The Nitty Gritty of The Debt

In March of this year I posted that Major Man and I had decided to do a little switcheroo with the money responsibilities. It was a little difficult for me to take, since I've always been the one in control. So it was a matter of letting go and trusting someone else. Something that should be easy with your husband, right?

Actually. Yes, it has been.

We've had a few bumps in the road but I wanted to tell you that we have gotten rid of $18,495 worth of debt. In four months.

I KNOW!

Part of that was selling my truck, which (despite the doom and gloom prognosis) sold for more than I owed on it. I've also had good luck with sales at the Day Job and Major Man has put most of his paycheques towards the debt.

Want to know how we did it? We just followed Gail Vaz-Oxlade's advice to the letter. She's one straight-talking lady!

Tips for living on a variable income

Wow, I can't believe I have survived financially without reading Gail Vaz-Oxlade's blog! She's the smarty mc smarterton behind "Til Debt Do Us Part".

Yesterday she offered this gem on her site:

Dealing with a Variable Income

Very important for those of us living on freelancing income. Now, you of course know that I have a Real Life Job, but I used to budget for a specific amount of freelance income and when I started writing fewer articles and focusing on books... the regular income dropped, but the spending level did not. Hence our new passion for being Frugal! and Clipping Coupons! and Sometimes Being Cheap!

The Debt Countdown

Hubby and I have started the big climb out of debt. Well, not that big, but big enough. Posted on the back of our front door is the Big Honking Debt Number which, thankfully, is less than a yearly salary. ;0)

I'm gathering up tools to help me on this crusade to be debt-free and one of those tools is a blog by Gail Vaz-Oxlade. She's a Canadian finance guru and she could totally kick Suze Orman's butte. Or butt even. (I give up correcting my own spelling sometimes and figure laughing at my misspellings is much more fun.)

Have you ever taken a good hard look at your money and what you spend? I have. Just this week. Since I was handing over the financial reins to hubby I had to pull some knowledge out of my brain and on to paper so I could tell him things like regular withdrawls from the bank account, regular debits to the credit card... etc... But the problem is that it's stored up in random files in my brain.

The credit card statement came in and oh lookie there's a charge to The Biggest Loser Club because I'd forgotten to cancel my 'free except you have to give us your credit card but don't worry, you'll remember to cancel the free' web subscription.

And, oh my, I bought some music online. Luckily I could say it was for the kids (Crazy Frog) and not a the latest Britney Spears album or that Greatest Drum Corps Hits that I almost bought a couple weeks ago. (I iz band gek)

I think the best tool I found was Gail's Interactive Budget Workbook. Fill in all your expenses and it will tell you exactly how much over budget you are. She'll also give you some guidelines for where you should be.... what percentage of your income is going towards housing and what percentage is safe.

So the countdown is on. I think we can do it in about a year.

Of course.. that's if "PLAN #1" works out... more on that in... ten days. I promise. And if Plan #1 doesn't pan out.... we'll be moving on to Plan #2. (Which is not my favourite plan, let's just say that.) Wow, could I BE more cryptic?

Thought for the Day

Givers have to set limits because takers rarely do.
-- Irma Kurtz, Cosmopolitan Magazine, September 2003

This struck me as really profound this weekend. It's the weekend of the financial reckoning. The weekend where I hand the reins over to my husband.

Part of me feels very 1950s Housewifeish. I'm not the one in control. But part of me welcomes this change. Major Man isn't shutting me out of the budget decisions, he's just the one doing the footwork. Our budget is posted on the door, as is our current debt load.

It's been eyeopening. For me and for Major Man. I don't think he realized the situation or why I was freaking out two months ago because I knew that the day was coming where we'd run out of credit.

It's not THAT bad, please don't think we're a hundred grand it debt or anything. But we have a credit card, a line of credit, a truck loan and high rent. We're the working poor it seems.

But not for long. Because we are not IN debt, we are climbing out of it.

We may need to downside, we will need to make some tough decisions. I will need to keep my fingers OFF the credit card.

But we shall also be improving living conditions and we will be happier. My outlook has changed this weekend from "oh my gosh, how much longer can I do this" to "I can so do this" because now I'm looking at where I can cut the fat.

I'm even considering biking to work!

The Velveteen House

I came across an article today that really spoke to me. Here's a peek:

I recently took my first trip to Africa. One pre-dawn morning I decided to
stop trying to fight my body clock and got up early. As I sat by our hotel
window, I could see a shacklike house across the street, and its family
stirring. My first feelings were of sadness. The house contained no more than a
couple of rooms. There were piles of junk in every corner of their small ten-by-ten, bare-dirt yard. But as I continued to watch, my perspective changed. There were definite causes for sadness that trip, but this was not one of them.

