink/a meal/activity/event. It is nice to meet up with a local who can often give excellent advice for things to do and see. And, if you are traveling alone, it is even better, especially if you also want to spend at least one night out on the town. Having company for that sort of thing is great.
    People often tell me I am crazy to do couchsurfing as a single female. Even moreso because I stay in the homes/apartments of men. Maybe I am crazy but, let me tell ya, some of my best traveling experiences came from couchsurfing!
  • AirbnbAirbnb has become my go-to site to check for accommodation when I am visiting another city. To me, Airbnb is a step up from couchsurfing, mainly because of the protection aspects. In reality, the difference between the two is that with Airbnb you do actually pay, although the rates are very reasonable and often much cheaper than a hotel. On Airbnb you can book any type of sleeping arrangement (couch, room, entire apartment) for any period of time and there are policies in place to protect both the host and the guest. Note that there are now a lot of similar sites, some of which are more popular in certain countries (Wimdu is one that comes to my mind).
  • Hostel – Hostels are pretty good in certain places. In my experience the ones in Europe are decent but hostels definitely have different levels of quality in different cities. So do some research to find out which cities tend to be ok and then, within cities, which hostels have a good reputation. For instance, I stayed in a 4-bed room in an amazing hostel in Germany for something like 11Eur/night. The room was immaculate! In fact, that hostel and room was eons better than the sketchy hostel and even sketchier 2-bed suite I booked in London for 50 pounds/night! Better even than some far more expensive hotels in Paris!
    By the way, Protip: Some people think hostels only have young people, twelve to a room, one shower for an entire floor…that sort of thing. Those aren’t the only ones. There are a variety of room types in a hostel. You can even get a suite as I often did, where you are by yourself or with up to 3 others and the people in that suite get their own washroom, and sometimes even a kitchen, just for the suite guests. Often, hostel suites still work out cheaper than a hotel room, especially when traveling alone.

I’ve just realized that these three all have one thing in common (if you do the room option in Airbnb):

sleeping with strangers

It doesn’t have to be weird, you guys!

Another option for those who are very risk-averse and just cannot see themselves staying in the home of a stranger:

  • Stay with friends – One time I stayed in a lovely apartment with a great outdoor pool, in Madrid, with a friend I made in another European city. On all my North American trips so far, including my recent trip to NY, I’ve stayed with a friend. And I have a number of friends living in other countries just waiting for the day I can afford to visit :P. Of course, this option is limited by your ability to make friends from other places or your luck with having friends who move to or who live in other places. No worries. I think this option is yet another reason it is good to make friends from other countries. Of course your motivation for doing so shouldn’t be so you can have a free place to stay in some exotic location. However, by making connections with people who come from a different city you may end up with that lovely by-product of having a place to stay next time you venture that way.

Tactic #3: Don’t spend (much) money on tourist traps

View of Eiffel Tower from Sacre Coeur

  • Guided tours can sometimes be expensive. E.g. those open-deck buses in Toronto or San Francisco are hella expensive. Look for the free walking tours that many big cities have, often in multiple languages. I have done 3 hour ones in Europe. Some people do walk away not paying anything to the free guides but the free tours aren’t really free. They are more like pay-what-you-can. Nonetheless, 5-10 Euros or $10-$15 is much less than the price of the official tours and, in my opinion, they are just as informative. Try to find the free ones!
  • If you don’t want to spend any money on paid or “free” guided tours you can find other ways. When I first started traveling, I found it hard to spend money on tours. So I created my own self-guided tours. I’d often research the best places in a city using TripAdvisor and other travel review sites. Then I’d make a list of what I wanted to see, usually sticking to free options only. Then I’d map out the places. Then I’d walk around these places with a hand-drawn map and notes on the different starred places on my map (I never use my cellphone in foreign countries – roaming is too expensive). Nowadays smartphones have built-in GPS that can sometimes work without internet so you may not need your piece of paper like I did. When I was strapped for time or too lazy, I would look up complete self-guided itineraries online, print them off and use them. And so I did “2 days in Venice” and “1 day in Amsterdam”, among others. Again TripAdvisor worked well for me but I’m sure there are other good sites out there.
  • I avoid tourist traps in general. Or rather, I avoid paying to go up or inside a tourist trap. Different people have different priorities though. For me, when I travel, it is more important to get a feel for the city as a local. So, for instance, while I love the Eiffel Tower and it is one of the first places I visit whenever I go to Paris, I have never actually been UP the Eiffel Tower. I prefer going up to the Sacré-Cœur and getting a similar view FOR FREE. It is also why I went by the London Eye and wished it well. I sure as hell was not going to spend a ridiculous amount of money for what essentially amounts to a ferris wheel ride. At the same time, there were some things I felt were worthy of me spending money on to see what all the fuss was about (e.g. the Sistine Chapel). Make your list of non-free things you have to visit or see and things you can pass on.

