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The War On Debt: The Work Has Just Begun

The War On Debt: The Work Has Just BegunWe have come to the end of our six-month blog experiment to kill The Colossus, which stretched into a year – and stretched us along with it.

Overall, this financial overhaul has been a difficult journey, not only because we had to curtail some bad habits – and in some cases, fight for a better deal…

But also because of stresses in our personal lives which have coincided with our financial crisis.

Report from the Job Front

I continue to apply for local positions in communications, copywriting and related fields, using some of the advice I discussed in blog seven, but so far, I have not been successful.

I’m not quite sure what I’m doing wrong, if anything, but it has been frustrating.

However, I am in talks with an internet services company in my city who would like to subcontract copywriting work for their clients, and I hope it will develop into a regular relationship. At the very least, it might look after our emergency fund.

In the meantime, with interest rates rising (our mortgage broker thinks we’re probably over the worst, but no one can say for sure), I had to generate some income immediately

So late in August, I took a part-time job in a retail bakery, for a bit more than minimum wage. I know the general manager – his store is chronically understaffed.

Until something better comes along, I work three early-morning shifts a week, which, along with money we were already paying, allows us to put $1,300 per month on The Colossus. This arrangement guarantees me at least 2 or 3 business days a week in which to continue as a writer-for-hire, or for whatever opportunities arise, since I work a lot of weekends.

While it has allowed me to chip away at the LOC, it has also taken a huge chunk out of my pride. Every shift, I fear that some business acquaintance will walk in and see me in the bakery aisles, in my hairnet and apron, stacking plastic clamshells of croissants and chocolate chunk cookies. “What happened to you?” I imagine them saying with a pitiable look – and I not knowing how to respond. I have ducked out of the way more than once when I saw someone I knew, and hoped they didn’t spot me.

Related: Why New Year’s Money Resolutions Won’t Work – And What Will

Forget pride, it’s about survival

But the 37-year-old woman who opens the bakery every morning at 5 am has chastised my pride without realizing it.

She is a new citizen, along with several other of my co-workers, and I was shocked to learn that after working an eight-hour day, she juggles evening shifts at two different restaurants. She finishes at 11 o’clock every night, and after 4 hours sleep – she rises and does it all over again. She takes one weekend off a month.

Why do you do that?” I asked, mouth agape. I was tired just listening to her schedule. “Aren't you exhausted?

She shrugged in agreement, but her response was matter-of-fact. “My brother, back home, needs an operation,” she replied. “Where I come from, hospitals are private. If you don’t have the money, you can’t be treated.

She makes more money in this retail bakery, she adds, than her sister does in her home country, who is a teacher. With the money earned working three jobs, she is not only paying for her own home here, but she has also bought her brother and her mother a house back home, and put her nephew through engineering school. In addition, her newborn niece is exhibiting some disabilities which also require treatment, and my new friend has agreed to help pay for this, as well.

This is a common story. It is simply expected of the immigrants I work with to send money to the relatives they left behind. For them, pride has nothing to do with it – it’s about survival.

Colour me shame-faced.

So I tuck my hair up and get on with it, while I search for better opportunities.

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Managing expenses

The Mortgage and The Colossus

As I discussed in my last blog, our 5-year mortgage term was up for renewal – so we decided to go with a deal of 2.7% variable at TD, found by our mortgage broker, rather than staying with Scotiabank.

We put the paperwork in order in December and took effect in this month. We have moved a large chunk from The Colossus on to our mortgage, which leaves $34,000 of unsecured LOC. If nothing changes, I will pay it off in a little over two years.

After the $34,000 is paid, we can concentrate on our mortgage. My biggest dream is to be completely debt free by the time my youngest son completes high school in 2021 – but I’ve lived with indentured servitude for so long, I didn't think it was possible.

With a better paying job, it certainly would be.

We are investigating where we might get a better rate for the LOC, our credit card, and all our other bank products. We don’t want to leave our current bank just for the sake of leaving, but if it benefits us – we will.

