# Digging Out



## petulantfem

I feel embarrassed to post here because my financial situation is so much bleaker than many, but I also feel like it will help me to be accountable and to make better choices in the future.

I am 30 years old, and will be getting married in a couple of months. My parents gifted us $5,000 for the wedding and we are trying to keep our expenses under $8,000 total. It is a little tricky with my large family, but I also know that we will get another $2,500 from my mother's side of the family and then whatever we get from my father's side (not anticipating much from FH's side, which is fine). 

If I had a time machine, I would go back and get married at City Hall, and funnel the $5,000 from my parents into savings for a house or debt repayment. So much for regrets.

I have three children - one with FH and two from a previous relationship. I get no child support for the older two, as my ex does not work (or works very little).

FH and I moved for a job offer for him before I finished my English degree. In the future, I'd like to go back and finish that, but in the meantime I am taking courses online for my Bookkeeping Certificate. I am home with the kids right now, but I want to be working by January (hopefully).

FH makes $19/hour. He consistently works 80+ hours per week, and also gets reimbursed some mileage for commuting to work, so his net income is usually around $2,000 bi-weekly. He is also in an apprenticeship that should take 2-3 years to complete, at which point he will be making around $25/hour.

Our debt load is very high considering our financial situation. In total, we owe $34,271.25. That is broken down into credit card debt of $3,399.63 (some wedding expenses on here right now, as well as courses I am taking for College), $15,688.30 of student loans between the two of us, and $15,183.32 of vehicle loan. 

We have another vehicle for which we had paid $6200 in cash. We do not have a mortgage, and neither of us have ever owned a home. We have no RRSPs or savings at this time. My credit score is 724 and FH's is 634 (these were both very low not long ago - mine was 590 the first time I checked it, but we have been working on that).

I'm not sure what else is noteworthy here. As you can see, our income is very low, especially considering a lot of that is overtime (and so, is not guaranteed). My biggest concern is how quickly we can increase that - I will be finished the courses that I am taking in December, but we will also have additional daycare expenses at that point.

So, huge concerns:
Low income
High debt load
We are butting heads about money because he wants a motorcycle (and other random, expensive items), and I want to get house-ready

Right now I am trying to cut down our variable expenses at home to free up some more money for debt repayment. We have not been tracking our spending (I just signed up on Mint.com and my jaw was all over the floor looking at our spending habits). I need to start an emergency fund and establish some savings, but our income is still so tight.

I need to really turn this around. My parents are amazing with money, have a great nest-egg, and paid off their mortgage within 5 years before starting a family, raised seven kids and put us all through school (my school debt is because I began refusing their money when I failed some courses ... felt too guilty), had a camp and a cottage, a boat, dirt bikes, always had two vehicles at a time, snow machines etc and never carried debt. I have no idea how they managed so well, because we never worried about money as kids. Everything was provided for us and we just spent whatever money we made on ourselves.

FH's parents are terrible with money and are both broke. He grew up in poverty, so he resists me every time that I say that we can't afford things and gets upset. He does work A LOT and very hard, so he wants to enjoy his money and buy nice things, but I know that we really can't afford any of it until we clean up the mess we made earlier and I start working again.


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## Four Pillars

You should apply to be on Til Debt Do Us Part.  Or get your hubby to watch it.

I think Gail would ask if you track all your spending and do you have a budget?

Regarding goals, debt reduction has to be a priority. However, if your low income is preventing you from doing that - at least don't add to the debt.

It sounds like you will be making some money in the future which should help a lot.

Your husband is working too much. You might suggest he limit himself to 60 hours per week and then adjust the budget elsewhere to match. 

The bike is crazy - tell him to wait until he starts making $25/hour. You just can't afford expensive luxuries like that.

The house idea is even crazier - you are not close to being able to buy a house. 

Can you find a job now? Are the kids in school full time? Gail would say that it's not fair that hubby works 80 hours and you work zero. You guys need all the income you can get.

Your financial picture isn't really that bad - if you can make some money and put a proper budget in place - you'll be out of debt in no time. Especially once the hubby makes more money.

I'm mainly concerned about you and hubby not being on the same page. That's by far and away your biggest problem.


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## petulantfem

Determining where we can cut back:

Monthly Expenses
Rent - $900
Parking - $25
Auto/Tenant Insurance - $343.33
Hydro - $130
Gas - $80
Water Heater - $30
Cable/Internet/Home Phone - $130
Cell Phones (2) - $150
Auto Loan - $299.75
Student Loan (mine) - $124.05
Student Loan (his) - $90.62
Fuel - $800 (I _know!_) 
Groceries - $500

Apparently we are also spending (gross) about $130/month at coffee shops (that is FH) and about probably $700 on "stuff" (oh, god, this one is me). We have a Tassimo, and all of this just needs to really stop.

*Auto/Tenant Insurance: We have Collision and Comprehensive on both vehicles, and he has a couple of speeding tickets in his history. Maybe we should lower our coverage? This number makes me crazy, because when I was single I had one old beater vehicle with PLPD on it and it cost me $78/month.

*Cable/Internet/Home Phone - I am looking into other options right now. We don't need the Cable at all, but I do need Internet for my courses.

*Cell Phones - Found an error that was costing us A LOT every month, so hopefully fixing that will make a difference, but I am still hoping to cut this down a lot more. I don't want to get rid of the phones completely as FH needs his for work and I like to have one if the kids need to get ahold of me from school/etc.

*Hydro - Hopefully we can decrease this by being more aware of turning things off (lights, etc).

*Fuel - I am currently driving a total of 45 minutes to get the kids to school everyday (we moved mid-year and didn't want to uproot the kids). At the end of the month, I will not be using much fuel at all. FH uses a lot of fuel as he commutes 2.5 hours a day to work and usually works 6 days a week.


