Weekly Column: Rolling Down Debt

Rolling down debt

This scenario might sound familiar to some: in the oil boom, most employees in the patch worked on a rotating shift which included plenty of overtime hours. Many received a live-out allowance (LOA) to cover the cost of hotels and meals on the road. There might also be a truck allowance to cover wear and tear and mileage on a personal vehicle. All things considered, times were good and there was always plenty of money to go around.

People that work hard have a right to play hard. Boats, quads, bikes, campers and after market accessories for vehicles were another way of rewarding oneself for time spent away from home and family. The payoff to leaving those you love for weeks at a time was taking them on epic adventures when you got home, right?

And then you lost your job

When layoffs started, many people began preparing for the worst. Cutting unnecessary spending helps but if you have lost your overtime hours your income is also cut significantly. Now you may be caught without the money to pay things off in full as you had expected. Contractors and the self-employed are in an even bigger fix because, for many, the work dried up but the cost of their tools, trucks and equipment did not.

For those outside of the industry, it may be hard to understand how people raking in huge money could so quickly find themselves in a jam. But not many people have a year’s expenses saved for emergencies, and it turned out that was what was needed for countless families and business people. Even the most careful and conservative spenders didn’t foresee such an extended slowdown. Saving for a rainy day and planning for the worst helped, but it’s been a tough couple of years for many in the area. People that normally paid off their credit cards in full might now be using credit to get by, month to month.

The new normal

It’s been awhile now and, though stressful, hopefully you have managed to get some assistance or work and adjust to the new reality you face. Possibly you aren’t yet able to consider paying off your creditors faster. Maybe you are struggling to get on top of your payments but don’t know where to start. Whatever the case, when you’re ready to tackle that stack of bills there’s a strategy to help you make the most impact in the shortest amount of time.

The snowball effect

Essentially, you want to list all of your creditors from highest interest rate to lowest. Most experts recommend paying off the highest interest rate first to save the most on interest over a period of time. For example, pay off your credit cards that charge 19% interest before you worry about the line of credit that charges 7%. Once paid off, put the amount that you are accustomed to paying towards the next debt on your list, then combine those totals and begin paying on the next, and so on. In this way you will create a “snowball” of payments that gets larger and pays creditors off faster, saving thousands in interest.

Pay more than the minimum

Credit card companies lower your minimum monthly payment as the balance gets paid down, basically stretching out the time it takes to pay the bill off in full (and making the company more money in interest). One example on moneymentors.ca shows how paying just $20 above the minimum every month and keeping the payment at that amount for the entirety pays off a debt of $24,105 almost ten years earlier and saving over $1700 in interest.

Can you find an extra $20 every month to get yourself out of credit card debt?

Be strategic

If you’ve only been making minimum monthly payments and plan to increase that amount to save on interest, be sure that you don’t overextend yourself and end up needing to use the credit card for survival again. The idea is to tighten up any discretionary spending and sacrifice a few treats here and there to raise your payment. If you are able to bring in some extra monthly income and can dedicate it exclusively to the highest interest rate you have, you’ll quickly see balances begin to drop.

Use that momentum to wipe creditor after creditor off your list. Once you’ve paid off your credit cards and some loans, use the amount that you used to pay on debt to build up an emergency fund, invest for retirement and save for vacations and recreation.

There are many online and printed explanations of how to snowball your debt repayment. Check out http://financialmentor.com/calculator/debt-snowball-calculator and do an honest calculation of your liabilities. The sooner you begin, the sooner you will unburden yourself from credit card debt.

For The Future Me

The other day I read something on Medium that really resonates. Although awkwardly titled, "How to Trick Yourself Into Being Kind to Yourself" hit home for me on a number of levels. The gist of it is that we can all try a bit harder, dig a little deeper, today in order to help ourselves tomorrow. Whether it is just maintaining a bare minimum when depressed, or being motivated to exercise and eat right even when we'd rather not, framing the situation as a "won't I be glad for this tomorrow" scenario helps keep us on track even in moments of weakness.

