Personal Finance Goals and Winter Blues

20170205_131143
  • DH = Dear Husband
  • DD2 = Dear Second Daughter

Lost on the golf course

About a month ago, I took our dog Rocky for a walk. We live near a golf course, and while we have to stay off of it during the summer months, through the winter, people are free to walk, ski, or toboggan on it. I took Rocky up onto an area of the golf course that was new to us. It was a mild evening, and  we walked for a good 20 minutes before turning back to go home.

I became alarmed after about 20 minutes. We should have reached the street, but we hadn’t, and it was nowhere in sight. As I surveyed the landscape beyond the hill we were climbing, all I could see were more trees (as featured above). Had we taken a wrong turn somewhere? I had a sinking feeling in my stomach, sensing the futility of continuing in this direction.

It wasn’t the first time I had become lost (I have a terrible sense of direction), and I accepted my situation stoically. I looked around for a recognizable landmark of some kind, and I saw three tall apartment buildings in the distance. If I could get to those buildings, I’d find my way home. The trek would add an hour to my walk with Rocky, but he certainly didn’t mind.

Winter blues

I have learned to accept that winter comes with its blues. This year, those blues came early and with greater than usual force. I don’t know why. If you’ve experienced it, you know what it’s like: every effort takes more energy than usual; and normal tasks become draining.

I remember reading some personal finance blog posts about New Year’s resolutions early January, and finding them oppressively perky. I read about a couple of no-spend challenges, and while my mind said, “I should join in,” I just didn’t have it in me. I felt as I did when I walked Rocky that evening – sensing a futility in continuing in the direction I was going: budgeting; tracking; blogging; budgeting; tracking; blogging . . .

Progress

But I’ve learned not to be led too much by feelings. When DH and I started our journey out of debt, I was high on purpose and determination. June 2nd 2012, I wrote my third post for this blog: “. . . DH and I are taking the proverbial first step on our journey out of debt.  Psyched by a vision of debt freedom, we feel a happy adrenaline – a hope-filled, united, optimistic energy.  At this point, I can`t even conceive of a time when we`ll hit a wall.”

That kind of new-beginnings-energy can’t last, and I knew it at the time. “At this point, we can allow ourselves to give in to the high of starting and to get as much mileage out of it as possible.” Through the years that have passed since that adrenaline-filled start, there have been “walls”. But perhaps because I have been on the look out for them, I’ve able to move forward in spite of their motivation-sucking force.

This month has been no exception. Our original total debt of $257,400 – a combination of consumer debt, business debt, and a mortgage – is now down to a modest mortgage of $86,900.

A matter of interest

I remember last January, DH wrote on our white board in the kitchen, “$297”. When he asked me what I thought it represented, I couldn’t say. “That’s the amount of monthly interest we’re down to now on our mortgage. We’re under $300.” That was a big deal because when we’d started our debt payoff,  we were paying over $600 per month in combined interest payments. This month, DH wrote “$192” on our white board.

An audacious goal

Seven years is the average amount of time it takes a household to become completely debt-free according to Dave Ramsey’s plan. So for a long time, our goal has been to become debt-free by June of 2019 – seven years after our June 2012 start.

This month, DH and I did some calculations. The maximum we can put against the mortgage on a monthly basis is $3,000. But once a year, we can put a lump sum to a maximum of $18,000 against it too. Last year, we made no lump sum payment. This year, we plan to. For the last year and a half, we’ve been paying $750 per month for DD2’s room and board as she studies at a university downtown. We’ll make our last payment in June.

If we continue to set aside the same amount of money on a monthly basis, we could save up for annual lump sums to speed up our progress. Our best case scenario is:

  • to pay the maximum $3,000 per month
  • to put aside an additional $750 per month, saved for annual lump sum payments, starting July 2017

In this best case scenario,  we’ll have the mortgage paid off January of 2019. So many things could happen to prevent this early pay-off date, but it is officially our new audacious goal.

Headed in the right direction

So the winter blues won’t steer me away from the direction we’ve been taking for almost 5 years now. Sure it would be nice to blow a few thousand on a trip south, but we’re staying the course.

Sunday morning, I took Rocky for a walk, and we went to the same section of the golf course that we’d walked on when we got lost. It was going to be a brief excursion, so I I knew I wouldn’t have the chance to take a wrong turn. After walking for about 5 minutes, we turned around. And I saw the same hill with the same trees beyond them that had convinced me I was lost a month earlier.