Tactic #4: Enjoy the local cuisine!

currywvrst

should say that one of the things I most look forward to is learning about the culture of a new city or visiting cool places. But I think the thing I most look forward to is the food! I LOVE food. I love trying new food. So, even when I am being my most frugal, I usually make it a priority to have at least one sit-down meal in a restaurant/cafe serving traditional food of the place I am visiting. This is another area where couchsurfing comes in handy. Usually locals know the good, cheap, non-touristy places. And, if you don’t have company, sit down meals are great for people-watching. Depending on my budget and the type of food that is popular in a city, besides the one real restaurant meal, I will also try to eat popular, local fast food. Belgian fries, currywvrst and everything from FEBO (!!) are a few of my favourite street food in Europe.

Please note that, in some countries, especially developing countries, eating street food can result in traveler’s diarrhea (which I’ve also unfortunately experienced) so be careful.

Tactic #5: Meet up with locals!

A lot of the activities above are made better with the help of locals. Don’t be too scared to meet up with locals, whether they are friends, acquaintances or strangers you meet through friends of friends, couchsurfing, meetup or other similar sites. You will learn a lot more about a city that way and you may also make a new friend!

 

~~~~~~~~~~~~

I know that traveling is the last thing some people think about when trying to reduce massive debt. However, you may be able to eke out a trip somewhere while paying off debt. Over the past year, I have taken long weekend trips (4 days/3 nights) where I spent a total of $100, including travel, food, drink and accommodation. That works out to $25 a day and that was when I was not really counting my pennies when it came to food. So don’t automatically discount traveling because you think it will be out of your budget. Especially if you can scrimp even more in another category and put the money towards a small travel fund. Furthermore, the sharing economy (such as that offered by Airbnb or RelayRides) is a part of our new reality as we seek cheaper and more efficient ways to get things done. And, in my opinion, by virtue of being more popular, sharing with strangers is not quite as dangerous as it used to be. Us frugal babes and men get to benefit from the rising popularity and that includes taking trips that fully utilize the sharing economy.

If you have to save on travel and really cannot afford to squeeze money from any other category, that’s totally understandable. But if you have a little extra to put towards travel or if you can be extremely frugal in other expense categories so you can put money towards travel, then try it sometime!

I have had a number of amazing experiences that came from spending little money or much less than the average. Be sure to try some of my tactics above on your next adventure.

Do you have any tips to add?

N.B. None of the sites mentioned paid me anything to promote them in this post.

September Monthly Report – Home Again

Hi everyone.

I come to you shame-faced and more than a little disappointed in my progress for September.

September was a busy traveling month for me. I was barely home.

The month started with a visit by two of my best friends from business school for the Labour Day weekend. That was an expensive long weekend! Probably the most expensive one in a while since my friends were foodies who wanted to try as much of the cool food/desserts in Toronto as possible. Including one of my favourite Canadian meals, also probably the most unhealthy thing one can eat.

poutinePoutine is the most delicious heart-attack-in-a-box ever!

Anyway, a few days after my friends left, I moved back home. However, within a few days of moving back, I left again. On a long weekend trip to visit a friend in Montreal. Then the weekend after that I went on a five day trip to attend my best friend’s wedding in the US. I saved greatly on transportation to visit these friends.

I saved money on the travel costs to visit my friends (more on that later) and, for the first trip, was actually pretty good on minizing spending once I arrived. However, for my friend’s wedding I spent more. Mainly because of gift-giving. I didn’t skip on the gift for my best friend and her husband. Also, I treated myself to a couple extra purchases there (namely the always-expensive fro-yo and a nice meal).

My Pinkberry fro-yo was great but I think my $6.57 could have been spent much better. Or not spent at all! This is my dilemma whenever I buy Starbucks coffee, coffee from independent coffee shops or little treats such as frozen yoghurt from specialty shops. I always think how I could have bought a meal for the same price as one little cup of coffee. A meal would have been much more filling and much less of a waste of money. That’s my Third World Mentality coming through. But seriously, if I never had to meet clients in coffee shops I would hardly go to coffee shops. They are a money drain!