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## petulantfem

Four Pillars said:


> You should apply to be on Til Debt Do Us Part.  Or get your hubby to watch it.
> 
> I think Gail would ask if you track all your spending and do you have a budget?
> 
> Regarding goals, debt reduction has to be a priority. However, if your low income is preventing you from doing that - at least don't add to the debt.
> 
> It sounds like you will be making some money in the future which should help a lot.
> 
> Your husband is working too much. You might suggest he limit himself to 60 hours per week and then adjust the budget elsewhere to match.
> 
> The bike is crazy - tell him to wait until he starts making $25/hour. You just can't afford expensive luxuries like that.
> 
> The house idea is even crazier - you are not close to being able to buy a house.
> 
> Can you find a job now? Are the kids in school full time? Gail would say that it's not fair that hubby works 80 hours and you work zero. You guys need all the income you can get.
> 
> Your financial picture isn't really that bad - if you can make some money and put a proper budget in place - you'll be out of debt in no time. Especially once the hubby makes more money.
> 
> I'm mainly concerned about you and hubby not being on the same page. That's by far and away your biggest problem.


Thanks Four Pillars! To address some of this:

I love Gail and Til Debt do us Part, but I would be too embarrassed to ever go on it lol.

I could find a job now, except that we have one at home and I am currently watching my nephew all day as well (my brother and SIL pay me $20 a day, which is awkward to me but they said they'd feel bad not to). So, at any rate, we'd have to wait until both the babies were placed in daycare and then pay that.

I will not be finished my courses for Bookkeeping until December, so I was sort of aiming for January.

As for FH working 80+ hours, he wants to do this! I have tried to convince him to slow down a bit, but he really does love his job. However, hours are supposed to start slowing down a little for the summer anyway. I feel guilty not working and I don't even like being at home (up until 8 months ago I always worked).

We just started tracking our spending on Mint.

For the house - I know it won't happen soon, but I want to start preparing (get our debt down, credit scores up, start saving etc). I feel like if we never start working towards this, it will never, ever happen.

I agree about the bike - I don't want him to ever get it, but I hate stomping all over his dreams all of the time.


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## MoneyGal

You should see if you can get a deferment on your student loan repayments, given that you are in school currently. 

Looking at the rest of your expenses, it's a little hard to distinguish between needs and wants there. You can probably not affect your food and shelter costs, and with three kids I suspect you'd say 2 cars are required. 

How important is cable to you? A home phone? Can you bundle any of those services for cost savings? 

Your total insurance costs don't seem *too* bad, given what you've told us about your situation. 

Do you have life insurance and does your spouse have disability insurance? Right now, you have a lot of obligations and not a lot of capital. Have you protected yourself against the loss of his income stream?


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## Four Pillars

So that list of monthly expenses is not complete?

The cell phones is the only area I can see where you can easily reduce the costs. Nothing else stands out, unless you are willing to eliminate something like cable tv.

Are you sure the grocery amount is accurate? $500 seems very low.

From your other numbers it appears there is another $500-$600 per month not listed. I guess that should be looked at as well.


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## I'm Howard

Save your money, Find a guy who thinks like you, this dog ain't gonna hunt.

The bozo wants a motorcycle, with your debt load, and his lack of income, He needs to grow up and start thinking of others before himself.

For the Record, Emergency Room Nurses call them Donor Cycles.

You sound like your head is on right, why spend the rst of you life arguing and, Oh Yeah, if He starts hitting the beer, it's your fault for driving him to it.NOT.


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## brad

Having climbed out of a hole myself many years back, I think you've taken the most important steps, which are 1) realizing you have a problem, 2) starting to track your expenses, and 3) trying to figure out a way out.

It may just have to be a long slog, so you may need to be patient. Your future husband isn't helping but I can understand his mindset: I got into my hole precisely because I had spent so many years having to watch every penny and do without that once I started making (what seemed to me at the time) decent money, the sense of limitless freedom was intoxicating -- dangerously so. A credit card added fuel to the fire.

"Stomping all over his dreams" is a difficult role to play -- in various relationships I've found myself either being the responsible one who puts the brakes on my partner's financial follies or the comparative spendthrift whose job is to make sure we have fun while the partner assumes the role of Chief Nagger and Penny-Pincher. I think it's actually fairly rare to have a couple in which both partners see eye-to-eye on financial matters; I feel very lucky to be in such a relationship at this point in my life.

For me, tracking my net worth (which started out deeply negative) and watching it rise over time was a big motivator -- kind of like tracking weight loss on a graph. Once my net worth made it to positive territory I stopped tracking it and haven't paid attention to it since, because it has no practical meaning to anybody but my heirs, but when you're trying to get your finances in order it's a great way to track your progress. It became a kind of game for me to figure out what I could do to make it grow faster.


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## Homerhomer

I can relate because few years back we were in a comparable situation, now we are paying significant lump sum payments towards reduction of the mortgage/debt and putting away savings, have enough savings for a rainy day and emergencies and everything is paid cash (I have started using cc again couple of years back for pionts and pay it off each month).

Good news is it can be done ;-)))))

The bad news is there is no magic bullet, it is simply a matter of making more money than you are spending.

You need to:
1) increase your revenues (no buts here, it has to be done, no excuses please ;-)
2) decrease your expenses, coffee should be drank at home or at the office, visiting timmies every day when you can't afford it is stupid, list all of your expenses and cut ...... then cut some more.
3) consolidate your debts to one managable payment with option of paying more when it is possible
4) getting each adult in the family to agree to the plan, that may be the most difficult of all.
5) no more credit cards, cash only

It can be done, you just have to figure out how and quickly ;-)


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## DanFo

No doubt planning a wedding on a tight budget is adding to the stress and burden on the family...sounds like your hubby is working pretty hard ..perhaps set a goal..like after all the wedding bills are paid off he can get a bike.....if he's driving 2 1/2 hours to/from work each day the fuel savings alone could be worth it. At the very least your bills are getting paid and you seem to be looking ahead and that's more then some people can say..


