Post Christmas frenzy!

I hope it was a happy Christmas for all. I had a wonderful, if not totally crazy time. It was so busy, it went by like a blur. After it's all said and done, all I want to do is exhale. But for others, the day after Christmas is a day for shopping, deal hunting, and spending more money. Here in Canada, it's called Boxing Day (origins of said name are not quite known) and it's a statutory holiday for many, including banks, government agencies, post offices and some other businesses. But for retailers, the name of the game is SALES. So the after Christmas sales are designed to entice people who have just spent their buns off for months to reach into their pocketbooks and spend yet AGAIN, this time not for gift giving, but simply because the deal is irresistible. Here where I live, people braved subzero temperatures to stand in line for 3 hours at a major electronics retailer to buy televisions, DVD players, laptop computers and assorted accessories at major discounts. At another local lingerie retailer, I was told the manager had to CLOSE THE DOORS of the shop, as the lines had snaked right around the store, and the staff could not handle the bargain shopping crowds.

For many it's fun, it's a big score, it's part of the holiday season. I personally loathe the post-holiday sales. I am so sick of shopping after December 24th, that I barely darken the door of any stores for the next month, except the essential ones (grocery stores and pharmacies). Part of my issue is that I am tired of the constant unyielding advertising and I just don't care to even peruse the flyers, no matter how promising the deals may be. Another issue is that I am usually cash strapped after Christmas (this year is much the same) and I am not going to run up my credit card, regardless of the discounts. (If you can't afford it, you can't afford it! That's the truth!) The last part of the problem for me is that I work in retail, so I am exposed to Christmas advertising from November 1st until the 25th of December, and by that time I am pretty sick of the whole thing. But mostly I just want stay home with my family, enjoy the gifts I received for Christmas (which I love) and just leave the whole retail therapy thing alone for awhile. Exhale.

Charting a Course

So it has been awhile, I inadvertently took a break from blogging. Life has been at work throwing me lots of punches, and I have spent a lot of time ducking!  A monster winter snow storm here, our region thrown into weather chaos, marathon hours at work, a sick child, Christmas preparations gone wild, and there are not many hours left in a day. Each night, I go to sleep thinking of what I would be writing if I was sitting at my computer, but I quickly drift off into sleep before I ever get started.

I have spent a lot of time reflecting, trying to understand what it is that motivated me to start writing in the first place. Why am I writing this blog, and how can my contributions be meaningful to any potential readers? I have spent a lot of time over the past weeks reading some high impact blogs, and taking lessons from these writers (including my blogging buddy John Paul). It struck me that I need to focus my writing a bit more. There are an abundance of blogs on personal finance out there, and I need to make my voice unique. My background is not in personal finance, it is simply a field I have gravitated toward as I have become a working professional.  My university degrees are in the life sciences, and in psychology, so I am not going to fool anyone with my expertise on retirement planning or following the stock markets. So I have been thinking that I will continue documenting my personal finance journey (the reason I started to begin with) and also talk about some of the psychological aspects of spending, saving, shopping and acquiring debt. We will see how this process goes. The content may still evolve as we go along, and that's ok too. It's just good to be out there, reading, writing, editing, creating, learning, socializing and networking. A welcome diversion from my professional working life!

Update

New post coming soon!! Total holiday meltdown mode...working, shopping, card writing, baking, wrapping, bill paying, the whole deal! Not many minutes left in the day. I have several ideas percolating in the old cranium, shall be putting pen to paper (figuratively) tomorrow.

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Blog Post: Personal wealth vs. security

Personal finance: wealth vs. security

Why am I trying to fix my financial situation? Why does anyone try to improve their finances? Talk to two people, and you may get two different answers. Each person has his/her own motivation, a reason to reflect, change, remedy. For me, my goal is financial security, and not necessarily personal wealth. It's a philosophy which resonates with me, and may not matter to others. However, I am not a person who covets many possessions, and so accumulating piles of cash and luxury goods is not a priority. The reason for my current fixation on personal finance is to try and achieve financial security or "financial peace" (once again, thanks to Dave Ramsey for this concept!) I truly believe that trying to minimize (eliminate!) our debts, reduce our expenses, and live below our means will lead to a sense of greater familial security and inner peace. That's what it's really all about for me. Just to have the freedom to NOT worry about how to pay the bills each month, and instead focus on what is truly important, my family and friends. That's the real deal.