Moving right along!

I thought August’s spending on dining out was bad but September got it beat by far.

DINING EXPENSES

July August September
$237 $371(!) $440 (!!!)

I am beginning to accept that dining is the category that benefits from my extreme frugality in other areas. I save extra hard in other areas so I can put a little more towards dining without feeling too guilty. Because I love trying new food. So I’m ok with spending a little more on dining, now that I am earning more money. However, I would like to keep my spending in the category to maximum $250 per month and ideally $150 or less.

I had only one week in the condo in September but I spent a whopping $62 on groceries. To be honest though, some of that was money I gave my Mum to buy me some things at the supermarket once I moved back home.

July August September
Dining Out $237 $371 $440
Groceries $94 $101 $62
TOTAL $331 $472 $502

All in all, minus rent, my total spending for September was $2133, which is just slightly less than August’s total. But September’s total includes only around $645 of interest payments for August, compared to the closer to $1000 figure it had been for the previous 3 months.

Also, unlike in August, in September I did not put much money toward debt. My spending total was around the same but my incoming cash flow was less in September than in previous months. So I was hesitant to throw extra money at debt.

As of the end of September, here is where things stand.

Oh, before I get to that, I decided to use the $1.1275 USD-CAD exchange rate to keep track of my progress from last year July til now. So my 2013 debt numbers will change a bit from this post onwards. Of course, now that I am using the $1.1275 rate though, looking at the currency history for this week, I am wondering if I shouldn’t just use a rate like $1.3 just to be safe…Hmmm, I will revisit this rate in 6 months.

Also, the credit card balances are not overdue. Just haven’t paid them yet but will do so in full before the balance due dates.

Ok, here is the latest:

Name July 31, 2013 September 30, 2014
Mastercard $6,123 CAD $57 CAD
Visa $8,653 CAD $167 CAD
B-school loan $96,800 USD
($109,142 CAD)
$86,650 USD
($96,698 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,730 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $154,527 CAD $115,652 CAD

August’s balance at the same rate was $118,011. So that means that in September I paid off $2359, which is below my monthly minimum goal of $2500 – hence the reason for the shame-faced greeting.

Sigh.

August Monthly Report – Exchange Rate Blues

Hi everyone!

I’m sorry I have been MIA this past month. I was enjoying my last month downtown. Also, I had a ton of visitors back-to-back this past month, almost right up until my last day downtown. I am back home with the ‘rents now so I have more time.

I have a post I want to do about saving money while living and having fun in the city. Before I do that though, I should do my end-of-month report for August. Here goes!

As I mentioned up above, August was a busy month. It also felt like an expensive month, spending-wise. With all the visitors I had who wanted to enjoy the food of downtown Toronto about which I’d been boasting, I didn’t really cook as I do when I am normally on my own. In fact, I barely cooked. Consequently, my dining expenses for the month were more than double what they were in June and 57% more than what they were in July.

Behold the difference in spending on dining out (this includes coffee shops, which is where I have many work meetings).

DINING EXPENSES

June July August
$177 $237 $371 (!!!)

So far, not good.

However, if I also look at grocery spending and compare the totals of dining out and grocery shopping per month, it looks like this:

June July August
Dining Out $177 $237 $371
Groceries $242 $94 $101
TOTAL $419 $331 $472

June and July’s spending on food are no longer far apart. Both are still hella high though!

Another big expense was a new laptop, which I finally bought after working with an old, slow one for way longer than I should have. Especially considering that on my laptop is where I do 90% of my work. More details about my laptop expense in a future post on saving in the city.

Besides those two aforementioned things though, almost all my other expenses were down or almost the same from the previous month. Here is a comparison of my biggest ones, minus loan interest payments:

June July August
Dentist & Health $150 $869 $263
Entertainment $93 $404 $68
Clothes $210 $84 $6

In total, minus that laptop purchase and rent, I spent about $2157 in August. Compare this with June’s $2426 and July’s $2838. Keep in mind that these totals look high because they include close to $1000 of monthly loan interest payments and an average of $430 per month of dental expenses.

Although July’s total included tickets bought for future weekend trips, it is pretty surprising to me that my spending total for August is less than those of the previous two months. But I’m not going to complain!