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## MoneyGal

Another POV: it is *normal* to have a negative net worth when you have young kids, and you are in school, etc. I think you can cut yourself SOME slack (but maybe not $700/month worth) for the choices you've made so far in life. 

And here's another way to think about what you are going through now: learning how to live in a way that is personally satisfying to you and also financially responsible (i.e., "living within your means") will pay dividends for the rest of your life. Good habits now will translate into long-term success.


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## petulantfem

Four Pillars said:


> So that list of monthly expenses is not complete?
> 
> The cell phones is the only area I can see where you can easily reduce the costs. Nothing else stands out, unless you are willing to eliminate something like cable tv.
> 
> Are you sure the grocery amount is accurate? $500 seems very low.
> 
> From your other numbers it appears there is another $500-$600 per month not listed. I guess that should be looked at as well.


Sorry, I just was doing a quick look, I really do have to go over it more carefully. Walmart is lumped in with shopping, but a lot of that is groceries too, so that changes my grocery spending quite a bit.

That is not including what we are currently spending on wedding stuff, or credit card payments and I am probably missing a couple of other things (ie. $430 repair on the car last month ... crap like that seems to come up a lot).


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## petulantfem

MoneyGal said:


> You should see if you can get a deferment on your student loan repayments, given that you are in school currently.
> 
> Looking at the rest of your expenses, it's a little hard to distinguish between needs and wants there. You can probably not affect your food and shelter costs, and with three kids I suspect you'd say 2 cars are required.
> 
> How important is cable to you? A home phone? Can you bundle any of those services for cost savings?
> 
> Your total insurance costs don't seem *too* bad, given what you've told us about your situation.
> 
> Do you have life insurance and does your spouse have disability insurance? Right now, you have a lot of obligations and not a lot of capital. Have you protected yourself against the loss of his income stream?


FH has life/disability through his work (not great), and we have looked into additional life insurance but have not signed an agreement for that yet (it would be about $44/month I think, if I am remembering correctly). 

We used to only have 1 vehicle, but bumped up to two when we moved down South because FH commutes so much to work (meaning I would have no vehicle at all). The second vehicle we paid for cash, and then our original died on us, so we opted to get one that was much newer than we had ever bought before (a 2008) because the old one had kept giving out on me on the 401 with the kids. It made me nervous. In retrospect, I feel like we made a bad choice here and should have gotten something older/cheaper.

We do not need cable and I am definitely willing to go without that. We do need Internet for my school courses (they are online). We are bundled, except for our stupid cell phones.

I cannot defer my school loan payments (I used to) because I am not in school full time.


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## petulantfem

I'm Howard said:


> Save your money, Find a guy who thinks like you, this dog ain't gonna hunt.
> 
> The bozo wants a motorcycle, with your debt load, and his lack of income, He needs to grow up and start thinking of others before himself.
> 
> For the Record, Emergency Room Nurses call them Donor Cycles.
> 
> You sound like your head is on right, why spend the rst of you life arguing and, Oh Yeah, if He starts hitting the beer, it's your fault for driving him to it.NOT.


LOL Sorry, I really do not mean to make him sound so bad! Especially considering that he is carrying our family on his financial back alone right now with no complaints. 

He actually doesn't spend a lot. I am the one who has been letting money slip around while doing the household shopping - he really only spends money on fuel and coffee. The motorcycle is something he really wants (though it scares me), and I want us both to be able to have/do the things that we are passionate about or else what is the point? But he has a hard time having patience and planning things out, that is all. That is why we butt heads about it. We don't FIGHT about it, I didn't mean to make it sound that bad. I just get frustrated with it, that's all.

PS No worries about him becoming a drunk - he is anti-alcohol.


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## petulantfem

Thanks Homerhomer and Brad, it is motivating to hear your success stories. I think that making a "game" out of it is a good idea. Maybe a sort of competition between FH and I to see who can be teh most frugal or creative in how to decrease debt/increase income.

And, you are right, I need to not make excuses for not bringing in an income. I was hoping my brother and SIL would be on maternity leave by now (they have been trying for #2) so that I would be off the hook for watching their son and they could watch mine ... but I am going to have to tell them to place him on the daycare lists now and see when he can get in (my son too). I can find something (even minimum wage) for now, I am sure.



DanFo said:


> No doubt planning a wedding on a tight budget is adding to the stress and burden on the family...sounds like your hubby is working pretty hard ..perhaps set a goal..like after all the wedding bills are paid off he can get a bike.....if he's driving 2 1/2 hours to/from work each day the fuel savings alone could be worth it. At the very least your bills are getting paid and you seem to be looking ahead and that's more then some people can say..


The goal that we have set is that, after the wedding, he can start saving a little in order to get a motorcycle next year (at the earliest). It would save money on fuel in the summer, but probably only enough to counter the cost of the additional insurance. I want him to have something to work towards, and feel like he is getting closer to his goals, but not at the expense of improving our financial situation, you know?


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## MoneyGal

petulantfem said:


> ... but I am going to have to tell them to place him on the daycare lists now and see when he can get in (my son too). I can find something (even minimum wage) for now, I am sure.


Hmmmm. Have you run the calculations on this? Does it make sense to take a minimum-wage job if most of it will be eaten up in daycare costs? 

What about doing bookkeeping as a part-time thing now? Or learning tax preparation? Both are good for work-at-home, part-time jobs.


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## brad

petulantfem said:


> he really only spends money on fuel and coffee.


Is there a difference?


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## petulantfem

That is a good idea, MoneyGal, but I'm not sure that I am ready to jump into Bookkeeping yet ... I might have to start with something else (I only have completed one course in Bookkeeping and am currently taking two more courses right now).

I have a neighbour who will watch my youngest for $20/day ... if I was making minimum wage and working, say, 20 hours per week I would make - what - maybe $750 a month? Childcare could cost over $400.

Right now I get $940 for CCTB, and that would drop, so I'm not sure that it would be worthwhile at this moment for part time. Full time at minimum wage would be more like (I think) $1300 per month, less daycare costs. 