Perseverance: in finances, as in life

I have to say straight off that I am, by nature, a person who aims to achieve in a decently respectable way. (not exactly an overachiever, but I try!) There are not many domains in which I am what you call "talented" but those things that I think I do well, I try to excel. Not always have I excelled, but I really try to push myself, and by nature I am somewhat competitive. (not outwardly competitive, but man, I am keeping tabs on the score!)

 So when I decide to embark on a project, I am full of enthusiasm and vigor, eager to meet my goals. So it was with my decision to remedy my financial situation. I threw myself into reading and listening to the experts, and decided to make it my mission to get myself out of this mess. However, it is a big, deep hole I have dug for myself, and I currently have a little, tiny shovel. (Thanks to Dave Ramsey for this metaphor) It is quite easy to become discouraged, I have discovered. I would LOVE LOVE LOVE to see the numbers start to diminish, the debts start getting knocked out. But until a couple large debts are cleared in early 2012, it will be difficult to get much traction. So frustrating.


When I decided to started blogging, I wasn't quite sure what I was doing, but quickly came to enjoy the process. As each day passed, and I started familiarizing myself with what others were doing, I eagerly wanted to see my blog blossom. Well, it's still tough sledding. My numbers are still pretty low, only a couple dozen pageviews each day. My expectations are quite high, but the results are definitely not there yet. But as with any worthy challenge, perseverance is the key. No major accomplishment ever takes place without a lot of blood, sweat and tears. In the personal finance arena, it means resourcefulness, sacrifice, budgeting and patience. In my social media experiment, it means practice, practice, practice, networking, and never stop learning.

Winning at Finances: first hand account

I work in retail, and one of my clients was talking to me the other day about our rewards program. In this program, we offer points with each purchase, and when the consumer reaches a certain threshold, they can redeem the points as cash off their purchase. She was remarking how her point totals were not increasing radically. "Well, you know what it is?", she said, "I don't buy things I don't really need just to rack up more points". She added that she watches the sales carefully, and generally pays for her purchases with cash. "You know what?" she said later, "That's how I got to buy my beautiful car!". This 60-ish lady, of no great means, bought a 2011 Ford Edge (LOADED!) and paid for it primarily in cash. She was so proud of herself, and I was proud (and envious!) of her too. A truly great example of responsible financial living, and it allowed this middle class senior citizen to buy the tricked-out SUV she always wanted. AWESOME!

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Clutter--The Hurdle to be cleared on the way to Financial Health

I was up late last night watching Hoarders (whoa!) and I was just amazed at the damage caused by the clutter in one`s life. In this particular episode, the featured hoarder (Susan) had over 5000 dolls crammed in her house. The house was rendered unusable by the amount of clutter (primarily dolls). After the house was finally decluttered, the sale of the dolls yielded Susan over $1000. It really got me to thinking what role clutter takes in one`s life and how important it is to conquer it.
I have to admit that while I am not a hoarder (nowhere near it, actually), I certainly need a bit of help to get organized and clear my home of clutter. I came from a household where my late mother was habitually clean and organized and my father was fairly tidy himself. I tended toward being a bit less organized, and need frequent prodding to keep my room clean. When I moved away from home, and without any one to monitor my situation, I started becoming a bit cluttered and disorganized. The clutter had a detrimental effect on me, psychologically, spiritually and financially.

Fast forward to present. I am (finally) in a home I can call my own, with an office that my husband and I share. When we moved here, there was literally an avalanche of papers, magazines, documents and items clogging this area. It took nearly a whole weekend, and a huge bag of shredding later, the paperwork was reduced to a manageable level. My husband purchased two filing cabinets, and we proceeded to start putting things in labeled hanging files. And so this system has more or less worked (for him), I still am struggling with what I should keep, and what I should toss. But I clearly know that this has an impact on my financial health, and it's something I am definitely working to improve.

Why declutter?
1. The most obvious reason? You'll feel better, physically (less things around to accumulate dust, therefore cleaner air!), psychologically and spiritually. It is freeing, liberating, exhilarating to inhabit a space free of clutter and debris. You can clear your mind, breathe deeply, and enjoy the space you inhabit. You don't have to fret about where you are going to store a new purchase!

