Money Monday AKA – How We are Going to Get Out of Debt

*Vulnerable Post Ahead* So if you’ve been reading here for a while you know that it has been my goal over the past few years to get better with managing our money.

The first big shift happened around this time last year when I was on Maternity Leave. Matthias had been working a commercial job that wasn’t paying enough, my mat leave pay was a huge reduction to the income I was getting pre-baby and we just weren’t managing it well. We were spending more than we were making and using our Line of Credit and Credit Cards to make up the difference.

After a bit of a breakdown and a few glasses of wine and a hot bath I got my ish together and started tracking everything with Mint. It was super helpful to see where it was all going and to get a better understanding of where we could cut back to save. Matthias started a better paying job, I made a bit of a supplemental income through Beachbody, and we made it through the rest of my Maternity Leave at about the status quo – not going into more debt, not paying more than the minimum payments.

I went back to work and for a bit I was working full time (Cha-Ching), and when that stopped I started working about 5-7 shifts a pay period, which was a good amount more than my maternity leave due to being casual and having a paid out vacation % and not paying pension and benefits.

We watched the state of the economy continue to decline, and we were thankful Matthias had in-town work paying close to what he would make if he was out of town, but we were aware the job he was in would end in August. In this time we paid off our credit cards and began paying down our line of credit. I was feeling pretty good! And although Mint was still showing me that we were spending more than we were making, and we were living paycheck to paycheck, it still was rewarding to see our debts going down.

In June we decided to sell our house and move to Airdrie, something that was semi-planned, semi-spur of the moment. Hindsight is everything and it probably wasn’t the right time financially, but it had to happen in order to bring us to where we are today and where we are hopefully going. So we sold our house for what we needed to in order to have enough of a down payment for a bigger place and to cover (most) moving costs. Tucker passed away and with that came a $1000 vet bill. And then we moved. I had a brief period after moving where I didn’t work for two weeks, which set us back, and then we had an extra mortgage payment go through that we weren’t expecting (because when you pay your mortgage your paying for the 2 previous weeks, not the two coming weeks, something I didn’t know!), and then about 3 weeks after we moved Matthias’ job ended and he was laid off. So throw in a 2 week EI waiting period without pay and we were basically fucked.

Matthias was off work for 6 weeks and we ended up racking our credit cards back up, losing our headway on our Line Of Credit, and cashing in some of our RRSP’s (not usually advisable, I know, but times were desperate) to make it through. We didn’t have any emergency savings to get us through. I was picking up to full time, and it wasn’t enough. It totally sucked, and I was super stressed about it. I applied to probably close to 100 jobs for Matthias before he finally got one. Unfortunately it is out of town and he is back in Fort Mac for a 2 week on, 1 week off shift, but right now you take what you can get.

I started in a .53 line – so 9-10 shifts a month, which is great in the long run because I will have pension, benefits for all of us, banked vacation, and an RRSP match from work, but its also tough in the mean time because it means a cut in my paychecks because of the extra expenses coming out.

I vowed to change. No more living paycheck to paycheck and not having a buffer in case of emergency. No more spending mindlessly without having a plan. No more overdraft. No more credit cards.

I read Total Money Makeover by Dave Ramsey at the suggestion of some of my FB friends, and now I’m onto Debt-Free Forever by Gail Vaz-Oxlade. Total game changers. I’ve restructured our entire budget and started using YNAB (You Need A Budget) and although I definitely find it confusing, I am committed to giving it a few months try to see if it will be better for us. I now can see the value¬† of Mint vs the drawbacks – It is excellent to look at retrospectively to see where your money has gone but it does little to help you plan where your future money needs to go. We have started a Cash Budget for the Groceries, Gas, Pet Food, Personal Spending Money, and Quinn Supplies – another big adjustment, but I’m committed to it.

Here’s the curve ball to it all. Matthias doesn’t get paid for the time he is off over Christmas. Last year he was off for two and a half weeks, and I had enough foresight to save enough to make up for his lost income prior to him going off. This year he is off for an entire month, December 15 to either January 11 or 18 (fingers crossed its not the latter), and with him just being off for 6 weeks we haven’t had the time or income to save for future missed income. So now I’m scrambling to save as much as I can before he goes off without going deeper into the red or spending more than is coming in. It’s a tricky balance.

So that’s where we are right now! Having a varied income for both of us sucks and I am jealous of all you salaried folks out there who know exactly how much is coming and when, regardless of the time of year! I can’t be the only one out there who has struggled with budgeting and overspending, so I am planning on making this a semi-regular post topic because it’ll help keep me accountable and maybe it will inspire someone else. :)