I hope at some point in the future I will feel empowered by this attempt at debt repayment…
But right now, I feel nothing but anxiety.
The process of poring over bank statements to fit our expenditures into categories—as I rack my brain to remember my purchases—is exhausting.
Remind me why I’m looking at these ugly, red numbers?
I know why.
I ached to go to Ireland this year. An esteemed friend and writing mentor of mine is conducting a ten-day writing workshop on the Fair Isle this spring. An expensive trip, but the trip of a lifetime, with an itinerary to make any lover of both travel and writing salivate.
I heard about it a year ago, but behind my polite smile, I knew there was no way I could afford to go, much less bring my husband, who needs a vacation as much as I do.
This is the power of money. It represents either freedom or bondage, and it appears I’m not the only one in chains.
In September 2016, Statistics Canada reported that Canadians owe $1.67 for every $1 of disposable income. And later on in December, Equifax announced that the average Canadian consumer debt load had grown to $22,081—which doesn’t include mortgages.
In January, I gathered my courage and plugged our numbers into the HowToSaveMoney.ca Budget planner, beginning with the “Simple Three-Step Process” (Hmm. It’s simple, but it’s not easy). Here are the results.
1. SET Your Goals
I only have two goals:
- To pay off our line of credit within five years, and
- To make a monthly contribution to a savings account which will fund necessities and decrease or eliminate our use of credit.
2. TRACK Income and Expenses
It will take a few months to get a clearer picture of what we spend, where and when.
There are some expenses in January that I added in even though we paid them earlier, like the quarterly water bill, for example. Our property taxes are included in our mortgage and remitted to the province by the bank, so I didn’t have to include that.
And there wasn’t a category for bank fees per se (we pay $12.95 monthly for a business account).
In the coming months, we may or may not choose to maintain that account, but for now I placed it in the “other” category of recurring bills.
Related: How To Save Money On Your Mortgage
3. REFLECT On Results
After all is said and done at the end of the month, there is about $200 left over, only because we are not paying any more than the monthly interest on The Colossus. We are not touching the principal at all.
I didn’t include my own dismal and unpredictable income. Using only my husband’s income (which is pretty good, if it weren’t for all this damn debt) we are barely covering the basics.
If we missed a paycheque, we’d be screwed.
So What Can I Trim?
After our mortgage, food costs for our family of five are our largest expenditure—around $800 in January, which is less than usual. Could we reduce it to say, $700?
The personal care category added up to around $180—haircuts for the boys, cosmetics and shampoo. I could shave off a little, but I feel guilty and peevish at the same time. If I can’t go to Ireland, why can’t my consolation be a $50 wrinkle cream?
Overall, though, there wasn’t much waste. At least in January I only spent money on coffee three times, amounting to around $25, and bought lunch once at the mall for ten bucks. Some past months, I’ve spent far more. But I think two or three times per month is acceptable, for the sake of my sanity. (More on this in coming blogs.)
In two instances we took cash withdrawals. One of them was used for purchases at the cash-only Saturday Farmer’s Market. The other withdrawal is now a mystery to me. I have long forgotten what that $60 was used for. No more of that!
Our Internet, phone and cable is bundled for a reasonable price. For The Breadwinner, who works at home in the tech industry, a reliable Internet connection is absolutely essential. I could consider giving up my phone, which isn’t essential. I’ll deal with all these things in coming blogs.
Freedom from Financial Servitude
So I could trim $200-250 in order to throw it on The Colossus…
...but it’s just a sip of orange juice to his breakfast.
It’s simply not enough to free myself from Permanent Financial Servitude.
In order to achieve my goal, I would have to pay roughly $1200 per month, plus the interest payment, which would increase it to around $1600.
This is an ambitious payment. It is the equivalent of a full-time, minimum-wage job—an extra $24,000 dollars (gross) a year. Netting around twenty grand is just enough to make the payment—leaving little for savings. A higher income would let us breathe a little.
Breathing would be nice.
Besides broken appliances or beds that need replacing, the worst discretionary income killer has always been car repairs. The air conditioner seizes, the muffler fell off, the transmission is wonky—but you’re still paying for the vehicle, so you can’t kiss it goodbye.
These incidentals are what have forced us to use our credit card, because our line of credit is full, so we frequently have a two-credit problem instead of one, although because of interest rates we do our best to pay off our credit card as soon as possible.
I haven’t mentioned other incidentals, like uninsured health needs—braces for a teenager, perhaps? We’ve done this twice, because of necessity, and we paid both times with credit. Only about $2,000 of the total cost was insured. That’s about twelve grand, right there.
(The orthodontist drives a shiny, red Mercedes, by the way. You’re welcome.)
My Two Choices
I think this amply demonstrates the need for a savings account. I have two choices. Try to substantially increase my freelancing contracts, or find a nine-to-fiver.
Sounds simple, right? Just go out and get a job.
I have been a stay-at-home-parent and part-time freelancer for two decades. My life’s goal is to publish novels, and in the last 15 years I’ve written one manuscript after another (in case you wonder what I do all day, besides the occasional copywriting gig) but I have not sold anything yet. To relieve our situation, I have tried to find salaried work in PR/communications or related fields, but to no avail.
I’d rather go back to an office than build a bigger client list. This may require upgrading my software skills and perhaps language, as well—since I live in a bilingual area. These are significant investments of time and money, neither of which I can afford.
Would an employment counselor help? It’s so humbling, dear readers.
In the meantime, it looks like LinkedIn is my new best friend.