I am not sure what the rules are for subsidy or if we would qualify for that, though I would prefer a daycare centre over a home daycare. 

I have never heard of a home-based job for which I am qualified that wasn't a scam.  I used to actually be a licensed home daycare myself (and worked part time outside the house in child care too), but I truly hated doing the home daycare and I don't think that it's a good idea as I think the kids deserve to be in a situation where the caregiver really wants to be there. It was too isolating and lonely for me.


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## petulantfem

brad said:


> Is there a difference?


Only in terms of amounts spent. What I have been spending on "stuff", say, at Walmart amounts to more than his coffee spending. But since he is out of the house and at work for the majority of the day, it might make more sense to buy a second Tassimo machine that he can keep at work.

The fuel I can't say anything about, as it is his commute that is the killer there and there isn't much to be done about that. So, really, he's not spending a lot on himself.


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## MoneyGal

Are you in Toronto? Here is the site with information on the child care subsidy in Toronto: http://www.toronto.ca/children/subsidy.htm 

There's a calculator on that site which will help see if you qualify for a partial or full subsidy. 

However, even if you qualify, my understanding is that the waitlist is hundreds of families long. Of course this will vary by location. 

Keep in mind that CCTB is non-taxable income, so in order to replace CCTB income (all things being equal) you need to adjust it upwards by your marginal tax rate to get the gross earnings you'd need to replace it.


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## Four Pillars

Hmmm...I was going to mention my brilliant suggestion of taking more kids in, but it sounds like you don't want that.

If you can find daycare for your son at $20/day then I would do it and get a job (even min wage).

I knew of one person who used to be a customer service rep for a pizza place (Pizza pizza I think) - he worked at home.

p.s. - I think Brad's last comment was a joke.


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## brad

Four Pillars said:


> p.s. - I think Brad's last comment was a joke.


Yes, I'm sorry, I should have added an emoticon.

I was just saying that for me at least, caffeine = fuel

But then again, I ride a bicycle, not a motorcycle


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## petulantfem

Thanks for the link - I am outside of Toronto, about 1.5 hours west, so I don't know how applicable it is, but I checked it out.

Also, my Auto/Tenant insurance is $354.47/month. I forgot it changed when we added Tenant.


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## MoneyGal

Soooooo OT but coffee is one of my fuels of choice as well. If you look at all the energy drinks and workout drinks etc. they usually just have caffeine and sugar. Thus, I have an espresso about an hour before I hit the gym. Works for me!


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## petulantfem

brad said:


> Yes, I'm sorry, I should have added an emoticon.
> 
> I was just saying that for me at least, caffeine = fuel
> 
> But then again, I ride a bicycle, not a motorcycle


Oh lol, I read that completely wrong. But it is funny!


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## petulantfem

Four Pillars said:


> Hmmm...I was going to mention my brilliant suggestion of taking more kids in, but it sounds like you don't want that.


I thought it was a brilliant idea before trying it, but I now know that I am not cut out for it.  

That is interesting about the pizza rep at home! I wonder how that works.


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## petulantfem

Found this online:

Pizza Pizza
Order Entry Agent *Target Earnings $10-$13/hr.

Answering inbound food order calls for Pizza Pizza.

Agent Access Class Sunday Dec 19th. 9AM – 5PM EST. $75.00 plus taxes.

Training Dec 20th Client Training $225.00 Plus Taxes

This course will provide you with all the tools necessary to work as an Order Entry Agent for Pizza Pizza.

Please note there is no trainer led class time, this course is entirely self-driven and will take approximately 24hrs to complete.

To graduate and be successfully contracted you MUST complete and pass the self-paced course and a tech setup appointment.

Note: Notification enrolment for Pizza Pizza Self-driven course will be emailed by end of day on the course date.

The deadline for course completion will be sent with course materials.

There is no registration date or number of seats available for this client at this time.

After you apply you will be notified of any invitation to train by your email address.

This sounds sketchy to me!! You really know someone who did it and actually had a job from it?

Haha, what sort of tools do you think are necessary to work as an Order Entry Agent? A phone and a voice? It costs $300 plus taxes to take this "pizza order entry" course.


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## Four Pillars

I can't believe you have to pay to take the course. I guess a lot of people were taking the course and then not doing any work?

Yes, it was a "friend of a friend" who I had met a couple of times.


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## bmckay

If the OP structured her life in such a way that she did not have to drive she would be in a much better position. Most people are unwilling to do that though. And granted, it is a difficult thing to do when your already in your routine. The struggle continues


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## petulantfem

bmckay said:


> If the OP structured her life in such a way that she did not have to drive she would be in a much better position. Most people are unwilling to do that though. And granted, it is a difficult thing to do when your already in your routine. The struggle continues


Not drive in terms of just saving gas, or do you mean become a one-vehicle family? We always were a one-vehicle family up until about 6 months ago - now FH has his vehicle and is gone roughly 12-14 hours a day. This sounds like rationalizing (and maybe it is), but I don't think it would be realistic to have only one vehicle with the three kids now, and the other vehicle gone all day.

However, once school is done for this summer, my fuel costs will drop significantly, so that should help.


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## marina628

So your husband does quite a bit of driving to get to his work and you do not work?Why don't you move close to his work?It seems that will cut on gas budget and possibly cut car expenses too.
The one father does not pay support because he does not work?Is that even Legal?My friend's ex lost his job and was on Unemployment of $1700 a month and he still paid his $450 a month Child Support so she and her baby could stay in their home.
If he is choosing to work 80 hours a week has he ever looked to see what his take home pay is on a 70 hour pay vs a 80 hour pay? on that 6th day he may be working for gas and coffee money.
Definitely I would be setting up a budget which is realistic for now knowing that in short term your situation will get better , the kids will get older ,daycare expenses will go down and hopefully that ex will start paying for the two kids.


