Give Me Back My Five Bucks

I once worked with a guy who was in debt. I was still in school, so I was in debt too. We would sometimes talk about our debt, and how we were dealing with it. He had maxed out his line of credit, so in order to avoid paying down the debt, whenever he got paid, he would dump his entire pay cheque into the LOC, and then take it right back out again - thereby making it seem as if he had made a payment. It seemed like a sneaky little plan, so I did that for a while too. Actually, probably until I graduated college. So, for about a year I would just transfer money back and forth from my accounts, and coasted along ... spending more and more, and getting deeper and deeper into debt.

Nobody knew that I did that. My family had no idea, and I didn't tell any of my friends. I didn't even tell the guy who told me about it. I just did it. I mean, I knew people in debt were doing the same thing as me, and for some reason it didn't make me feel as bad. I remember lying to my mom about how much I owed on my LOC (she was the co-signer). I remember even telling K that I didn't carry a balance on my credit cards. But I did. And that was 5 or 6 months into the relationship.

The point is, nobody knew I was in debt. I mean, they knew I had student loans, but not the maxed out credit cards or the maxed out LOC. It's easy to hide debt, because you can't tell just by looking at that person what their net worth is, or how much they owe the credit card companies. And because of that, it makes it so easy to ignore the debt.

Even now, because I'm so open with this blog, you all know exactly how much I have, down to the penny. But if you saw me, and were just to make an assumption of me, you couldn't tell how much money I was worth. If I saw a person like myself wearing my standard articles of clothing - hoodie, jeans, converse skate shoes ... I'd probably guess that person lives pay cheque-to-pay cheque, and that they may or may not have a hard time making ends meet.

And then I look at J. And I have no clue what his financial situation is. I mean, I know the basics. I know approximately how much he makes. I know he pays for everything in cash or with his debit card. I know he made a lot of money on a piece of property he owned a few years ago. I know that over the past few months, he's been spending more than he earns, because he's been buying hiking gear like nobody's business (for the trip that he's currently on). I know his car loan has a high interest rate due to him not taking care of his finances when he was younger. I can relate to that, because I was there too. But other than that? No clue. Absolutely no idea. I don't even have a ballpark figure about how much he has. Part of me really wants to know, but another part of me doesn't even want to go there. It's a touchy subject, and it's something I always avoided talking about in past relationships. It's just that with this blog, I can't exactly turtle and hide from any of it anymore.

I don't really know what this post is about, and I feel like the point of this all is right around the corner ... but I haven't quite put my finger on it yet. It's driving me insane. I'll have to get back to you.

Hi Krystal,

I am so glad to have found someone who was/is in the same boat as me. Well, my boat is sinking fast, I think - my debt is pretty bad.

This is what happened and how I am coping. A year and a bit ago, I decided to start working on a project that makes me extremely happy but requires funding to accomplish what I set out to do. I borrowed money from a family member to get it going, in hopes that funding would pull through in some shape or form. I also charged lots of expenses to my 2 credit cards and took out extra on a loan. For over a year, I've been filling out application forms for funding and/or trying to get sponsorship opportunities, with no luck.

I had people involved in the project who believed in it, but in the end, I was the one taking the risks, I quit my job at one point and worked on it for 4 months, without an income. I even had this one partner say "borrow as much as you can and I'll get you the money you need," he ended up pulling out 6 months ago and brought no money to the project.

I'm back to work now and have been struggling to keep up with the calls from the creditors. It's terribly upsetting when after, a long stressful day at work, there are people calling and demanding to be paid or they are taking me to court. I have only paid off a tiny bit of what I owe my family member and she has even emailed me because she wants to discuss my inability to pay her back. It's bogging me down and I definitely don't want to disappoint her, and I definitely don't want to be sued. I continue to believe in this project but I have to put it all on hold until I sort my terrible mess.

I had gone to a credit counsellor about 8 months ago - they said I could declare bankruptcy - but of course - that's 7 years of hell! I don't feel that I want to write off my debt, I have to take responsibility. Also, they said that since I owe money to that family member, that I would have to declare bankruptcy with her as well - NOT an option! The other option is the consumer letter, which is a 45 day process to get creditors to agree to let you pay off a percentage of what you owe. This will only affect my credit for 3 to 4 years. But the credit counsellor has to know everything that is going on with your finances... ugh.