2. It has a truly detrimental effect on your financial well-being. What happens when you are dealing with a mound of papers stashed in some random corner? Bills get misplaced, and therefore get unpaid, or paid late, dinging your credit score in the process. Receipts which are needed for your yearly tax return are MIA resulting in an inaccurate (and potentially costly!) tax bill at the end of the year.

3. It's the vital first step in any good financial plan! You have to start by knowing what exactly your financial situation is--that means having pay stubs, credit card statements, banking statements, insurance invoices and other vital documents within arm's reach. Outlining a budget (an important first step towards managing expenses) requires that you know what money is going into and out of your bank account. All these statements need to readily available and accessible by you!

How the holiday season can snowball

I have written much about the need to plan for holiday spending. So far, I have felt fairly optimistic about how this holiday season is going. However, I am starting to feel the pressure a bit, and how my seasonal spending could possibly snowball. Everything has seemed fairly straightforward up to this point, but now I am starting to realize that there are some other gifts that I had not thought of before (e.g., my sons' teachers--all four of them, my sons' surrogate grandmother). I am also wondering whether I have bought enough for my husband...aaah, I am starting to feel the tug of the emotions playing into my spending patterns. Anytime emotions starting playing into the game, well-thought out plans go out the window. Should I buy more for this person? How much is my spouse spending on me? Should I spend as much on him/her? Am I going to look cheap if I buy just this one item? What's a person to do?

Plan, plan, plan!If ever there was a time when planning was crucial, it's the holiday season. Write out your list of people to buy for. If you are entertaining, write out a proposed menu, and what you will need to buy for the event. 


Budget thyself!What amount of money can you realistically afford to spend without stretching yourself too thin? Shopping with cash can help you keep within budget, if you are actually visiting bricks and mortar stores. Don't lean on the credit cards too much to help complete your lists. The post-holiday hangover has a nasty effect when those bills start rolling in.

Stay organized! Keep track of what you are buying. (this is especially important for people who shop all year) Periodically take out your gifts and separate them into piles, and see what you actually have. It's amazing how easy it is to forget what you have bought, then realize you have purchased too much for that special someone.

Take a deep breath. Try not to get caught up in overblown expectations. Realize that most of the cliches about gift giving are true. It's not what you buy, but the sentiment behind it. Keep in mind that a month from now, your special someone is not going to hate you because you didn't buy that one extra thing.

Planning for the 2011 Holiday Season

So we're (barely) keeping our heads above water this holiday season thanks to the use of rewards points to buy some Christmas gifts and a couple other fortunate circumstances (a small inheritance and having a 1 year old for whom I don't have to buy an airline ticket when we fly to the US for Christmas). However, as much I have been scrambling this holiday season trying to keep costs under control, it has made me think that I want to try and budget for next year starting immediately. Next year, my one year old son will be 2 years old, and he will no longer be able to fly free. So that means we will need approximately $1000 to fly our family of four to the US to visit my husband's family. That's a significant amount of money to spend each December, in addition to buying presents for everyone. However, because it's a predictable expense, it makes sense to try and set aside the money each month. So, to that end, I set up a high-interest savings account (HISA) with Ally. Ally's HISA has one of the highest interest rates (2.00% compounded daily) of the banks I researched. Most of the big banks offer just above 1%, and other online banks pay approximately 1.5%. I like the idea of the online banks mainly because it's a safe place to park your money as you are working towards a goal, and the money is not easily accessed (reduces temptation!).

The goal is to try and sock away approximately $100/monthly out of my regular pay cheques. It may or may not be feasible to put this money away each month. When my tax return comes in (May), I will try to put a chunk of cash ($500?) into the HISA to help me achieve my goal. Hopefully, this was greatly reduce the financial crunch next year, as our expenses and debt payments will continue be significant factors until February of 2012.