The extra bother was never worth it to us before. But now we realize that not changing, whether for the sake of:

  • convenience,
  • laziness,
  • ignorance, or
  • a combination of all three

...has turned out to be very expensive.

Related: Never A Better Time To Open A Tangerine Bank Account

Out with the landline, in with VOIP

Three years ago we switched from Rogers to Bell because Bell offered us a 3-year contract for unlimited internet, landline and basic cable for $99 per month (even though we haven’t watched cable TV for years – it was a requirement for the deal).

At the time, Rogers wouldn't give us unlimited internet. They preferred to make bucketsful of money on the overage charges.

We recently passed the 3-year mark, and without notice, our Bell monthly payment doubled – no notice, no negotiation.

Employees freely advised us to make a switch-over appointment with the competitor to get a better deal. The only people at Bell or Rogers who have the power to dicker, apparently, is the retention department.

Therefore, our only choice is to bounce back and forth between the two carriers every time our contract is up.

So, what did we do?

We ditched the landline and went VOIP, for $9 per month.

Related: magicJack In Canada - My Review Years Later!

It’s been hard to let go, don’t ask me why. After all, the only people who call the landline are telemarketers, crooks from the overseas Windows service desk...and my mother.

We’ve cancelled the cable, and squeezed another two years of internet-only, out of the Bell Retention Guy.

We’ll be threatening to move again at the end of this $85 contract. But in the meantime, we’ll be saving about $100 per month that we can put elsewhere.

Overall Lessons?

As you might expect, the first one is obvious.

1. Stay away from Lines of Credit, unless…

You have the necessary discipline and the cash flow to pay it off in a certain amount of time, in the same way you would a standard loan.

There is too much temptation to let it ride and just make interest-only payments.

Related: Erase Your Debt Fast By Lowering Interest Rates

2. We are not victims.

We created The Colossus and we chose the conditions under which we became crippled by it.

However…

I resent the banking industry, who hands out LOCs and credit cards like crack to any unsuspecting fool who wants them – the more naïve, the better.

And in our case, with disapproving-but-greedy looks, Scotiabank raised our interest rate on our LOC to 10% when we were late on a couple of “interest-only” payments – and did you know the punishment lasts for three years?

After two years, we asked them to lower it to 5.7%, and are still waiting for approval.

“It wasn't hard to get when you applied, was it?” said our mortgage broker, Kathy Nutter, in one of our meetings.

“And you probably didn't have to apply. They just said, ‘here, take this!’ And that’s the problem. We’re so heavily regulated in the mortgage industry, why aren't the banks regulated in the unsecured credit industry? Why are they handing out these big lines of credit to people? Because today there are a lot of people who can’t qualify for a mortgage that they want, because they have a big line of credit."

So our indebtedness became the bank’s cash cow, and they have no good reason to help us get out of it.

I believe the term is called “usury,” in the archaic sense. Their greedy cash grabs might not be illegal, but they are immoral.

3. If you don’t take control of your future, your future will control you.

In one way, this financial crisis has been in my power to fix all along, in much the same sense as Dorothy and her red shoes (“You always had the power to go back to Kansas…”).

We are in the enviable position of being able to live on my husband’s salary while we pour my entire income on our debt. Such a strategy means living through one concentrated period of intense effort ‒ but once it’s gone, it’s gone.

Not everyone enjoys this luxury, although the past year has not seemed like one. To consciously break bad habits and force ourselves to:

...when it doesn't come naturally, has been difficult.

And yet, I am grateful.

Final thoughts

This exercise has brought me hope, because we are seeing results.

I realize I’m still capable of change.

This is important, given that I am on the threshold of a significant birthday while I simultaneously watch my father pass away.

Time will pass, whether I make plans or not. I can take control, or I can allow the waves of my previous choices to carry me away.

Thanks to HTS for the tips and the support ‒ and thanks to you, dear readers, for coming on this journey with me. I’ll check in occasionally to let you know how The Colossus is crumbling.

