On The Side

So it looks like I'll have a second roommate as of this weekend. This works just fine for me, as it means I'll have 2 people helping out with housing costs, and I won't have to worry about finding people to keep an eye on my house if I go out of town for a while.

Unfortunately that means I'll also have to pay taxes on that money. Bugger.

So, I've been trying to decide what the best way to handle that money is. I could use it to pay off debt and reduce my interest load, but then I'll have to pay taxes on it next spring and may not have the money handy. I could put it directly into RRSPs, which would negate the whole tax issue, but then the money is locked up until retirement. I could put it into my emergency savings account, but it will eventually hit a point where I'd have more in there than really necessary (I don't have anything against savings, I just have other pressing issues that need attention as well). I could invest it, but again I'd be taking a risk of it shrinking and not having the money available to pay taxes.

I could use more dilemmas like this more often. There really is no purely bad outcome here.

I honestly think I'm going to end up splitting the income. Half of the money will go into savings, and half of it will go onto my highest interest debt (the credit card). I'm going to double check, but I don't believe I have to pay 50% tax on rental income, so putting half in the savings account should more than cover me there. I'll probably bump the savings account goal up to $6000 so that I have both emergency savings and tax money. Once that target has been hit I'll divert the excess payments back to debt. Once the credit card is payed off, I'm going to put the money towards the line of credit.

I don't think I'll be able to pay off everything in a year, but hey, what's the harm in trying? ;)

We'll see where my life is sitting at that point. I'd like to pay back the new homebuyer's plan RRSP loan well before my 15 years is up, and I'd love to use up my unused contribution room on my RRSPs as well. At the same time, I want to take a good solid chunk out of my mortgage; I'd like the balance owing to be under $200,000 when it comes time to renew in little under 4 years.

Or maybe I'll sell my house and use the proceeds to start a tea shoppe :)

Realistically, planning this far in advance is a bit of a pipe dream, but it's a fun one. For all I know I could be back to no roommates next month trudging away at my little *cough* pile of debt.

Only time will tell.

In the mean time, I'm going to scope out some sources of side income to help tackle the pile. I'm thinking I might see if there is a need for math tutors here in town.

What do you all do for side/secondary income?

*and away...*

Okay, now for this month's slip ups.

I don't know how it is you girls (and guys) out there manage your all out shopping bans without slipping up at all. You have willpower of steel. I apparently have the willpower of a wifflebat.

On the upside however, even though there were a lot of red days last month, the spending itself was kept pretty low. Less than $100 for the entire month. This is the smallest total to date :)

Okay, as I mentioned a few days ago I was working outside for about a week this month. All things considered, it was reasonably nice out. It was about -8 out, perfectly acceptable March weather. Unfortunately, it was also a little windy, which makes things worse. I didn't have direct access to sunshine, and the landscape was shaped in such a way that the wind funneled itself to where we were working. Basically build a wind tunnel and put it inside a deep freezer, that's where I was working. I made it all of half an hour the first morning before I was shaking uncontrollably. Knowing that I'd be there the rest of the week, I went down to Mark's Workwear World and bought myself a big bag of those chemical warmers that you can stuff in your gloves, an insulated boot sole liner which I had to cut down to size (they don't make full liners or insulated rubber work boots in my size), a neck warmer, and a pair of fleece lined work gloves. I've worked in colder temperatures before, but I have never been as cold at work as I was that day.

Credit Card Damage: $46.71

The next day, rather than bringing cash from home, I put a hot lunch on my credit card. I've really got no excuses for this, I used it because it was convenient.
Credit Card Damage: $9.61

Back at Mark's Workwear World again. I had run out of those chemical warmers and needed some more to finish the job off. Again, I didn't have any cash on me.
Credit Card Damage: $7.52

My recurring habit that I know how to fix and just haven't. iTunes. This is sheer laziness. I bet if I took my credit card number off the site this one wouldn't happen anymore.
Credit Card Damage: $11.31

And finally, the last one to top off my month (which literally was the last day of the month) was lunch. As I mentioned yesterday, I haven't been brining my lunch to work. As such, I've pretty much run through my desk lunch supplies. My body has had it up to HERE with scones, bagels and other processed baked goods; my skin is beginning to show it; and I just don't feel good. Not cool. I had $3 in my coin purse, which would pretty much only get me those baked goods. So, I picked up lunch and put it on my debit card. So ticked off that it happened on the last day of the month.
Debit Card Damage: $11.50

That beings me to a grand total of  $86.65 worth of non-cash spending. It's better than February and March, but there is still lots of room for improvement.