This is what it looks like in terms of what I owe. It's a lot, so please don't judge!

$25,000 (family member)
$2,000 (small personal loans)
$11,000 (credit cards)
$7,000 (Citi loan)
$12,000 (student loans)
$550/month (rent)

My salary is $50,000/year. I don't know what to do, I figure I can catch up in a month or two, after the personal loans are cleared but the creditors are riding me, constantly.

Oh yeah, it's not that I'm being wasteful either. I have been biking to work to save on bus fare, I try to get groceries so I don't go out for lunch at work, and I don't lavish myself with material things.

Do you have any advice for me?

I'm a mess right now, I can barely stay focussed.

Thanks,

Debbie Debt

I was watching a TV show called "Till Debt Do Us Part" (on Slice) the other night. It was about a couple who were caught in the vicious cycle of high interest payday loan advances. On top of that, they owed thousands of dollars to friends and family. It was an interesting episode because, in my darkest days (when I was barely keeping my head above water), I considered getting a payday loan. I knew exactly how they worked, and I knew that if I got caught up in them, I'd never get back out ... but still, it was tempting.

Nowadays, payday loans are so popular. The way they work is the lender will agree to lend you a specific amount of money for a certain period of time. You write a postdated cheque for the date you agree to pay the amount back on (plus a finance fee), and you go on your way.

It seems simple enough as long as you have the money to pay the loan back. But the thing is, most people who get payday loans are the kind of people who don't have the money to pay it back. Let's say you needed to borrow $100 to get you to the next pay cheque, and the finance fee on that amount is $25 for a two week loan (a typical fee would cost 25% of the amount borrowed). When the two weeks are up, you owe $125. That's an APR of 651.79%!!!! If you needed to borrow the $100 for just one week, you'd still have to pay 25% for the finance fee. That works out to an APR of 1303.57%!! And don't even get me started on how much it costs if you bounce a cheque!

For many people living on the edge, payday loans may seem like the only solution. If you end up in a situation where you have completely exhausted all other options, and you absolutely must take out a payday loan, make sure you have the resources to pay it back when the loan becomes due. More importantly, make sure you have funds available to NOT have to take out another loan to offset the cost of paying back the first loan.

Short-term solutions like payday loans and cash advances can provide temporary relief in a financial crisis if you know what you're getting yourself into, and if you have the means to pay the loan back. That being said, financial solutions like budgeting, creating an emergency fund and living within your means, are tools you can use to create long-term life solutions.

I am both surprised and honoured to find out I'm the first debt-free success story featured on the brand new website, We Beat Debt!

We Beat Debt! was created with the intention to inspire people who have debt in their lives with real-life stories of people who were able to climb out of their debt. As well, they will focus on personal finance tips and tricks, and the occasional book review.

I think We Beat Debt! is going to help a lot of people find the motivation to tackle their own personal debt. They are always looking for new inspiration, so if you have a good success story to tell, you can submit your story to them!

The past few days, I've been reading a message board about Canadian student loans. Basically, the hundreds of people who have joined this message board want the Canadian government (i.e. the tax payers) to pay off all outstanding student loans. They are starting a petition, and contacting politicians, etc. To me, this under minds all the hard work it took to pay off my stupid loans, and all the hard work all my classmates are going through right now, trying to pay back what they owe.

Yes, I understand that life happens, and sometimes your financial situation changes along with it. But student loans are a luxury offered by the government to people who can't afford to pay for their education up front. It's like a 0% interest credit card for the duration of your schooling, and that's pretty generous in my opinion. If someone racked up their Visa, and then at the end of the month, realized they couldn't pay it off, is Visa just going to relieve them of their debt? No. They don't care about life. They care about their money. So why should the government be any different when it comes to loaning us money?

