Julia’s Story: A Work in Progress

January 2nd, 2009

So here I am, 41 and finally getting debt free. I never learned from my mistakes. I filed for bankruptcy at age 21 thinking that being in debt about $8,000 was life shattering. Only to get back in debt 10 years later over $100,000. Student loans, credit cards, Citifinacial loans etc. I filed for bankruptcy again as I just never learned…I was so stupid.

So now at age 41 I have learned how to control my life. My husband and I have used the jars for almost 7 months now, and I have to say they are a life-saver. We do not have 5 jars, We have 12 jars. We broke the 5 jars down over the course of 7 months to 12 to simplify the actual spending to the penny on everything, from gum to gas…. By doing this we were able to shave even more off of our original weekly budget.

We are living off cash and finally have savings in the bank. We still have 2 loans but that is our small goal to pay off. We made up yearly goals and one loan (smaller one) should be paid off in full in July 2009 and the larger one by Aug 2010.

With the money we now have we will be able to invest in out future. We were trying to rebuild credit with a secured credit card as a start (but as I wrote to Gail about this) we were actually denied a Secured card.

So, I know we may have done our getting out of debt differently than most but this system Gail created REALLY works for us and I truly thank her for it. I actually feel guilt now when I spend money on “stuff”. I learned what my needs are and that my wants are a waste of money. We are not out of debt but a “work in progress” with a happy ending and a secure future…Thank you Gail…

Suzanne’s Story

December 29th, 2008

Wow, what a site! I have been glued to my computer screen for a few days now, and every time I think I have read everything, I find another link to more stories/blogs. So, I thought I would share my story and maybe give readers a few things to think about.

At 51, I am finally hopeful that I can turn things around and be more secure with my future. About dam time, right? I too have a Student Loan Monkey on my back, having returned to school at 46, with two of my three children still at home. Reader’s Digest Condensed version of my history includes a wayward, midlife crisis-experiencing former husband, an 800 mile move back to my home community, a self-esteem crash and burn (I identified myself as a wife and SAHM), a short-lived attempt at employment (last hired, first laid off in downsizing), a government “handout” to start a home-based business using my sewing skills (still owe for that venture), a debilitating injury which killed that idea, another short-lived stint at employment, followed by an almost fatal bout of Viral Meningitis! (Almost the best thing that ever happened to me, but that is another book). Luckily, I had been employed long enough to qualify for EI, and the necessary assistance to figure out what to do next, after recuperating.

A Career Analysis course confirmed that I was not a dummy, and could follow a gazillion career choices – just pick one! Teaching was one choice, but I did not want to go back to school for four years. Next came administrative/ accounting type choices. My city has a post-secondary college offering just such training, and I became a student, with classmates the same age as my two oldest sons!! More often than not, I was confused with the instructors!! The government covered my tuition and books for the first two years. The loan was for basics like living expenses. I was surprised that I even was approved for a Student Loan, considering my past history during our “poor” period. Not once did I consider the implications of getting that thing paid off. The sad part was that with poor health, and a disability that required twice-weekly 100 mile round trip therapy sessions (yes, even while attending school), I was never able to find employment for the four month summer break, so had to survive on the crumbs of the system, usually less than $800/month. After four months of being in arrears on everything, the next student loan lump sum payment went to catch up. Then the whole cycle started again, because some of that lump was to be spread out through the year! Like peanut butter, if you spread it thin, it will cover the edges, but doesn’t taste like much!

While at school, I decided to enroll for a third year, fully covered by Student Loans, combining classes and earning three diplomas! So much for not spending too much time in school. Think three two-year programs in three years… I was extremely proud of myself at my age, maintaining an 82% average over 3 years (can we take out the computer class?) while suffering the loss of my father, winning five scholarships (although not huge amounts) while singlehandedly raising two teenage sons.

Sadly, after graduation, I discovered that our small community was not the place to be living with those credentials, and with one son still in high school, I was determined not to move, nor would I commute 100 miles a day for work with a recent roll-over accident as a deterrent. I am not going to say that age discrimination might have had a part here… My sons and I lived frugally as a matter of course, no vehicle, no smoking, no drinking, no cable/internet, sometimes no phone! Clothes came from the Salvation Army usually. I was not too proud to use the Food Bank. I cut the boys’ hair, and had mine done at the local Hair Academy maybe twice a year (still do, $8/haircut!). All Xmas and birthday presents were handmade, still are. And very few, if any take-out type meals! Pizza two or three times a year made the occasion all the more special.