On the surface, I have been doing this for sometime without even thinking about it. I have been doing much better at tidying the kitchen before putting the kids to bed. I know how I dislike waking up to a mess so it has become a matter of routine to do the dishes, sweep the floor and tidy the living room before we go up for baths and stories. The boys also know their roles in helping and it has made life so much more pleasant. Unconsciously, I have made a routine of tidying today, though tired, to start the day off right for myself tomorrow.

In other ways, though, I have failed to invest in myself, whether it is today or in the future. I have slowly allowed myself to become that tired looking mom we all know--the one whose home is reasonably tidy, her kids are polite and clean, the bills are paid the lawn is mowed the list goes on, but in her ability to look after everyone else she has neglected to look after herself. Possibly her clothes don't fit, her hair may be disheveled or simply pulled back for practicality. She may have nothing to say because she has lost her voice and opinions and interests in her quest to make everything good for everyone else.

This didn't happen overnight. It is a slow erosion and small sacrifices are made so naturally that they go unnoticed, at least at first. By the time they are felt it is too late and the opportunities that come along where she might renew her interests and reinvent who she once was...those opportunities often go unanswered out of fear, or something comes up, or it is not convenient to make it happen.

It pains me greatly to say that I am that woman. I've allowed thirty pounds to creep onto my frame the same way I've allowed my interests and intellect to creep out the door. Losing your identity is an insidious, silent chipping away at your spirit.

Of course I am happy with my life. I have two happy children--having happy children is all any of us really wants, isn't it?--I have a caring common-law husband, a helpful family that I am close to in spirit and proximity. I have friends, real ones, that understand me. Life is good and I am grateful and this is not a stay-at-home-mom rant. But having all of these things and losing myself in the process? That is not fair and it is not even necessary. It is just something that I have allowed to happen.

Frugality can do that. Living in the country can do it too. My mom is the only person that has watched my kids, save for a handful of afternoons at a friend's house. My mom is busy and overworked and I don't want to add to her workload, no matter how much she loves to help with the grandkids. So here I sit.

But I am realizing that, for the Future Me, I need to step out of my well rehearsed role of martyr-mother. I do NOT want to look back on my life and see a path littered with opportunities I didn't take, stories I didn't write, experiences I didn't have because it was easier to stay home and do the work that needing doing. I will always take care of my family and animals. I know that. I am not throwing everything overboard for a life of glamour and adventure. I am simply making myself part of the conversation again.

Even before I read the Medium story I had begun to schedule myself some writing times, usually in the evening. It's not a perfect scenario because I am often too tired and worn down to properly focus. Sometimes I just fall asleep instead. But I am working on it. I have even worked in a bit of afternoon time and it has been massively productive.

Most importantly, for me at the moment, I have begun to exercise in earnest. I am tired of having a belly hanging over the jeans handed down to me by a friend. I am very tired of looking frazzled and worn and spent. That is not how I feel on the inside. Inside, I am brimming with life and curiosity and possibility. I want to look like I care about myself. Right now I know that I look like I put everyone else's needs before my own. Because I do.

Scheduling time to write and exercise has made me more efficient at completing all the jobs I like to get done. Leaving the dishes pile up for 3 days does not help my situation because then I am tired and frustrated in a dirty house. But if I want the time to write and exercise, I can accomplish quite a bit. I know that I can get the dishes done and floor swept and house tidied in only a few minutes. The Future Me needs me to do that. Investing in myself, giving myself time to exercise, read, write and grow, is very much  a part of caring for the Future Me too. I have to do it.

Weekly Column: Consumerism is a Costly Cycle

Consumerism is a costly cycle

In years gone by, frugality was a way of life—not out of stinginess but out of necessity. Families were larger and were quite often supported by a single income. Handing down clothes, growing food, spending cash only and waiting until payday was how most everyone got by. Basically, if you couldn’t pay it off in full, you didn’t buy it.