And a lot of people don't even know what student loans really are when they apply for them. A lot of the people were angry because they didn't realize that after graduating, interest would still accrue during their 6-month grace period. Some didn't even realize how big their monthly payments were going to be. And we all know those people who spend their student loans on alcohol, a new TV, a vacation, etc. Sure, most aren't like that, but some are.

I empathize with the grads who weren't able to get a job right away, or who have to support a family. I really do. A lot of my friends are in the same situation, and it's hard for them. But at the same time, I don't want my tax dollars going to erasing their debt just because they aren't able to pay off their loans. It may be selfish, but isn't it also selfish to want the country's tax payers to pay for what they spent? Maybe they should have evaluated whether they were willing to sacrifice it all after graduation in order to pay the loans off.

There are a ton of ways to pinch pennies and make it work (as I've found over the months, by reading all of your PF blogs), but a lot of them just don't want their lifestyle to change because they've gotten comfortable. They don't want a strict budget to follow. Or maybe they're overwhelmed. Move home if you have to. Clip coupons, get rid of the car, move to a city with a lower cost of living! Just do something ... because complaining isn't going to make the debt go away any faster. Well, it might if by some miracle the government decided to erase the country's student loan debt. And while it may be great for those students who do get their debt erased, I'm sure it'll piss off the thousands and thousands of grads who have already paid off their loans.

And I'm not just spouting off here because I have my loans paid off. I've always felt this way. I'd love to get my B.A. right now, but I can't afford being $20k in debt again, so I'll wait a few years and save up so I don't have to take out huge loans. It has always annoyed me to see all the student protests at Parliament, wanting the government to get rid of their debt. They knew how much their education was going to cost them before they started school, so why are they so upset? Yes, tuition is ridiculously high, but what are you going to do? In North American culture, post secondary education is a privilege, not a right. And until the government changes their attitude, that's just the way it's going to be.

The bottom line is: complain all you want about paying back your student loans. Those payments suck! The system sucks! DEBT SUCKS! It's all true! But at the end of the day, just pay the loans back and stop trying to score a free ride from the Canadian tax payers.

Maybe I'm being insensitive, but I just think debt is debt, no matter who you owe money to. What do you think? Am I a complete asshole?

I AM DEBT-FREE!!!

My hands are shaking right now as I type this. I can't believe I've finally rid myself of the financial baggage and stress I've carried for so long!!! Goodbye student loans! Goodbye stupid line of credit! You're all dead to me now!

Starting this blog was one of the best decisions I've ever made, because it made me accountable for my spending habits. So thank you all for your support! :) You might notice that I've updated the sidebar today as well. I rolled my LOC and Student Loans into one category called "My Debt" to save space. I also put July 14th, 2006 as the starting date, because that's when I made my first payment towards my debt. I put $100 into my EF, $100 into the condo down payment fund, and $50 towards my RRSPs.

Ahhhh!! I'm practically bouncing off the walls with excitement. Time to get out of the house and celebrate! Well, seeing as it isn't even 8am yet, maybe I should wait. :)

Well, I got paid today, so I updated the sidebar.

I paid off the rest of my student loan, so that is gone forever! :) Anyway, $100 went to my Emergency Fund. I said I was going to put it off for a little bit, but I need to start stashing away cash so I can pay for my stupid dental work. $50 went into my RRSP and $125 into my Condo Down Payment fund. I also paid off $665 of my line of credit.

I can finally see the light at the end of the tunnel. I know that my debt wasn't as bad as a lot of other people's, and I should be grateful that I only ended up with $14k in student loans ... but spending and personal finance in general have never been my strong point. I was one of those people who wouldn't even open bills when I received them. I just threw them out. Before I started this blog, I had just finished paying off my credit cards (which I always carried a balance on), and I was even sent to collections once for unpaid parking tickets! That was really embarrassing. Anyway, hopefully with this blog, and this new PF blogging community I've found, I'll be able to keep up and achieve the goals I've set out for myself!

Got my quarterly GST cheque today for $74.45! I also qualify to receive it again this fiscal year, except I'm not sure how much it'll be. I'll deposit it on Friday when I get paid, and it'll go straight towards my debt.