Anyhow, six months after graduation, I still was not working, and getting desperate. My landlord was very tolerant, taking whatever I could pay, but I owed him LOTS! During all this, that debilitating injury was going through the legal system, damages pending in a settlement (the only thing saving us from eviction) – but being Canadian, we can only receive medical expenses, lost wages (if you can prove them – remember –’self-employed’), etc. Very long story short, I went to a career fair for our local Casino. I had been the recipient, two years in a row, of the Gaming Corporation’s scholarship, so thought that I was a shoe-in for employment, thinking HR Department, Here I Come! Not so fast, you have to start at the bottom they say, apply internally for the choice jobs; think lounge server, customer service or dealer. Playing cards is a family past-time; the hours suited my night owl nature, and the government benefits were great – so, off I went for training. The rest, as they say, is history.

Or just the beginning. Starting as a part-timer, you were not guaranteed hours, so accepting shifts and working sometimes 23 days in a row was not unheard of. I was so grateful for a paycheque I never turned down anything. I grabbed at training opportunities, and advanced to the highest Dealer level within three months. My first year there, three months worth, earned me almost half of what some of our previous years’ ‘gross’ income had been – our worst year was $8,129 (1999) GROSS. And we survived. After more than two years, I am now full time, guaranteed hours, along with the increased benefits earned. I applied for any and all office type jobs internally as they came up, sometimes got an interview, always got told my ‘experience’ was not current – remember SAHM for over 14 years, then school, etc. If I returned to school for Adult Education, or Payroll administration, maybe….. Still no way to get those years of experience, though.

During the past two years, our lives have changed for the better. Really? Then why am I still broke? I paid cash for a used vehicle with my first paycheque. We have cable, internet, eat out – lots – even if it is McD’s, son has Xbox (he went without right along with me, he deserves it), and more stuff than we know what to do with. After my first full fiscal year, to the tune of $36,000 (union contract arrears included here), my youngest son made a startling discovery. We were rich, in our eyes, but still had the problem of late payments on utilities, and living paycheque to paycheque! I pointed out that we now had the luxuries of cable, internet, cell phone, ate out; took trips, he was in martial arts class, with the subsequent uniform, and mokkum, etc.

I never woke up to the fact that, even without credit cards, we were living beyond our means. During that first full year, my legal settlement came through, although it was more a band-aid than five years lost wages and medical expenses. Think maybe, possibly stretch it and it COULD be 1/3 of current wage. Oh, and because it was medical, I had to pay the province back for any treatment I received out of that amount, oh, and the lawyer got 30%!!

Regardless, I was able to get a better used vehicle, sold the first one, needed mechanical work on it, paid up rental/utility arrears, (the job had kept me current, but had not made a dent in what I owed B4 job) and went on a short road trip/holiday; and before I knew it, it was gone!!

Being paid biweekly meant rent came out of one cheque, and not usually on the 1st, and everything else came out of the next one. IF there was anything left over, it was considered bonus money, not something to use to pay off debt. If we came across something we really thought we needed – like that spin saw kit on sale for less than half it’s ‘regular’ price, and son really likes working with tools, sometimes it was bought before bills were paid. How could someone so SMART be so dumb, you ask? Think, I Deserve It mentality, I work hard, have no ‘bad’ habits, so buying this ‘on sale’ $5 sweater in three different colors is my due. I looked at my co-workers, driving nicer vehicles, young singles buying homes, for a while one a month!, and so many of them smokers to boot!! How could they do it? I realize now that every one of them is in hock to their eyeballs, and I feel for them.

A recent “Shoe” comic strip had someone interviewing an older fellow – “you’re going to be 96 soon, is there anything you want to do before you die? “Yes, I would like to pay off my Student Loan.” I busted out laughing in the staff room, and then I wanted to cry. That’s me!!! The strip is on my fridge. After three days on Gail’s site, I can now look to the future with hope. I may get that debt out of my grey hair before the first Old Age Pension cheque comes after all! Here are some of the things I have done/am in the process of doing, to get on track.

1. My landlord put ‘our’ house up for sale, so I moved into a smaller home, with all utilities included, saving myself $200/month. It is also closer to work, so I generally walk to work, and take advantage of the ‘free’ cab ride home, or the generosity of co-workers. I did have to rent a storage locker to stuff the ’stuff’ a three bedroom, two storey house with a basement can hold that a two bedroom suite can’t, and that I couldn’t downsize (yet) but that will soon be emptied with trips to mom’s farm (empty barn). You would not believe what I did manage to cull! $70/month savings coming up.

2. While I don’t smoke (quit 24 years ago), have never had a cup of coffee in my life, and only have maybe 3- 4 alcoholic drinks a year, I am a devoted addict to Diet Dr. Pepper (no calories!, all my caffeine and chemicals in one place). I just realized that my minimum three cases a week habit is costing me over $1,000 a year!!! Yikes, not to mention what it is doing to my health!! I quit for two short periods this year, but am more determined than ever to quit b4 the year is out. If I can quit smoking, I can do this!

