The Round Up Part 3 – December 2016 Edition

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You know how they say it gets worse before it gets better? Seems like “they” can often be right. However there’s good news in that adage – it does eventually get better.

I have sadly gone backwards since my last roundup. I had a tax reassessment and the result wasn’t pretty. I don’t want to make an issue out of it because I am truly grateful that I live in a safe place with a high quality of life, but I think I’m allowed to say it can really sting when your employer takes the wrong tax amount and you get a very unwelcome letter from the CRA in the mail. What a punch to the gut.

So here’s my new round up:

  • Visa: $5,300 (19.99%)
  • Line of Credit 1: $12,000 (8.8%)
  • Line of Credit 2: $13,924 (9%)
  • Line of Credit 3: $10,700 (9%)

Total Commercial Debt: $41,924.00

  • Loan from a family member: $20,000

Debt Grand Total: $61,924.00

Compared with my last round up, I am in the red by $3,815. In the course of a year (from my first roundup post) I have only paid $1,346 towards my debt due to these developments.

Gah. That’s an amount I would have loved to be putting towards my debt per month.

I wasn’t perfect this year, but I did do a lot to change my life: I changed my habits, obliterated my social life, went through bouts of loneliness, didn’t indulge in things I enjoyed (all the food! All the cheese!)…to only be better off by $1,346 over the course of a year. Deep sigh. Clearly there is a lot more work to do.

It’s really tempting to want to throw in the towel and say screw it, this is going nowhere. But then I calm down and remember that has absolutely zero logic. None whatsoever.I know some people can live with debt just fine and think it’s a part of life (which is messed up thinking to begin with, in  my humble opinion) but time has proven I’m not one of those people and debt keeps me up at night, so giving up will not make this any better. I just need to dust myself off, lick my wounds and keep going.

I’m sure if you’ve been following my blog it must be tiring to only hear bad news bears from my neck of the woods. However I want to post all the highs and the lows on here as it’s simply the truth – my truth – and I know this is often how it goes for those trying to climb out of debt. I absolutely love coming across debt-payoff success stories online, but sometimes I feel disheartened that my story isn’t looking like the makings of a success tale yet. So far there have been more valleys than peaks, more lows than highs.

I think the tough part is that we all know that hard work pays off, so it’s tough putting in the work when you can’t see the payoff yet. Getting out of debt is not an instant gratification exercise; it takes regular incremental effort over an often long period of time to really make some headway. To add a monkey wrench into the equation, falling backwards in the journey is also a very real threat; whether it be from unexpected expenses to the grips of a shopping addiction – or for those not struggling with spending as an addiction, it could just take one indulgent day online or in the mall with a credit card! – to reverse months worth of work.

Seeing this is not a point in my journey I want to be in, the only solution is to move forward. So how does one do this? I’ve been thinking about theses following points the last few days:

  • If something is not working, it means I’m not working hard enough/smart enough. First step is always to accept responsibility. I got myself into this mess, and I’m the one who will pull herself up by the bootstraps to get herself out. Time to get tough, realize there’s a lot more work to put in and a lot more time to go, but I can/will do this.
  • I mentioned it takes regular small increments over a period of time. Those increments can become larger by spending less and earning more. My spend less plan is already in place with my Spending Ban; the make more part is something I need to continue with. In the past month I successfully got an additional licensing certification after a year-long self-study course, finally got my full driver’s license (yes, embarassing, I know. I’m a cyclist and have always lived downtown, I never wanted a car!) and went to two informational interviews for the next role I want. There are no availabilities yet but need to keep in contact for when there is, and think about what other courses I can take to keep making myself into an attractive prospect for promotion.
  • Back to tracking every penny spent. Today is the first day of a new month, so will be easier to get a clear picture of what a typical month looks like for me. I’ll make sure nothing slips between the cracks this way
  • Knowing things will get better. So maybe my first year was a rough one. Maybe this was just the brunt stage of laying down the groundwork so that things will flourish later on. You can go from rubble to a beautiful garden overnight; I just went through the process of de-weeding and getting rid of the rocks so I can plant the seeds. With constant care, I should be able to see my efforts blossom in the months and years to come.

So here you have it, my financial picture as of December 1st, 2016. Come hell or high water, I will show progress every month. No more going backwards, no more reversal of my hard work. I’m committing to doing what it takes to make some real, tangible progress monthly.

I know I’ll be sharing good news with you from this point forward!

Anyone else have a fiscal goal they have in mind for the end of the year?

 

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7 Comments

  1. Hi There. I think one accomplishment you made here is that you didn’t ADD to your debt, even with that unexpected expense. While you’ve only reduced debt by a small amount, having some cash reserves seems like it helped a lot. You’re on the right track! 😀

    1. Thank you so much for the support, Sheri. I’m lucky to have people drop in and remind me that at least I moved forward instead of backwards, even if it’s just a tiny bit. I should use that small win to keep my motivation up, that’s for sure.
      You make a great point about the cash reserve! That’s number one on my list for “next steps.” Once I ensure I can always cover my debt payments per month, the next goal (starting with my next paycheque) is to put a little bit of cash in an emergency fund so I don’t have to turn to credit whenever something unexpected comes up.
      Thanks for stopping by 🙂

  2. I was also going to say that your progress is much larger than it seems when you consider the reduction in spending as opposed to the reduction in debt–truly remarkable if you ask me 🙂 I think tracking spending is what has most helped me reduce our monthly expenses. I was completely unaware of all the little splurges frittering away our money. Even when I think I’m being careful I can justify almost anything, but am much more accountable when every receipt will be entered in a spread sheet.