Yay me for kind of spending less this month!

I also made a big effort to put more money towards my debt this month, more specifically toward my business school loan. I actually put money toward the debt before I received pay from my clients this month. I’m happy to report that my efforts again paid off this month. However, they came at the expense of my monthly saving goal. Since my main client was again late with their payments, I didn’t get much income for August until September. And I actually had to dip into my savings a little until I received the payments. Thankfully, I had built up a buffer of savings from the past year so I could survive just fine until I got paid.

Speaking of buffers, since I started paying off the principal balance on my MBA student loan in July my payment due date has been going further and further into the future. My next due date is now June 2015! My goal is to push it out at least one year ahead, in case I, for whatever reason, no longer have work and it takes me a year to find a paying gig. Would love to have the burden of paying my loan off my shoulders while unemployed.

Anyway, without further ado, here is where things stand as at the end of August:

Name July 31, 2013 August 31, 2014
Mastercard $6,123 CAD $0
Visa $8,653 CAD $605 CAD
B-school loan $96,800 USD ($105,503 CAD) $87,382 USD ($95,238 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,883 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $150,888 CAD $114,726 CAD

It would seem that my debt has fallen below $115K! At the end of July, it stood at $119,428. By my calculations up above, the balance at the end of August is $114,726. Meaning, I paid off a whopping $4702. That seems fantastic! However…however…and here is where I become the bearer of bad news again…

Today, I remembered (after making a transfer of funds from a Canadian bank account to my US bank account) that my bank charges me higher than the actual exchange rate whenever I make a transfer. Worse is that I certainly noticed the downward trend of the Canadian dollar against the US dollar the first 6 months after I started tracking my debt reduction. And I most especially noticed a downward trend again in July this year. I finally went and checked the historical values today.

The two charts below are exchange rates from July 1, 2013 to September 9, 2014 (the date I am writing this post).

Here is a chart of the value of the Canadian dollar to one US dollar.

CAD to USD Exchange Rate - Historical

You can see that the Canadian dollar dropped from over $0.96 of a US dollar to under $0.92. As I mentioned in my first post, it sucks that almost the entire time I was in the US during grad school and afterwards when I was unemployed….In other words, when I had no income whatsoever, the Canadian dollar was at par or greater than the US dollar. I arrived in Canada and I swear it felt like the Canadian dollar literally began falling that very same day. The chart above, which begins a few months after I moved back, kinda proves my feelings correct. Do you see that depressing downward trajectory going to around February 2014? This year’s July and August were also looking dim. For the past few months, the Canadian dollar has been nowhere near where it was last year July. *sigh*

Here is another view of the same information. This second chart shows the US dollar expressed as one Canadian dollar.

USD to CAD Exchange Rate - Historical

*double sigh*

As you can see from the second chart, one US dollar is now equal to $1.0885 Canadian. My Canadian bank, however, charged me the rate of $1.1273 to do the wire transfer to my US account. At first glance, $0.0388 does not seem like a big difference. However, to my five-figure US dollars loan amount owing, that $0.0388 is a $3,390 CAD difference. Not an insignificant amount of money!

This, by the way, is one of the many reasons I have been focusing on paying off the business school loan first. I don’t want to continue losing money because of crappy exchange rates! And, while the Canadian dollar may yet rise again to equal the US, I think that the quicker I pay things off the less I will lose.

To be more accurate in the debt amount I have to pay off, I have decided to stop using the exchange rate of $1.0899 which I’d been using since July and instead start using a rate closer to the rate I am charged. I also want to use a higher rate because I am conservative when doing my financial planning.

Besides checking when I go do my transfers, I have not really been following the currency markets and have precisely zero idea whether or not the Canadian dollar is expected to rise or fall in the next year or so. Earlier I chose $1.0899 for my rate, although it was probably around $1.0589 on average, because I wanted to account for that increase bank rate. Now that the Canadian dollar has fallen even more (and the USD/CAD rate has risen) I think I should adjust my numbers. And yes, I recognize that the Canadian dollar seems to be on a little upward trend the past 3 weeks. However, as a financial pessimist, I am going to assume that it will fall soon, at least getting back to today’s level within the next 3 months.