I subscribe to a ton of PF blogs, and lately a lot of them have been talking about debt reduction strategy and student loans. Most of my friends are paying either the minimum or slightly above minimum payments. A lot of finance books are also talk about not paying much more than minimum towards student loans, and I wonder why. They say it's because it's a low interest loan, and you would be better off investing that money at a higher return.

I'm not sure how I feel about this. I've always thought that any debt is bad debt, whether it's credit card, student loans, a car loan, etc. My student loans have a 9.5% interest rate, and that's practically the same for every student in Canada, I would imagine. Is that considered a low interest loan? To me, it's highway robbery! For a while, I was paying $2 a day in interest!

Anyway, reading all of this has gotten me doubting my debt payoff strategy again, and it's not like I can just take back all the money I've paid towards my loans. It makes me nervous that while I'm pouring every last cent into my student loans, the next person is paying the minimum, but socking away all that extra cash into investments, emergency funds, etc.

I know everyone has their own way of paying off debt, but it still makes me stop and think about if I'm making the right choices. I wish there was one solid set of rules that everyone followed regarding finances. That way, if you deviated from the rules, you knew you were screwing up. But I guess that's just not how life works! :)

I just got my tax refund today, so I updated the sidebar. I put the entire $1300 towards my student loans, and now I'm at 97% paid off!! HOORAH!!! Next Friday, they'll be gone forever!!!

I got paid today, so I updated the sidebar! $1,000 towards my student loan, $25 to my condo down payment fund (almost not even worth contributing, but at least it's something), and $50 into my RRSP. The Emergency Fund won't get much love for a while, but I'm not that concerned. I don't foresee any major emergency that could cost me over $500 anyway. Plus, it'll only be for a month or so until I'm completely out of debt. I also paid $150 rent, and $35 for a new field hockey skirt that my team ordered.

My boyfriend and I live in a basement suite that my parents rent out. I lived here rent-free while going to college though. Our total rent is $500 (all utilities included), and since my parents own it, I pay significantly less than market value for rent. So does the BF, but I still pay way less than him. Suites in a college town like this usually go for at least $800-$1,000/mo. It's a pretty sweet deal. 1100 sq/ft, with in-suite laundry, and 2 bedrooms (one is converted into our gym). The only deal is I've gotta be out when I turn 25. My birthday is in October, but my contract runs out at this job in November. So my parents decided I can stay until I've found another job. Since I am looking to move to Edmonton after this job is over, it would be very hard to find a place that would let me move in on a month-to-month basis.

Anyway, it's the end of the month, so it's time to take a look at the monthly goals I set for myself!

March Goals (end of month review):

• Talk to potential client for my graphic design business, and get a contract signed. She definitely wants to go with me as her web designer, but she is still getting herself (and her budget) finalized. She wants to make sure she has the money to pay me before I start doing any work. It's taking forever to get this finalized, so it's a good thing this is my side job, and I'm not counting on the income. It's just a pain because I've turned down a few potential contracts b/c I thought I'd be working for this woman by now.
  
• Take on a 3rd job that will yield 10-15 hrs/month or less. I'm honestly not sure if I want to take on the 3rd job. It doesn't pay well, so is it really worth my time? I'm already busy practically every night of the week. I don't think I'll pursue this goal any further unless I start to have some free time. Because really, I already work up to 50 hrs/week, not including my design business.
  
• $2,000 towards my line of credit. I put $900 towards it, which is still pretty good. But since I've revised my goals a bit in order to pay off my student loans faster, this debt will have to sit as is.
• $1,000 towards my student loans. $2,000 towards it! Only $1700 remaining!
• $150 towards RRSP. Done!
• $75 towards Condo Down Payment fund. I'm happy to report I've contributed $200!
• $300 into my Emergency Fund. I was only able to contribute $200.

All in all, I'd say it was a pretty successful month. I spent more than I wanted to, what with my dental surgery costing me $200, 2 birthday presents, and my accountant's fee of $95 for doing my taxes.

That little bit of student loan debt has been driving me INSANE. So to stop me from going crazy, here's what I propose to do over the next 2 weeks:

I currently owe approximately $2,700.