On another positive note, I managed to write down all of my spending for the month of March as well :) I'm going to keep this up for now on, it's been very helpful.

Month End - March 2011

An interesting thing happened while I was at work yesterday. As those of you who were reading back in February know, I signed up for the Ride to Conquer Cancer, a 200km bike ride fundraising money for cancer research. I was in a meeting yesterday with my coworkers/coparticipants, working on fundraising ideas. The discussion of team jerseys came up, and their cost. A minimum order is 12 jerseys, and there aren't that many of us riding, so we'd each have to order 2 in order to get them. Their (discounted) price is $65 a piece, or $130 a person. All around the table was a chorus of "Oh, that's a lot of money", "I don't know if I have that kind of money right now", "I'm maxed out".


I'm impressed.


I'm not impressed that $130 is financially tight for most of us, but I'm impressed that they're willing to say that rather than just putting it on credit. Some of the other places I've worked you would be looked down upon for saying that, like you were being cheap. It's much easier when you're working with a group that is receptive to hearing your concerns.


So thank you PF community for being the receptive ear (eye?) for me to talk to about my financial worries. I really appreciate it.


Anyway, welcome to the March edition of how the financial ball is bouncing:

	31-Mar-10	28-Feb-11	31-Mar-11
Chequing	$116.66	$661.78	$166.51
Savings 1	$0.24	$0.26	$0.26
Savings 2	$100.00	$0.90	$0.90
Savings 3	$500.00	$0.07	$580.07
Investment	$2,189.67	$1,256.02	$1,362.91
TFSA	$0.00	$2,522.19	$2,514.04
RRSP 1	$1,525.96	$1,642.74	$1,649.01
RRSP 2	$3,868.08	$4,038.05	$4,027.81
RRSP 3	$0.00	$667.42	$889.90
ASSETS	$8,300.61	$10,789.43	$11,191.41
Car Loan	($13,138.27)	($9,034.03)	($8,665.84)
LOC	($10,000.00)	($11,000.00)	($10,950.00)
Credit Card	($5,155.65)	($4,301.76)	($4,030.33)
DEBTS	($28,293.92)	($24,335.79)	($23,646.17)
Net Worth	($19,993.31)	($13,546.36)	($12,454.76)

One thing you might notice is that my starting tally is officially 1 year old today. In that time frame I've improved my net worth by little over $7500. It seems like a bit of a measly sum for a year's worth of work, but it's also because my net worth went down further last year before it started coming back up. I've got a set of posts mostly written for next week explaining how/why I got into debt in the first place. To be completely honest, it was stressful writing them, and quite embarrassing. It will probably turn into a 3 post set, because I'm thinking I want to talk about what I learned as a result of it.


Anyway, the big winner in the account department last month was my Emergency Savings account which went from $0.07, to $580.07. It could have been sitting at $800, but I decided at the last minute to put some extra money towards my credit card. I didn't follow the game plan I set out last month to a T, but it's still a move in a positive direction. *shovels money*


It feels good knowing I've at least gotten somewhere in the last year.

Banging My Head On A Table

I made what is quite possibly the most bone headed move I've made in QUITE a while.

I was late on a credit card payment.

Actually, scrap that, I was early on a credit card payment.

I made a payment thinking it would be going towards my March bill, but I didn't pay attention to the date on my billing cycle. The payment actually got posted onto my February bill, leaving my second March payment short of what I actually owed.

I'm kicking myself so hard right now, you have no idea. I've never done this before. Short of racking up my credit card balance, this is the stupidest thing I've ever done with it.

The only reason I noticed anything was wrong was the fact that my minimum payment jumped. It had been below $100 a month for a little while now, and my balance had been steadily decreasing, so when it jumped to $120 I looked at it with my head tilted to the side thinking wtf?

Then I saw the little note at the bottom:

Your account is one payment past due, which may result in account suspension. Please contact the account management centre at 1 888 XXX-XXXX to make payment arrangements.

You want to see my eyes bug out? That did it. I checked my bank records. I checked the credit card's payment history. Sure enough, it was all there, just not where I thought it would be.