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## petulantfem

marina628 said:


> So your husband does quite a bit of driving to get to his work and you do not work?Why don't you move close to his work?It seems that will cut on gas budget and possibly cut car expenses too.
> The one father does not pay support because he does not work?Is that even Legal?My friend's ex lost his job and was on Unemployment of $1700 a month and he still paid his $450 a month Child Support so she and her baby could stay in their home.
> If he is choosing to work 80 hours a week has he ever looked to see what his take home pay is on a 70 hour pay vs a 80 hour pay? on that 6th day he may be working for gas and coffee money.
> Definitely I would be setting up a budget which is realistic for now knowing that in short term your situation will get better , the kids will get older ,daycare expenses will go down and hopefully that ex will start paying for the two kids.


We thought about moving, but it has come down to two issues ... one is that we have a support system where we are, as I have four siblings in the area. The other is that FH's company works different contracts and he won't be at this site indefinitely ... when the work is done at this site, who knows where he will end up. We also do not want to keep moving the boys from school to school, we really want them to feel settled where we are now.

Regarding my ex ... I don't even know where to start. Apparently he was to go back to work last Monday, but I don't know if he did. He never gives me straight answers regarding work. He does not get Unemployment (as far as I am aware) because he quit his job (as far as I am aware). He told me that last year he made $6,000 while he was working. He did make a couple of payments a few months back, but that dwindled out again. He is saying he'll start paying again soon, but I'm not holding my breath. I don't know if it is legal - he could probably claim undue hardship, but at any rate I also don't want to start a war between us - he is finally able to at least talk to me on the phone without being bitter.

We have never calculated out the difference of cutting a few hours from FH's schedule, though I have mentioned it to him. He's in the habit of just saying yes whenever they call him in. I don't know - he's happy doing this and he wants to be "that employee" in terms of being thought of first for promotions/raises etc. He has gotten an apprenticeship and a $2 raise so far, since starting there 8 months ago. Apparently hours are starting to fall a bit now anyway for the summer, so that will be nice for a bit. Maybe he'll realize that he likes the fewer hours.

Our youngest is turning two this summer, so I figure I would have around 2 years of daycare expenses before that is not really an issue.


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## zylon

On the topic of child support; the *legal* obligation of the father might end when the mother remarries; the *moral* obligation is another thing.

I say the obligation _might_ end because this may vary from province to province and would be subject to any special provisions which may have been made.


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## petulantfem

zylon said:


> On the topic of child support; the *legal* obligation of the father might end when the mother remarries; the *moral* obligation is another thing.
> 
> I say the obligation _might_ end because this may vary from province to province and would be subject to any special provisions which may have been made.


Hmm, I am actually not sure about this, so that very well might be true. At any rate, I am considering other factors along with finances. There is value in maintaining a cordial relationship with my ex for my kids' sake, and I know that bringing up money with him would just lead to a total disaster. So I leave it alone for now.

I think that what I am going to do is apply for the subsidy daycare list now and see what sort of wait times there are. If it is several months, that will give me time to complete my courses anyway. If we get in sooner, I'll take work doing something else while I finish my courses. I just have to tell my brother.


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## Charlie

I think tracking your expenses is key. And sharing it with hubby. Make sure you're spending your money where you think you're spending it and where you're getting the most enjoyment from it. 

FWIW, $40-$60K/y is very tight for a family of 5, but not crazy low. Especially if your rent is only $1000/mo. So it's doable, and moreso when you add the CCTB etc. But not if $700/mo misc expenses slip through. And not if you exempt the 'one time' expenses that always seem to come up -- car repair/ wedding/ birthday/ etc.

I don't think you're in as bad shape as you might believe. I'm not convinced adding child care costs, losing a portion of the CCTB, and adding work related expenses is necessarily worth it for a min wage job. Possibly you can save almost as much by flyer shopping, home mending, budget cooking etc then your net gain would be by working? But that's as much a personal decision as a financial one. And make sure there's a little pocket money for yourself and hubby in the budget or it'll be even more difficult to keep to your plan.

Good luck.


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## petulantfem

Thanks Charlie - looking at a breakdown of spending has definitely been an eye-opener. Right now we are both on board with trying to get that under control. FH took his Tassimo to work with him today so that he doesn't end up visiting Tim's all day. I think that I can cut out a lot of miscellaneous spending, and I could probably do much better with menu-planning and shopping flyers.

Maybe our family income isn't the worst case scenerio, but it sure feels that way. Though I suppose a lot of that has to do with not being aware of where the money was going. At any rate, we do need to increase our income, and that will fall on me because FH is doing more than his share of earning.

In terms of a job, I'd love to find something more than minimum wage, and that's the goal - but just getting back into the workforce, I also want to be prepared for all scenerios too. I think that I would be happier working than sitting at home, so we need to figure out a way to make that work.


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## the-royal-mail

petulantfem, it is not necessary to quote everything you reply to. Esp when the post is directly above yours. Simply click the reply button and start typing.


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## marina628

Petulantfem This is not about your rights , child support is the right of the child and who gives a **** if you and your ex are friends .He has to support his kids and I would be filing for child support let family responsibility take care of it.
It does not matter if you remarry these are his kids and your FH is working his *** off to provide for the family while the ex gets away with it?I do know what I am talking about as I had a friend who let her baby daddy do same thing for 8 years while struggling and living off debt.I finally got her to take his *** to court and she got retro of $13,000.He also cried the blues for many years while making $19000 more a year than he claimed to her.
You come here for help and advise I would start with stopping the charity to the ex.It will probably do him some good if he has to get his act together to take care of his kids.I am sure your FH loves your kids and takes care of them as it were his own but still does not let the BIO DAD off the hook.


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## petulantfem

marina, this is the thing that is so frustrating ... if he was paying support it would be based off of his wages, right? So, it would be next to nothing, really. The boys adore their dad, and right now we are in a place where we can communicate and compromise with him seeing them - for a couple of years it was very difficult to even get him to talk to me.

