Hey All,

Not sure if anyone does this or not. Personally I'm 6 months ahead on my power bill and about 2 months ahead on Eastlink.

I'm not sure why I do this, but for some reason I do. I tend to pay an extra 10% on my bills, If I have it in my bank I will spend it, but I like to "plan" ahead incase of a job loss or whatever.

I don't notice the money missing, but I went online to take a look and noticed I have over $500 in credit for NSP. Mind you $500 is like a few months in a house, but in a 2 bedroom apartment, we only spend 75-85 on average.

Other bills are just paid on time. (Recently paid off 1 CC and our Wedding rings, almost have the new furniture paid off) I also take all but 10% of my paycheque and put it towards paying down debt. 10% of my cheque is for me to screw around with ($100 every 2 weeks).

Since July 1st (105 days), by doing this we've eliminated ($300 shy) $10,000 off our total debt. We would have more paid off it, but we got married and spend alot of our cash paying on that or paying back the inlaws lol.

Paid off:
2 peoples accounts
Mastercard
some other CC she has
Closed 2 over draft accounts

By Xmas
Old Car (2300 left)
Furniture (1100 left)

I've started to snow ball the money, it is hard to get use to for the first while of not taking alot for yourself, but you get use to it and only taking what you need.

I used this as a guide line and will give you a good overall idea on when you could potentially be debt free.

http://financialplan.about.com/gi/dynam ... wball.aspx

It's really good, I highly recommend writing bills, etc on a calendar /w due dates. If your snowballing your debt you need to know what is due when so you can have the funds available.

It sucks not having alot of "spend cash" but it's a good feeling when you see your over all progress. We've so far free'd up about $400.00 a month on minimum payments else where and are appling it to other debts.

I recommend starting /w highest interest first. But put it on debt you can't reaccrue (CC's).

If you have any questions, or looking for advice, let me know

What you mentioned is good information. And you wouldn't believe how many people don't use this "Common Dog" knowledge.

Bills are bills. I pay them monthly.
People get into High Interest Debts for a reason: Bad credit and it's insurance for the creditor to recieve their money+ interest right away as over time statistically people default. Maybe from being tired of paying...

Only thing I have at the moment now is a upcoming mortgage. No other debts. rest of the money is being put away (1000.00) And any benifits are double - dipped now for taxes.

The method im following makes money tight but if I really need it, I can take it. I'd rather not though especially working 4 days on and 6-8 days off I can easily utilize my additional time off for making a extra buck.

But it's a good link. Glad you provided it. Can help many people!

Luckily I've never really had problems managing my money so I don't really have a "free to spend" and "set aside" money when it comes in. I pay all my bills in full when they come in each month (and to the cent because I don't want some fat cat company making interest on my money when I could be) and and then just manage my spending. Some months I'll spend more than others but the average is probably quite low compared to most people my age, and other than that when I have a nice buffer built up in my chequing account I'll shift the funds elsewhere where they can be put to better use. In the past when I was in an apartment that meant my High Interest Savings account but with interest rates now it usually means additional payments on my mortgage as that rate is higher than what I'm getting in my aggressive-growth Tax Free Savings Account, which is actually maxed out for the year with the $5000 initial deposit.

The one exception was the one time in the 9 years I've had my credit card that I forgot to pay my bill. I had just moved so the bill was mailed to my old address which meant I never got it to remind me to pay. I noticed about a week after that it had been a while since I got the bill and found out. Oh well, I haven't paid a cent in interest for my credit card other than that one time.

Yea,

Unfortunately I racked up quite the debt while going to school, and the lack of descent paying jobs over the past 8 or so years.

I was at about 26k in debt and now am down to less then 12. However my wife is HORRIBLE with money and it's been a real "treat" to help her learn to manage her money.

She is doing better then she was, but she still has a bunch of room for improvement.

She is sitting at about 30k in debt, but this is way down from the 40k she was at a year ago.

She figures minimum payments is the way to go on her debt. Took a long while to explain to her that her minimum payment is only paying the interest, well a bit more.

if we all paid minimum..we would die with debt that wouldn't decrease.

I feel you're pain. I went to school and got a degree in I.T. Lack of a decent paying job is leaving me hard pressed to pay it off. What the bank wants and what I make minus cost of living/bills are clashing big time. But within the next year with some planning and a little luck I can make a dent in that overal. fingers crossed.

I want to be house shopping next year so there's a lot of work and frustration ahead.

I hear ya. It sucks. But it is comming down. Sept next year we should have it all paid off (minus the car).

Then were saving for our house.

Once it's paid off you may have a bit of difficulty finding a good mortgage. Brokers are the ones to see as the do one credit report and roll through all the institutions finding the best loan for you. They cost nothing to do for you as the brokerage is paid by the firm who will take the loan for the best deal. It's a win - win situation in that matter.

In a situation where you do have a significant amount of debt the best way (and quickest way) to rebound into a home is by using your RRSP as a first time homebuyers down payment. The RRSP can be used for the down payment as well as closing costs, moving, etc. The amount of time for it to be paid off is 17 years and the money that your putting back into paying off your RRSP is counted towards contributions which you can claim on your T4.