• This Friday is pay day, so I'll pay $1,000.
  
• I'll throw in my entire tax refund of $1,300.
• April 13th pay day, I'll pay the balance off of around $400!!!

So that means it will have taken me one year to get rid of that dumb student loan debt. One year on the dot, as a matter of fact. The seemingly unbelievable goal will be obtained! I can't believe it! WAHOO!!!

I will now be completely debt-free by the end of May! :)

I was thinking yesterday, is it a smart move to pay off my debts as fast as I can? Should I be saving more aggressively for my condo down payment?

Every pay cheque, after taxes, I make around $1,500. Currently $1,000 goes towards my debt, $50 goes towards my RRSP, and whatever is left goes towards my condo down payment fund after I've paid off all my bills and expenses. My plan is to put at least that $2000/month into my condo fund as soon as I finish paying off my debts. But, it occurred to me yesterday - is this the smartest idea? Since I want to buy in about a year (and I need to be out of my current place by this time next year), should I be saving up as much as possible now? If I stick to my plan, by this time next year, I will have saved $20,000. That' s a lot to save in just one year!

The biggest reason why I've been paying off my debt as aggressively as I have been, is because I hate paying interest. HATE it. And I hate the fact that I'm in debt, and my net worth in Quicken is still in the red. But maybe it's better to pay a little interest, and stay in debt a little longer in order to secure my short-term goal of buying a condo.

My friend who's a mortgage broker told me to get rid of all my debts as fast as I can, and then build up a down payment. He said it's easier to get approved for a mortgage with a smaller down payment and no debt, than with a larger down payment and a little debt. Is that true? Because if it isn't, then I've been doing this whole debt reduction thing backwards from the beginning. Over the past 8 months, I've put $12,000 towards my debt. If I just paid a little over the minimum payments to my student loans, I could have saved up $10,000 of that money by now. And if that's what I should have been doing all along, then I think I'm going to have to go throw up a little.

Well, it's not a big change b/c I don't have a lot of money left over from Friday's paycheque (I already put $1,000 towards my student loans), but I managed to put an extra $50 into my condo down payment fund, and $200 towards my line of credit. That'll stretch me thin until next Friday, but since I'm getting surgery done tomorrow, I'll be stuck in the house for at least 4 days. I have $50 left in the chequing account, and I'm sure that's more than enough to last me. In fact, I'm positive.

Last night, the BF and I went to watch Happy Feet at the IMAX. For Christmas, he bought us both an annual membership to IMAX for $45 each. To see a movie without a membership is about $15, so it's a pretty good deal. Anyway, whoever's seen Happy Feet before knows how ridiculously cute it is. Too bad the BF didn't like it (his idea of a good movie involves lots of violence, helicopters, and guns), but what did he expect? I told him it was an animated movie about a dancing penguin, so he knew what he was getting himself into when he took me to see it!

Also, I hate how my sidebar looks in Internet Explorer. I use Firefox at home, and the status bars look perfect and nice, but when I get to work and look at it through IE, it looks like someone crapped all over it. And I know it's due to my poor coding, but to be honest I'm just too lazy to fix it. So I guess it'll stay ugly like that until I can get the % amount high enough in the bars to accomodate the actual number. Some website developer I am!

Well, there goes my dream of getting a free computer. The transaction finally posted to my Visa, which is making me pretty depressed. Just when I was less than $3k in debt, I had to go and double it. I don't regret the purchase, because I know I'm going to love it, but still. At least on a positive note, by May 25th at the latest, I should be completely 100% out of consumer and student loan debt. So the computer basically added on 6 weeks more of living with debt, and when I think about it that way, it's not so bad after all! :)

I met some really important deadlines at work today, which I've been stressing out about for the past few weeks. To congratulate myself, I went shopping online. Well, not really. I didn't buy anything, I just lusted after things. Clothes, mostly ... but also funky accessories, and home items I'll never be able to afford. Browsing online was probably the worst thing in the world I could have done for myself, because I love shopping. So to calm myself down, you know what I did? I logged onto my city's public library site, and put Shopaholic & Baby and Save Karyn on hold. Normally, I would have just popped down to Chapters and bought myself both books, but I saved myself a ton of money and will borrow them instead. Even though I'm hold number 196 of 196 for the Shopaholic book, and they haven't even gotten any in circulation yet since it just got released. Sigh.

