No Honour in Secrecy about Personal Debt

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DH = Dear Husband

“Honour” killing

I once taught a girl who was later killed by her brother in an “honour killing“. She was in a large grade 10 class of mine for a short period of time before the class was split into two smaller ones. News of the killing a few years later was utterly shocking. Just this past spring, a colleague of mine talked with me about his connection with the girl. “She came and sat in my class after school every day because she said it was the only place where she felt safe. I told her she needed to contact the police about her brother’s threats, but she said she couldn’t ‘dishonour her family’ like that.”

Secrets for family “honour”

Yesterday, I was on the phone with someone for close to 2 hours. I didn’t say much at all. A steady stream of words flowed out of this normally quiet woman whom I’ve known at a polite surface level for almost 2 decades. It was like a cork had been unplugged, and the family secret

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Image courtesy of Rebecca Barray

A Brief Step out of Frugal Mode – Good for the Long Term Goal

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Don’t they look happy up there? DD1 and DD3.

  • DD1 = Dear first daughter
  • DD2 = Dear second daughter
  • DD3 = Dear third daughter
  • DH = Dear husband

It’s been a time of relative extravagance around here, and it’s been lovely.

Travel (and dreams . . . )

Shortly after last Christmas, DH and I realized that it would be best to cancel our planned trip to Orlando with our three daughters this year. We were going to piggy-back a family vacation onto DH’s annual business trip in July, but with the plummeting Canadian dollar, it just wasn’t turning out to be a good idea. Consolation prize? We gave each daughter a round-trip flight:

  1. DD2 flew to Alberta to compete in Nationals/Olympic trials for track & field. (Unfortunately, she pulled her hamstring.) While DD2 wasn’t a contender for the Olympics, it was wonderful for her to meet and compete against Olympians and to get a taste of her dream for greater excellence in her sport.
  2. DD3 flew to British Columbia for two weeks to visit with DD1 (who has lived there for 5 years going to school and working). In the photo above, DD1 and DD3 are on a ferry on
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Value of Financial Shock Absorbers

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Shock absorbers in action

DH = Dear Husband

Numbers for June

Once per month, I report on our debt-reduction and savings progress. In terms of numbers June was not stellar. Our goal each month is to put as much as possible against our mortgage up to a maximum payment of $3,000. As for savings, our goal for last month was to top off our emergency fund so that it would be 100% full.

What actually happened was that we put $2,200 against our mortgage (down to $104,000 now), and we didn’t save anything. We would have made a smaller mortgage payment if we’d known what was ahead of us.

Real story for June

The numbers aren’t the real story. The real story is that in June, we hit a significant bump in the road.

DH is self-employed. He’s been running a franchise successfully for seven years now. Let me say that again: “He’s been running a franchise successfully for seven years now.” Such a short sentence. It can’t convey the “Hallelujah!” inherent in it for us. DH’s successful business is the happy, happy resolution to years of career uncertainty and under/unemployment. It will be a long time before I take it for granted.

Although DH has a lot of autonomy in his work, certain things are standard in the company and otherwise beyond his control. For the most part, no complaints. In fact, it’s been a huge help to have a structure and network in place. But in June, there was a company-wide glitch that lasted a bizarrely long time and that had the impact of butchering business.

DH had absolutely no control over this business-stopping “technical difficulty” (sorry I have to be so vague about it), but it had a staggering control over him. It was something that blindsided all concerned, and it brought home to us the fact that there are no guarantees when it comes to DH’s work and income.

The crisis did eventually pass, but while it lasted, it was the focus of just about every conversation that DH and I had. What if it lasted for several months? What options did DH have? How would we absorb a possible huge loss of income? 

DH carried an understandable amount of stress for those couple of weeks. But I carried almost none.

Shock . . . but a smooth ride

Let me say that again: “I carried almost none.”

A little over 3 years ago, still in the first 12 months of our journey out of debt, DH had slow business through the spring. Although I knew objectively that his income varied, that brief period of low income set me off. I wrote a post at the time about debt and depression, and how women in particular feel financial angst. “Dave Ramsey notes the same gendered difference in response to financial stress in his book, The Total Money Makeover.  ‘Somewhere down inside the typical lady is a ‘security gland’, and when financial stress enters the scene, that gland will spasm’ (Ramsey, p. 144).  My ‘security gland’ was in a spasmodic state for the better part of six years, so there is a trigger effect now, even though logic and perspective don’t justify it.”

Since that time, I’ve learned to go with the flow when it comes to our variable income. This past May, for instance, was possibly DH’s lowest income month ever, and that was completely OK. What happened in June was of a different order of magnitude. There was no “going with the flow”. There was no flow to go with. It was a random anomaly that we had no power to resolve.