3. I used the Interactive Budget to map out a plan. I converted ALL the monthly expenses to my biweekly pay schedule. I then mapped out my pay dates for the next year, with the in/out of my rental amount as a test. Unfortunately, without starting out this ‘account’ with the designated allotment first, I would be in the hole for most of the year. So, that will take some juggling, as I am sure that most of the individual amounts will be in the same boat, but it can and will be done. More juggling will have to be done to ensure that items requiring 12 months ‘payments’ in 6 – 7 months time will have the desired amounts in their ‘account’. By tracking every single penny that leaves my hands, I hope to conquer my current wastefulness. I will be contacting most recent creditors to work out payment plans, instead of sticking my head in the sand. Anyone have advice on what to do with a six year old credit card debt that has gone to numerous agencies for collection??

4. I intend to set up automatic savings withdrawals to coincide with my pay dates, and work on building an emergency fund. A year ago, after my son pointed out that we were still broke even with me making so much money, I started CSB plans for both of us. I will admit that I went a little extreme with the amount of my deposit ($220/pp) and eventually cut some of that out, but my son’s Bond, at $20/pp has turned into over $500! And I didn’t even miss it! I now have a planned process, where I can tackle my Student Loan, AND put some aside for the future van repairs I am fearing necessary. Any thoughts on whether CSB’s are more beneficial than a savings account at my regular bank? I am thinking accountability to the Credit Reporting Agencies (regular deposits??) vs Savings only your employer and CSB knows about. I also have a habit of emptying all change smaller than a loonie into an old water jug, a visual reminder to save, and that every cent counts. I am going to roll that monthly into an extra debt payment somewhere. I had planned to fill the sucker full, but at five gallons, would never be able to lift it to dump!!

5. I am canceling Cable, and Cell Phone. I don’t even know how to use the Cell phone, except for basic calls! We originally got it for emergencies while on our first ever road trip out of province in our new life, and part of my settlement went to pay the $500 deposit I had to put down due to my poor credit history. I still have more than a year on the contract, and was not told that in order to get MY $500 back, I would have to make six months of consecutive ‘on time’ payments – before the next month’s bill is printed! Miss once, and the six months starts all over again!!! I expect that I will lose most of my deposit to get out of the contract, but will still save half of what the phone will cost long term. Cable – well, how many channels can one watch anyway??? I work ten hour shifts, 4 – 2 am, or 5 – 3, so what is really on while I am awake??? Days off don’t usually involve TV; working with my horse or sewing are my day off activities. I just found another $1,200/year that can go into savings – or $100 month to Student Loan. No time like the present, just called cell phone provider – will cost $190 to get out of contract, and can still use phone with prepaid cards!!! AND, they will pay interest on my deposit – very little, but hey, good enough!!! Yippee!! That is where the $300 start up deposit into the rent “account” will come from. Wow, on a roll, just called and cancelled cable – how freeing a feeling is that??

6. I have always sewn/crafted/baked as a means of supporting my family when my former hubby ran away from home, (and even when he was there, actually). 24 hour baking sprees for the local Farmer’s Market were too hard on my system, so gave that up, but it was a necessary means of income during my school years. Most of my ’stuff’ fits in the category of supplies for this minimal income hobby. I have to say that when things always looked bleakest, someone would need pants shortened, or a coat recycled into a teddy bear, which bought milk, or paid the phone bill, etc, as needed. Attending craft sales was the norm, and sometimes quite expensive, (think Regina Agribition – 10 days cost me $1,000 to be there. Broke even, but no profit there, only did it once, in my ‘business’ persona). I know I will never stop creating, or selling my creations, but am going to do it properly. No more dipping into ‘family’ finances to buy supplies, or pay for craft booths. No more using proceeds from the sales to put back in family finances, instead of replacing supplies, and the vicious cycle starts again. I have enough product on hand to hopefully sell (out of my home) to create next year’s buffer for table rentals. Tracking every penny I spend will hopefully keep me honest with myself in this endeavor.