And in the meantime, stay savvy.

Follow the Debt Dispatcher’s Story

The War On Debt: Shopping For A Better Deal From The Bank
The War On Debt: Surviving as a Single-Income Family
The War On Debt: How NOT to keep up with the Joneses
The War On Debt: A Vacation From Debt?
The War On Debt: On The Hunt For A Job
The War On Debt: Progress Takes Time
The War On Debt: Save, Pay Down Debt, Or Both?
The War on Debt: Spending Blindly With Plastic
The War On Debt: Reining In The Food Budget
The War On Debt: Here, Have A Debt Sandwich
The War On Debt: Notes from The Front Line

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Comments

peppa's picture

sending you lots of prayers for you right now!! love p

March 06, 2018 @ 11:39 am
DebtDispatcher
DebtDispatcher's picture

Thanks, Peppa. I happily receive prayers. My Dad actually passed away shortly after this writing, so 2018 has so far been even busier.

March 06, 2018 @ 6:57 pm
Reformed Canuck
Reformed Canuck's picture

Congratulations on the move towards slaying Colossus!

We had our own Godzilla - $125K. Income dropped 75% due to downturn in economy and huge CRA tax demand. Did consumer Proposal and two years later, paid it off with LOC from mortgage.
Now, credit cards automatically paid on due dates. No LOC. Credit score slowly inching up and savings in RRSP & TFSA in excess of $100K.

Focus is on saving EVERY month. So that the next storm can be weathered. Also constantly reviewing a tight budget and not straying too far. Date nights are special but we always talk about how we can live mortgage free one day. Focus on a debt free life!

March 06, 2018 @ 1:53 pm
DebtDispatcher
DebtDispatcher's picture

Thank you for your comment. Yes, a debt-free life. How exciting, and the time will pass whether you work toward it or not.

March 06, 2018 @ 6:56 pm
Cheryl's picture

Way to go for tackling what you've done so far and best wishes for continued success.

My condolences on the loss of your father. Mine passed away 3 years ago this month. It's not easy.

The thing about work as you've figured out, many times its all about survival. There are jobs that I'd love to do, and have done for periods of time in the past, but sadly the pay wasn't good enough to survive so I had to move on and look for better paying jobs.

You don't say your age, but mention a child graduating high school in a few years so I'm guessing around 40. Ageism is alive and well in Canada. After age 40 it is really hard to find a job. I'm not being discouraging, just truthful. After months of searching most will take any job they can just to survive.

The 5 big banks in Canada all want to gouge the little guy. They make their money off their big business accounts so they don't really care about small potatoes. They charge little guys monthly service fees for the privilege of us keeping our money there. Ditch the banks and look for a credit union that has no fee chequing with unlimited transactions. You'll save $10/month or whatever the big bank is dinging you for. Also look at online banks like Tangerine. They have low/no fee accounts. Also it's a little tougher getting your money out, you have to think about it cause transfers take a couple of days, though I think they have an ATM card now and go through Scotiabank so it might be easier access. They also have a credit card. At least twice a year they barrage me with emails and snail mail that I'm pre-approved for their credit card with $15,000 limit. I'm not interested and even though I don't respond by their deadline they'll bug me again a few months later. Like how many times can I miss their deadline before they get a clue!

Look at moving your banking to save monthly fees.

You don't mention saving for retirement. This site has some good advice on investing in ETFs. You might want to look at diverting $100/month into one.

I will say that I finally got my finances under control and am doing really well with my retirement savings after getting divorced (he's a spender) and selling the house. I got rid of the two biggest drains on my finances, though I'm not suggesting you get divorced! Just saying I couldn't take his constant spending and financial irresponsibility any longer especially as retirement age creeps up. I'm not sure I'll ever buy a house again, I've owned other houses in the past too, but it's a big financial relief not to worry about the mortgage, taxes, and expensive maintenance.

Continued success to you!

March 07, 2018 @ 12:45 am

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