After I finished torturing myself by pretend-shopping online, I went pretend house-hunting online instead, and hit up my favourite real estate sites, MLS.ca and comfree.com. Most of the homes in my price range are ugly and dated, or super small and cramped. But there are some gems out there. I am really looking for a chic loft in the city, or a condo/townhouse in the suburbs that isn't completed dated. At this point in my life (while I'm young and just starting out), I think the city loft sounds more appealing, but most of them are so small (500 sq. ft or less). I guess you have to sacrifice space to get city living.

Recently, a few people have asked me how the heck I've been able to decrease my student loan debt in such a short period of time ... so I figure I'd blog about it instead. :)

My goal from the moment I first took out a student loan was to pay everything back one year after graduating. I heard stories of people taking 15 or 20 years to pay it all off, and I did not want that weight on my shoulders, even though I knew it was "good debt."

I didn't actually start paying off my student loans until July 2006, when I got my first pay cheque from my first job after graduating. I had 3 loans: a student line of credit (approx. $7,000), a provincial student loan (approx. $2,000), and a federal student loan ($5,000).

My full-time job paid me approximately $2,100 monthly after tax. But from Sept-April every year, I have a part-time job which yields probably about $200-250/month. Not a lot, but every little bit counts. I decided to put at least $1,200 of my income towards my debt every single month, sometimes more. After rent, groceries, RRSP contribution, putting money into savings, and other miscellaneous things, that didn't leave me with too much left over, but I was okay with that.

In October, I decide my full-time job needed a huge upgrade, so I started applying for other positions. Miraculously, I landed a job I really didn't have the educational qualifications for (I had the skill-set they were looking for, at least), and at a much higher salary. So now, I was making over $3,000 after tax each month (crappy higher tax bracket!) ... since November, I've been putting $2,000 or more towards my debt every month ($1,000 bi-weekly).

When I've told my story to other people, they seem to think I'm some crazy budgeting queen who must have to sacrifice every last penny in order to make it work. But I haven't. I enjoy Quicken as much as the next person, but I'm not psycho about it. Since I was a student for so long, and working a part-time job that only gave me $200/month, it's not like it was a huge life change I had to make. I went from going to school full-time and having a part-time job, to going to work full-time and having a part-time job. I guess I just never got out of poor-student mode, which is good for me, because once I finish paying off my debt, I'll have an extra $2,000 worth of income every month I can stash away for a down payment for my condo. And that's income I never really utilized to begin with, so it's not like I'll be missing it.

I didn't receive any monetary "gifts" or anything like that, and it's not like I'm making a ridiculous amount of money either. It was good ol' fashion budgeting, and the determination to meet the deadline I had set for myself. So there you have it! The story of my student loan debt. I only have a little ways more before it's out of my life forever! Let the countdown begin!

I got paid today (hoorah!), so I updated my totals on the sidebar. You might notice that my line of credit is still sitting at 0% paid off. I put my new computer purchase of $3,152 onto my Visa card last week, with the intention of paying it all off with my line of credit. However, the transaction has yet to post to my Visa, so it leaves me in financial limbo at the moment. As soon as it posts, I'll transfer the entire balance over. But since it hasn't for this pay cheque, I'm not going to make a huge payment to my LOC, which currently has a zero balance. So instead, I put $1,000 towards my student loan debt, and now it's over 80% paid off! w00t! In 2 weeks when I get paid again, I'll make up for it by putting $1,000 towards the line of credit debt.

My direct transfer contributions to my RRSP and my Condo Down Payment fund will happen tonight, so I"ll post the updated numbers tomorrow. Hopefully the TSX isn't such a bitch today.

I just found out that a good friend of mine got fired yesterday from basically her dream job. I don't really know the details, but we both graduated from the same program together last year, and she's an amazing graphic designer (a million times better than me).

