I bought two extra copies for friends as Christmas gifts and I’m hoping they take them in the spirit they’re meant!

In Nov 2006 I took a debt consolidation loan from the bank for a 3 year term, and I rounded up my monthly payments. This consolidation loan combined my car loan and my credit card debts – which was not too high but still I found myself robbing peter to pay paul and felt I was going no where before this. The total loan was $20,000. Since jars were too tempting to switch money around I changed my approach – I used envelops in the wallet each labeled for a specific purpose and for a specific week, and I tracked everything on-line and with a journal – I kept what was mandatory cash expenses in my wallet such as gas and food allowance – everything else I put into checking for automatic banking withdrawals and a savings account for everything else of the jar topics- including clothes, savings and emergency money.

When I went out I could only use the money in my wallet (cash money) – If I didn’t have the money I didn’t spend it – I did the three question need it? want it? necessity? and Do I already have it? Which I applied to everything.

Then a close friend and I added to the need it, want it – necessity – can I borrow from someone? What this included was can I borrow anything from any one. Example: clothes from someone? Instead of buying a new dress for a wedding/special event – do I know someone I can borrow it from?

In the journal I tracked the balances in the savings account for each of the remaining jar titles. What monies I did not need for the month (as calculated from your on-line spreadsheet) I dumped onto my loan – even if it was $10.00.

In the mean time I had received a raise at work – this additional income I put into the emergency account in addition to the money I was already putting in. If I learned to live on the previous income I can continue. Boy that emergency money came in handy when I need some major car repairs – yes I put the repairs on Visa for the points – then I went home and prepaid that expense to my visa bill through on-line banking. Nice feeling to do a visa transaction and see the payment on the same statement and the balance owing is $0.00.

It was great being able to save and pay things off – but I got tired of always asking my self questions and always looking at my budget so…I got a part time job. This was specifically for treating me. This hard earned money did not go into the bank accounts – did not go into the wallet – but went into a Jar. One Jar. I tracked the deposits into the jar and I tracked the withdrawals out of the jar. If we were going to the movies I would check the cost on-line, check the cost of snacks and take a little extra if we went out for coffee after the show. What I didn’t use I put back into the jar. If I wanted to buy a new pair of pants and a top I would pre-shop look on-line to see what I was looking for – budget the expense then take what I needed from the jar. Once I started a good routine I started to use my visa. I would take the money from the jar and take it to the bank and deposit it to my account and pay the visa off in full each time.

You are probably thinking YIKES VISA!! But I get points with my visa I can use my points for a lot of things but I am saving the points for a TRIP – to really treat myself. And the goal of this trip is to be able to go and enjoy myself and reward myself for a) learning to budget (Thanks to you Gail) b) learning to spend wisely and c) learning how to differentiate a need and a want and focus on necessity. Yes a trip is a want but it is also a necessity. I have family in New Zealand, Europe, Western Canada and in the southern States I will pick one of these relatives and visit them.

With all this hard work I paid my loan off 6 months earlier – 2.5 years of staring into a budget work sheet and planning my expenses and yes picking those pennies off the street paid off well. I have taken a little break from staring weekly and tracking my expenses but I still only put what I can spend in my wallet and an envelop for gas money.

And now it is a whole new world and a whole new game of budgeting – my next expense is a house. But I will wait until after Christmas.. and plan my attack. Any suggestions…I already have an appt with the bank to see what they suggest I can afford. But like I said it can wait until after Christmas.

Have a great day and thank you for all your suggestions and on-line guidance.

Sometimes, I have found, I just want to buy something nice — doesn’t matter what. A magazine, some fresh fruit, a postcard or a cookie will do. That does not happen every week, so I just do it. The budget covers it.

It is lot harder for me not to impulsively spend money on non-material things which, after all, do not gather dust. Great new restaurant, let’s try it. I always wanted to see that opera, why not get the best seats? Seven unexpected days off on overtime, how about going skiing? And you can always throw a party for all your friends… will be fun!
That’s what got me into debt when I started working and felt very rich.
What I do with those, again, if they are within budget, fine. If not, the question is, “is it worth sleepless nights worrying over money”? And the answer, so far, is “no”.

And 15 years is respectable. In the US, 15 years to pay off a mortgage would make you the hare.

http://tilldebtdouspart.wikispaces.com/message/list/home

Fast forward four years and we were $31,000 in debt – we’d just gotten married six month earlier, had done some renovations on our condo, and basically were living “beyond our means.” We thought at the time that all 26-year-olds should have $200 dinners out several times a month!