Another shopping mission: $200 cash

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November and December are busy months around here. My birthday, my husband's birthday, my brother's birthday, then Christmas equals a lot of gift buying and gift giving. I received $200 USD from  my family to spend on clothing that I needed for work. My wardrobe at work is work-casual, but I have been wearing the same clothes for more or less four years, and everything is starting to look worn. Plus, I have had 2 babies in those five years, and the clothes were starting to feel a bit tight (my personal fitness journey should be starting soon, but that's another story). So I was sort of compelled to get some clothes for work, and I had $200 to do it. The idea was to get functional clothes (as many as possible) for the money. Obviously, I wanted to spend as little as possible for each piece, but didn't want to cheap out too much, because with all the wear and tear, cheap clothes will wear out faster. (I work 40 hrs/week, and each piece gets washed every five days). So I went to the US to shop, mainly due to the lower prices for clothing there and also because the Canadian dollar is currently at par. I went to a mall, checked out a few department type stores (time being an issue!) and walked away with the following:
- two pairs of dress pants
- three semi-dressy tops, suitable for work and evening wear
- one pair of Nike running shoes
The running shoes are not exactly work-related, but my current pair was 6 years old, and I have been wanting to start walking/running soon, so a new pair that fit properly was something that I had hoped to find. The total for all items was $170, so I went out for lunch, and still came home with $20 USD in my wallet. Another good shopping mission accomplished! I feel empowered that I can go out there with cash in hand (NO CREDIT!), and stick to my shopping list. No impulse purchases!

Black Friday: Retail Bombardment

Even though I am not an American citizen, I am married to one, and so for that reason, we celebrate Thanksgiving twice, once in October and once in November. We also live close to the U.S. border, so it is hard not to notice Thanksgiving, and the crazy retail shopping holiday that is Black Friday. I already talked about Black Friday in a recent post, but I thought it beared repeating: the whole Black Friday phenomenon can be absolutely toxic to someone who has trouble controlling his/her spending. I am absolutely astounded at how much the media-overload seeps into your psyche. Over the last year, I feel like I have been so sure of my need to save and my aversion to spending money I didn't have seemed rock solid. But then the advertising-- print, online, television and radio-- began building a few weeks ago, and reached its crescendo this week. I could feel myself start to crumble, I started coveting all the things I could not afford. Every day a new bundle of flyers would appear in the mailbox, and I could not stop myself from eyeing all the sales. I have not buckled (yet), still resolute from my successful trip to Costco. But I can see how this environment causes people to overspend. Retailers know just what buttons to push in order to get cash-strapped, debt-burdened North Americans to spend money they do not have. It's a minefield out there!

Postscript: Happy to report I am over 200 pageviews for my blog. It may not seem like anything much, but it's a nice milestone for me. I started this blog not really knowing what I am doing (still don't really know!) but I am learning a little more each day, and I am glad to see some people are reading! 

Empty Pockets: Shopping mission: Accomplished!

Empty Pockets: Shopping mission: Accomplished!: "I began this week with my bank account perilously close to zero. I had precisely $200 left until payday (Friday). I had a few things to get ..."

Shopping mission: Accomplished!

I began this week with my bank account perilously close to zero. I had precisely $200 left until payday (Friday). I had a few things to get for our upcoming U.S. Thanksgiving celebration on Thursday. I made the decision to go to Costco to get some of these things. What I did was this: make a list, and withdraw the $200 cash and vow to exit that store with at least some of that money left.
Costco can be a real minefield for the cash strapped. When I first started shopping there, I used to blow $300-$400 each time, and rarely examined the costs too carefully. Now, I always go there with a list, and I am more diligent about checking the unit costs. My experience has showed me that while there are definitely some good deals at Costco, other things are not so differently priced as your average big box store. I also find that you have to be able to dodge the diversions, the things that they keep on the ends of the aisles which often turn out to be impulse purchases.
So I brought my list, my cash, and my Blackberry to do some quick calculations in the aisles. I felt a bit weird doing the calculator thing in the store, but it was a good idea! I found myself well under budget ($110) and was able to get a couple of the optional items on my list. Total cost: $180. I walked out with a measly $20 until payday, which still isn't great, but my shopping mission was accomplished.