“I had a sinking feeling in my stomach, sensing the futility of continuing in this direction.” But it wasn’t futile! I wasn’t lost. I was headed in the RIGHT direction. If I has just climbed that hill, I would have seen that the trees beyond it were across the street  – the street that would bring me home.

20170205_131259


Have you ever hit a “wall” in trying to reach a goal? Do you get the winter blues? Your comments are welcome.


 

December 2016 Report & New Year’s Resolution for 2017

img_20160101_214151

The dress behind the resolutions.

DH = Dear Husband

Happy New Year! I don’t know about you, but despite the weirdness of our time – Brexit, Trump, a nervous sense of imminent but unpredictable change – I feel optimistic about the year ahead.

My New Year’s resolution for 2016

“And I will. Every day, I will do a plank. Every day. I’m putting that stake in the ground. I’ll start at 2 minutes, but each month, my goal will be to increase by 15 seconds so that by the end of 2016, I’ll be holding a 5-minute daily plank.”

And why did I resolve to focus on planking through 2016? Two reasons:

  1. A dress that DH had given to me as a Christmas gift made it clear that I had a “baby-bump-without-a-baby.” I couldn’t wear it without slipping on some gut-flattening shapewear underneath, and I wasn’t happy about that. I proclaimed, in bold font no less: “For Christmas of 2016, I will not have to resort to ‘shapewear’ to put on that dress.
  2. I used the plank to symbolize the steady, patient balance that I knew I needed to develop in my approach to money-management.

The plank: an analogy for personal finances

At this time last year, we had just finished renovations for which we had saved and paid up front. (Yay us! We never used to take on big projects without using debt.) These renovations had been a sort of reward that we allowed ourselves after having paid off all $102,000 of our non-mortgage debt. $21,000 in consumer debt + $81,000 in business debt were gone! But as I looked ahead to the next steps of our money makeover, I recognized that they required a shift  – in me:

“Past the point of putting all of our focus upon debt-repayment, we now require more balance. Short-term savings; emergency savings; investments; mortgage payments; and an increase in giving. I felt more directed and sure when it was all about paying off our consumer and business debts . . . I’ve come to recognize in this journey out of debt how impatient I am. Impatience played a big role in getting us into our debt-ridden state (“I want it NOW!”), and I don’t want it to sabotage the financial health we’ve been building . . . I need the core strength – the stability and balance – of patience in my approach to our shifted financial goals. Muscles in the human pelvis, lower back, hips and abdomen ideally work in harmony. Efforts towards our savings, investments, mortgage payments, and giving can also progress towards an ideal of harmony. No rush. Slow, steady, progress. Balance. Stability.”

My planking progress

You can read the full story of my planking progress for 2016 at Fruclassity. Here, I’ll give a short overview: The “every day” part of my resolution did not last. Injury in the last half of January was followed by gradual lapses in determination. And as the months went by and my plank-time increased, it just became so HARD! After achieving one plank of 3 minutes 45 seconds in August, I decided I’d had enough and gave it up. But in early December, at a staff Christmas party, a colleague asked me how my plank challenge was going, and that conversation led to . . .  an impromptu plank-off.

unnamed

Two other colleagues joined us. And the result? Each one of us attained a personal best plank time! Including me. I held for 4 minutes that night – even though I hadn’t tried a long plank since August. The power of community support! We committed to a weekly plank-off, and at our last one on December 23, I hit 5 minutes! That’s a life-time best for me. So while I didn’t actually fulfill my resolution – “I’ll be holding a 5-minute daily plank” – I did hit my goal time and I did gain core strength.

But what about the dress?

Can we skip this part? No. I still can’t wear that dress sans shapewear. Clearly, it takes more than strong core muscles to flatten a belly. Which leads to my resolution for 2017 . . .

Resolution for 2017

I eat ravenously – always have. When I get hungry, it’s not pretty, and I often resort to quick carbs to take away the edge. This metabolic demand plays into both my finances and, I believe, my tummy.

My New Year’s resolution for 2017 is to learn to manage my personal food intake. And it is personal, isn’t it? Just like personal finances. By that, I don’t mean “private”; I mean “unique to the individual”. We all need to find our own way towards balancing the budget as well as balancing the weight scales. One of my personal challenges lies in what I can only call food addictions.