Today, it’s a different story. Most families have more than one vehicle, at least one credit card and various loans besides their mortgage. Often both parents work and must pay for after school care, a sitter or day care. Add extra-curricular activities to this already busy schedule and it’s understandable that people no longer have time to cook and eat at home.

Gone are the days of waiting for a movie to become available at the video store or, worse yet, be shown on TV. Pay-per-view, downloading and live-streaming provide almost instant availability of anything we are interested in. We are steeped in convenience and we don’t mind paying for it. In fact, convenience is so much a way of life that we don’t always realize the cost.

Everything is disposable

Older folks will remember that eating in a restaurant was once a rarity. Now we have play structures to entice families to bring their kids and turn them loose. An added bonus is the plastic, throw-away toy included in every kids’ meal. Our homes are overflowing but we are conditioned to accept, and even expect, more all the time.

If children grow up receiving a new toy every time they have a meal out, at a restaurant geared toward their total satisfaction, should we really expect them to treasure their belongings or are we fostering in our kids an “easy come, easy go” attitude? I lost that toy, or this one broke. No worries, I’ll get another next week. Besides the McHappy lifestyle, do you let your kids pick out a new toy or treat whenever you are out? Are you drowning in debt but have no idea how to save yourself? Are birthdays and Christmas becoming ever more extravagant just to elicit a response from people that are bombarded with new things year-round?

We have Facebook, Pinterest, Instagram (the list goes on) to show us daily how everyone else is living. Often we feel that they are living better—either more stylishly, with more adventure, fewer worries…happier. Seeing inside people’s homes and vacations, not to mention the carefully staged presentation of their relationships, can leave you wishing for more. But maybe it’s time to strip away all the layers of consumerism that our culture has piled on us in the last few decades.

Is your consumption sustainable?

Have you ever put a price tag on the garbage you throw out of your home every week? Have you added up the cost of clothes you have never worn that you either donate or give away when you purge your closets? How much food rots in your fridge before you toss it out and go buy more? To be honest, we are all guilty of waste to some degree. The question is at what point will we say “enough is enough”? When will we tire of the cycle of working and worrying, spending and purging? Is there actually a simpler way to live?

In most countries in the world, having unworn clothes, uneaten food and a surplus of belongings is a dream that will never be realized. Many nations don’t have a reliable food system and the little food there is has become unaffordable or inaccessible because of war and crime. Compare that struggle to our preoccupation with getting the latest fashions, keeping up with trends and competing on social media. It really puts things into perspective.

Many families effected by job losses have already altered their spending to match their income. They would probably agree that keeping up appearances is not important when it comes to keeping the roof over your head and the kids fed: “when the going gets tough, the tough get going”.

It takes courage to make changes in your life. You may notice that certain people are not supportive of your desire to stop mindlessly spending. You have to decide what is right for you—living according to their standards or choosing your own priorities.

Frugality in and of itself will not guarantee you a good life. It may get or keep you out of debt, but it is up to you to find the pleasure in the little things and give meaning to your daily interactions. Do you choose to stress and worry in order to preserve an unsustainable lifestyle or do you step off the consumerism treadmill, set some goals and get back to basics? 

Weekly Column: New School Year, New Spending Plan

(Obviously, there's been a delay between my writing this for the local paper and my actually posting it here!)

New school year, new spending plan

Do you know exactly how much income your family has available every month? Do you know, within a few dollars, how much of that will be spent? Many people will answer “all of it” but might not know where all the money goes. If you are one of those people, creating a spending plan will help you track those dollars and also let you hang onto them for a lot longer.

Budgeting fatigue

Just like the word diet, talking about budgeting gives people a negative outlook as though they will be forced to sacrifice all the things they enjoy. Saving receipts and doing math might feel like one more nasty job at the end of a long day. But it is worth it to find out where your money goes every month. Use your bank statements and credit card bills and track all the cash spent by family members for a couple weeks (a month is better). Try one of the great budgeting resources found online: https://moneymentors.ca/home-budget/ (this one puts all your expenses in a pie chart) or www.gailvazoxlade.com/resources/interactive_budget_worksheet.html . Find a template that works for you and get started.

