2014 Report – Another Year Over

Happy New Year!

Happy New Year!

2014 is over and, as always, I am thankful to get the opportunity to see the start of another year.

Today, I bring you the end of month report for December 2014 as well as a debt progress summary.

In December, I had zero money coming in and the Canadian dollar fell even further against the US dollar. At the same time, some of my expenses went up instead of down. For instance, I spent a bit more on dining out because of the holiday dinners and meetups with friends.

DINING EXPENSES

OCTOBER NOVEMBER DECEMBER
$172 $133 $201

I also spent about $240 on gifts.

Thankfully, my family is not big on Christmas gifts. However, a family member had a significant birthday, there are kids in my household and I also bought little holiday gifts for a few friends so that’s why the figure is $240. AND I also spent $1000 more on health (dental) expenses than I had been averaging the past few months.

Another thing to give thanks for is that my holiday spending was limited to eating out and gifts. I had no entertainment expense! The cold weather is not conducive to my going out. Yesterday, for instance, the weather was feeling like a positively depressing -30C/-22F. When winter hits in Canada I know I can look forward to spending much less on entertainment!

ENTERTAINMENT EXPENSES (TRAVEL, DRINKING/PARTYING, RECREATION)

SEP OCT NOV DEC
$0 $30 $13 $0

Also, since I had no incoming cash flow, I did not give my Mum money for the family this month. A bit of the dining expenses up above though was towards a couple family takeout/delivery meals (pizza and takeout).

Here is where things stood at the end of December:

NAME JULY 31, 2013 DECEMBER 31, 2014
Mastercard $6,123 CAD $0 CAD
Visa $8,653 CAD $38 CAD
B-school loan $96,800 USD
($109,142 CAD)
$79,667 USD
($89,936 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $18,260 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $154,527 CAD $108,196 CAD

November’s balance was $110,767. So that means that in December I paid off $2571, just meeting my minimum threshold of $2500 per month in debt reduction. A minor miracle considering I had no income!

At the end of December 2013, I was $139,881 in debt. So that means that in 2014 I paid off $31,685 or an average of $2640 per month. On a salary that ended up being quite a long ways below the six figures it would have hit had I been earning proper income the last 4 months of the year.

Overall, I have paid off $46,331 in 17 months! And that doesn’t include most of the interest payments!

I am currently on track to meet my goal of eliminating my debt in a total of 5 years and that is great! I may not be quite where I want to be right now financially, my savings are currently being depleted and my future is still quite uncertain. But I’ve begun to accept uncertainty as my permanent status in life anyways. And, more importantly, I am super thankful that I got good income for as long as I did and that I was able to pay off as much as I did! Many people’s entire gross income is the total I paid off this past year and many of those people work a helluva lot harder or at least expend a lot more physical energy working in their jobs than I ever will. So I AM thankful!

My financial wish for 2015 is that I, and any readers in a similar boat, will attain our debt reduction goals this year!

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.

June Monthly Report – Two Steps Back

Hiya!

I hope my fellow Canadians had a great Canada Day and that my American readers had a happy Fourth of July!

Social life wise, June was a splendid month for me! Savings and debt reduction wise, not so much :/.

I am too lazy to keep hiding my city so I will just let you know what city I live in:

Toronto skyline
Toronto

Toronto is awesome, especially in the summer! There are numerous events, including many free events, all summer long and I partook in many this past month. I also went to many more meetups. And I went out a lot, eating out and partying, seemingly trying to reclaim the party life I had during b-school. I didn’t reach my b-school heights of partying and I kept my drinking to a minimum but I certainly had almost as much fun!

Excluding rent and the amount I gave to my Mum, here were my biggest expenses for June:

  • Clothes – $210
  • Groceries – $245
  • Dining out – $180
  • Dentist – $150
  • Miscellaneous – $150
  • Gifts – $100
  • Entertainment (clubbing/drinking/movies/recreation/etc) – $85

Looking at my total spending for dining out and partying ($265), I actually did not do that badly for someone who ate out and partied at a club/pub an average of three times a week. It was also less spending in this category than the previous month, my birthday month ($495). The dentist was unavoidable (*siiigh*). However, for groceries, I was hoping to spend $200 per month so I’m quite a ways over my goal. In addition, there were a few expenses that drove up my spending for the month and had they not been present my spending would have been lower than last month’s. My best friend is getting married at the end of summer. I had to buy a bridesmaid dress that cost $200. I also spent about $100 getting sheets, a comforter set and pillows for the bed in my apartment since I had nothing at home that would work and I did not want to have a mismatched, tacky-looking bed. Those were included in the Miscellaneous category. Then a friend told me last-minute about his small wedding. So of course I had to get a gift.