And it didn’t stress me.

I was actually able to play the role of stabilizing spouse. DH’s day-to-day life was dominated by this crisis, but mine wasn’t. And so I listened, empathized, acted as sounding board, offered perspective, and confirmed our strategy. We’d batten down the hatches and be ready to respond to whatever was going to come our way. Ultimately, if worse came to worst, we’d close up shop and move. Significant, but nothing to get my “security gland” in a spasm.

Financial shock absorbers

So why the difference? Why were May and June of 2016 not difficult for me when March and April of 2013 were so depressing? I can think of 3 reasons:

  1. Less debt. In the spring of 2013, our business debt sat at about $65,000. Now, we have no business debt. Our mortgage debt was also about $43,000 more than it is now.
  2. More savings. In the spring of 2013, we had a mini-emergency fund of about $1,000. Now we have an almost fully funded big emergency fund that would see us through 6 months of expenses if we lost an income.
  3. Different attitude. “As you pay off your debt, you’ll realize it wasn’t about the money at all.” This statement, from Ramsey as well as other sources, annoyed me at first, but I’ve found it to be true. In 2013, the prospect of having to sell our house because we couldn’t afford it was mortifying. Now, there’s no ego obstacle to such a move.

I hope that “normal” will last through July – and many years to come for that matter. But if it doesn’t – if we hit more bumps in the road – I’m so glad we have these financial shock absorbers in place.


Would you say that you have “financial shock absorbers” in place? What is the most significant one for you? Your comments are welcome.

 

*Image courtesy of herrtichy

Broken Air Conditioner? Improved Heat Tolerance (Our Badass Response)

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DH = Dear Husband

MMM’s side-benefits of badassity

Almost two years ago, I read a post over at Mr. Money Mustache’s site that ended up being very significant for me.* “Necessity Is The Mother of Badassity” focused on the side-benefits of uber-frugal living. During his recent project of putting a new roof on his mother’s house, MMM encountered some challenges, but he didn’t take the easy way out. When he realized her roof deck had disintegrated, the job more than doubled. He learned how to replace the roof deck as well as the roof, and he spent many, many more hours of hard physical work under the hot sun than he had planned to. The benefits?

  • confidence gained from getting in over his head, figuring it out, and making it through
  • physical fitness from hard labour
  • doing something for his mom and saving her a whole lot of money
  •  improved heat tolerance

I got a kick out of that last benefit: “Improved heat tolerance.” Really? Was MMM scraping the bottom of the barrel with that one?

Our car’s air conditioner

In the winter, our city gets REALLY cold. And in the summer, it gets REALLY hot & humid. Last Sunday, we hit 91 degrees F (33 C), and it’s only June. I tell you this so that you will recognize the significance of the following fact: This spring, we realized that our car’s air conditioner was

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Responding To The Massacre in Orlando

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Our school’s response to the massacre in Orlando.

  • C = colleague in the LGBT community
  • F = childhood friend in the LGBT community
  • DH = dear husband

Yesterday I told C, who reads my blog, that I wanted to post about the massacre in Orlando, but that I didn’t know if I should just include a photo of our school’s card or if I should also share how the past week has played out for me personally. “It’s never ‘all about me,’ ” I said to her, “but this time it’s REALLY not about me. As someone in the LGBT community, what would speak more to you?” C encouraged me to tell my personal story. “People who read your blog want to know about you,” she said. “Write your response. Make it clear that you’re writing as a white woman who is hetero and Christian, and acknowledge the privilege in that identity.” 

So that’s what I’m doing.

Where I was when I found out

F is a childhood friend I hadn’t seen for five years. She lives in the U.S. now, but she and her siblings returned to town a couple of weeks ago to attend a family wedding. They stayed together at a house in the old neighbourhood, and F made arrangements to get together with some of her friends from school days. She asked me if she could stay overnight at our place last Saturday night. Her brother and his friends were going to be having an old style house party, and she didn’t want to stick around for it.

So F came to our place last Saturday afternoon. She, DH, and I had a wonderful visit. Faith and finances ended up being the centre of much of our conversation. F has explored different religions, and she has a unique insight into the message of Christ, to which she is returning. She’s also had a financial wake-up call, and she was very interested in hearing about our journey out of debt. F listened to the podcast of our talk at church from 2014, and she cried. “I can relate to this SO much!”