Budget vs spending plan

Once you know how much money comes into and leaves your household in a month, and you can see on paper whether you are coming up short, it is time to make a plan. The Money Mentors website defines a budget as “a spending plan that helps you get as much as you can from each dollar”. Seeing your expenses listed on paper can point out waste and unnecessary spending that might otherwise go unnoticed. Use a budget as a tool to cut excess costs, saving money for the things you want. It might not happen in the short-term but with hard work and persistence you will get there.

Write a list of some things you would like to purchase: a new vehicle, a house, a family vacation. Perhaps you would just like to build a small and large emergency fund for your family’s peace of mind. Put a dollar figure on each of your goals, then turn to your interactive budget worksheet and look hard for places to trim your spending. Remember, you will need to tackle outstanding debts, particularly credit card debt, before you get to the fun part of saving for your goals. But if you can free up even a few extra dollars a month, it will help get you where you want to go.

Easier said than done

If you’ve been underemployed for some time it must get frustrating to be told to budget better and everything will be alright. But making a plan and sticking to it gives a sense of control in uncertain times, which helps morale and prevents getting into a deeper hole than necessary. There are so many reasons to start tracking your money, one of which is only four months away: Christmas (no one wanted to hear that, sorry!). If you are out of money at the end of the month now, December will be no different…aside from the additional spending, that is. But if you can set aside some money every week starting now, hopefully you will avoid going further into debt with Christmas expenses.

And then there’s hot lunches

If you have school aged children then you’re familiar with unexpected and urgent last minute requests for money for sports, crafts, the list goes on. Have you made room in your plan for these unforeseen costs? Avoid derailment--factor a small amount of cash for school expenses into your budget even if it means going without your drive thru coffee every day. Focus on your long-term goal—a vacation, a massage, being debt-free—no matter how big or small your goal may be you’ll only get there one small step at a time. If certain costs are inevitable you must factor them into your list of expenses or you won’t see the results you are hoping for.

No matter what you call it, a spending plan or a budget, this is the way that people get themselves out of debt. Do you know a family that seems to weather every storm with relatively little change to their simple lifestyle? Do they still manage to have a vacation and pay their bills although their income has taken a hit? Are they independently wealthy or, more likely, do they plan how their money gets spent every month? Do they foresee upcoming and unexpected costs and save for them in advance? If you think that family would be comfortable discussing how they handle their money, approach them for tips and advice. Treat the new school year like a new beginning and start planning for the costs that are just around the corner.

Oh ya, I have a blog

The days are flying by around here. Our lives have gone from the slow dull grind of toddler monotony easier-to-stay-home-than-go-out-and-risk-a-meltdown (mine, not theirs). Suddenly, here we are with one kid off to school everyday and me and the other guy busy with sheep and pigs and the house and yard and even trying to do some sewing ;)

I feel like I am not sure what this blog is about anymore. I know I've mentioned that before so I won't go on and on. There's been no time to keep up with budgets and spreadsheets but as the garden and animals wind down for the year I hope to get back at it. I have lots of crafts and projects on the go that I'd like to share. It's a matter of figuring out how to put pictures on this blankety-blank blog! I've been out of the workforce a few years now and keeping up with technology is a real pain in my side. Most days I am tempted to do like my dad and reject it altogether (except that he literally has to get someone to change the radio station in the tractor for him). I guess I don't want to go that far with it.
But there's a fair amount of cursing happens at this desk :-)

For the longest while I had lost the camera. When I found it I promptly lost the cord to charge it. Now I have found the cord but the camera is at my mom's, where I took it to take pictures of my sweet baby nephew but forgot to. I am not even making this up. So although I have decided to say to h=ll with using my iphone to do pictures for the blog, I still don't have pictures until I get used to carrying a camera around again. Once I have it, that is.