As a consequence of all this fun, extra spending and, this is the main reason, the fact that a client is once again late with a couple payments, I didn’t put too much towards my debt.

As of now, here is a summary of my debt situation.

Name July 31, 2013 June 30, 2014
Mastercard $6,123 CAD $0
Visa $8,653 CAD $0
B-school loan $96,800 USD ($105,503 CAD) $94,944 USD ($103,479 CAD)
Ontario Student Assistance Program (OSAP) loan $20,931 CAD $19,196 CAD
Student Line of Credit (LOC) $9,678 CAD $0
TOTAL $150,888 CAD $122,675 CAD

At the end of May my debt was $123,771.  That means that this month I only paid off $1,096.

TOTAL FAIL! 😦

That’s the lowest I have ever paid off in a month and well below my $2500 minimum and desired $3000. 😦

I’m guessing that July will be very similar with the spending. However, I will make an extra push to put more money towards debt. On the brighter side, I have now paid off $28,213 of my debt and as long as I do that extra push I can still make my goal of paying off $30,000 by the end of July, to mark one year from when I started my debt squashing journey.

A Lesson In Appreciation and Delayed Gratification

Hello again,

I hope your week started off well. Before the week was the weekend. And last weekend was good for me.

I finally made good on my goal to start volunteering this year. Because I think it is great to give back and it is important to me that I volunteer. I made some sandwiches to give out to the homeless and went around with a group to one of the parks the homeless in my city frequent. We handed out sandwiches, clothes and shoes. It is pretty much the ideal volunteer activity I’ve been wanting to do for a while now.

It’s not just the homeless who benefited from our volunteering effort though. I think we, the volunteers, benefited even more. Having long conversations with some of the homeless, finding out their life stories, made us realize how lucky we are. Made me better appreciate how lucky I am.

For one, I am not suffering from any mental illness or destructive addictions. And the other thing is that I have a very strong support system. I think that sometimes a big part of what prevents us non-homeless people from becoming homeless is that we actually have friends or family members we can count on for emotional support and often-times other support such as temporary shelter.

Emotional Support - Hugs

I am definitely planning to volunteer again with the group! It was an especially nice activity to do the day before Father’s Day here in Canada.

For Father’s Day my family came to hang out with me for the day. We walked around downtown for a bit but mostly it was all eight of us in my one bedroom condo. Wouldn’t have had it any other way though. It was an excellent day!

Speaking of fathers…I previously mentioned how much my spending habits have been influenced by my parents. And how a big reason for my desire to pay off my debt as quickly as possible is to help out my parents and my family. I know that in North American culture in particular it is a bit unusual to be planning my life around ensuring my parents’ future well-being. Because in this culture it sometimes seems like every man or woman for him/herself. So I know people are wondering why I want to financially help my parents in retirement and why I am not thinking about saving for only my retirement, like most North Americans.

Firstly, when compared to other cultures, my slightly more wide-reaching plan is just a fraction of what people in other cultures do. Secondly, I mentioned in an earlier post that my family immigrated to Canada eleven years ago. This means that I didn’t actually grow up in North America. So I have that excuse for my different way of thinking. However, truth be told, what is perhaps most influential to my way of thinking is my parents’ history, especially my father’s. My father’s life has been the ultimate example of putting one’s family first and delaying gratification. Delaying gratification is one of the key tenets I think to living a frugal lifestyle, something that’s necessary if you are me and are trying to pay off $151K of debt as quickly as possible.

Delaying Gratification - Now Later

My father was the third child and most book-smart one of six kids in his family. The younger of two boys in the family. He was the only one of his siblings to pass his grade six achievement test and gain acceptance to a traditional high school in his home country, the country I also grew up in.