Our low-key visit included three meals, a long walk with the dog, and a failed effort to watch a movie. (I fell asleep.) Sunday afternoon, I drove F back to the house where she was staying with her siblings. She would be flying home on Monday, and she promised it would not take another five years for her to come back to town. As I started my drive back home, I turned on the car radio. So for me, it was just after I’d dropped off my dear friend – who identifies as a lesbian – that I found out about the mass murder in Orlando of people targeted for their sexual orientation.

What could I do?

The news left me in a fog of shock for days. Too much to process. So much hate.

As I drove to work Monday morning, my head swimming with new details that kept emerging, I was determined to harness within me a simmering chaos of sadness, rage, incredulity, powerlessness . . . – and to DO something. I’m a teacher, and I work in a high school library. I thought of staff and students in the LGBT community. If I was feeling this raw, how were they feeling?

The idea of a card came to mind. I’d write a card to establish a stand against the hatred of the weekend’s massacre, and to extend empathy to the the LGBT population in our school. Only one voice – but hopefully one that would be magnified by the signatures of others. A big card. With lots of white space for names.

As soon as I could get to my computer in the school library, I started to write the words for the card in great big font. “I’ll need to ask someone else to read this before I do anything with it,” I thought as I approached the end. A voice surprised me. “OK, now I have to hug you.” It was C. I stood up to hug her, sensing the brutal impact that the shooting had had on her. “There’s something I want you to read,” I said. “I’ve already read it,” she told me. “I could see it over your shoulder.” I shared my idea for the card with her, and she was behind it.

The principal gave his approval. I glued the message to a bristol board along with pieces of blank paper. And by the time the 9:00 bell had rung to signal the beginning of the school day, staff and students in our very multi-cultural school had started to sign it.

My first devotional reading after the Orlando massacre

I have never succeeded in establishing a daily habit of reading the Bible, but I want to. It had been many days since I had done a proper devotional reading when I finally picked up my Bible again Tuesday morning. I found my bookmark half way through Acts 10. It’s a long chapter, and clearly, I hadn’t made it through the whole thing last time I’d read. Starting at verse 23, I soon came to these words, spoken by the apostle Peter, in verse 28: “But God has shown me that I should not call any man impure or unclean.” I am keenly aware of other verses in scripture. This is nevertheless the one that my readings brought me to just at that time.

To the LGBT community in the bloggosphere

Communities overlap. And within this pf bloggosphere, there is an LGBT community. I want you to know that I stand against the targeted hatred of last weekend’s massacre. With you, I mourn the loss of lives cut short. With you, I will continue to strive towards a world in which such atrocities have no place.


Your comments are welcome.

 

Competing Priorities of Home-Buying: Nadia & Jason’s Smart Move

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Monday morning at the high school where I work, Nadia stepped with glee into the photocopy room about 15 minutes before the 9:00 bell. “Ruth, you’re going to be SO proud of me!” A drama teacher, Nadia is someone I have written about before. She’s the “Ms. G.” featured in a post I wrote in October of 2015 –  “The (Not So) Great Escape Via Debt” – about her decision to travel on credit. A self-proclaimed sitter-on-the-fence when it comes to personal finances, she has talked with me a few times over the months as she and her husband Jason have been on the lookout for a larger home for their young family. This past weekend, they made their decision, and after Nadia gave me the details, I WAS proud of her. “You should write a post about it!” she said. So I am.

How long have you been living in your current home?

We have been at our current home for nearly 10 years. It’s a semi-detached bungalow duplex located centrally in the south-east of the city.

Why do you want to move out of it?

It has two living spaces (two apartments, top and bottom) both fully finished and furnished. We bought this thinking initially that it would be the best move financially because I was pregnant (without a full-time contract) and my husband was and remains self-employed. Yikes!!! So, having a renter in the basement was a big help to cover the mortgage early on. But once our first daughter grew older and we had our second child, our family needs grew until 

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4th Anniversary of Debt-Reduction: $150,000 Down!

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DH = Dear Husband
DD1 = Dear First Daughter
DD2 = Dear Second Daughter
DD3 = Dear Third Daughter

Happy 4th anniversary for our journey out of debt!