It’s no secret that the food industry uses salt, sugar, and fat in an intentional effort to make consumers addicted to their products. They’ve succeeded with me, and I want to overcome those addictions. Why? Two reasons:

  1. Management of discretionary money has been the stumbling block in my efforts to get my money act together since our journey out of debt began almost 5 years ago. In the last couple of months, I’ve finally started to track my discretionary spending, and this tracking reveals the extent to which I spend on food. It’s never expensive as an individual purchase  – $4.50 for a coffee and tea biscuit at Tim Hortons – maybe $9.25 if I’m treating someone else – and the occasional lunch or dinner for around $10 – but it adds up to so much that I invariably end up in debt in my discretionary account. If I get my food act together, I’ll get my discretionary spending act together.
  2. There is definitely a vanity thing going on here too. I really would like to be able to wear that dress without having to resort to shapewear, and it’s possible that a reduction in unhealthy carbs will allow that to happen. But it’s also possible that it won’t, and if that is to be the case, then long live shapewear.

Getting your finances in order: facing character flaws

“The deeper side of debt reduction is that as you work on the practicalities of budgets and tracking, you’re going to bump into character flaws that you didn’t even know you had.” That’s what I said as part of my talk on debt-reduction at the local public library in November, and it’s what I continue to discover.

For me, impatience is one such flaw, and in 2016, I believe I addressed it well. DH and I are steadily bringing the mortgage down. In December, it was at $89,700 – our only remaining debt from an original $257,400 of combined mortgage, consumer debt, and business debt. At the same time, we’re maintaining long-term savings, building up short-term savings, and giving more. We’re well balanced and strong. The plank analogy works.

I don’t think that a demanding metabolism can be called a character flaw. That’s beyond my control. It’s my management of it that reveals a fault: I tend to be reactive rather than proactive. In the area of food, I too often set myself up so that I’m hungry and have nothing to eat. Maybe I’m at work and haven’t prepared a lunch – so I “have to” go to a restaurant. Or I’m out doing errands and it takes longer than I’d planned – so I “have to” get a snack at the coffee shop.

For 2017, it’s going to be all about becoming more proactive – getting a grip on my food issues, and thereby finally getting a grip on my discretionary spending. And who knows? Maybe I’ll be able to ditch the shapewear too.


Do you have a New Year’s resolution?  Your comments are welcome.


 

October & November 2016 Report

fall-autumn-red-season

Sorry for missing October’s update! I was in over my head through the fall: big project at work early October; a niece’s wedding the next week; first debt-reduction public speaking engagement early November; and ongoing developments for the children’s book I’ll soon be self-publishing.

Where our debt now stands

For each month – October and November – we paid $3,000 off of our mortgage. That means that our June 2012 original debt of $257,400 has now been reduced by a total of $164,700.

  • Our $21,400 consumer debt is gone.
  • Our $80,800 business debt is gone.
  • Our emergency fund is saved.
  • Our mortgage, which in June 2012 was $155, 200, now sits at $92, 700.

Here’s a fact: As our mortgage gets lower and lower, the temptation to quit our intensive focus on debt-reduction increases. At this point, our debt and our debt-to-income ratio are significantly lower than most people’s – including those in our age group (50s). I know a few people who hover around $50,000-$100,000 in mortgage debt who stay there for a long time. It’s not a debt load to get anxious about, and it’s often casually extended by a trip or renovations.

DH and I are feeling a growing sense of, “Is it really worth it to make such a fuss about getting to zero? Nobody else seems to think so.” In fact, without my blog reading and writing, there’s a good chance we would have taken our eyes off the prize by now. Fortunately, I am still reading and writing about debt reduction, and despite the temptations to change focus, we’re still committed to reaching zero.

Where this blog now stands

I’ve been on a bit of a blog journey for the past couple of years. When I started Prudence Debtfree in May of 2012, I wrote once per week. In the last half of 2014, I gave the idea of biweekly writing a try – including mid-week guest posts. That ended up feeling like a stress though, so I stopped it.

I was unsettled. I had a nagging sense that after more that 2 years of blog writing, it was was high time for me to find a way to make it a source of income – as so many other bloggers had. And although I sought out and got advice to make this happen, I never developed much of a clue about it. In part, my problem was limited time, but at least in equal part, my problem was that ever-present tech-phobia which made each little step towards writing-for-income seem too daunting a task.

In March of 2015, I joined Laurie from The Frugal Farmer in creating Fruclassity.  I felt SO fortunate to be working with someone like Laurie. We were two debt-bloggers with different life experience and in different situations, but we also shared a lot in common, and we were on the same page when it came to our outlook on personal finances. Laurie was better connected, more widely read, and in command of better business sense than I was, and unbalanced as the partnership was, I was determined to give it my best.