I am absolutely livid with myself. This was nothing short of bone headed.

Let this be a lesson for everyone in knowing your payment due dates. Learn from me so you don't have to learn for yourself.

*head desk*

Foul Ball

I went into the bank last Thursday to take out my money for the next 2 weeks. I wish there were still bank machines that gave out $5 and $10 bills rather than just $20 and $50 bills, it would save me a trip in to the bank to talk to a teller. Furthermore, it would save me from the frequent credit product pitches that the bank likes to give.

This is a little chunk of my most recent discussion:

"I see you don't have our XXXXXX visa, would you be interested in signing up for one today?"

"No thank you, I already have a credit card"

"But this is an excellent card. If you do any travelling and rent a car with it, if you get in an accident the card covers the insurance for you"

"I understand that, but I'm not interested in another credit card"

"This card has a lot of other perks as well that you might be interested in"

Seriously, I just want $5 and $10 bills, leave me alone.

"What is the interest rate on it?"

"19.9%"

"That's too high"

"But if you pay the card off every month, you don't have to pay anything and the rate doesn't matter"

"It's more a matter of principle"

Okay, so right now it's not strictly a matter of principle, but in general it is. 19.9% is just greedy, especially when you contrast it with what they pay you in a savings account.

"We also have a low rate card you might be interested in. The rate on it is 11.9%, and the annual fee is only $20"

"My existing card is 12.9%, and I don't pay an annual fee on it"

*blank look*

"Which bank is that with?"

"XXXXXXXX"

"Oh. I'll have to leave a comment in the notes about that"

Seriously guys, I know you can see right on the screen that I have a fairly healthy chunk of debt with your bank, why push it?

Okay, chances are your supervisor is making you do it, but still.

It used to be hard to apply for credit. Now it's hard to avoid having it pushed on you. I just wanted small bills.

The more the banks push, the more I want to pay the debt off NOW so that I have less of a reason to deal with them. I know a lot of people who are getting pissed off at the banks right now over it. One guy told his bank that if they don't stop calling him and pestering him to sign up for things he's going to close all of his accounts and go elsewhere. One of the girls I hung out with this past weekend got a message on her answering machine from her bank saying it was very important she call them back. When she did, they tried to sign her up for a credit card. Seriously? Call me saying it's important if someone has tried to drain my accounts, not because I don't have one of your credit products.

Banks, if you're reading this, PISS OFF!

*slide*

And now, for last month's slips. Needless to say, it was a little rough for me this month, especially around the middle. I'm not going to beat around this one, I slipped into an old, very bad, habit this month. I used shopping to beat stress.

I seriously deserve a beat down for this one.

After what was the hardest day I've had at work in well over a year, I went shopping. I didn't use cash. I did set myself a limit, I wasn't allowed to spend any more than 50% of my extra payments this month. That way by the end of the month I was still digging myself out, it was just slower than anticipated. Still, it's a habit I need to break.

After reading on Hi That's My Bike that the jeans I had been after were on sale at Anthropologie, I trotted down there and picked a pair up. Originally almost $220, they were marked down to $80.  While I was there I noticed the sweater I had been fawning over the weeks leading up to Christmas was marked down to $40 from $120, so I picked up the last one in my size as well. Tack on a couple small gifts for people, and a tube of mascara to replace mine (it was time), and I was done. Part of what limited the shopping (other than the fact that the mall was closing), wasn't so much the fact that it would mean my debt would take longer to pay off, but the fact that I'd have to write about it on here. Let's face it, admitting to this stuff is embarassing. So, thank you all.
Credit Card Damage: $184.64

I love music. I know what I should do here is delete my credit card information off iTunes, go out and buy an iTunes gift card with cash, and then use that. As of yet I haven't done it. Chalk this up to laziness, I'll buy one next time I'm out getting groceries.
Credit Card Damage: $3.57

As many of you probably saw earlier in the month, I signed up for the Ride to Conquer Cancer. Unfortunately there was a sizable registration cost associated with signing up for it.

That's right, I paid money to raise money for someone else.