    This is just a suggestion and must always be done very safely, but have you got any items you could sell and put that money towards debt? I use kijiji and have sold things like a vitamin D lamp we no longer use etc. It would be a fast and relatively easy way to make some quick money particularly if, like me, some possessions eventually take on a bad taste with buyer’s remorse. I usually feel a great sense of relief to pass unused things on to a new home!

    Stay strong. It may seem like slow progress but your momentum will grow. It is beyond refreshing to read a true story that’s not trying to create a personal brand or click bait me into buying something. This is real life. We all struggle in different ways. You are doing fantastic and your courage and candour are a breath of fresh air! Loving this blog 🙂

    1. Thank you so much for your kind words, Jill! Such a compliment coming from a great writer who’s blog I truly enjoy 🙂

      Funny you mention Kijiji – I just put some items up this weekend! No bites just yet, but keeping my fingers crossed. It definitely will feel great to unload some of these items, especially knowing they will be used by people who want them enough to pay for them, and thus lessening the chances they’ll wind up in a landfill (which I would hate!!) Looking at my “for Kijiji” box taking up space in my living room is definitely sobering; I have this big eyesore in my living space that got there because I spent money where I shouldn’t have. Definitely will make me think twice before I bring a new item into the home.

      I will definitely keep tracking every penny spent – you’re right, it’s crazy to see how the smallest little chunks of change we fritter can really add up! The visual of the log – and something about the tactile activity of physically writing everything down – is a motivator to keep those numbers low.

      Most of all, thank you for the encouragement! To be perfectly honest, sometimes I’m embarassed reporting all the hurdles and setbacks. I feel there are a lot more “success” blogs out there when it comes to digging out of mountains of debt, followed by lists of advice on what to do, followed by some e-course, and I figure everyone would always prefer to read blogs by those who “won” already and I definitely am nowhere near winning yet. I do my best to have the hustle and heart to get there but it doesn’t always go as planned. Your encouragment goes a long way in helping keep me motivated when times get rough – thank you!! 🙂

  3. Hi Desperado! I’m late to the party but still want to comment. You have to take the highs with the lows and frankly a debt reduction is still a high. Just consider it a hill instead of a mountain 🙂

    But don’t get discouraged and keep moving forward one baby step at a time. As Sheri said above having the cash reserves was helpful. In 2017 perhaps think about moving money more frequently to both cash reserves and debt. I am not sure how often you pay off your debt or contribute to savings but consider making some sort of a payment every single darn week.

    Example: I move $20 from my checking account each week to my savings account. It’s not a huge amount for me (and it’s key to pick the right amount for each person based on their budget) but it is an amount that I don’t miss. But it does equal over $1,000 each year in my savings account.

    On the debt side, perhaps start with the Visa since it has the highest percentage. If you make your main payment once a month, great. Then transfer a bit each week as well, or an extra payment a month.

    If you think you can avoid needless spending, then move the money quickly towards a better purpose (savings or debt). Provided you are keeping track and say don’t inadvertently transfer part of your rent towards debt/savings, then you may pay down more than you think.

    Also, on the loan from a family member…this one is always tricky. You may want to evaluate if it is worth making some small payment to show that you do intend to repay it. (Again this is tricky and it depends on the relationship etc. etc.) But even $10/week is over $500/year and shows intent to repay while you focus on higher interest debt.

    Finally, let’s kick off 2017 with a solid focus on getting rid of one debt forever. (The VISA is the best because it is the smallest and the highest interest rate.) Kick it to the curb. But keep up the cash reserves so that it stays dead (i.e. in the future the balance each month will be repaid in full). If you can accomplish this, then it will be 4x more debt repayment than in 2016 and a huge step forward.

    2017 will be great!

    Pru

  4. You’re the best, Pru! This is great advice! Practical, and down to bite-size morsels I can chew on while still making a big impact. I can definitely run with this!

    The key to all of this is what you mentioned – avoiding unnecessary spending – and shoveling the rest into a greater purpose. Currently I get paid bi-weekly, and with every paycheque I set aside the minimums for the LOCs and all extra cash (besides rent and bills) goes my visa with each pay. The problem I’ve created for myself is not properly assessing what I need for “pocket money” between paycheques, and then dipping back into the visa, which reverses my progress. Or something comes up, which results in the same outcome. So I’m going to act on your and Sheri’s advice and build an emergency fund and start leaving a bit of a buffer in my chequing account (or take out cash and don’t touch the debit card!) so that the bi-weekly progress I make on my visa, STAYS on my visa! I need to make a pact with myself that money on the visa only goes one way – in! You’re very right – cash reserves are the way to go.
    It’s going to feel phenomenal to get rid of that visa once in for all! Then snowball all of that to the next LOC, then the next. You’re right about the family loan, I should put something down consistently, to show good faith and make some progress there. The lender has never pressured me to pay it off and is understanding of my situation, but sending some money towards it shows I by no means have forgotten my obligation and most definitely would never take advantage of their generosity and understanding. Thank you for that idea.

    2017 will be great indeed! Let’s do this!!

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