Writing a weekly post at Fruclassity and another one at Prudence Debtfree proved to be too much for me. It’s been a messy transition, but I’m satisfied that I’ve found a new normal: I write at Fruclassity once per week, and I give a monthly update at Prudence Debtfree.

Writing goal #3

You might remember that in August, I wrote about goals for writing that I’d had for my summer off work. “I had three writing goals. And I’ve met each one. They’ll all take a bit of time to come to fruition . . .”

  1. Goal #1 was to step out of my comfort zone in writing and to give a public presentation about debt-reduction – which I did in November.
  2. Goal #2 was to self-publish a children’s book. The book is on it’s way. I’m waiting for the illustrator to finish her work so that it will be ready early in the new year.
  3. Goal #3 was finally to break into paid blog writing. And it’s happened!

Early in the summer, I received an email message from a magazine editor who asked if I would be willing to allow the publication of a post I’d written a few months before – for a small payment! I was thrilled! It will be another 7 months before it’s published, so I’ll give more details later. The point is, my very fist paid blog writing fell into my lap.

My next few were the result of Laurie’s connections and business savvy as well as both of our work. Fruclassity has hosted and written its first few paid posts.

It’s a modest beginning, but it IS a beginning – one that was a L-O-N-G time in coming. I’ve earned my first few hundred dollars from blog writing!

Thanks to mentors

Again, I can’t emphasize enough how absolutely clueless I was to start with, and how slow I’ve been to begin catching on. I’d like to thank a few mentors who have helped me to navigate my way to this goal.

  • Thank you, Travis Pizel from Enemy of Debt.  Your mentorship got me into the online personal finance community and gave me an understanding of social networking. I was essentially in my own bubble of blogging until you extended yourself out to me.
  • Thank you, Melanie from Dear Debt Blog. Besides letting me write a Dear Debt letter (which I really loved doing!), you confronted me about an obstacle I didn’t even know I was imposing against my writing goal. I felt guilty about my desire to earn an income from writing. I don’t know if you’re aware of it, but it was you who brought that false guilt to light.
  • Thank you, Catherine from Budget BlondeYour mentorship to this technically-challenged learner was one of great patience. I was a slow student, but I did learn. I remember you emphasizing the range of writing niches in the personal finance community and the importance of finding the right fit. I believe I’m getting there : )
  • Thank you, Laurie from The Frugal Farmer.  It is an honour to run Fruclassity with you! You’re the one who brings the savvy to our site, and I’ve been a beneficiary of your know-how. I believe that we’re getting somewhere with our mission to offer hope and a safe place for those stressed by debt and poor financial health. There is supportive community between the two of us, and that’s a great foundation for a broader community of people who need support.

Do you think we should keep our focus on zero? or should we let up a bit? Does guilt play into your relationship with money? Your comments are welcome.


 

Image courtesy of Pexels.

 

September 2016 Report: 6-Figure Debt Now Down to 5 Figures!

20161002_062356

One risk of self-publishing? Boxes and boxes of books.

  • DH = Dear husband
  • DD3 = Dear 3rd daughter

Milestone: $100,000 barrier broken!

Our $257,400 debt from 2012 is now under $100,000. Consumer debt? GONE. Business debt? GONE. Mortgage debt? Down to $98,100. We have broken the 6-figure barrier! The finish line is still 3 years ahead of us. But I can see it.

Writing Goal #2

Last month, I wrote about my trial run at financial freedom in the summer, and the opportunity I had to write more. “I had three writing goals. And I’ve met each one. They’ll all take a bit of time to come to fruition, but I’ll share one for this month’s post.” The goal I wrote about last month had to do with my venture into public speaking about debt reduction. Ottawa Public Library, Main Branch, November 7 from 6:30-8:00. There will be plenty of nervous energy going into that event!

Goal #2 has nothing to do with debt reduction. Here it is:

Two children’s books

I wrote and self-published two children’s books way back around the turn of the millennium. The first, published in ’98, I dedicated to our eldest. The second, published in ’02, I dedicated to our second child. For each book, there is a personal connection to the daughter for whom I wrote it. From ’98-’02, I was either working part-time or I was home on extended maternity leave (I actually resigned in ’01), and it was such a privilege for me to be able to devote some time, energy, and money to these projects. For a few years, I marketed books. I sold about 5,000 of them (not bad for the Canadian market) and even went to local schools as a visiting author.  I can’t tell you how much I loved that.