I don't feel too bad about the cost of the registration because they feed us and provide us with a place to sleep that weekend. I'm basically paying for a weekend out now rather than in June. They only took either credit card or cheque for the registration costs, and I didn't have any cheques on me, so it ended up going on my credit card. That's the problem with having your card number memorized, its still usable even when it's frozen in a block of ice. My only saving grace on that is that while I have the loooooong number on the front memorized, the short one on the back I don't. That means I usually can't use it online. I put extra money on my card the following payday, but it would have been nice if that money went towards paying the balance down rather than just maintaining it.
Credit Card Damage: $75

That's $263.21 in non-cash spending during the month of February.

*facepalm*

That sucks.

Amazingly enough though I didn't use my debit card all month, other than to take money out of the bank machine every payday. I did however write down and track my spending all month, which was one of my other goals for February. I'll post the results of that tomorrow :)

Wallet Worries

One of my friends has been having an absolutely brutal time over the last couple weeks. Every time something starts looking up, she gets side swiped by something else. The poor girl just can’t catch a break right now. The most recent thing to happen? Her wallet was stolen and the thieves racked up her credit cards before she realized it was missing.

What would you do if your wallet was stolen?

Hint: Your first response should not be to go out and buy a new wallet.

It occurred to me after she mentioned it this morning that I wasn't actually sure what to do if my wallet did get stolen. I knew I had to call the banks and the credit bureaus, but that's about it. So, I did a little digging.

I wish I could dig out of debt as fast as I can dig stuff up on google.

There was a decent stack of things to filter through on there. Everyone seems to have their own order of importance for what you should do first. One site that I did find particularly interesting though was a link from Service Canada, detailing the order of events they recommend you follow. Have you ever gone into a government building to apply for something, and after half an hour of waiting in line find out you don't have the necessary ID to actually do it? Kind of a piss off, and that's what I'd expect I'd be dealing with if my wallet was stolen. Service Canada breaks down the order you should reapply for your ID, so you don't get hung up on the "You need ID to get ID" issue. Kinda handy.

They don't really go into great detail on the financial items though. They mention at the very beginning that you should contact your banking institutions and credit card companies, along with contacting the police, but that's pretty much all they say. Nowhere do they mention that you should also contact the credit bureaus. There are 3 bureaus in the US, but in Canada we only have two: Equifax and Transunion. Why the 3rd company pulled out, I don't know.

The ugly part about having your wallet stolen is that whoever is holding your wallet is basically holding your identity. They not only have (some) access to your money and credit, they also probably have enough information to open new accounts in your name. Think about some of the more common security questions: What is your date of birth? (Drivers License, Health Care Card) What is your postal code? (Driver's License) What are the first/middle/last 3 digits of your social insurance number? (SIN Card). Immediately after calling my banks to have all of the cards frozen and reissued, I'd be calling the credit bureaus. You can have them put a fraud alert flag on your account so that they know to watch for suspect activity, and prevent new accounts from being opened. If the thieves do manage to open up accounts in your name, it will be much easier to argue the charges aren't yours because you've taken a proactive approach and they're aware of the situation.

Personally, I'd work in this order:

1. Call Banks - Have accounts frozen.
2. Call Credit Card Companies - Have cards frozen and reissued with a new numbers.
3. Call Credit Bureaus - Have Fraud Alert placed on account.
4. Contact Police - Go to the station and fill out a report.
5. Go to Bank - Get debit card reissued with a different card number and change your PIN.
6. Go to Government Building - Start the ID replacement process, it'll take a while.
7. Contact Utilities - Or anything else you have automatically billed to your credit card. They'll need to know what's up so that your bills don't bounce. See about getting an extension on paying the bills if you need to and let them know you'll update them with the new number as soon as you get it.
8. Check Credit Report - Wait a while and then contact the Credit Bureaus again to make sure nothing has been opened in your name.

You may do it in a different order, but that's how I'd do it personally. Fingers crossed I never have to deal with this as an adult (my wallet was stolen as a teen).

One things I've seen recommended a lot is keeping copies of your ID at home. I'm not sure whether or not this is actually useful in this case, seeing as last I checked most places won't accept a photocopy of your ID in place of actually having it. Has anyone else had to deal with this before? Do you know if the government will accept photo copies of ID? My gut feeling is no.

Has anyone had to do this before? If you had to do it again, what would you do differently?