As I watched the woman of the house, I realized what I was calling "junk" were their useful belongings. In the course of an hour, I saw the woman make good use of most of the tools in her yard—building a fire to prepare a meal for her family and tending to a small garden. The more I watched, the more I saw her care for her home and use her things well. Theirs was a "Velveteen House," where everything was well-used and full of purpose. In contrast, our culture creates "a house to look at" that covers the house in which we really live. For years I had towels that were not to be used, canisters lining shelves that held nothing, books that were purchased for the color of their cover, and most troubling, a guest room with no guests.

Read on...

I have been guilty in the past of wanting too much. I want 'things' for my house to try and make it a better home for my family. I want nicer pictures on the wall and more books for the bookshelf.

In reality, we need nothing more to make our home a warmer, friendlier, happier home. We just need to increase the love. So I've put a buying embargo on our house. We don't buy any more things unless it's something we can't cope without. If it's replacing something broken that can't be fixed, that's ok. But if it's just prettier or nicer than what we already have, I don't buy it. Surprisingly (or maybe not) this has stopped me from buying a lot of 'stuff'.

Notebooks and pens, books and daytimers, new coffee mugs and cutlery. When I'm at the store they seem the perfect things to complete my life... then I come home and see my cupboard bursting with mugs and my pen jar crammed full of pens that work just fine and I'm actually thankful that I have shown restraint.

This also makes my frugal and money-smart husband happy. Always a good thing!

School Prep

At the end of last year the Kindergarten teacher told me that M. has issues with printing. I knew, of course, that he was a bit wobbly. However up until that final report card she assured me that it was normal boy behaviour.

Then I saw the words "will experience difficulty in Grade One due to poor writing skills". (Or something along those lines, I have already translated the teacher-speak for you here!) I realized that I'd been blissfully believing his printing would get better on its own. So as soon as school was out I started asking M. to print things for me every day. We started with a sentance and I let him choose what to print.

At first it was "I like my baby sister" and "I like to play outside" but soon it became "I like toys" and "I am cold"... shorter sentances that could get him out of his printing duties faster.

I smile. Then go buy lined printing paper so he can practice the ABCs.

And maze and connect the dot books so he can strengthen his fine motor skills.

I encourage him to color and draw me pictures.

But it dawns on me that my love of school and my love of writing is not genetically passed on. He is the lover of cars and spiders, the bike rider and Jedi Knight, the video game player and part-time Transformer.

I have, however, fostered a love of words. He has a huge vocabulary (which he uses mostly to impress friends and get out of trouble) because we read three books ever night.

I've tried explaining to him that I know he's smart and I love when he explains things to me, but in school you also have to explain things by writing them down to show the teacher. He accepts this and has just now accepted that you should also write in a line. Very often his words would all be there... just in their own order. Three letters, line break, three letters, line break. Last letter. I could read it, he could read it... but unfortunately that's not How It's Done.

So today he was practicing his c's and d's before he could play his video game and he was complaining about why he had to do it. I said that it's good to practice, that I'm proud of his letters and I want to see him write. He complained again.

Then I heard it come out of my mouth.

"I'll give you a quarter for every line you write."

Shoot. I didn't even think before that came out. I started adding up the number of lines he might write. I started thinking about whether or not it's unethical to pay your child to do his work. Will I start paying for A's and B's next? (We don't do A's and B's in Canada... we do percentages...) Will I end up with a kid that says "what's in it for me, show me the money?"

Hopefully not. I think I'll put a stop to it. Soon we'll have homework to do... I just have to vow not to pay him for doing his homework. Goodness... I'd be broke by grade three!

Til Debt Do Us Part

There's a show I watch some days called Til Debt Do Us Part. It's one of my indulgences in the middle of the day.

Money is the number one cause of failed marriages. Rare is the couple that agrees on how the pot should be divided and the bills paid. Most families are in debt, and with debt come family arguments, tears, tantrums and marriages on the verge of divorce. To save families from the doldrums of debt, each episode of Til Debt Do Us Part follows financial wizard Gail Vaz-Oxlade as she helps families go from red to black by getting to the root of their destructive spending habits. Related Reading on Slice.ca: Short of cash and it's still a week till payday? Read the slice.ca article, Survive on Little to No Money.

What this show helps me to do is to keep my family's financial situation in the forefront of my mind. My habit has been to exert control over my money by spending it. In a backwards sort of way I felt that it was the only way to show Money who was boss.

Thankfully I have a wonderful financial consultant to help me these days and the only debt we carry is my truck loan.

One habit I'd like to change is one I carried over from my own family's inability to save properly: telling my kids we can't buy something because we have no money.

While it's important to teach your kids to budget, it's equally important to keep the adult finances a topic of adult discussion only. Sure, you could break down the finances for your children, show them how much goes to rent and how much goes to food etc... but let's not scare the children!

I think that parents have a tendency to add extra information after the word "no" because they want their children to understand that they aren't just being mean, there are reasons for "no".

"No, we don't have enough money" actually causes kids to worry. If they don't have enough money... what does that mean? They already know that we use money to 'get things' like food and fuel and housing. There's a fine line between giving enough info and too much info.

Sometimes, though, no is enough.