An abrupt halt

In 2002, it was clear that I had to return to work, and that part-time would not be an option. DH had become a casualty of the NORTEL ship sinking, and his high-tech career – which  provided our family’s bread and butter – was spinning. We didn’t know it then, but there would be years of uncertainty and financial stress ahead of us. All I knew then was that I had to go back to work full-time.

Marketing the hundreds of books that I still had in boxes at home? Not even a remote chance. I hoped that our situation would be short-lived, but as the years passed, those books became a burden. I ended up giving away a few thousand of them to different school boards earlier this year.

DD3’s book?

If you have 3 daughters, and you write a children’s book for each of the first 2, there is no way that you are NOT going to write one for the 3rd. Since 2002, I have known that I had to write a story to dedicate to DD3. I trusted that the right time would come, but my time was swallowed up. And money was so, so tight for so long. The cost of self-publishing a children’s book with illustrations is significant, and we weren’t even close to being able to justify such an expense. Furthermore, with boxes of unsold books hanging around the house, there was some dread at the thought.

But the book had to be written.

DD3 never said anything about it, and I was grateful for her patience. Last year, though, she asked me frankly, “Mom, are you going to write a book for me before I’m dead?” OK! I felt an urgency to get going. It was DD3’s question that made me decide to stay home for the summer of ’16 instead of teach summer school in the name of debt reduction. As Laurie wrote in a recent post at Fruclassity, “Every person/family has things that cost money that are important to them; more important than dumping debt.” DD3’s book was more important.

Time and money: DH’s negotiation

Once I had decided to take the summer off, I got an idea for a story, and I was excited about it. It would be about a girl named Ella and how she learned to deal with a school bully. July came and my test drive of financial freedom began. I liked it! Rest, exercise, socializing, family visits, blog writing, preparations for my talk at the library . . . I just couldn’t focus on writing the book. July became August, and as the first and second weeks of the month passed, I became worried. What was my problem? Why couldn’t I just sit down and write the story? Why was it locked in my head?

Mid-August, I was sitting by the bar-b-q with DH, and he started to talk about the guitar he was saving up to buy with his discretionary money. “I don’t think I can wait until next year,” he said. He wondered if we could do a planned splurge with our common money – which would mean holding off on aggressive debt-repayment for  a while. The last time we had agreed upon such a splurge, it had been at DH’s request too. He wanted to go to Whistler for snow boarding a couple of years ago, and I had automatically been in support of it. We planned a few months in advance, and gave ourselves each a “bonus” for our discretionary allowance the month before his trip.

But then when I  – at the last minute mind you  – and because of my poor management of my discretionary money – wanted a mini-splurge of $200 to go away for a week-end with friends this past spring, DH had not supported the idea. “If you managed your money better, you’d easily be able to save up that amount and go.” He was right of course, but still . . .

“No,” I said. “You’ll just have to save up and wait for your guitar.” That felt good. I had the power. No more automatic agreement from me! “Isn’t there something you really, really want?” DH asked me. “There is nothing that I want more than debt-freedom,” I said in a burst of self-righteousness. But before the words were out of my mouth, I knew they weren’t true. So we struck a deal.

Knowing that I had the money to self-publish DD3’s book made all the difference. Within 4 days, I had written the story. DD3 loves it! I have sent the text and a proposed layout to the publisher. A former student is preparing the illustrations. It feels SO satisfying to be at this stage. After a wait of 14 years, DD3 will have her book.

Debt repayment opens doors

I said that goal #2 had nothing to do with debt reduction, but that’s not quite true. Our debt repayment has allowed money stress to evaporate. And all of the good things that had been stifled by that stress now have their chance to breathe. Among them are DH’s guitar playing. And my children’s book for DD3. Passing the $100,000 mark is worthy of celebration, and I think we’ve chosen the best possible way to celebrate our growing freedom – by using it.


Do you celebrate financial milestones? Your comments are welcome.

Thanks for reading our report for September ’16! Please check out my weekly posts at Fruclassity.

August 2016 Report: Trial Run at Financial Freedom = WONDERFUL

20160728_195224

The view (including my feet) while camping 

DH = Dear Husband

“Ikigai”

Mr. SSC (Slowly Sipping Coffee) recently wrote the post, “Will your retirement have an ikigai?” Ikigai (pronounced icky-guy) is a Japanese term meaning “the reason to wake up in the morning”, and in his post, Mr. SSC explores the idea of life purpose during retirement. (He and his wife are very close to achieving early financial freedom.)