Black Friday Frenzy

We`re coming upon another Thanksgiving week (for my U.S. friends and family). That means Black Friday is fast approaching, and the consumer frenzy is about to begin. I have to admit that I am a relative newbie when it comes to Black Friday.  When I started dating my husband, I quickly figured out how big a deal it is in the U.S. My stepson scours the Black Friday ads online starting a couple weeks before. Then, he gets up in the middle of the night (usually 2am) and gets in line at his preferred stores (often Best Buy and Walmart) and gets the door crasher type items. I must admit, I was kind of mystified by this annual shopping holiday. Here in Canada, we have no equivalent day. I have seen a couple retailers here and there try to emulate the Black Friday phenomenon, but it really has not caught on.
I must admit, looking at some of the advertisements, it really gets tempting. I have seen some really, really good deals, especially on toys and electronics equipment. It definitely makes me want to part with some of my hard-earned money, and I guess that`s really the point. Consumers need that temptation, that little push, to open up their wallets and spend some money on Christmas gifts. In a recession tinged  year such as 2010 this has never been more true. However, it also encourages me (and a lot of others, I suspect) to sink deeper into consumer debt. I can definitely imagine having that rush, scoring that one thing I wanted to buy for 50-70% off retail. However, that rush would soon turn to guilt, watching my credit card bills climb, something that I definitely don`t want to do this year. So I guess I will be sitting out Black Friday this year, sigh.

Financial purgatory

It's a tough spot to be in, this financial purgatory. We're in a bad spot, yes, as I have already documented. Could things get any worse for us? Well, yes, of course, one of us could lose a job, we'd lose our home, and we'd really hit rock bottom. That being said, the financial place we're at right now is kind of grim. The problem is that we're kind of stuck. Both of us are very cognizant of the peril we're in, and want to take steps to secure our situation, but there's just no wiggle room right now. We have pared down expenses as much as we can. Our money goes strictly to paying bills, mortgage, taxes, and child care. After that, we buy groceries, gas for the vehicles and clothes/supplies for the kids. Often we don't even have enough money to do the basics. We don't spend any extra money on ourselves, for clothes, entertainment and the like. As much as we would love to splurge once in awhile, we are committed to living within our means right now, and so there is no putting things on the credit card for the things we can't pay for.

It's so tough--I have the motivation, the drive, the will to dig myself out of debt, I simply lack the funds.
We have no excess cash at the end of each month, and will probably remain in this limbo until February 2012 when three major debts are paid off simultaneously. Then, we will able to go into attack mode, and throw major chunks of money at our various debts. Then, we will finally be able to see some progress. In the meantime, barring a lottery win, (right!) we will try to stay the course, and not get any further into debt.

"Mad" money

I have read several commentators talk about how to do a household budget, and quite a few talk about the concept of "mad" money, that is, having a small cash allowance built into the budget to do whatever. I think this is quite important. No matter how dire your situation is, and how much you are trimming expenses, it is necessary to be able to keep one's sanity and enjoy a tiny bit of whatever it is that makes you giddy. All this must be in moderation (and hopefully legal) and in keeping with one's own financial situation.

For me I keep about $20 in cash each week, mainly to feed my caffeine addiction. I have to bring a Tim Horton's large coffee to work, no matter what. It's not something I am willing to give up. I have heard people expostulate on the total cost of buying coffee in a shop versus brewing it at home, I know there is a cost involved, and I don't care. I truly don't have many vices, I don't smoke, I don't buy designer labels, I very rarely drink, etc. Buy I really truly love my coffee, and it doesn't seem like such a bad habit to have. (at least my vice is fairly cheap)

My other little vice is magazines. I love to read, and I don't have a lot of time with working full-time and caring for two young children to read novels, so magazines fit the bill. I have 3 subscriptions, each fairly inexpensive (total cost for all 3 each year might be $60), and in keeping with my "cheap vices" mandate. For about $5 monthly I get hours of enjoyment, and some quiet time to myself.

The quagmire of Christmas part 2

I was out running some errands today, and went into a book shop to get my brother a birthday gift, and into the Hallmark store to get him a birthday card. In both cases, the person ahead of me in the checkout line tried to pay for their purchase with a debit card, and in both cases the purchases were declined. Unbelievable, but true. So many times, I feel alone in this process, like no one understands how much it sucks being broke, and then something like this occurs, and suddenly I realize, there's a whole lotta folks just like me. We're all running on empty, trying to purchase yet another gift, with only the hint of a whiff of gas left in the tank.

Yesterday, I mentioned as part of my need to be thrifty this year, I purchased both my husband's Christmas gifts using rewards points. I also used rewards points to purchase a free photobook from Shutterfly (www.shutterfly.com). I plan on giving my Dad and stepmom a photobook of my oldest son's first year. Using rewards points is one way to try to minimize costs at Christmas. With the many types of rewards programs out there, there is certainly a wide range of gifts you could select.