And it IS happy. This anniversary feels different from the first three, and I think I know why.
  • For this anniversary, we are only dealing with our mortgage debt. No more consumer debt. No more business debt. That’s a first.
  • For this anniversary, we are backed up by an almost-full emergency fund – one that will see us through 3-6 months of possible income loss. That’s a first.
  • For this anniversary, we have less debt to pay off than we have already paid off. We’re well past the half way mark. That’s a first.
  • For this anniversary, we are focused on savings & investments as well as debt-reduction. We’re following Dave Ramsey’s steps, and when only the mortgage is left, significant savings start. The satisfaction of paying off debt is the redemption of past errors. The satisfaction of saving is the opening of future possibilities. We’re feeling our possibilities. That’s a first.
Four years ago, here is where we sat:
Start of June 2012:  Total Debt = $257,400
Debt #1 New Car Debt – $8,600
Debt #2 Old Car & Course & Dog Debt – $12,800
Debt #3 Business Debt – $80,800
Debt #4 Mortgage – $155,000
End of May 2016:  Total Debt = $106,700
Debt #1 New Car Debt – $0
Debt #2 Old Car & Course & Dog Debt – $0
Debt #3 Business Debt – $0
Debt #4 Mortgage – $106,700
We’ve paid off a total of $150,700, and we have $106,700 to go.

Our best year yet?

One of these days, I’ll make a graph of our progress, but for now, I’ll continue to list the numbers. Our average debt reduction per year has been $37,675, but our actual debt-reduction each year has varied quite a bit.
  1. Year #1: $50,000 – The year of big motivation and no major expenses.
  2. Year #2: $28,000 – The year of multiple major expenses: a new roof + a rotted tree cut down + our dog’s surgery + DH’s accountant’s advice = over $21,000. Our biggest accomplishment for Year #2 was the fact that we didn’t take on debt in meeting any of these expenses. We paid for each outright.
  3. Year #3: $45,000 – The year of steady effort and no major expenses.
  4. Year #4: $27,000 – Our lowest year in terms of debt-reduction numbers, but I think it’s been our best year yet.

Here’s why:

Renovations paid outright

After we paid off the last of the business debt in the summer of 2015, we went ahead with our plans to renovate. DH’s home business office had long been too small, and we re-jigged our house to better accommodate it. The combined living room and dining room space became his office. His old office became a TV room. Our family room became a dining room with a sitting area.

These changes included electrical work, new flooring, new office equipment, and new furniture. Although DH installed the hardwood and did the electrical work himself, and although we shopped carefully, it was an expensive undertaking – coming in at about $12,000. It was a practical move, but also an allowed indulgence. We’d had the same furniture and carpeting for 17 years, and they’d had heavy use at the hands and feet of three growing daughters over that time. Everything was WORN, and we were more than ready for a change. If we hadn’t been on our journey out of debt, we would have bought new furniture much earlier. Instead, we waited until we had paid off all non-mortgage debt AND saved up enough to pay for the renovations and furniture outright.

Emergency fund almost full

We finished our renovations in December, and in January, we ramped up our savings for our big emergency fund. According to Dave Ramsey, a mini-emergency fund of about $1,000 is needed before any debt-reduction begins. The mini-emergency fund keeps unexpected expenses, like car repairs, from being a ticket back into debt. Once all non-mortgage debt is paid off though, it’s time to save for the big emergency fund – “to protcet yourself against life’s bigger surprises like the loss of a job.”

DH and I calculated how much we would need if he suddenly wasn’t able to run his home business – for whatever reason. We figured out how much we’d need to cover the expenses involved in closing the business and to see us through 6 months – either to sell the house and downsize or to give him time to find other work – and we actually reached that number in May . . . but then had to dip into it . . .  so it isn’t quite full yet.

Our May “emergency” resulted from DH’s extremely low business revenues for the month. DH’s income varies wildly from month to month, and May was his lowest one ever. To give some perspective, his revenues for May of 2016 amounted to only 16% of his revenues for June of 2015 (his highest month ever). The low income was easily supplemented by our savings, and although it would be nice to say, “We now have a full emergency fund,” it’s a wonderful sign of our new financial reality that we can say, “We were prepared for the unexpected, and what would have been a major stress a few years ago was barely a blip.”

Funding DD2’s living expenses

Another thing we did last summer after having paid off the business debt was to grant DD2 her long desired wish to move out and live closer to campus for her last two years of university. Our house is in the suburbs, and her school is downtown. Taking the bus to and from campus wasn’t such a big deal, but she’s also on the track team, and getting to the indoor track for training through the winter months would sometimes take as long as 2 hours. Add to that the need for part-time work, and it all just amounted to a draining lifestyle for everyone concerned.

It’s a hefty amount we give her each month to pay for her part of the rent in shared student housing and to cover her groceries, but it’s been worth it to foot the bill. And we’re maintaining firm boundaries in our financial support. We’re not enabling any poor money management in her. A couple of weeks ago, DD2 lost her job. It wasn’t her fault, and everything in me wanted to rescue her. But we held our line and were prepared to have her postpone her final year if necessary. No need to go there though! DD2 applied like mad to as many places as she could, and three days ago, she was accepted to a new position. Better location. Better pay. Better job. Better hours. Win-win-win-win! DD2 can walk to classes and cycle to work. She takes an easy bus ride to her training. She has had her best academic year to date, and last week-end she got a personal best time in one of her track events. She’ll be heading to Nationals next month.