My decadent summer of ’16

For the past two months, I’ve had the great privilege of test driving financial freedom. I’m a teacher, and for the first time in seven years, I chose to take July and August completely off. No additional qualifications courses (summers ’09, ’10, ’11). No teaching English through July (summer of ’12). No teaching co-op through July and August (summers ’13, ’14, ’15). Next summer? We’ll see.

The summer of ’16 has been the most decadent of my career. For every other summer that I’ve taken off to be home, I was on full-time mommy duty. It was wonderful for me to be able to spend all of those summer months with our 3 daughters, but it wasn’t “decadent” – it was super busy. This summer, we’ve only had our youngest at home, and as a seventeen-year-old, she has not required me to be on full-time mommy duty. Not even close. She has her part-time job and her social life. We’ve enjoyed some great times together over the past two months, but they’ve been more laid-back than “super busy”.

So no job to go to + no course to study + laid-back family life = My trial run at financial freedom.

Increased fitness in retirement forecast

If the summer of ’16 is any indication of what retirement will be like, I’m going to be a very fit retiree. Most weeks involved 6 workouts: 3 early morning bike rides with a neighbour – 30-40 km (18-25 miles), and 3 visits to the gym with DH for cardio kickboxing and weights. The benefits of regular workouts are so worth pursuing! Better sleep. Clearer head. More productive. Happier. What’s not to like?

Writing project #1: Debt-reduction talk at the library

More writing is also in the retirement forecast. As my summer of ’16 began, I had three writing goals. And I’ve met each one. They’ll all take a bit of time to come to fruition, but I’ll share one for this month’s post.

I was very impressed when Brian at Debt Discipline wrote about his talk on debt reduction at the local public library. Brian and his wife paid off $109,000 in credit card debt and then went on to save an emergency fund that saw them through a tough year of unemployment for Brian. “What a gutsy move!” I thought of his initiative to speak at the library. It’s one thing to share your struggles with debt online, and a very different thing to speak about them in a room full of strangers. I admired the combination of humility and confidence that Brian showed, and I had no doubt that his talk had been effective. Who better to motivate than someone who has been through the ups and downs of turning his own finances around?

Then I started to wonder if I could do the same thing. I had spoken at church about our journey out of debt. Why not follow Brian’s lead and speak at a local library?

I’m not much of an initiator, and so it took a real step out of my comfort zone to contact the Ottawa Public Library. When I did, things went remarkably quickly. I’d need to fill in a proposal form. Provide references. Indicate dates of availability. Summarize my topic of presentation. Within days, I was fulfilling a request to provide PowerPoint slides.

“A presentation from a personal point of view,” I was informed early in the process, “is a new approach for the area of financial literacy programs at the Ottawa Public Library.” So this was new territory for the library too – not just for me. There were a few weeks’ worth of back-and-forth emails about detailed edits . . . And then it was a “Yes.” As it stands now, I’ll be speaking at the Main Branch of the Ottawa Public Library (120 Metcalfe St. for any Ottawa readers who might be interested in attending) the evening of Monday November 7 from 6:30-8:00.

This opportunity means a great deal to me for many reasons:

  • From the start, I’ve hoped that my writings about our debt-reduction would encourage others who had the desire to turn their finances around – especially those who, like us, felt powerless or incompetent to make it happen. I know from experience that speaking about personal debt can be very powerful in breaking down walls that keep people isolated in their financial struggles. There can be a huge relief in witnessing someone else being open about a topic you’ve always experienced as oppressively taboo.
  • I feel a “cutting edge” excitement about being the first speaker in this venue to present from “a personal point of view.” An old friend – who has no problem speaking her mind – recently asked me, “What makes you think you have the authority to write about debt-reduction?” I got a chuckle out of the question, but I appreciated it and answered her. “I write as someone who is going through it,” I explained to her. “We have a history of financial mistakes, but we’re learning, and we ARE strengthening our financial reality.” I compared our situation to people in AA who had been sober for 4 years. “People who have never struggled with debt don’t have the same insight into everything that’s involved in dealing with it,” I said. My friend nodded her head. She got it.
  • Even more personally, I feel an “I can do it!” growth in confidence. That may seem a bit premature since the presentation is still 2 months away, but I really have overcome an anxious hurdle just in going through with my proposal of the talk. There will be plenty more anxiety in the coming weeks as I practice, refine, practice, refine . . . Mr. Money Mustache’s latest post deals with his preparation for a recent public speaking event, and it brought home to me the work that still lies ahead. Very different type of event! But the point is, there’s a lot of effort that goes into a good presentation. So here we go!

