My finances are like a small boat with a hole in the side several inches above the water level. In calm seas it is smooth sailing. A medium sized wave has me bailing like mad to keep the boat from sinking. One large wave and I am sunk.
I have to keep the debt repayment on course. Even the best boats take on some water in calm seas and making regular debt payments and not allowing the debt to increase will help keep things high and dry.
If a wave comes I have to bail myself out. I cannot rely on the government or a family member. There is only me. I have tens of thousands of dollars of available credit on my 3 credit cards and me HELOC (home equity line of credit) but if I need to bail myself out with more credit debt then I will never get ahead and the boat will slowly sink under the weight of the payments that I struggle with at the current debt level.
To help keep things on course I looked for extra money around the house today. I rolled $49.50 in change and I decided to sell a gold bracelet I never wear and have no sentimental attachment to. I also spent more time on hold with Bell trying to get the $11.00 they still owe me from the time I cancelled my account. They are very tricky and try and get me to hang up by playing tacky computer generated hold music that is some variation on 90s pop. They kept coming on every minute to tell me they appreciate my patience, that they are experiencing a higher than normal volume of calls and that a representative will be with me as soon as one is available. That is not how I intended to spend my day off. I was forced to hang up. I was able to hold my own against the bad music but after 20 minutes the battery on my cordless phone died. Bell wins again.
I will add the money from the bracelet ($10 or $15 at most) and the rolled change to the emergency fund. The emergency fund is my own personal bailing bucket. Right now my emergency fund is the size of a Campbell’s soup can. It can keep up with the small puddles in the bottom of the boat but I need my emergency fund to work like a diesel run bilge pump. Something large and powerful that automatically deals with every bit of water that comes in through the hole or across the bow. An emergency fund big enough to protect me from the largest wave.
A great song from my college days. My boat has been leaky for much more than 6 months but I am working on it. Split Enz 6 Months In A Leaky Boat.
https://www.youtube.com/watch?v=sH83TT4WobA
After writing the first draft of this post I went to Home Hardware and bought a new sump pump. I have no idea how old the current pump is so I have installed a new one. Better safe than sorry. A little bit of bailing now to save being hit by a big wave later.
Good luck. I hope you don’t have any big waves in your future. Keep working on that emergency fund! You’ll feel much more content when you have it fully funded
There always seems to be some sort of emergency that I am paying for instead of saving for. I have increased the amount I am budgetting for home maintenance and repairs. My roof and furnace were 2 items that I should have planned more for because I knew they would need to be replaced but they both left me scrambling.
I will feel more content when I can handle the small and medium waves easily.
Can you rent out a room in your house to a student? A few hundred dollars per month for 8 or 9 months could go a long ways towards plumping up the emergency fund.
I tried that last year and it seemed to hurt more than it helped because I had to declare the income.
I do like my privacy and we always seemed to be tripping over each other.
When my sons are done school and actually move out I may consider it again and put a little kitchenette in the basement so we have lots of seperation.
Good luck. I hope you don’t have any big waves in your future. Keep working on that emergency fund! You’ll feel much more content when you have it fully funded
an emerg fund seems like a great thing to have. we have a bit of one now, but in april, when all our insurance bills are due, it will disappear again….
easy come, easy go, i gues
I find the money goes easily but it is hard to get.
Before I ask, I want to say that I obviously hope nothing bad befalls you and want to commend your commitment to paying off your debt. But, in all seriousness, have you ever considered bankruptcy? If your liabilities are so significant compared to your assets that you are simply treading water to maintain them, couldn’t this be a more dignified way to resolve the issue?
My house is worth $200,000 and my debt is now $19,800. I feel personal responsiblity for my debt.
I know that $19,800 does not seem like much debt but my net is $37,000 per year and my expenses eat up most of my money and the debt repayment eats the rest.
I know that I can pay my debt eventually but the word eventually is what upsets me. It will take me 2 more years, with no financial surprises, to pay off my debt and that means that I can’t really start saving for retirement until I am 51. I am not sure how I will ever be able to retire but I will pay my debt.
Have you considered selling the house and renting? If it’s anything like the average Canadian home, it’ll be worth less in five years. You could pay off your debt, pay a much lower monthly amount to support your housing needs (i.e. rent), invest the rest of the equity, and focus on being liquid in retirement rather than having all your portfolio tied up in one asset. Do you read Garth Turner’s blog by chance?
I think I will stick with the house because the sort of ok rentals in my city are $800 to $900 per month and if I wanted a yard for the dogs I could easily pay $1000. My city has a lot of newish fancy single level seniors condos and there are a few of those for rent but they are $1,200 per month and you have to pay your utilities and I am not sure who is responsible for the monthly fee. There are hundreds of these units in town and they will be a great value in a few years. Right now the ones that are 10 years old are selling for $245,000 and the new ones are around $300,000.
I plan to keep the house until I am 70 then sell and rent one of those. My city is not friendly for renters or people who can’t drive but any builder who wants to make a single family home subdivision always gets city council approval. The city has not changed to keep up with the times. It is a lot like the 1950s around here.
I was not aware Garth Turner had a blog but I will check it out.
There are only 3 ways to achieve any financial goal: earn more, spend less or both. You’ve got the spend less part down pat. What can you do to boost your income? You have said that renting a room to a student won’t work. How about renting out the garage? Get a gig walking dogs twice a week. Babysit somebody’s kid. Clean a house on Saturday afternoons. Help a small business catch up on their filing or bookkeeping. Even small amounts of extra income can make your financial goals happen faster!
JanJ, I like the way you think. How about bartering on craigslist (does CL work in Canada?).
I was just looking at CL yesterday and an accountant wanted computer help. I’m a computer guy who would like tax advice. Dunno if it will work out yet, but I think its a neat idea.
I love the idea of trading skills! Especially, if you are able to take the amount you would have spent on tax prep and throw it at your #1 financial goal. Best of luck to you, Mr. 1500!
I am hoping to have an exciting income update in the next 2 weeks. Fingers and toes crossed.
Slowly but surely, you’ll get over the little waves. Is there anything else in your closet you don’t care about that you could sell?
I have only begun to dig in the closets and storage areas. I am taking it room by room and I am ruthless and I am not sentimental about stuff. Every penny counts.
I will get there and I will retire at some point and I won’t have to go to work in a giant snow storm the way I am going to do this morning.