7. Sadly, the advice of an ‘outsider’ (Gail) has finally made me see the wisdom my mother has been trying to cram down my throat most of my life. She raised five children on a limited budget, (farmers) and we never went without, at least not anything important. I can remember the awesome Hallowe’en party she threw once – another book! We each got to have one friend overnight, and after that, EVERYONE wanted to be on the list to come to mom’s next party. Creativity, humbleness, and frugality are all traits my mother has tried to pass on. How sad that the five of us have gotten “too big for our britches” what with regular paycheques and all. She started a habit of recording every penny spent/earned (learned from her father) with her first job, in a little notebook, which she transfers to her binder at home. She can show anyone the difference in gas costs through the years, for example, and how much she spent at garage sales in 1998. When I told her what I was doing, and allocating so much to the different categories, she told me to keep track first of all expenditures for at least a month. How do I know that $100/month for gas is what I really spend/need? Do I need to spend that much on food, when I have a pantry full? Another suggestion has me heading back to my interactive budget page for revamping. I share tips with co-workers, which is put on our paycheques in order to calculate/pay the government’s portion. Some paydays are better than others, but almost all my tips balance out my usual government deductions. Mom suggests that I take those tips and bank them, using my basic wage as my income. What a smart mom I have! Another painless way to add to my emergency fund. A long ago acquaintance had a life-altering layoff, from highly paid, with an expense account, to manual labour for minimum wage. According to him, it was the best thing that ever happened to him. Luckily for him, his wife still had a good job, and no kids to care for. He started looking at that night out with the boys in terms of how many hours he had to work to pay for it! I do that now, a lot, especially my occasional nights out to go play ‘free’ poker at the local bars. While I don’t drink, I WAS guilty of throwing $5, 10, even 20 into the VLT with everyone else, then discovering that what cost me an hour to make could be gone in less than ten minutes! “Stupid Tax” is a correct term for these machines, and shame on our government for continuing to use them for revenue. I know, coming from a casino employee, who am I to talk. In all fairness, over 50% of profits go back into the local community for social development plans.

On a last note, son #3 turns 18 in a week, and has already left the nest. I am now free to leave the community to pursue my chosen career if I so choose. Or write the book I have always dreamed of writing – does this count? Current developments have me considering keeping this suite as a home base, and going up north to make the BIG bucks, at least for a while. I need to decide, soon, if I have past the point where home-ownership is no longer a sensible option, considering my age, single status, and disabilities. If anything, an acreage would be my dream, considering my ‘pet’ is a two year old Arabian filly (got her for free – another story); board is cheaper than keeping her at mom’s farm, considering I pay equivalent to a tank of gas, and she is only 10K from my door. Mom is 150 miles away, round trip. I am disheartened to see how many people view a casino as a form of income, rather than a form of entertainment. Do they really think Vegas pays for all those lights by letting people win huge amounts of money on a regular basis??? GET REAL!!! I do not stack the deck, or step on a button to stop the Roulette ball. I don’t think it is some stranger’s place to ask me if I am married just because I am stationed at the same table he is sitting at. Maybe I am just getting cranky in my menopausal years, but my personal life is nobody’s business, and my professional life is just that - professional. This job also puts me in contact with the WRONG type of men for any future relationships, has put me in physical danger from one intoxicated guest, (currently banned for two years, but the reason I no longer walk home after work) and subjects all of us to verbal abuse at least weekly. To which we have to remain professional and patient!! Time for a career change, I am thinking, since I can’t win the lottery. Yes, I am one of those silly people who faithfully buy my ‘lucky’ lottery ticket, using the same numbers for the past 10+ years. Guess what? They obviously aren’t that friggin lucky!!!!! I don’t even want to calculate how much I have wasted. But over 10 years, $7,000+ would not be a stretch. Gail Smack rightly deserved, right in the middle of my forehead. My mom will give it to me, Gail, no worries.

I am excited about the future, and hope to convert my siblings’ lives for the better, once I can prove to them that this works. Half of them have declared bankruptcy at least twice, for no good reason other than living beyond their means (for one thing, they all smoke!) I don’t expect to see this missile printed, but you know what??? It feels SOOOOO good to just get it all out. I plan on giving my mom a copy, and thanking her for all her sacrifices throughout the years. Really, where DID she come up with the money for not one, but two High School grad dresses (required short and long)??? Fortrel or not, they totaled $55.00 in 1975 (I still remember), a fortune in my eyes, now, for her back then. And thank you Gail, for reminding me that I come from thrifty stock who did NOT buy anything they could not, or did not save for. My grandma saved all her quarters to buy our family our first bike. Try sharing that with five kids!! Thank you, thank you, and thank you!!! AND, statistically proven health wise, we should be getting/giving something like 29 hugs per day. So here are a few to reach both our daily quotas.