Another aspect of my gift giving this year will be to give the gift of Christmas treats. I did this last year, and it turned out well. I'll make a few dozen cookies and bars, buy some decorative boxes and ribbons at the dollar store, and voila, instant personalized gift that most people will appreciate! It certainly didn't cost me much money, maybe $30 total on baking supplies, and $10 at the dollar store. A really smart Christmas idea for the cash strapped consumer!

The quagmire of Christmas

The holiday shopping season is once again in full gear! The stores are filled with glittering displays of beautiful merchandise. It is all so intoxicating. It's easy to see how we can so easily get sucked in by it. Retail outlets have their pulse on the consumer, knowing just how to merchandise their wares to get our attention, and open our wallets.
Unfortunately, for those of us in deep debt, Christmas is a tricky time. I am very nervous on how to get it all done, make all the purchases, meet everyone's expectations, and still keep my head above water. We made the decision a few years ago to forgo gift giving among the adults, and simply buy Christmas presents for the kids. It's all about keeping costs in line, and everyone seems to think it's a wise idea.
I have made my resolution to try as hard as I can to stay within my budget, and NOT use my credit cards to buy my presents. We'll see how this works. So far, so good. I made one major purchase online, paid with a credit card and paid it right off the next day. For my husband's gifts, I am buying him a new phone for his office using Air Miles (www.airmiles.ca) and a new Bauer electric razor with my Shoppers Optimum points (www.shoppersdrugmart.ca). So I feel good about that, he'll be receiving the things he really wants, and I found a way to do it without spending any money. It'll be more challenging buying all the kids' gifts, but I have done well so far, and no major debt has been incurred. I'll keep you posted on my progress.
 

The art of couponing

Ahhhh, coupons. They've become quite trendy with the recent economic downturn. Suddenly, economizing has become tres chic. There was once a time when it was almost shameful to use coupons in the grocery line. Like, somehow it indicated extreme thrift or poverty. Not anymore! Coupons are an essential tool in the smart shoppers wallet. It's money that you keep instead of spend. What could be better than that! The whole idea behind couponing is to use coupons wisely, for things you would buy anyway. 

Some tips:

1. Use your coupons for items that are already on sale! This is a great strategy. It's not always possible to do this, but for certain items (e.g., diapers) that go on sale frequently, it's a must! For example, at the store where I usually buy my diapers, the retail price for a jumbo pack of Huggies is $21.99. Using my Huggies coupons (I almost always have $2.00 or $3.00 coupons at all times for these), that brings the price down to $18.99 or $19.99. However, at least once every 2-3 weeks, Huggies go on sale for $14.99. A huge difference in cost $12.99 vs. $19.99.

2. Keep your coupons organized! My friend Pamela bought me a mini-accordion file that fits nicely in my purse. So I have files set up for food, kids items, hair care products, cleaning products, etc. It makes it much easier to find what you need when you are at the store.

3. Share with your friends. My friend Pamela and I often take out our files, and exchange coupons. We give each other our duplicates, or the coupons we no longer need.

4. Grab 'em at the grocery store! Often, grocery stores will have a pad of coupons for a particular item attached to the shelf. If it's a product you already use, grab a bunch of coupons, and stash them for future use. 

Where to find coupons:

I have a number of sources for good coupons.
www.save.ca  One of the best sites for coupons in Canada. You choose what you want, and the coupons arrive in your mailbox 3-4 business days later. 
www.webSaver.ca  Also a good site, not as great a selection as the previous site, but they conveniently are mailed to your home within 3-4 business days. 
www.brandsaver.ca  This site, operated by Proctor and Gamble, has a great selection of coupons for personal care items and cleaning products. Similar to the previous sites, you select what you want, then they mail the coupons to your home within 3-4 business days. 