I don't know if I want to throw a wrench in that for a few bucks a month, if that makes sense. I know it's not fair, and I know it is just letting him off the hook, but I'm trying to keep my finger on the pulse of the greater good in this scenerio.

PS Sorry about all of the quoting!


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## marina628

Does he have a house ,a car ,investments? My friends ex had to refinance his house to pay her .He was staying at home caring for his new kids with wife #2 while she was making 100k a year ,intentionally under employed .Hve you seen his last couple tax returns?Is he working under the table for cash?How does a grown man with kids NOT have any income?


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## petulantfem

No house, though he told me that his girlfriend's aunt bought the house that they are renting and they plan to rent-to-own it from her. No car, his girlfriend has one. No investments of any kind (he had nothing when we were together, and nothing has changed since then, I am sure). I think his girlfriend is working, but their line of work is around minimum wage where they are. She has two of her own children. So, as far as I understand, he is living with her while she works (not that different from the arrangement we had when we were together, come to think of it!).

I don't understand how he can have no income either, as he smokes cigarettes and he always seems to have those. I don't know where they come from. I have never seen any of his financial statements like T4s since we separated. He told me that he made $6,000 last year (he was working as a PSW then, but only a handful of hours a week, as I understand). When I looked online, someone making $6,000 does not have to pay child support. Theoretically, if he were to make $10,000 per year, that would only be $61 according to the tables, so I just don't know if it is worth the nightmare that it would definitely be.


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## marina628

petulantfem
I am disabled and have a PSW who works for me ,her rate of pay is $16.30 per hour .PSW do not make minimum wages and typically there are shortage of male PSW o they earn a bit more.First thing is ask him to prove his lack of income and if he is a registered PSW there is no shortage of work ,trust me this is one thing i know VERY well .


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## petulantfem

Yes, I think that they make a little over minimum wage - at the hospital they would have made much more, but I think the rate for the home care staff was about $14/hour in our town. At one point many years back I took a second job doing housekeeping for one of the homecare companies and I made $11/hour with them doing that. The PSW's didn't make a whole lot more, if I remember right. 

He says that he didn't get many hours in home care because the more senior staff had all the clients ... also he says that he will have to work opposite hours of his girlfriend so that he can use her car to get to client's homes - which means evenings and weekends (and I think many clients prefer weekday appointments?)

Anyway, at the end of the day it is probably a lot of excuses. I just don't know what to do about that.

ETA: I just messaged a friend of mine that lives back home and works home care as PSW to ask her what the job front is like there and what they start at per hour. Maybe I'll get an idea of if he is snowing me or not?

Actually, I just did a job search back home and came up with one PSW listing:

Personal support worker - home support
Employer: XXXXX
Salary: $10.5 to $13.5/ Hourly, 20 hours 
Location: XXXXXX, ON
Date Posted: 2011/06/14


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## marina628

If he wants to take first job out there i believe there are agencies like comcare who start off at $11.00 plus mileage etc .If he is going to make a career of it they do get raises.I started my workers off at about $12.00 and they now make $16.30 -$17.90 per hour.You get more when you work directly with the clients ,an example is if i call an agency now for them to send me somebody they will charge me $23.00+ per hour. i have a disability 24/7 ,the evening and weekend hours are a premium .Maybe you and his new G/F need to have a meeting and both kick him in the *** .At the end of the day he is not a child and he has to face his responsibilities , If he wont get motivated on his own I am sure family Responsibilities will .
i will play devil's advocate here ,If FH and you did not work out , would you sit and let him give you a line and not support his child? My guess is he will probably get on the hook for all children because unlike the EX he is a hard working guy.I would try harder to get the father of the two kids to contribute his fair share so FH ,you and the children can have a better life together.FH is busting his *** making $19 an hour to support somebody elses responsibility while ex sounds like he has a great life . I have great respect for your FH and people like him ,is he ok with ex not paying support?He should go get that bike and send the bill to the ex.


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## petulantfem

Haha, I'm sure that FH would think that was a great idea. He is a hard worker, and he has mentioned my ex's poor work ethic in an off-hand way at times, but he has never made a huge issue out of it. I'm sure he would feel less pressure if my ex was contributing though. But that is something that I can help with too - I want to be working also, so it's not all on his shoulders.

If FH and I didn't work out, I can't imagine in a thousand alternate realities a future where FH did not take care of his responsibilities, it is just not in his nature - but I see your point.

As far as my ex goes, yes - he is dodging this payment. In the grand scheme of things, though, I'm inclined to stress more about what I can do to stablize our financial situation, because ex's contribution would not likely make much of an impact. We were together for almost a decade, so I know his character and I'm aware that he's not likely to change any time soon.

The things that I can do, though, are start controlling outflows of cash more carefully, get creative in cutting expenses and start figuring out how I can work in a capacity that brings in more income. So those are my real goals right now - I haven't got the energy to take on my ex right now, I think.

ETA: He won't consider making a career of PSW, he has already decided that he doesn't like it and wants to go back to school again.

I'm making a real effort to watch our spending, so I'll be interested to see what impact that has on our numbers next month.


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## Guigz

marina628 said:


> i will play devil's advocate here ,If FH and you did not work out , would you sit and let him give you a line and not support his child? My guess is he will probably get on the hook for all children because unlike the EX he is a hard working guy....


Forgive my contrarian view point, but would that not just put the other family under hardship?

The Ex and his new GF are supporting 2 kids of their own, the Ex may or may not work (alot) and the GF alledgedly makes minimum wage. Sure you may be entlitled to some support, but maybe that support will prevent the other kids from getting food on their table.

Sure, some of you may say that the Ex smokes and has money for that. However, the reality is that, as with drug addicts, cigarettes and other addicting substances will be the last to be removed from a budget when hard times are coming.