Suzanne

P.S. How does almost dying qualify as one of the best things that ever happened to me? It made me prioritize my life into what is important, and what is not. “Busy-ness” does not equate to productiveness, cable and internet does not promote family togetherness, plowing blindly ahead is just plain stupid, and does nothing to teach our offspring good values, or common sense. And here is where my youngest would say “If sense were common, everyone would have it”!! Instant gratification leaves a trail of guilt, remorse, and self-disgust more often than not. Nine days in a hospital bed, hoping I could walk and talk again, gave me plenty of time to realize that we MUST slow down, stop and smell the roses, kiss our kids, ask your significant other how their day went. Nine days on the Neurological Ward made me realize that my illness was nothing compared to the man next door with nine kids, who had lost most of his brain function, and was technically younger than his toddler, needing to be fed and clothed by his loving wife. Nine days is a long time to make all kinds of promises to God that you WILL prove you deserve this second chance at life. And, nine days is a long time to realize that your previous life has left you in a bind that will take years to get through. A safety cushion back then would have been such a great thing to have. Shame on me for not using every opportunity to take care of that oversight sooner. I have poor balance now, sometimes I fall going UP the stairs! I lost most of my long-term memory functions up until that November night six years ago, but maybe some of that was meant to go away. I type, write, and sometimes speak complete words totally backwards (which is why this is taking me forever), and has given my sons giggle fits.

I consider myself lucky. You can’t go back, you can only go forward from where you are today, right now, and make things better from there. As a “mature” student, most of my instructors knew my situation, from poor choices in husbands (yes, there were two), to the injury, and then the Meningitis. They marveled at my tenacity, my organizational skills which allowed me to run home between classes and punch down the bread rising for the next day’s market, tutor other students, travel for physio-therapy twice a week, maintain my grade level, volunteer for various programs, AND raise teenagers, all while trying to be a role model and mentor to my fellow students, AND be in good spirits, most of the time. My motto was “Whatever doesn’t kill you makes you stronger”. These are the traits that helped me win five scholarships. I am ashamed that that marvelously ‘together’ person I just described got selfish with her earnings and fell into the “I have been without for so long, I deserve it” mentality. I hope that I can prove that no matter what your age, or situation, you CAN do something about it. I can’t wait to get my next paycheque – I know EXACTLY what I am going to do with it!

Jane’s Story: One day at a time!

December 18th, 2008

I love personal finance. And I love Gail’s show. It wasn’t always this way… once upon a time I was a hard-working university student who also worked a full-time job. I was living at home with my parents (and learning how to live on a fairly large disposable income). I bought a used car on a $15,000 line of credit. I know. And I decided that I would set my automatic payment for interest only. I fully intended to make additional payments… Then I added $5000.00 for “student fees.”

Fast forward a few years, where I was still living on a substantial disposable income and paying just the minimum payment of interest and I still owed $20,000. Then I racked up $7000.00 on a credit card. My limit on my line of credit was increased to $30,000 and so I consolidated. I now owed $27,000, which crept up to 30,000, on this line of credit.

I was very, very hard on myself over this. I felt powerless and ashamed. My attitude was to avoid this problem that caused me to feel so low. I paid the interest. I never missed a payment. I was never late… but there was this tightness in my chest… and I felt like I was living a lie. I kept this a secret for a long time. Every time I thought about it, it made my light grow dim. One of my friends who is Muslim had told me that it was her dream to make the spiritual pilgrimage to Mecca at least once in her life… but to do this, a person should be debt free. I get this. I really do.

I confided the whole thing to a good friend a few years ago, which was the catalyst for change. Finally someone else knew, and still respected me. So maybe I could respect myself. And respect my money. I made positive changes over the next few years, experiencing a few more challenges… which brings me to the present…

I am 33 years old. Today, I make just over $50,000 a year and I owe approximately $24,000 on my line of credit. I set up a $200.00 bi-weekly automatic payment to pay off that line of credit. I went into the bank and negotiated my interest rate to prime + 1.45%. (Currently 5.45%) It was very interesting how quickly they brought this down when I mentioned that I was planning to research a better rate…

One of my biggest challenges was that I never had any savings set aside in case of unforeseen costs (i.e. car repairs, etc) so I now have an automatic deposit of $100 bi-weekly to a money market fund that is not that easily accessed. I am still driving my car I bought with that initial line of credit - it is 11 years old and running very well but recently had an exhaust issue that cost me $400. When my sister and I looked under my car we saw that the pipe had broken off completely from the muffler. I laughed. My sister was shocked. I ACTUALLY HAD THE MONEY TO PAY FOR IT IN THE BANK! So I laughed.

I also recently visited Africa and had an amazing trip. I had saved up the money in that money market fund and returned home with no debt from the trip (a problem I had in the past - rack up a big visa bill and pay it off with the credit line… over and over again).

I still owe a substantial amount of money but I have a PLAN - and this feels GOOD, so I am less focused on that big number… and I know it is shrinking all the time!

Personally, my attitude about money has shifted very drastically from the days I lived at my parent’s house and bought whatever I liked. Material things mean less. I don’t mind driving an old car. I can WAIT to get things. I love this quote - “Let every dollar you spend be a vote for the kind of world you want to live in.” I think long and hard about what I really NEED or WANT and whether buying it will increase the peace in my life or diminish it.