So from now on, I will use an exchange rate of $1.1275 for my amount owing in US dollars (and pray that the rate falls in the future or does not go much higher, on average, than where it is today).

When I use the rate of $1.1275 for August, my new table looks like this:

Name July 31, 2013 August 31, 2014
Mastercard $6,123 CAD $0
Visa $8,653 CAD $605 CAD
B-school loan $96,800 USD ($105,503 CAD) $87,382 USD ($98,523 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,883 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $150,888 CAD $118,011 CAD

That, my dear readers, is a $3,285 difference in amount owing. And, it makes the amount paid off in August only a measly $1,417.

Sad faces upon sad faces.

If I want to feel better I should think about how my total paid off in the 13 months is $32,877 or an average of $2,529 per month. To pay off $150,888 in 5 years, I need to pay off $2515 per month on average. At $2,529 paid off per month, I just hit that monthly goal.

If I want to feel A LOT better about things though I could also use that $1.1275 rate for last year’s July amount too to get a better idea of the progress I have made in comparative terms. My new-new table would then look like this:

Name July 31, 2013 August 31, 2014
Mastercard $6,123 CAD $0
Visa $8,653 CAD $605 CAD
B-school loan $96,800 USD ($109,142 CAD) $87,382 USD ($98,523 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,883 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $154,527 CAD $118,011 CAD

Making my total paid off so far equal to $36,516 or an average of $2,808 per month. To pay off $154,527 in 5 years I need to pay off an average of $2,575 per month. Paying off an average of $2,808 would make me a few hundred dollars ahead per month, which is good!

I’m not sure which table to use. Should I use the same exchange rate for my entire payoff period (beginning July 2013) or should I adjust the exchange rate periodically, perhaps every 6 months? I am leaning toward going with the former because if I do the latter it makes my true progress harder to track as the amount paid off will fluctuate a lot when I make adjustments to the rate.

If any of you reading have an answer or any suggestions for how to handle currency fluctuations in my debt reduction tracking, please let me know in the comments!

July Monthly Report – I Believe I Can Fly

Hello all :). I hope those of you in Ontario are having a great long weekend. I know I am! There were so many free events this weekend in Toronto that it was hard to choose where to go. Long weekends are especially fun in the city because there are usually more events than normal. And normally summer weekends in Toronto are already packed with events.

I love Toronto

This month I continued to spend a lot. Sad face. However, I should note that while it is a lot compared to the spending I did when I was at home it is not that much considering that I am on my own and am going out a helluva lot! Also, after last month’s total and utter failure I made a big effort to put way more towards my debt, although I once again was dealing with some late payments.

In July, I made a bunch of extra payments towards my b-school loan. In so doing, I finally paid off the accumulated interest part of the loan and now some of my monthly payments are being applied to the principal balance. This is great news. It is great to see the principal going down now, after well over a year of seeing every payment I made only being applied to interest. THAT was depressing because it felt like my principal balance owing was never gonna go down.

I had a big credit card bill of over $1500 at the end of the month. Over $600 of it was towards my dentist fees. I forgot to pay off the credit card balance before the month’s end. Otherwise, my debt reduction progress for July would have been much better! Don’t worry though, I didn’t carry the credit card balance past the due date. I actually just paid it off, before the due date, so I’m good.

 

Name July 31, 2013 July 31, 2014
Mastercard $6,123 CAD $0
Visa $8,653 CAD $1167 CAD
B-school loan $96,800 USD ($105,503 CAD) $91,038 USD ($99,222 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $19,039 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $150,888 CAD $119,428 CAD

At the end of June my debt total was $122,675. So that means that in July I paid off $3247, thereby meeting both my minimum monthly goal of $2500 and paying off more than my desired goal of $3000 per month! I still have some catching up to do though since June’s progress was so dismal. I need at least a couple more months of paying off more than the desired goal to be fine again.

In great news though, I met my goal of paying off $30,000 in one year! I paid off $31,460 of debt from July 2013 to July 2014! So I am on track, actually a little ahead, of my goal to be debt-free five years from July 31, 2013!