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## petulantfem

I am actually inclined to agree with you here, which is why I have not pushed the Child Support issue. Regardless of whether or not my ex has a duty to provide support, the reality is that he is not in a position to do so (whether by his choice or not), and even aside from putting him in a more difficult financial position, I don't think it would be in the best interests of our own kids to cause more drama between us for a minimal amount of money. I feel disappointed in him, to be honest, but also not surprised. This is nothing different from what we dealt with when we were together, and a huge reason that we split up.

However, the smoking this is a bone of contention with me, because we both did smoke when we were younger and had quit about 10 years ago together. He then picked it up again about a year after we split up after being smoke-free for several years. So this bothered me a lot - I made a snide remark about the money issue here, but what really bothers me is that he had kicked the habit and now let himself get hooked back into it. I hate that he's doing it, and it bothers me a lot that the kids know he smokes and see him do it.

Anyway, I've got to refocus here - I haven't got any control over whether or not he gets a job but I can control whether or not I am working, so that is what I want to focus on. 

I have been watching every penny the last few days, and FH has not been to Tim's at all in the last couple of days either (that is a big deal for him!)


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## Berubeland

I was thinking that even though you don't like the idea of having a home daycare again...a minimum wage job somewhere is not exactly a fulfilling career. 

I suggest you get over yourself and do what you have to do to create income for your family. Home daycare may not be glamorous but it is probably the easiest way to supplement your income and in line with what you're currently doing. 

The lists for subsidized daycare in my area...2 years. Stop waiting and start doing what you can with what you have.


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## the-royal-mail

What's FH?


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## kcowan

the-royal-mail said:


> What's FH?


My guess is Future Husband. What's the prize?


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## the-royal-mail

A ban due to misuse of the quote feature?


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## KaeJS

the-royal-mail said:


> What's FH?


Lol, TRM.

5 pages into the thread and you ask what FH is.

Haha, sorry. I just find it slightly amusing.

Also, someone in the very first page suggested that FH maybe not work 80 hours. Um. In my opinion, thats not even an option. FH _must_ work 80 hours.


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## MoneyGal

When I first read the thread I didn't know what FH was so I just used "effing husband" while I was reading. Eventually I figured out the "future" part.


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## the-royal-mail

I've never heard the letters FH before. I would normally let this sort of thing slide but it kept reappearing. 

It would be better for the OP to tell us what she means for sure, rather than for us to try and guess. OP?


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## petulantfem

kcowen - yes, it is future husband. The prize is bragging rights. 

I should have clarified earlier. lol Effing husband is also sometimes appropriate.

Berubeland - I'm not worried about a minimum wage job not being fulfilling, but I did the home daycare for a year and a half previously - it might not be a big deal in terms of myself not enjoying it (and I could get over myself and do it if that was all it was), but I do not think that it was fair for the little ones that I was watching that I was a miserable piece of crap. Much healthier for all if I get a job out of the house - in the end it would amount to about the same income (home daycare doesn't make a whole lot either). I wouldn't want to place my kid in a daycare for 8 hours a day where the only caregiver was not passionate about what they did.

I will be applying to the waiting list for subsidy - question for those who have done it ... can you apply before you have secured a job?


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## MoneyGal

Yes. You can apply before you have a job. 

Your eligibility is based on (1) need and (2) income as verified by past tax returns plus either (i) a plan for self-employment or (ii) an offer from an employer. 

So, you can't get subsidy during the time you are looking for employment - but you can *apply* for subsidy and then receive it once you have secured employment/started a self-employment arrangement. 

Hope that makes sense. I am the former treasurer for my kids' former daycare and I dealt with a LOT of subsidy issues in Toronto.


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## petulantfem

A little-ish update:

H (not FH anymore!) is now working between 44-60 hours a week instead of the 80 or so he was doing before. We haven't noticed a HUGE change financially that way (probably most of the extra went to taxes anyway) and it is nice having him home a little more.

We got married 3 weeks ago and have no wedding debt (also no wedding gift money left over, but I am happy enough that we broke even). 

We had our credit card debt down to $550 until the car broke down two days ago. Add an additional $2000 for repairs blech.

We cancelled our cable and paid the $40 penalty - the penalty was cheaper than a month of cable was anyway, that will be a $50/month savings. We changed our phone plans a little - H's is still expensive because he uses a lot of data for work, but mine is a lot cheaper and we are saving about $50 per month. Our insurance has gone down by about $100 per month.

I have finished (and we have paid for) 3 of the 4 courses that I need for my bookkeeping certificate. I have one left to go, we are just waiting to have a little extra money to pay for it. In the meantime, I am starting to look for a job (it is a little intimidating). I am also still trying to figure out how I'll work and make enough to do more than just pay the child care that will be necessary. Trying to be creative! (Maybe work nights somewhere?) I have started contacting daycares to see what availability and costs are.

My credit score is now 750. H's is still only 635 though. 

We are spending less on gas since we transferred the kids to a school in our area (we were driving them about an hour total every day to attend their old school because we didn't want to switch them mid-year when we moved). One thing that is annoying is that the new school is not full time for kindergarten - our middle son was full time full days in JK last year and is down to every other day for SK at this school. This was something that I didn't anticipate and will make child care more expensive when I start working.

We have agreed on a budget and we are hoping that we can straighten ourselves out enough over the next 2 years that we can buy a house. H has agreed to wait on the motorcycle thing until after we have a house/savings. Our biggest challenge is still in increasing our income.

I have brought up child support with my ex. He is still not working, and I haven't made much headway, but H and I are going to talk to the Family Law office and see what they suggest for us.

That's as far as we have gotten so far. I've been really distracted from working on our finances because of all of the chaos of the wedding and focusing on my courses for a while. But I'm trying to always keep it in the back of my mind.

I can't remember if I mentioned this, but H does have benefits at work now (dental, medical etc) and some life and disability insurance (not a lot, but it is something).