We had our chickens butchered a few weeks ago. In my quest to teach my boys about where their food comes from I have created two part-time vegetarians. I suspect there will be more unintended consequences along my parenting journey, but we have 3 pigs nearing the end of their tenure here and I don't want to turn them off bacon for life. Although, "more for me" is a thought that does cross my mind.

The year's garden did well. I did not, however, succeed in keeping better records of what I grew and how much I harvested. I did not really even get pictures of it. But the yard is maturing and the spring will be a time to put some needed work into infrastructure by way of more stepping stone paths and hopefully the larger garden spot that I wanted this year but did not get. After that, the focus will be on maintaining what I have--better weed control--and getting the pond pump running. We had a very labour-intense spring this year and I hope never to repeat that. Some projects are to be expected, even wished for, but the work installing the rocks on our pillars and basement was a strain. Very expensive, very time consuming. Glad to have it done, though!

Front door: before

Front door: after 2 coats of paint

Petunia

Well lookie there, I just figured out how to put up a couple pics. Hopefully this is a sign of more good things to come :) I will put up another picture of the front door makeover when I finally get that last coat of paint done. Hope all is well for you :)

Weekly Column: Is your young adult ready for the real world?

Is your young adult ready for the real world?

Many young people are looking forward to leaving home in the next few weeks. Having graduated high school, they’re embarking on the next chapter in their lives: post-secondary education or the work force. Many may have already experienced working at a part-time job. Perhaps mom and dad encouraged them to save, discussed finances, opened up an RESP and have made sure their child is literate with money. But there are young adults out there who’ve never been taught to set aside money for necessities, emergencies, and the future—before spending on entertainment and “stuff”. Do young people read the paper? If they do, this column is for them!

Most people admit they have some regrets in their financial pasts. Whether it is not saving for retirement or a bad credit situation, these regrets can add stress to your life for a long time. Ensuring your children have an understanding of how credit works and illustrating for them how their savings will grow over the years is as much parenting as teaching them to cook and do laundry. Basically, you know your child is going to be an adult with bills and payments and income. Is that child equipped to make good decisions that benefit her future and will she have security as she sets out in the world on her own? There are some ways you can help.

moneymentors.ca

Money Mentors is an Alberta based, not-for-profit credit counselling agency. It aims to help families and individuals recover from financial crisis and move forward in their lives. They offer credit counselling, money coaching, retirement planning and teach financial literacy and, best of all, it’s free! Their site offers free online resources on a number of topics—debt management, choosing a credit counselling agency, organizing your finances, to name a few. They can teach you to set investment goals, write a home budget, or roll down your credit card debt. They offer free online courses like Budgeting Boot Camp and R & R Retirement. There is a course on this site for everyone if you have a computer and a few hours to dedicate to your financial well-being. If you can’t immediately get to the free courses, go to Resources on the top of the page and find Free Online Courses there.

Budget now, profit later

The Money Mentors site is intended for people in every stage of life, do give it a look—you are bound to learn something that helps you reach your financial goals. For the young adult today this site is a convenient way to review some money basics that might not have felt relevant while they were living with mom and dad. But the decisions they make in the next few years can either haunt them or benefit them for a long time to come. We could all heed the advice found on the site: 

1) track your spending 

2) automate your savings

3) save loose change 

4) learn to comparison shop 

5) avoid spending triggers

6) consider buying used 

7) save windfall income 

8) institute a waiting period before you buy 

9) consider the cost in hours you will work to pay for it 

10) be content with what you have.

Credit crisis

Many stores make credit seem so easy. 0% down, no payments for 6 months, we’ve all heard the appealing ads. It’s a great deal if you know for certain you can pay the whole bill off before you are charged the exorbitant interest after 6 months. A nightmare situation for a young person is buying their electronics on such a plan, heading off to university where they find they spend more money than they planned on social life and miss their first several payments. Now they have student loans, consumer debt, possibly no job, and a few years ahead of them where these credit issues are going to snowball into a problem that effects whether they can buy a house, start a family, and ever feel secure. Contrast that with a young adult who knows how much money they have available to them every month, pays the bills first, stashes a bit for emergencies or savings, and lives simply on what’s left over.  