There are many other sites out there offering great savings on goods or services. Be a savvy shopper and grab your coupons. Keep your money!

needs vs. wants

I think of the biggest eye openers for me of this process is diffentiating between needs and wants. It is amazing what you think you "need". Then, adversity strikes, your income dries up, and you have to decide what is absolutely necessary. I should preface this by saying that not everyone scales back their spending when their income dries up. Some people live in patent denial, and rack up credit card debt, compounding their problems even more. However, in my case, I have gone into survival mode. When the paycheque is dropped into the bank, the bills get paid. If there isn't enough money to pay all the bills on time, then the sequence (in order of importance) is usually: mortgage, electricity, car payment, gas bill, credit card bills, phone/satellite/internet bill, then cell phone bills. A bit of money is always set aside for groceries/personal care items and gas for the car. And then usually that's about it. I almost never have anything left over for anything like clothes, entertainment and the like. I make sure the kids are fed, they have clothes that fit, buy diapers/formula and that's about it. My husband and I have wardrobes that are beginning to look worn out, but at the moment it's not a need. I get down at times, feeling sorry for myself, bemoaning my old raggedy clothes, but really it has to be put into perspective. One only needs to turn on the news and see the situation in countries like Haiti, and then your own life looks pretty darn comfortable in comparison. We really don't need anything that badly.

Peer pressure

I got invited to this show, which I felt compelled to attend. It was a Christmas gala, put on by a local merchant, meant to showcase this shop's merchandise for the holiday season. I was very hesitant to attend, partly because it was not really my thing (I'd rather be home with my kids after a long day of working) and partly because I am totally broke this week and have not an extra dime to spend on anything. You go to these types of events (females primarily get invited) and you spend some time doing some token socializing, eating hors d'oeuvres and the like. But the primary reason for the fete is to hock some products (Pampered Chef, Tupperware, Fantasia, Partylite and many others). Generally these products are not items you really need. You feel compelled to buy because others around you are. There is also the element of not wanting to offend the host, who likely has extended to you the invite. So peer pressure has really got you between a rock and a hard place. I held firm, I didn`t buy anything tonight, and I felt incredibly awkward about it.

Lottery ticket

My friend Dana, after reading my last post,  sent me a birthday card with a lottery ticket in it (Cash for Life). Thanks Dane! Unfortunately, I did not win $1000 a week for life (or any other prize), so back to the tough stuff. But it was a nice thought! In one of the financial blogs I read, someone wrote ``a lottery ticket is not a financial plan`. True enough.

Needed: lottery ticket, preferably a winner.

I went to the bank yesterday, to speak with a personal banker about my current situation. I was positively terrified. I am carrying around this burden with me, and there is an incredible amount of shame attached to it. As she kept asking me to "show her the numbers", I felt a mixture of fear and relief. It was somewhat nice to be able to unburden myself of all these numbers and see them on paper, but I was scared of what this woman would think of me, and my situation.

So she crunches some numbers, and looks at me soberly, and says, "You need to win the lottery."

No, really. That was seriously what she said. I was like, "Oh, crap, it really is that bad".

Alright, so yes, it is what it is. A bad place to be. But also confirmation that YES I am indeed at the bottom. I have to take a deep breath each day, and try to remain focused on what I need to do, however impossible the task may seem.

The critical time

There comes a time in everyone's life where one crucial decision causes a cascade of intended and unintended consequences. Our decision to build our home was one such decision. It was my husband's dream, something he had always envisioned doing. In fact, he had helped his best friend build his own dream home, so it was a plan that seemed certain to come to fruition.

The temptation here is to share every last gory detail of our home building odyssey. However, I should condense it down to the essential points. We bought a piece of land for more than we should have paid. We decided to build a house without a general contractor (i.e., my husband did the contracting) thinking that we could have the home we wanted for much less than we would normally have paid otherwise. Along the way, we hit many, many roadblocks. Costs spiralled out of control, money slid through our fingers, and long story short, we have a (mostly) finished house which is beautiful, but has drained us financially.

So what to do? The housing marketing takes a dive. Suddenly, we are "upside down", so even if we could sell our home (which we definitely don't want to do) we would not be able to recoup our costs, much less make a profit.

We're here, in this big, beautiful home, and commited to making it work. However, the flip side of this is that we're house poor. Which is essentially how I got to where I am now, and why I am consumed with trying to find my way out of this pit of debt and getting my head above water so we can actually enjoy our lives, instead of trying to make our paycheques last until the end of the month.

Thanksgiving 2010

I said that I would finish my story, how I got to this place. So, backtrack to the years 2000-2002 and I am making pretty decent coin, saving a bit, bought a condo, and then the bills started to climb. The savings remained steady at about $600/monthly. But, I also got a home equity line of credit to cope with all the expenses of owning a condo that wasn't new. So I had a couple credit cards, a line of credit, student loan debt, and a mortgage. Not earth shattering stuff, but a fair amount of debt to be sure.

