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.