Sabrina’s Story: One year and $23,000 in consumer debt later…

December 16th, 2008

It was curiosity and not any sense of fiscal responsibility that led me to tally up all my credit card debt. But the big number I found after I totted it all up ($23,084.18, to be exact) left an indelible impression on me. It’s been just over a year since that day, and yesterday I made my final credit card payment, leaving me debt-free and reflecting on what has been a life-altering year.

I don’t have much to show for all my credit card purchases, and what I do have, I’m a little ashamed to look at. I bought bridesmaids dresses for my wedding posse, financed an intensive trip through Europe, and shelled out for taxi-cabs and take-out dinners and movies and a closet-full of gorgeous shoes. But what I still have, I own now!

Paying off all my debt (and saving $4,000 on top of it) required me to transform my entire lifestyle, and, by extension, my husband’s, because even though he doesn’t have any credit card debt, he passively watched me whip out my credit card for everything and didn’t ask me questions about my finances. Now, we have lively discussions about our financial future, and we’re excited to look beyond tomorrow.

How did I do it? With a series of big and little actions. The first thing I did was I just stopped using the credit cards entirely. I took on a boatload of extra freelance work (on top of my day job) and I worked and I worked and everything I earned went to my debt. I cut out Starbucks (I had a $10 a day habit; I actually ended up giving up coffee altogether, which has also transformed my life). I read every blog and every book I could devour on the subject. I started speaking to my girlfriends about finances. My husband and I spend more time together because we’re preparing every meal at home together. I learned that frugality is hip, and fun, and empowering.

So now my debt is gone, and I’m building my savings. My freelance work is set to overtake my day job, and so I’m exploring new career possibilities. My husband and I both note that, if I can pay off $23,000 in debt in one year, together we’d both be able to save an incredible amount of money for a future home or nest egg.

The possibilities are endless, and I am no longer a slave to my debt. And if I, a former practitioner of retail therapy, can do it, anyone can!

Drowning’s Story

December 12th, 2008

Single mom, daughter in first year university. I ended a relationship and was left with my house in total reno ruins. Winter coming and I’ve already seen a hydro bill of almost $200.00 and we are just the first part of November.

My father is using my address for his mail and had repo men at my house to repossess his vehicle and and and and. (I’ve informed him no more get your own mailbox I’m done with the crap). I end up pulling him out of more holes and neglecting my own. ie. buying this house from him 5 years ago which ended up in foreclosure, tax sale, never paid the water bill so I’m playing catch up. He is telling everyone it is his house he gave me. Wrong I have a mortgage. I ended up in court for 3 years to fight to straighten out in regards to a lien on the house which was thrown out of court.

That is the tip of the Iceberg.

Lord love a lord.

What do you suggest? where do you suggest to start?

Aimee’s Story

December 8th, 2008

When I met my husband in the spring of 2001 he was driving his brother’s expedite truck for a living. That summer his brother told him that he either had to take over the truck as an owner operator & pay his $10,000 for it or find a new job. So he did, and I thought from minute one it was a bad idea but kept my mouth shut as I figured as the new girlfriend it wasn’t really my place to tell him what to do.

Anyhow a month later I moved in with him and it became my problem. I discovered he wasn’t even paying his own bills on time, let along running his business properly. Everything was in his name and on his personal credit cards. The truck turned out to be a lemon, expediting business really dried up following 9/11 and after putting more than $28,000 in repairs into it over an 18 month period (all on personal credit including mine that I lent him out of desperation as we tried to keep up the payments) we wound up losing the truck, going bankrupt and moving back home to my parents’ house with our then four-month old daughter.

It is sad to say that after the bankruptcy we went for about four years without any extra money or credit to rely on. We had a budget, but didn’t account for all the little things that pop up and didn’t really change our spending habits. There were many times that we were so deep into our over-draft that we couldn’t have bought a bag of milk if we’d needed it. It was funny how we could always find enough money to cover planned expenses but could never actually get ahead (for example we managed to pay off $9,600 for our wedding in cash in advance over 16 months but could never get to the next pay day without being flat broke for several days).

Last summer I happened to catch an episode of ‘Til Debt do us Part on t.v. and did some research on the web. I found Gail’s site with all the budget sheets and revamped our budget. We found tonnes of places and ways to cut back so that for the first time in forever we were in the RED! It was terrific.

We found the jars didn’t work for us and like others have written it is too fiddly to mess with the small change, but we have cut out monthly restaurant expenses from over $300 to under $50. We’ve cut our grocery bill from over $700 a month to $500 (and we now have a second child for which we buy diapers and formula)! We have $30 per week for entertainment but usually we save up and have one nice couple’s night out per month.