In 2003, I met my significant other. Ours was a long distance courtship, so we travelled a fair bit (i.e. air travel) to see each other, and also racked up some big phone bills. By 2005, we married, and then the bills (and debt) really started to climb. We still had to cope with travel costs (travelling by air to visit families in another country). Then, right after getting married, I got pregnant with my first child. An expected pregnancy, but we were delighted to be having a child. However, I had not saved even one penny towards a maternity leave. During my pregnancy, I was faced with my spouse still living in another country (immigration issues not ironed out), caring for my dying mother, and finally the death of my beloved mother in my 7th month of the pregnancy. It is not surprising that I did not save any money during this time. My attention was completely focused on survival (my baby's, my mother).

My son was born in 2006, and my goal was to stay home with him for 6 months. My employer provided me with 17 weeks maternity benefits, during which I would collect 75% of my previous years' wages. I also could collect unemployment insurance during this time. However, all these benefits were deferred, meaning it took almost 2 months after the birth before I could start collecting. In the meantime, I still had to figure out how to pay the mortgage, utilities, student loan, property taxes, car insurance etc. Hence, the line of credit started to get used once again.

This is still not the whole story. I thought I could compose it more quickly than this, but I guess it's more complicated than I first thought.

More to follow on another day.

Happy thanksgiving. I am blessed and thankful for my wonderful family, my home ($$$) and my job that I still have, and my friends. Despite my mountain of debt, there are still lots of blessings in my life.

How did I even get to this place?

Sometimes, I think the first step towards recovery is to analyze how you got to the place where you are. That applies to many things that we would label as problematic, like addiction, divorce, unemployment and yes, debt. I think it's critical to be able to understand the behaviours which landed me in this place.

First off, my parents both came from rather humble beginnings. My mother immigrated here from Europe after the Second World War, and her life here in Canada as a young child, was, well, pretty humble. My dad came from a working class family of 8, so there was a little bit of money coming in, but lots of mouths to feed. They got married, both with decent jobs, but they started at the bottom of the pay scale. Gradually, over time, they improved their lives, and we were well taken care of as children, but middle class all the way.

I entered university, and my parents agreed to pay for my degree. Unfortunately, after graduation, I had no idea what to do with my life, so I proceeded to further my education sans
parental assistance. I racked up $35000 in student loans before graduating with 3 degrees at the age of 29. Thankfully, I had a great job waiting for me after all that education, but I also had the aforementioned student load debt, in addition to consumer (i.e. credit card) debt.

I went from being broke my entire student life, to making good coin. It was like a lightning bolt hit me. I started spending money like crazy. I did have the wherewithal to meet with a financial planner and get some retirement savings going. But I still managed to spend quite a bit of money.

After a few years, things settled down a bit, I was socking away $600 monthly into a retirement savings account, but I also purchased a condominium, so the bills started to climb. More on how I REALLY got into this mess in my next post.

Happy Labour Day

fallout of job insecurity

It has been awhile since I last blogged and in the meantime, my profession has undergone some massive funding cuts and more cuts are slated to come. At the moment, the cuts have not drastically affected my bottom line, which is good. I still am full-time (40 hrs/wk) and I am still able to get the odd bit of contract work, although the rates for contractors have gone down. My overall outlook is relatively unchanged. We are still have a boatload of consumer debt, which consumes much of my thoughts. I still have little money for any frivolous expenditures. So my current spending will continue to remain unchanged for the time being.

why blog

Why create a blog? What is the purpose of writing about my personal finance journey?
Unburdening.
It is a huge burden on my shoulders to have this financial mess. Each day, it is the first thing I think about. Each night, I toss and turn, crunching the numbers in my head, trying to figure out how to get through another month. I made the decision a long time ago to change my financial ways. For a long time, I have been penny pinching, scrimping, reusing, and forgoing major purchases. Yet I still feel so burdened. I want so badly to talk about what I'm going through, but finances are still a taboo topic in our society. No one talks about what they make, never mind how much they owe. It helps me enormously to write about it, telling whomever reads this how I got on this path, and what road I am taking to get back to a state of financial health.
I am on a conference call currently, listening to how my profession is going to cope with massive funding cuts. I am trying not to think what will happen to us if I lose my job.