Anyway, it got me to thinking: if I lost my job right now, today, I'd be fvcked. Royally. I have less than $400 in my emergency fund, and debts still looming over my head. I need to pick it up, because I know I've been slacking at work the past month or so. It's not that I'm being lazy about it, it's just that I think I'm still in a little over my head, know what I mean? I've found it really overwhelming to be SO busy all the time, with 5 or 6 coordinators pulling at me, all wanting different things, managing a huge budget ... I got hired because of my graphic design skill, and nothing else (even though my design skills are mediocre at best) ... and to try and learn all these new skills on the job, well, it's been an eye-opening experience to say the least! But I'm so grateful to have gotten this opportunity, and I'm going to take the most out of these next 8 months.

Also, this morning I checked my mutual funds online, and because of the lovely Chinese stock market, my porfolio fell over 2%! I checked the TSX this morning when I got to work, and to my horror, it was already down 300 points! But I just checked it now, and it's still down, but only by 45 points. What sucks is I have both my registered RSP and non-registered MF accounts in the same fund. They're still higher than they were at the beginning of 2007, but it's still a huge jolt to have them drop so much in one day.

Well, not quite. Yesterday, an hour before I launched this website I dropped just over $3,000 on a new 24" iMac computer. Let me be the first to admit that 1) I did not need to get an iMac, and 2) I did not need to load it up with a ton of add-ons. That being said, I'm considering it an investment in my graphic design business. Let's face it, working on a crappy Seanix PC laptop just wasn't cutting it anymore. Plus, if it's any consoloation, it's tax deductible. I know I shouldn't have to justify splurging a little lot. What's done is done, and I'm very happy with my purchase. I should get it in the next week or so, and I'l be sure to post pictures. :)

Let me start off by saying that I am by no means a financial expert. In fact, I hardly know anything about investing. Up until a year ago, I was living paycheque to paycheque, up to my eyeballs in debt. Some months, I could barely make ends meet. It was horrifying and embarrassing. I made some dumb mistakes when I was younger (including lending money to a significant other, who obviously never paid me back), and I am determined to make up for lost time. Just thinking about all the money I've wasted over the years makes me sick to my stomach. I think a lot of my friends think I'm "money-obsessed" these days, and think I'm too wound up in it all. Maybe I am, but maybe I'm okay with that. I want to have the financial freedom to do anything I want to do, and that is my ultimate goal.

My job. I currently have one full-time job @ 35hrs/week, and one part-time job that gives me approximately 20-35 hrs/month. Combined, I gross about $4000/month, and actually net around $3000/month. That's a decent salary for someone my age, and with my education. That's also not including any graphic design contract work I receive.

After fixed expenses such as my cell phone bill, rent, groceries, RRSP contributions, and Mutual Fund contributions, I am able to put $2000 towards my debt. Any money left over at the end of the month gets put into my emergency fund. As I write this, I'm carrying about $6,500 worth of debt. Because March is a 3-paycheque month, I'll be able to put away a little more. Hopefully.

March 2007 Goals:

• Sit down with a potential client for my graphic design business, and get a contract signed
• Take on a 3rd job that will yield 10-15 hrs/month or less
• $2,000 towards my line of credit
• $1,000 towards my student loans
• $150 towards RRSP
• $75 towards Condo Down Payment
• $300 into my Emergency Fund

How I got into debt ... and out of it

In May 2006, I graduated college owing over $20k in student loans and credit card debt. I had absolutely nothing saved, and I was living with my parents. I was 23 years old, and it was downright depressing.

What did I spend my money on? Well $14k of my debt was my student loans, and I had maxed out my credit cards on stupid things like clothes, concert tickets, trips, etc. I was stressed out all the time, because I literally had no money to my name. I could barely make my minimum payments on my bills.

For the first few months after college, I was just getting by, making minimum wage working part-time at a drug store. As my classmates were starting to land their first jobs, I was receiving statements from collection agencies. It got to a point where I honestly couldn’t even afford my monthly prescriptions, and it was so humiliating having to ask my boyfriend at the time to lend me the money. He couldn't believe I didn't have $10 to my name in cash, or in credit. He was nice about it and lent me the money, but I know what he was thinking, and I felt awful. That’s when I knew I had to change. I want to become financially independent so I don't have to live my life relying on someone else to bail me out.