Now we have secured credit cards which I budget 30% available for spending as I hear that is the most you want to use to rebuild your credit, and budget to pay that 30% back at the end of the month. I use the credit cards for all the little incidental expenses through the month like clothing, haircuts, gifts, oil changes, school field trips, etc. We also each carry $10 per week for coffee money or whatever to avoid temptation.

Previously our only savings were RESP’s for our two girls (the oldest is 5 and she has over $8,000). In the last year my husband has put over $2,000 in RSP’s and I’ve put $600 in mine (with me on maternity leave). We also managed to break the cycle of renting a fridge and stove from Easyhome and saved enough money to buy a brand-new set (saving us $143 every 4 weeks). We also managed to pay off a small loan we’d taken out 6 months early. And by making double payments every month we will have our car paid off a full year early (terrific to be saving as the 30% interest is a killer). My Christmas shopping is not only DONE already, but PAID FOR!

If everything goes to plan (knock on wood) this spring the hole should disappear for us for good. We have $1,300 every four weeks in SURPLUS to put towards savings and all the big things we’ve been putting off all these years.

Thanks, Gail. You sure pointed us in the right direction.

Myra’s Triumph

November 27th, 2008

Let me start my story by going back on the year 2005. I was working in one of the Airlines in Dubai when I met my husband online, and after a few months got married. Year 2006, I resigned from the job that I love, followed my husband here so we can start a family. I am lucky because when I came here there is a brand new house that he purchased for us. Imagine of not needing for us to rent an apartment. The only thing that I was not informed by my husband that time is that he has a loan amounting to $25,000 and couple of credit cards amounting to more than $10,000.

Imagine my dismay and total shock because I was not informed of those huge DEBTS! I took over on our financial matters and figured out how much we owed with each credit company. My husband, being the obedient one, gave me the total control on how we will spend our money. Then on February 2007, I got a job. Even though I can afford to have a car loan by that time, I chose to commute everyday going to work so I can save the money and just put it into our debt. And oh, I forgot to tell you, March 2007 I found out I was pregnant. Imagine the stress that I have on my shoulder because I’m thinking on how we can pay our debts and here I am pregnant but don’t think we’re financially ready.

I experienced switching our credit cards to balance transfer on a lower interest rate. I cut down into pieces the cards that we don’t use anymore. I remember those times that we always use our visa for cash advances because every month were on overdraft. I gave birth last November. Until now I am on maternity leave and trying to live with only $1,200 a month aside from my husband’s salary as a tool and die maker.

I am proud to say that the amount of debt that we have is very small now. Based on my computations, by June 2010 we will be finish paying it off. The car loan of my husband is finish this coming January 2009. I even opened an emergency savings for us and it’s only lately that I told it to my husband as a surprise for him. My son has an RESP already.

If you are going to ask me if it’s worth it experiencing those things, I would definitely say yes. It was a humbling experience. It let us become closer as a couple and taught us the real value of money. At age 28, we have a home, car, a son and now we are almost debt free.

My advice to those in deep debt is to reassess your priorities in life without sacrificing what will make you happy and love. It’s okay to spend if you have the means but save also for rainy days. Talk as a couple when it comes to money and seek support from each other. I hope you are happy with my story. And to Gail thank you for answering my question before.

Jai’s Story - My Best Strategies

November 23rd, 2008

* Communicate: People never used to talk about POOP either but we got over that! Money is no different, and it brings another type of intimacy into a relationship when you know someone financially too.

* Don’t just talk about your past, talk about your future spending too. My boyfriend and I have set a limit of $150.00 as our “no-question personal spending amount”. What does that mean you ask? Means if I want to blow up to $150.00 of my savings on jelly-bellies then that’s my business. $151.00 and we talk about it first so I can vocalize my thought process on why I want to buy this, before I just go ahead and do it. It helps me to justify my spending to myself, and he adds another perspective to my conversation. My mother, though, had a heart attack and started quoting women’s lib.

* If you have a credit card you like to use to accumulate points of some sort, use it to pay for your stuff and keep your money budgeted in your jars until the end of the month. Then use the cash in the jars to pay the bill.

* Shop places that have point cards (not credit cards) that accumulate to give you money back, then use your budgeted money to repay bills or add to your savings.

* Look for friends with similar spending habits and uncluttered houses.

* Find co-workers that also bring lunches to work with them, and alternate days of who brings lunch. Great way to not have to make something each day but still stay within budget.

* Use your creativity to buy the things you want: I purchased the majority of furniture we needed for our new house from a website full of used-stuff. I found quality at a reduced price, you have to buy in cash only, and I felt good about buying things that would have probably ended up in the landfill within a few years.