Debt-reduction milestone

The summer of ’16 leaves me with no doubt that there will be plenty of “ikigai” in my retirement.

August brought our mortgage down another $2,000. So of our original grand total debt (consumer, business, and mortgage debts) of $257,400, we have paid off $156,600. If you’re good at math, you’ll quickly calculate that we’re on the verge of a very significant milestone. Our 6-figure debt is about to become a 5-figure debt.

That kind of milestone is worthy of celebration, and DH and I have been wondering how to mark it. But that ties into Writing Goal #2. And you’ll have to wait for next month’s post to find out about it : )


Do you ever wonder what the “ikigai” (reason to wake up in the morning) of your retirement will be? Have you ever had a practice run at financial freedom? Your comments are welcome.

Thanks for reading our report for August ’16! Please check out my weekly posts at Fruclassity.

 

 

July 2016 Report: Olympic Inspiration Squashes Mortgage-Payoff Complacency

olympic-rings-on-white

I’m finding it really hard to pull myself away from the Olympic Games coverage! Ever since my early teens, I’ve manifested symptoms of Olympic Addiction Disorder (not a real thing – at least I don’t think so). So I’ll make this quick!

Here’s a recap of where we are in our journey out of debt since June of 2012:

  • Consumer debts of $21,400
  • Business debt of $80,800
  • Mortgage debt of $155,000
  • Grand total debt of $257,200

Following Dave Ramsey’s strategy as outlined in The Total Money Makeover, we attacked our two smaller consumer debts first, and then moved on to our business debt. It took us just over 3 years to pay off all non-mortgage debt. In July of 2015, we were left with the mortgage to tackle, and the new step of saving up our big emergency fund (to cover 3-6 months of expenses in the case of job loss).

From June 2012 to July 2015, we paid about $27,000 off our mortgage just by our regular monthly payments. Starting in August 2015, we put extra against our mortgage, and in the last year, we have paid off almost another $26,000.

  • The grand total of our debt (just the mortgage) now sits at $102,800

Psychology of debt-reduction: Focus on what has been paid off, not on what’s left

In June, I made the discovery that it is better for the psychology of our debt reduction to focus upon what we have paid off rather than what we still have left to pay. In the first few years of our debt reduction, it was natural to think in terms of how much we had paid off. Once we got past the half way mark of our grand total, it became natural to think in terms of what we had left to pay off. But that had a discouraging impact, so I’m trying to focus again upon how much we have paid off.

In July, we paid $2,000 against our mortgage, bringing our total mortgage reduction since June 2012 to $53,000.

2 significant milestones

  1. Our emergency fund is now full (I should be more excited about this than I am), but we will continue to save at the same rate for big upcoming expenses as well as for retirement.
  2. The mortgage that we have left is roughly equivalent to the total amount of non-mortgage debt that we paid off from 2012-2015.

A wall of exhaustion? Or a wall of complacency?

Ramsey talks about people “hitting a wall” when they reach this stage of debt reduction. Consumer and other non-mortgage debts are gone; the emergency fund is saved; and all that’s left is the mortgage. Ramsey compares this wall-hitting stage to a marathon runner reaching mile #18 out of 26. Exhaustion sets in, and every muscle in the body screams, “Enough already!”

I think I might be facing a wall, but it’s not of exhaustion. It’s of complacency. We are at the point now where we’re “normal” – even for people in our age group (in our fifties). No longer do we have a debt-to-income ratio that is way above the record breaking household national average. We’re well below that average. While we felt a sense of urgency about our non-mortgage debts, it’s hard to muster that same urgency for a mortgage – and a pretty modest one at that.

Refocus

Hold on here! We were never going for “normal” to begin with. We were going for complete freedom from debt. When it comes time for us to retire, we don’t want to fit in with “normal” – which is to retire while still in debt. So time to refocus, to stare down that wall of complacency, and to attack our mortgage debt like champions. The Olympic athletes, whose competitions I’ve been watching, strive for way beyond “normal”, and they certainly don’t give up before they reach the finish line. My finish line still lies ahead. The course has changed, but it still needs to be covered. On to the next stretch of the race!