My home country’s school system is based off the British system. When you are 10 or 11 years old you have to take an exam to get into high school. If you fail to get a grade that wins you a spot in one of the traditional high schools you get to re-sit the exam the next year. If you are lucky and were born in the last three months of the year you get a third try. If you fail the test after your last allotted try you get sent to a technical high school which basically prepares you for a career in trades. When I was in high school, I remember an English exchange student once telling me that everyone in England is eventually placed in a traditional high school. In my home country the number of spots available at a traditional high school is far below the number of students who get decent grades in the exam. So only the cream of the crop get in. Needless to say, it is a very competitive process just to get into high school! And, essentially, your life path is determined when you are eleven years old.

As we all know (well, unless you live in Finland), getting in to high school is not the end of exam stress though. An easy way to understand the high school system in my home country is to think of the Harry Potter books (hopefully you know at least a little about them) and the various school exams Harry had to take. Here is a quick summary:

In grade 6, you take an exam to enter high school. High school goes from grades 7 to grade 11 (or 1st year to 5th year). After grade 11 you take another exam (the equivalent of the OWLs in the Harry Potter books). Your scores in the OWLs determine what kind of jobs you can get. You officially graduate high shool at the end of grade 11, as long as you pass a minimum number of subjects. However, if you want to attend university you must continue on to grades 12 and 13, also known as lower 6th and upper 6th. Once again, spots are limited. It is more competitive than the process of getting into high school. If you get in, thank the Gods. But then prepare again because in grade 13 you have to take the equivalent of the NEWTs in the HP books. Your scores for those exams determine whether or not you get into university and into the programs you want. If you do not do grades 12 and 13, university life is off the table and your only option is to enter the job force.

Back to my father…

His father got sick a couple years before he started high school. Shortly after my Dad started high school his father died. Before my grandfather got sick, the family was doing pretty well because my grandfather owned a successful small business. However, when my grandfather died that immediately made my grandmother a single mother of 6 kids. And life got rough after that point. Actually, life had started getting rough from before he died, since he had a lengthy illness before his death. My grandmother had had to sell the business from pretty early on. It might even have been before my grandfather died. And she was not educated beyond elementary school level so the multiple jobs she got to support the family were all low-paying.

By the time my father sat the equivalent of the OWL exams in grade 11, things were bleak financially. My father’s two older siblings had long since dropped out of school to help their mother by doing odd jobs. Pretty sure they didn’t make it past grade nine even. He had no one in his family who had ever finished high school, much less college. He wanted to attend university but didn’t realize he needed to sit the equivalent to Harry Potter’s NEWT exams. In any case, he also did not have the money to apply for the entrance fees for university, knew he could never afford tuition anyways and after getting decent grades in his OWLs had a job offer from a family friend offering him a job that paid decent wages. He decided to accept the job offer to make money to help out his family.

My father was sixteen when he graduated high school and started that job. He worked and moved up the ranks slightly, doing little certifications here and there to get better positions. He used his earnings to help his mother, his siblings and then later on his siblings’ first children. It was only when he was certain that his mother and his siblings were taken care of and his sisters had worked their way up to decent-paying jobs that he felt okay enough to leave his family to attend university in the UK. But it took many many years for that point to be reached. So many years that my father did not end up attending university until he was 28. He graduated with his Bachelor’s degree when he was 31. My exact age now. Many people would have given up on their dream to attend university. My father didn’t. And by doing so he showed me that whatever I put my mind to I also can accomplish!

I will never be as selfless in my actions for my family as my father was. However, I would like to at least somewhat take my family into consideration when I think of the future. In addition, whenever I think of all the things that I want for myself and realize sometimes how self-centred and/or selfish I am being I only have to think about what my father did for me to realize how good I have it in this world. If he could wait TWELVE YEARS to accomplish his goal of attending university then I can certainly wait a few years to start enjoying life more and can most definitely get by holding out for a few months to have whatever rare material thing it is that I desire.

If any of you reading this are fathers or serve as fathers, I hope you had a wonderful Father’s Day :).

Next post will be the monthly update on my debt reduction progress!

May Monthly Report – Material World

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!
LOC paid

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!).

funny negotiation

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.

In other news, last weekend was also my birthday!
happy dog birthday

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
Mastercard $6,123 CAD $0
Visa $8,653 CAD $0
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!