Savings Decision

After giving it a little thought, I'm going to follow the advice that was given to me earlier this week. I'm going to put the debt reduction on hold (beyond minimum payments that is), and focus on building an emergency savings cushion. I'm going to save $4000 in cash to augment my investments. At their present value, that gives me little over $7500 that I can use in case of emergency if I absolutely have to. That gives me at minimum 3 months to work with. If I take in a renter, sell my car and get whatever job I can while looking for a permanent one it will last closer to 6 months. My freezer is already full, so I only have some dried staple stocking to do.

Once the $4000 is built up, I'm going to switch gears back to debt reduction again. As much as I'd love to have 6 months worth of cash savings, I don't want to be letting those balances sit and accumulate interest while I'm doing it. I'm building a cash reserve for the sake of liquidity, but it still makes more sense for me to pay off the debts before focusing on building up savings. Credit isn't supposed to be used as an emergency savings account, but building up a stash of cash to avoid paying interest on your debt while your debt balance sits there generating interest doesn't really make sense. Hence the savings limit.

*shifts gears*

Moving forward again.

Mmmmm Payday

I'm happy that since starting my cash only year I've been much less concerned about when payday actually occurs. While some of my envelopes tend to run out rather quickly (I'm looking at you Food and Entertainment), its soothing to know that I have cash sitting in the other envelopes for when I need something. It also feels like the 2 weeks between paydays go by much faster now. Rather than sitting impatiently waiting for the money to come in again (MUST SPEND MONEY! RAWR!!!), I'm a little more content. Scratch that, a lot more content.

That doesn't mean the internal shopping beast doesn't occasionally try to manifest itself, it's just that I'm getting a little better at beating it into submission.

Along with the lower spending comes higher debt payments :) I love dumping a decent size chunk of change onto the totals. I feel like I'm sticking it to the credit card companies every time I do it (not nice, no, but if it's keeping me going...). I've also gotten better at writing my spending down in my day planner! So far I'm up to date with my February mini goal. I'm not blogging the result of that weekly, though I plan to do it all in a more visual form at the end of the month. I know you like the visuals FB ;)

I'm also a little excited about this payday, because I have a new way to track my money now :) One of my friends read that I have problems writing things down, so we met for coffee and she showed me how she tracks hers. She also gave me one of her little note pads, which was/is SO appreciated (Thanks M!), and I plan to start using it today as soon as I take my cash out for the next 2 weeks :)

On a side note, apparently Tim Horton's is trying to rebrand some of their products again. Their danishes and croissants are now European Style danishes, and European Style croissants. Really? Last I checked they haven't changed at all. Yay marketing?

Anyway, that's it for today. I hope you're all doing great ;)

Interest Introspection

I was looking at my debt balances the other day, and thinking about how much I pay on them in interest every month. My credit card balance currently costs me about $55 a month in interest charges, while my line of credit costs me about $85 a month in interest charges. For a little while there I was thinking "maybe I should pay down the line of credit first, it's costing me more in interest." For a couple days now that's what I'd been thinking I'd do *shakes head*, but I sat down and gave it some thought in terms of investments this morning. The money I put towards paying off the credit card is like investing money and getting a 12.9% return, while putting money towards the line of credit is like getting an 8.52% return. Sure, I'll feel better watching the total interest I'm paying decrease every month, but it will decrease at a much slower rate than if I keep paying off my credit card first, and I'll end up paying more interest overall. If I had applied my slightly confused money sense to all of my debts I would have had myself paying off my mortgage before I paid off my credit card. Doesn't exactly make sense, does it?

Some days I wonder how I got myself into this mess. Then I have moments like these. Then I remember.

*facepalm*

Weekend Update

Sometimes I just feel like appreciating the little things going on in my life. This a quick blurb about some of the things that made me happy this weekend:

• I went on a first date. It went well. We'll be going on another this week :)
• I hung out with one girls from work. We've been trying to do something since September, but the timing has never worked out! We finally got a chance to hang out :)
• My credit card minimum payment is down below $100 for the first time in months.
• While I'm still a tad under the weather (turns out the cold/flu was actually a sinus infection. Boo that), I can actually breathe through my nose again :)
• We've had gorgeous weather! It's been +3 degrees here for the last couple days :)
• Breakfast cinnamon bun. Om nom nom :)
• I spent over an hour talking to my grandfather on Skype, and gave him a virtual house tour with my laptop. I love how he stays reasonably up to date with technology :)

You'll notice I'm quite enjoying using my smily face for punctuation :)

Anyway, I hope you all had great weekends as well. See you all in the blogosphere early Monday morning!