It's never too late to learn

Sites like moneymentors.ca are refreshing to find in an online world where everyone is selling something. If you have been struggling to make ends meet it is worth your time to try a free online course and read through the resources there. Make reading and learning about financial fitness part of your routine and the good habits are sure to follow. If people starting out in life can get the financial knowledge they need before making poor decisions, who knows how far they can go.

Weekly Column: Preserving the season's harvest

Preserving the season’s harvest

Growing your own food is a great pastime because it gets people outside, provides exercise, puts you in tune with the changing seasons, and rewards you with delicious produce in the end. While just a hobby for most nowadays, it wasn’t that long ago that local families relied on their gardens to provide the bulk of their winter food supply. Although not usually a necessity anymore, given the year-round selection in grocery stores, many people still preserve their garden’s bounty so they can enjoy the fruits of their labour in the winter months.

Not a gardener? No problem. Trot yourself down to your local farmer's market and meet the folks that grow good food. You may feel that homegrown food is pricier than that at the grocery store, and maybe it is. But consider the labour that goes into growing, cleaning and setting up for a local sale. Consider that what you purchase has been locally grown and picked fresh within the last day or so. Compare this with grocery store produce that has been picked too early and trucked in from out of the country. There’s no comparison in flavour or quality, and if you would splurge on an ice cream cone don’t deny yourself the healthy pleasure of fresh vegetables. Like the saying goes “you can pay your farmer now or your doctor later”.

If you’re lucky enough to find yourself with an excess of fresh food and aren’t interested in preserving, don’t let it spoil on the counter if you can’t eat it all. Share with your neighbours, trade for other vegetables, or donate the surplus to a food bank so that it can be enjoyed at a free community meal.

Getting started

Even if you’ve never preserved food, there’s likely a method that will suit your tastes and abilities. Check out recipe books at the library or ask veteran cooks for their favourites. Be wary of what you find online: use only trusted sources that follow USDA guidelines. Pickling and preserving is not difficult but don’t take chances with botulism or spoiling your food.

slow roasting tomatoes

The Company’s Coming: Preserves cookbook by local author Jean Paré is a great starting point for novice cooks and don’t forget to watch for cookbooks at used bookstores and thrift shops. While you’re thrifting, keep an eye out for boxes of good quality jars intended to withstand the heat and pressure of canning. Frugal home canners will note that the cost of jars is ever on the rise. At around $10 for a dozen quart sealers, it’s not cheap to start canning unless you can source your supplies more affordably.  You can buy lids and sealer rings separately for a substantial savings over the jars and lids you find at the grocery store at this time of year.

 If you’re cutting back on how much you preserve as you get older, perhaps you can think of someone that would appreciate some of your extra canning supplies. Likewise, if you’ve been given food in jars kindly wash and return them to the source in hopes that you might get lucky twice.

The price of sugar usually skyrockets when it’s time to make pickles and jams. Buy extra when you see it on sale, or even at regular price because it’s bound to get higher all season. Stock up on turmeric, mustard seed and other spices in the ethnic food aisle rather than the basic spices section—the bags are bigger and usually much cheaper.

A healthier option

Many would argue that the process of first growing, then preserving, their own food is of no savings at all once you consider your time and effort. On one hand, this is true. Buying canned vegetables and store bought pickles is quick and easy, and sometimes cheap. But if a person truly enjoys the time spent outdoors working in the fresh air and looks at it as a pastime that prevents costlier diversions, the benefits soon outweigh the costs.

Knowing what goes into the food your family eats has never been more important with chemicals and BPA so prevalent in commercially made products. Home preservation is another way people can take control of their diets and budget. There’s growing interest in the health benefits of fermented foods and the simple pleasure of handling your food from garden to table. Watch for deals on your canning supplies and enjoy the flavours of summer year-round for less.