Now if you don't have a RRSP for first time homebuyers. There is light. A RRSP for first time homebuyers only has to be in the bank for 90 days to count as a contribution and qualify for this plan. So you can have your money put away and begin looking for a house. Once you find a house you like. Negotiate a closing date around the maturity of your RRSP.

Not to mention all the money you piled into a RRSP in 90 days is Claimable as well!

Quick review

Bounceback form debt to house:

-Invest downpayment into RRSP. Let mature for 90 days.
-When money is all there begin looking for a home.
-Negotiate closing date around your 90 day maturity.
-If you can as it's highly recommended while waiting for the maturity and closing date save for your closing costs which is 1.5% of the cost of the purchase price of the home.
-Take note if you are in a apartment these are the following bills to take into account and calculate to your safe financial standards: Cable,phone,internet, power,water, other source of heating.
-To get a calculated amount of power for your budget plan you can call your power company and they will connect you to a power specialist who can calculate a monthly plan for you.



Rebates:

New homes have significant rebates to take into account.

HST grant which is 7k on new energy efficient homes constructed within this year. NOTE: The timeframe has been widened. And the resource for more info is on the Access Nova Scotia Site.

Bontractor rebate: somethign to discuss as they usually have a rebate that will be mailed to you for about 1500.00 for a new home as well.

these are great things to grab when buying a new home as well as being more energy efficient. the only downfall really on buying a new constructed "turn-key" home is the fact that contractors don't have (or wont) as much negotiating room.

Smoke break..

These are things I will be taking into account next yr ( hopefully ) when looking for a home. Like many, me and the missus are rebuilding credit and in a yr we should be ready to go if all goes according to plan. Thanks much for the hard work done beforehand and posting it here for our benefit.

so purdy soon we can be "sittin on the front porch cleanin our rifle and playin a banjo"

that still cracks me up....and No worries Top, if I actually do move to your area, I will stop (when bored) pressin my arse to the front window to see how many vehicles pile up outside. you know, outta courtesy.

Rofl.

I have the paperwork of the whole shabang process but im not typing it all out let alone get off the coach atm.

I'm actually in the market for a banjo now. Heard they are actually easy to play. And found my straw hat so i mgood to go for the front patio!

Managing money and learning how to have your money make even more money is a necessity these days. So important is this knowledge and skill, the subject should be taught in grade school.

The miracle of compound interest will eventually reward your patients.

Putting money away and learning to live within a budget is the key. Financial disciple is also very important for those who cannot show restraint for impulsive buying.

Always pay yourself first! The first bill you should pay each month is your RRSP or other investment vehicle. NSP, water, etc comes second. That or marry rich or a well educated partner able to get that high paying job.

This is what most financial advisors tell you first.

Just when I was about to put your ol' mug on the side of a milk carton. You should post more as people enjoy reading your wisdom like myself for one.

This is all good stuff to know as I already have student loans that I'm repaying now (starting early to avoid as much interest pile-up as possible) and I'm looking to finally get out on my own with apartment and perhaps even car in the near future.
So while you guys are digging out, i'll be digging in; just hopefully in a way that is planned and easy to dig back out of within 5 years.

Or plan B could happen and I could be unemployed before the end of the month. In which case all that's out the window, I apply for interest relief on the student loan and then go job hunting and maybe go back to school again.

yeah or go bankrupt and have that debt cleared. lol Its not hard to re-establish yourself after doing that. I thought about that option long and hard for awhile but just couldn't do it. Something about taking responsibility and finding a better solution appealed more to me than an easy way out.

I agree. They do touch on it now but it's sorta like too little (half term with only a minor focus) and too late (grade 11 I believe).

From my experience I would have to say getting a small allowance, and not getting extra money above and beyond that, taught me the most about living with a fixed income. If I wanted something I pretty much had to wait for Christmas/Birthday (even though my family doesn't spend much for those occasions) or save up my allowance for it. After wanting a few things *really* badly and having to wait weeks and weeks to buy them you start learning how great it is to have money saved up ahead of time so when you do need/want something, and it's a good price, that you don't have to wait and this also helps curb buying impulse items as well.

In fact, even when it came to buying things I did need my parents would basically allow me the money to buy something good enough and if I wanted a fancier pair of cleets or better baseball glove than I would have to pay the difference. I liked that because it didn't mean I *couldn't* get better things if I wanted them but I had to make a sacrifice for it if I did want them. Some things I would opt to pay the extra to get other things I would suck it up and just get the "good enough" item... often sports stuff I paid extra for and school supplies I got the basic things... who needs those expensive Five-star binders anyways but kids always seem to want them???

Anyways, that's my $0.02.

great piece keith, i wish i was in your position, i currently seem to not be getting anywheres with my debt...as soon as i do, something changes and it seems to amount up quickly...i can honestly almost see my credit score going in the toilet, hopefully with the bit u wrote, when tommorows pay comes i will be a bit sensible.....