* Host a “Clothes” party instead of Tupperware or Candles. Idea: Invite and organize a list of 15 to 30 women by their size (try to find groups of at least (3) women in the same size) to bring (5) items of clothing in good condition that they no longer wear. (Clothes, bags, accessories, shoes etc) Display and tag the clothing, and play trivia games etc. to award points to each person. At the end of the night, everyone can use their points to cash in on new-to-them clothing to take home. This also works great for kids’ stuff!

* Find a charity to volunteer for with your partner or a friend. It’s a cheap way of being involved in something greater than yourself without breaking your budget.

C’s Story

November 20th, 2008

This is a little story about my personal journey towards financial health and renewed confidence. I am a person who has attended some of the most elite universities in North American and in Europe. Along the way, I went through some personally challenging times that landed me clinically depressed, unable to confront my fears and - yes - financially very messy.

While living in Europe, I was on a fairly modest grad-student income, but I compensated for my unhappiness with consumerism coupled with a strong aversion to managing finances. Bank statements went unopened, sales were an invitation towards spending, and bank fees each month were astronomical. I was not proud of this at all. I felt like a failure and couldn’t handle any confirmation of this feeling by acknowledging my lack of responsible budgeting. It was a vicious cycle — the worse I felt, the more I spent, then I felt worse for my financial irresponsibility etc. It is the sort of trend that I see often in Gail’s shows. The end result was that I hurt myself and my family. Grasping for aspirations and relying on consumerism to fill a void can be a destructive addiction!

About a year ago, I returned to Canada. I was living overseas for the past years, and a return to my support network was much needed. But it was also a decision based on my total lack of money. It was painful to be a mature grad student with no savings, and a debt of $16,000 in student loans (not to mention the huge sums owed to family members). This is when I came across Gail’s show, ‘Til Debt Do Us Part’ — and thank goodness! The financial advice, coupled with the understanding that finances are often a symptom of deeper issues, truly helped me.

Once back in Canada, I set about getting my life ‘back on track’ and have secured some career building, although modestly paid, jobs. Although I am poor, they are the types of work-experiences that I need to progress towards my intended professional career. I am also receiving help from my family — room and board — for which I am truly thankful. It is not a totally free ride: I must pay my share of living costs, but nothing close to paying full rent.

When I saw Gail’s show, it gave me hope and I was truly determined to change my ways. I used her budget sheet, created my own spread sheet, got some jars (although I don’t always use cash-only), and I began justifying my bank statement about twice per month. I use online banking to check my statement about 5 times per week. This is a great change from my previous tendency to shove my bank statements in a drawer unopened!

Along the way, I have met other life-goals and moved forward. I am still battling my demons and it will still be some time before I put my past experiences behind me, but I have come a long way nonetheless. Financially, I know that I owe a lot to my family, but I am also much more responsible thanks to Gail’s show, website, advice, blogs and her worksheets. I have learned much about finances reading her answers to questions and her daily blogs. So this is a big THANK YOU to Gail.

As for my finances now: I stay within my budget every month. In fact, not only do I put aside an emergency fund in savings every month, I am also managing to set aside money towards a ‘car purchasing’ fund that I hope to achieve in 2 years. Furthermore, thanks to the budget worksheet, I am setting aside an ‘income floater’ amount since I am only hired on a per-contract basis and my income fluctuates quite often. This is a modest story, but I am proud to say that, considering I earn so little, I have managed to put aside $4,000 in total over 5 months! I have set myself a VERY tight budget and account for every penny. I understand that many other people have children, mortgages etc with the added financial responsibilities. However for me, this change is a very big achievement. It is a path on which I wish to continue, and through which I hope to keep on moving forward.

George’s (real name not used) Story:

November 16th, 2008

I am an advisor at a financial institution and like many others, I am feeling frustrated and overwhelmed with the people walking in my doors for the last two years wanting consolidation after consolidation and after strong discussion/budget review, JUST NOT GETTING IT!! I went to see Gail at a speaking engagement and was inspired to return to work and give people a wake up call! So far, success has been varied and I was feeling largely ignored on the advice bit…UNTIL George entered my office.

George is 27 years old, has a great job and a bright future. He also has $60,000 in credit card debt - $10K of which was money he lent to his girlfriend — and needs $15,000 more for vehicle repairs. Luckily for George, he owns his own home which he has been faithfully paying down for the last 4 years and we were able to pull enough equity out to refinance his mortgage and pay off all his debts. As George was leaving my office, he told me that he had already done up a budget and was looking forward to being able to start saving as he hadn’t been sleeping much, worried about how to pay off all this debt.

Gail, this is where it gets good - he tells me that him and his girfriend have been watching ‘Til Debt Do Us Part’ for some time now and that is what prompted him to come and get some help. So hat’s off to you, Gail, for restoring my faith in the fact that there are people out there like George actually listening and taking action!!