I am extremely grateful that I was afforded the ability to be able to pay down so much in one year, while still living my life in a way that worked well and was enjoyable for me. I love this feeling of having met a goal. Believing that I can fly does get me places! I pray and hope that next year I will be in a similarly joyful position when it comes to my debt reduction progress!

Phone Savings

A month ago, for the first time ever, a phone I owned crapped out on me. Of course, as is my luck, it was a phone I had bought outright, not on a plan. I spent total $450 for it. It was a Samsung Galaxy S3, a great phone, that is before it started giving problems. And it conveniently died just a a week after the warranty ended so repairs are not covered.

phone dies days after warranty ends

Joking aside, you are probably asking why I spent so much on a phone. Why not buy a cheap phone? Or better yet, why not get one for free on a plan?

One major concern at the time was that I was not sure I was going to be staying in Canada/Toronto long-term and I did not want to lock myself into the typical 3-year plan the major Canadian carriers had at the time (most Canadian plans are city-specific or region-specific with roaming fees charged once you leave a coverage zone). By buying a phone outright I could either sell it if I left Toronto within a few months and get back most of my money OR bring it with me unlocked and, rather than buy a new phone in my new location, use it instead.

I got the phone on sale at a great price too, $200 less than it cost elsewhere. As a testament to how much of a sale I got, new phones of the same model and make as my phone are currently selling for the same price I paid for it a year ago. So, if needed, I could have easily sold back the phone a few months after I bought it and got back basically all my money. Another reason I had at the time was that, during b-school, I got used to using a smartphone like a mini-tablet. So when I came back and had to get a Canadian number I was looking for a fast phone with features that were excellent for business and personal use when on-the-go. The Galaxy S3 fit the bill!

It sucks that my phone died and while I am way more pissed at Samsung than at my carrier, Mobilicity, I am still a little angry with my carrier’s non-helpful response that they are not responsible for helping me with my phone problem, especially considering I bought the phone from them. However, I’m not gonna switch from low-cost Mobilicity to try to get a phone for much cheaper on a 2-yr plan with one of the bigger carriers. Here’s why.

If I got a phone and plan with one of the three major cellphone providers here in Canada I would have paid something like $299+tax for the same phone, instead of the $399+tax I paid. That is $100 less than what I paid. However, as previously mentioned, if I had signed up with one of the major carriers I would also have been locked in to a minimum 2-year plan at a much higher monthly rate than my current one. As it was though, I got unlimited talk, data and text PLUS free calling and texting to the US at a discount rate from Mobilicity ($29+tax, instead of $45+tax) and I was NOT tied to a plan. Furthermore, my all-inclusive bill from Mobilicity has been $39.55 for 14 months now, taxes and fees included. The average for any of the big three phone companies for a similar plan is $95 and that’s only for 2GB of data. This means that I have saved at least $45/mth for the past 14 months, or $630. I paid just over $450 all in for my phone. So although my phone has now died I am still $180 ahead. And I can once again do the same thing of buying a phone outright and continuing on Mobilicity’s unlimited plan because I’ll still be saving money compared to if I was on a plan with one of the major carriers.

In Canada the big three cellphone carriers have an oligopoly on the system.

Canadian Cellphone Companies Market Share
Source: Seeking Alpha

Most people are with one of the major carriers (Bell, Rogers and Telus) and make no attempt to leave. People usually mention quality of reception as a reason for not switching to a cheaper carrier. So far, my reception quality with Mobilicity has been pretty great.

Another reason people used to give was the inconvenience of having to change numbers every time you switch carriers. Now that Canada has phone number portability, if you want to save money, the least you can do is try out one of the new, also cheaper, carriers. If you find out you don’t have good coverage in your area then by all means switch back to your original provider. However, you may discover that coverage is good to great and if this occurs you will be well-pleased to know how much money you can save on an annual basis by switching. If you are in the US or elsewhere in the world, it goes without saying that you too can do the same price comparison and calculations before going with the company that every one else uses.

At the same time, it still stings when I consider that I either have to spend a considerable amount of money to fix my phone or buy a new phone!