I needed a life change, and as scary as it sounded, I decided not to hide from my debt any longer. It was horrifying having to actually open up the bank statements that I’d usually just ignore (and throw away), and after carefully calculating how much I owed, I was in shock. I had no idea I owed so much, and I knew my first course of action was to make a budget and stick to it.

I had decided to move home in 2004 because I couldn't afford to keep my apartment, pay all the minimum balances on my cards, and go to school at the same time. It was a great decision, because instead of spending $650/month in rent plus utilities, I was only being charged $150 including utilities. Then there was my lack of a budget. I was regularly spending $100+/week in groceries for myself alone, and I was going out and partying with my friends every weekend. That had to stop. And let me tell you, it was really hard. My friends weren't as supportive as I had hoped they would be ... but I kept on with my new lifestyle. I became a coupon clipper, and only bought what was on sale. I also quit partying and found alternative ways to have fun for free.

My next course of action was to get a full-time job.

In June 2006, I landed an entry level job with a government agency. It wasn’t what I was trained to do, but it was a job. My take-home pay was about $2100/month, so I decided to earmark $1,000 of that income towards debt repayment. I opened up an RRSP, and started putting money into an Emergency Fund. I also started to save for a condo down payment. Each of those accounts got $50/month. It wasn’t a lot, but it was a start.

By October, I had eliminated my credit card debt and vowed never EVER to keep a balance on my cards again. There's nothing worse than those outrageous interest rates they charge!

So it was onto my student loans next. All $14k of it. That much money was intimidating as hell, and I knew I needed to adjust my priorities. So, I sold my car and bought a scooter. It was a little drastic, but drastic times called for drastic measures. Not only did my insurance drop from $80/month down to $15, but I only paid $5 to fill up my scooter every week. It was a great decision, and yes I missed my car (and it sucked having to ride in the pouring rain), but I knew it would be worth it in the end. I saw the BF with $450 car payments every month, and I was so glad I didn't have anything like that to deal with. I also implemented a very strict budget on myself. But that still wasn’t enough. I needed to do something more extreme – so I started applying for a new job.

Miraculously, in mid-November, I landed a great opportunity in my line of work with another organization. It was a one-year maternity leave position, and although it wasn't a permanent thing, it would give me the mid-level experience I needed within government. I also started a part-time job, and was able to step up my debt reduction to $2,000/month!

It was around this time that I really started counting my pennies. I literally threw every last cent I had at my debt. I kept within a $30/month dining out budget, and never let my groceries creep above $25/week for my share (I lived with my BF at the time, and we split the groceries evenly). I also learned little tips and tidbits on how to save money on the little things. I got a ton of heat from people about being too "extreme" about my budget and not having a life because they thought I was afraid to spend money ... I guess everyone has their own way of dealing with debt, but the way I saw it was: I got myself into debt, so I didn't deserve the niceties I was so used to spending on myself until I got myself out of debt. It seemed fair to me, anyway.

Throughout this process, I started reading personal finance (PF) blogs and articles online. I found it hard to relate to my friends in real life because they didn't seem concerned with personal finance or paying back their debts. They just didn't understand why I was so stuck on saving money, and often made fun of me for it. I was the "penny pincher" of the group, even though I didn't feel deprived of anything at all. So, needless to say, it was inspiring and uplifting to know there were other people like me out there who wanted to change their lives.

The PF blogosphere was so welcoming and inviting, and I felt so inspired through the actions of others that I decided to start my own little PF blog. It really helped me become accountable for my actions, and I quickly made online friends who were so encouraging and supportive. To this day, I still think creating my blog was one of the best decisions I’ve ever made.

On May 11th, 2007 I became debt free. What a wonderful feeling! I still can't believe it. Now, when I get my pay cheques, I don't owe money to anyone but myself, and it feels great! Not only did I eliminate my debt, but I have established a pathway to my future, and I know that my dream of financial independence is going to become a reality.