We were setting aside money for debt repayment, but by the end of the month we were always short and relied on our credit cards to tide us over to payday. In April 2009 I was frustrated and fed up that our debt repayment was getting us no where. I felt like my partner wasn’t playing an active role in digging us out of our mess.

I had a serious “Come to Jesus” moment – and decided instantly that I didn’t want us to live with this crippling debt forever. My husband and I collectively make $120,000 a year – but I felt like we were drowning in debt. I decided it would come to a stop and we would make a plan to end the debt.

We undertook several steps:

1. Coming Clean: I had no idea we were carrying $31,000 a year – and when I added it up between our credit cards and line of credit, I was shocked. It was devastating – and looking back, I’m relieved I chose to continue this process. Many would have given up upon finding out that number, believing there’s no hope to getting out of this mess. My first piece of advice? Be honest! Look at all your sources of debt, take note of your payments, interest rates, and terms. Only when you are honest will you actually be able to “fess up” and move on.

2. Categorize, Categorize, Categorize: I didn’t know where we were spending our money – how much things what our true housing costs were (including insurance, utilities, cable, etc.) I did a one month snapshot of our expenses, and categorized everything so I could see where we were spending – or rather, burning – our money.

3. Involve Your Partner: My husband and I didn’t really talk about money much, and when we did it was usually us arguing about getting out of debt. Once I tallied our true debt costs, coupled with our one-month snapshot, I presented it to my husband, and we were able to come to terms with our situation and begin to formulate a plan for getting out of debt.

4. Burn, Baby, Burn!: We looked at our monthly categories and evaluated where we could cut – where we could make sacrifices in our lives to ensure our long-term financial health. Home phone? Didn’t use it anyway – there’s $30 a month. Cell phone? Husband used it for work purposes, so got them to cover the $70 a month fee. The really dramatic change we made was selling both of our leased vehicles (which we sold for more than the lease-back rate and made a profit), and downsizing to one car that we finance. Doing this saved us: $350 a month on a car payment, $100 a month on gas, $150 a month on insurance, for a total of $700 a month cut from our budget. Now my husband drives me to work, I walk or ride my bike, or take public transportation.

5. More Money!: Simultaneous to cutting expenses is increasing income – our debt situation wouldn’t be complete without increasing our earning potential. My husband is a graphic designer who has taken on extra work in his spare time freelancing, bringing in extra money to pay down debt. And I work weddings and events for a wedding planner that brings in extra funds on my own. Collectively, between cutting our spending and increasing our income, we’re able to set aside an additional $2,500 a month to pay down our debt.

6. Hail to Gail: We stumbled upon Gail’s show on Slice accidentally – and now I PVR it every day! It’s such a treat to come home and learn more about how we can be financially successful and ensure we make good fiscal decisions. Gail has also inspired us to switch to … the jars and cash. We have our fixed expenses and variable expenses – miscellaneous (cat litter, toiletries, clothing, gifts, etc.), food (both for our cats and ourselves) and “fun” (entertainment). I’m thrilled to say that after just two weeks on the system, we’ve saved an additional $300 a month! The “pain of purchasing” has been very educational for us to see where our money is going – and how we can save for the future.

7. Make a Plan: I am thrilled to say that our debts will be paid off by the end of January 2010 – meaning we’ll have paid off over $3,400 a month to rid ourselves of debt! We already have a plan in place with what we’ll do monthly with our extra savings – putting money into an emergency fund, planning a trip to reward ourselves (which we’ll pay for using cash!), funds into retirement allocations, and paying down our mortgage. We have a comprehensive plan on how to look at the future. And the best part? The communication between my husband and I has improved dramatically – we are now both active participants in our financial future.

Cheers!
Lindsay

Merry Christmas

I feel so privileged to be able to turn on a tap and have water come out of it, to be able to eat fresh fruit and vegetables and know they haven’t been washed in dirty water, to know that my rubbish is being collected and recycled and not burned in the street.

I feel so lucky to know that I’m not going to die of starvation, or cholera or any of a number of treatable diseases. I feel lucky to know that if I hurt myself I can go to a top class hospital and if I become disabled the government will help me and I won’t have to send myself out to beg on the streets.

I feel truly blessed that I was lucky enough to be born here and that I received a great education and have the ability to own a house and go to university, all things that a lot of the population of Nepal cannot do.

The trip has made me feel so so lucky to be where I am and who I am.

Sarah

And the answer is always no!