Points Points Points

Apparently my bank has a points program. I have 10,000 points. I have no idea what I did to earn these points, but apparently they're there. Maybe it was from opening an account? I have no idea, though apparently these points are redeemable for merchandise. Apparently if I upgrade my banking or sign up for a specific credit card I can get more of them.

I'm not going to.

Why? It would cost me money to do so, and they aren't offering a net benefit to me. Why would I sign up for a credit card with a 19.99% interest rate that charges $50+ a year just for the privilege of earning points that are worth pennies on the dollar? It doesn't make sense. It's like signing up for a cash back credit card that offers 1% cash back, then charges you $50 a year to use it. You'd have to charge $5000 a year on that card just to break even on it. Carry a small balance for a month and your cash back is wiped out. It just doesn't make sense.

Don't get me wrong, I'm happy to have the points. In fact, I'm going to cash in 9,000 of them for $75 worth of Starbucks gift cards that I can use when I go for coffee with my friends. The other 1,000 points are just going to sit there afterwards. I didn't do anything for them, they don't cost me anything to sit in the account, so why do I need to spend the account to zero? I don't. And I certainly don't need to "top up" my points just to use that last 1,000. Most of the rewards that are handed out by companies are little more than a way to entice us to spend more money we had no intentions of spending in the first place. Banks in particular are really good at it, as a credit card companies.

If the points are free and can improve my quality of life, awesome. I don't need to pay for them, thanks. I'd rather just save for an item in the catalogue myself.



Take Charge Now: A Woman's Guide to Personal and Family Finance
The Smart Cookies' Guide to Making More Dough and Getting Out of Debt
The Wealthy Barber: The Common Sense Guide to Successful Financial Planning

Someone Kick Me Now...

	31-Mar-10	31-Oct-10	30-Nov-10
Chequing	$116.66	$110.04	$5.35
Savings 1	$0.24	$0.26	$0.26
Savings 2	$100.00	$0.89	$0.90
Savings 3	$500.00	$70.07	$120.07
Investment	$2,189.67	$800.24	$931.24
TFSA	$0.00	$2,235.01	$2,322.60
RRSP 1	$1,525.96	$1,558.50	$1,551.30
RRSP 2	$3,868.08	$4,009.75	$3,985.44
ASSETS	$8,300.61	$8,784.76	$8,917.16
Car Loan	($13,138.27)	($10,629.89)	($10,272.45)
LOC	($10,000.00)	($10,820.00)	($11,745.00)
Credit Card	($5,155.65)	($5,591.72)	($5,174.07)
DEBTS	($28,293.92)	($27,041.61)	($27,191.52)
Net Worth	($19,993.31)	($18,256.85)	($18,274.36)

Well, I had met my goal of getting my credit card back below where it was in April. I had actually achieved it, then I caved and bought something online. *kick* Then I bought Christmas gifts on credit. *smaller kick* The problem with that was that I started telling myself that it was okay to spend on credit. Oh, it's just a little bit. I'll just pick up these groceries now rather than waiting. Should have waited. My progress changed by about $20 in the wrong direction, and it's not even December yet.

End of Month Sobriety Test

Am I drunk? Nope. But I kind of wish I was seeing as I'm looking at this.

	31-Mar-10	31-Oct-10
Chequing	$116.66	$110.04
Savings 1	$0.24	$0.26
Savings 2	$100.00	$0.89
Savings 3	$500.00	$70.07
Investment	$2,189.67	$800.24
TFSA	$0.00	$2,235.01
RRSP 1	$1,525.96	$1,558.50
RRSP 2	$3,868.08	$4,009.75
ASSETS	$8,300.61	$8,784.76
Car Loan	($13,138.27)	($10,629.89)
LOC	($10,000.00)	($10,820.00)
Credit Card	($5,155.65)	($5,591.72)
DEBTS	($28,293.92)	($27,041.61)
Net Worth	($19,993.31)	($18,256.85)

It isn't the worst month I've had. That distinction goes to the month of June this year. Both the assets and debts moved in the right direction this month, I just thought I had made a lot more progress than I apparently did. I think next month's goal is to get my credit card balance down below where it was back in March.