Do you have a lower sense of urgency about your mortgage debt? Do you have Olympic Addiction Disorder? Do Olympic athletes inspire you – either towards physical fitness or some other pursuit of excellence? Your comments are welcome.

Image courtesy of PublicDomainPictures.net.

Thanks for reading our report for July ’16! Please check out my weekly posts at Fruclassity.

June 2016 Report: Value of Financial Shock Absorbers

maxresdefault (1)

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

Thanks for reading our report for June ’16! Please check out my weekly posts at Fruclassity.

Responding To The Massacre in Orlando

20160617_145553

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.

 

May 2016 – 4th Anniversary of Debt-Reduction: $150,000 Down!

18555939_068a92103e_z
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

Thanks for reading our report for May ’16! Please check out my weekly posts at Fruclassity.

Books for Attawapiskat: Ready to Learn?

Attawapiskat

By the end of the day yesterday, even more packages had arrived than those featured above.

Yes, this is still a blog about one couple’s journey out of debt – mine and my husband’s. And I will get back to that topic soon. Just not today.

Thank you!

I’d like to extend my thanks to everyone who has bought a book for the initiative that I wrote about last week. As you can see from the photo above, in just 1 week, we have received so many generous donations of books for the youth of Attawapiskat, a northern First Nations community in crisis. I personally have never been involved in something like this – that takes off through social networking. E-mails, Facebook, Twitter, blogs . . . They can certainly work their magic.

First Nations issues: It’s time to learn

Our Board of Education has, for the past several years, made a real push to have First Nations issues taught. I’ve been very, very slow to respond – partly because I feel so inadequately educated in this area myself. A younger teacher approached me about this a few months ago, and she said that the thing to do is to just start teaching even very basic lessons – because most of us know very little. When I went through school, I never even heard about the residential school system – which was ongoing at the time. (The last residential school in Canada closed in 1996.) And as I grew up in a family and a church that encouraged an awareness of social issues, the plight of First Nations people in my own country was somehow never on my radar. I knew there were problems, but they baffled me, and the unacknowledged, silent belief that I have to admit I carried was that the root of the problems must lie with the First Nations people themselves.

I responded to the advice my young colleague gave me by offering to give a brief presentation on the history of the residential school system to the class of any teacher in our school who was interested. As it turns out, last week, the same week our Books for Attawapiskat initiative was unfolding, I gave my first lesson. I had significant angst as I prepared it – given my own ignorance, and having to make decisions about the level of detail to go into, what to focus upon,  what to leave out – all while making it fit neatly into one self-contained period of 75 minutes. I was nervous about giving my first presentation, but it went well.

As I prepared for it, the most significant thing I learned was the concept of intergenerational trauma. If a person has grown up in an institution, separated from family and community, and has been forbidden to speak the language, engage in the spiritual practices, wear the clothes, eat the food, develop the skills of his/her heritage – if that person has grown up silenced and micro-managed, every expression of self squashed, every minute of the day and night scheduled – if that person has grown up within a culture of normalized abuse, physical, mental, emotional, and even sexual – and then that person at the age of 18 is sent out either to return home or to make it in the world at large – what chance does that person have to find his/her place? Anywhere? As a spouse, a parent, a worker, a community member or leader, how functional is that person going to be? Now multiply that person by tens of thousands of people over seven generations. “Get over it,” just doesn’t cut it, does it.

The wake-up can lead to new strength

In both personal terms and in terms of society at large, the wake-up moment can allow for powerful change. As a debt-blogger, I know how important it was for me to “wake up” to the self-sabotaging personal finance chaos that paved the way to my own experience of financial distress. I have friends who have had a wake-up to alcoholism, drug addiction, or to negative patterns of codependency in relationships. As we survey history, it’s common for us to respond with, “How could they have let THAT happen? Couldn’t they see what was going on?” And no doubt, future generations will look back at us and wonder the same thing. As societies, we have wake-up moments too. We humans are so adept in our strategies of denial, and it’s very hard to break through them. But when we do, paradigm shifts happen. I know. My husband and I  have paid off 60% of our total debt.

There. It will be back to our journey out of debt next time. Thanks again to everyone who has supported our school’s initiative to help a First Nations community in crisis. We can now receive packages until May 19, so it isn’t too late to buy a book for the youth of Attawapikat.


 

Thanks for reading our report for April ’16! Please check out my weekly posts at Fruclassity.