More good news about our kids

Forgive me for bragging about my kids, but I really want to point out the inter-generational ripple effects of good financial health.

DD1 gained what I might call a “negative benefit” from our years of financial stress – which were characterized by unemployment and debt. She decided as a teenager that she would not make our mistakes. She has managed her finances carefully since that time, and she graduated without student debt three years ago. Eager to impart to her a “positive benefit” after starting our journey out of debt, I advised her to save 15% of her gross income once she started working. “What am I saving for?” she asked at the time. “I don’t need a car, and I don’t want a house.” I promised her that she would eventually want something, and that she would be very grateful for the savings. 15% of a low income adds up over three years, and this year, DD1 did indeed want something: She wanted to go to law school. This September, she will. And it looks like her first and second years will be covered by a combination of savings, scholarships, and part-time work.

DD3 had the benefit of being still quite young when we started to get our money act together. She’s heard more than she has cared to hear about the importance of delayed gratification, the ability say “no” to friends who always want to spend money, the freedom of choice that results from saving . . . When she started her first part-time job last summer, she automatically put 50% of her pay into a savings account – without being told to do so. She has some as yet uncertain goals for her savings – like living in a different city in a few years – and some very certain goals – like flying out west to visit DD1 for two weeks in July. As for a future career, she informs me on some days that she’s going to be a bar tender. On other days, she leans more towards working in the community with the developmentally delayed. She is free to choose her path as far as we’re concerned. And she’s setting herself up to have that freedom of choice. DD3 is experiencing the power of her own good management of her personal finances. And she’s still in high school.

Yes, our best year yet!

So although we paid off less in Year #4 than we did in each of the first three years of our journey out of debt, it’s been a great year! Our past of poor financial health is giving way to a strong present reality, and it’s opening up doors to our future – and into the next generation.


Your comments are welcome : )

 

*Image courtesy of Lenny&Meriel

Kay the BF Minimalist: Open to Advice on Managing Inheritance

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Many of you will recognize Kay the BF Minimalist – if not by her blog (The Barefoot Minimalist), now on hold, then by her friendly little avatar: f28ef47690999d7da9428d9ddd6c71bd Kay has not been writing much lately. She recently lost her mother and is not sure in what direction her blogging life will go from this point on. I’m grateful to Kay for allowing me to interview her about receiving an inheritance. Kay has said that she and her husband are open to financial advice as they move forward.

Describe the “money blueprint” that you grew up with, and the one that your husband grew up with. What messages about money, both spoken and unspoken, did each of you absorb from your parents?

Well, my dad was in the Air Force.  He came from a poor, inner city background, and the military was his way out.  The message from my parents was that you joined the military or you worked for the military as a civilian. The pay was good, the benefits were great, the security was excellent.  Out of 4 children, I’m the only one who didn’t go in the Army.  However, I did work as a civilian at the local Air Force Base.  So the message got through.  

For my hubby, his dad was a factory man.  He was a machinist and a tool maker.  For him, the message was to work in a factory.  The pay was good, the benefits were great …  well, you get the drift.  However, hubby never did work in a factory.  He became an HVAC guy.  His dad . . .  

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Olyvia working hard as a co-op student in the library.

For today’s post, I’m featuring a former student. Olyvia worked in the school library with me as a co-op student for 3 semesters before she graduated in 2013. She has now returned as a volunteer, and it’s wonderful to see her transition from a rebel teen to a mature young woman. Even as that teen though, Olyvia was a hard worker who loved books. After doing custodial work for three years, she has decided to pursue her love of books once more. She’ll be taking library studies at a community college this fall. 

Olyvia grew up with her brother and her single mom, who suffers from disabilities and has been unable to work. As a child, Olyvia pitched in by helping with household chores as soon as she was able to, and later, she contributed to her family financially. She left home to live on her own at the age of 17. 

Olyvia uses a “no-touch account” for her savings. It’s an account that is set up so that she can’t access it without her uncle – because as she said last week, “I can’t trust myself with it.” This was significant for me personally, since I had a hard time accepting that I needed a “no-touch” accountguarded by another person. Olyvia seemed to have no qualms about using this strategy. I wanted to find out why, and so I asked if I could interview her. I’m so glad she accepted. 

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