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## petulantfem

*Monthly Expenses* - $4,363.00
_Monthly Fixed Expenses - $1,628
$900 Rent
$25 Parking
$135 Hydro
$58 Gas
$25 Water Heater
$100 Phone/Internet
$100 Cell Phones (2)
$35 Charity
$250 Insurance

Monthly Variable Expenses - $1,470
$600 Groceries and Personal Care
$100 Clothing and Gifts
$550 Fuel
$100 Vehicle Repair
$100 Entertainment
$20 Medical

Monthly Debt Payments - $665.00
$300 Vehicle Loan 
$125 OSAP 1
$90 OSAP 2
$150 Credit Card Debt

Monthly Savings - $600.00
$100 Emergency Fund
$500 Savings_

*August 2011 Snapshot*

*Income*- $4,962.71
_August Income Breakdown
H's Employment Income - $4,190.86 
CCTB + UCC - $641.27
HST Rebate - $130.58_

*Debts* - $32,224.55
Vehicle Loan - $14,472.02
_Vehicle Loan Details
$299.75/month with 54 months remaining
Variable Rate 4.99%_

H's OSAP - $7,705.47
_H's OSAP Loan Details
$90.62/month with 103 months remaining
5.50% Interest Floating_

My OSAP - $7,562.39
_My OSAP Loan Details
$125.04/month with 100 months remaining
5.50% Interest Floating_

Credit Card Debt - $2,484.67
_Credit Card Debt Details
$2,317.16 at 19.99% Interest
$167.51 at 24.97% Interest_

*Savings* - $1,081.76
TFSA 1 - $301.51
TFSA 2 - $206.67
RRSP GIC - $573.58

*2011 Financial Goals*
1) Pay off Credit Card Debt
2) Pay an additional $1,500 on Vehicle Loan

1) $0.00 paid of $2,484.67 = 0% Complete
2) $0.00 paid of $1,500.00 = 0% Complete


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## petulantfem

I can see right off the bat that I should be focusing on paying the credit cards off first, then the OSAP and then the vehicle loan based on the interest rates. I should take the money out of the TFSA, maybe, and get rid of the $167.51 at 24.97% Interest and put the rest on the other credit card? The RRSP is untouchable, it was created by an old employer when I worked for them. I know $500 of savings is nothing, but it's all we have. Gross.

Maybe we won't be house ready in two years, now that I am looking at the numbers. But it should change as soon as I am working - maybe I can figure out something clever for daycare costs yet. 

I also just realized that I forgot to allot money for my school courses. It would have to come out of the $500 savings, I guess, until it is all done?

We can probably still do some trimming in our expenses. H and I will have to have another look tonight. Off the top of my head - maybe we can take H's cell phone plan down a notch, and maybe we can get rid of the home phone altogether. I might be able to get fuel down a little more ... H spends at least $350-$400 just on his work commute, but I can walk the boys to school and even walk to the grocery store while the weather is still nice. It means I will have to limit visiting my family for a while though. If we meal plan, maybe I can cut back on groceries? Entertainment and Clothing and Gifts can maybe come down for a little while too, at least until we get some debt down.

Starting next paycheque we are going to implement a jar system for our variable expenses and take the cash out for that each week. The remainder of our money will remain in our accounts untouched, to be used either for bill/debt payments or savings ONLY. Not for spending.

Any other suggestions?


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## financialnoob

When does the RRSP GIC mature? It might be worth it to take it out now to wipe out some more credit card debt. Since you're not working right now, you should get it without having to pay any taxes on that money. There will be a withholding tax, probably 10%, but you would get that back when you filed your tax return. 

I don't think you're getting 19.99% on that money so why not use it to help reduce the CC debt? I understand the argument that it is part of the savings, but in many ways, it's not really since it's not very accessible. And if you need it later, the tax hit may be more once you start working. At the very least, you could pull it out and put it into your TFSA and all you'd do is lose some contribution room from the RRSP.

What about switching to a new card that would give you 0% on balance transfers for 10 to 12 months? That could bring down your credit score a few points temporarily, but would give you a chance to tackle that debt without further interest charges. RedFlagDeals has a list of some cards here. 

I also am unclear what the $35/month for charity is for? I'm not suggesting charity is not a worthy cause, but that's over $400/year for someone trying to get through some debt. 

For groceries, I think you can save some cash if you're willing to be flexible about meals. Grocery stores always have meat on sale, so we try to plan our meals around that. For example, boneless skinless chicken at Loblaws goes for around $7-$9/lb, and we never buy it unless it's on sale for $4/lb. Pork ribs are $6-$8/lb, but we get them when they're on sale for $3/lb. Today, steak was on sale.  

Bear in mind I'm not talking about lowering your food quality standards. Just not needing to buy things at full price if they're going to be on sale. Ham often goes on sale for $3/lb, but the regular cost can be $6-$7/lb. It's the same ham from the same company though.

Oh, and congrats on the wedding. Speaking of which, your new husband should be able to claim some of your tax credits this year if you don't earn around $11K over the next few months, which could lead to a big tax return next year. I know that's not the main reason to get married, but hey, might as well take advantage of it.


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## petulantfem

Hi fn,

The $35 for charity is actually for a sponsored child that we have with world vision. I'd feel really awful about getting rid of that, so I'd rather pinch in other areas instead.

You are right about the grocery thing - I am not organized and grocery shopping overwhelms me (probably because I also hate/am terrible at cooking so food is mostly intimidating haha). I just buy things from one place, I never check flyers. This is something that I can work on.

Is it worthwhile, do you think, to get another credit card for that amount of debt? I feel very resistant to getting more credit, but I'm not sure if my feelings are logical. If we were to be able to pay the $2,500 off over the next 5 months, would the amount of interest be very high?

The RRSP GIC matures and goes right back into whatever it is called when it locks. It won't be accessible until I retire, apparently. But I could put the $500 from our TFSA onto our credit cards right now, that brings us down to $2,000 of credit card debt.


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## petulantfem

Okay, I just transferred the $500 out of our TFSAs so that I can apply it to the credit cards. It will take a day to go through, so I will put it on the cards tomorrow.


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## Sherlock

I think it was a good choice to pay off as much credit card debt as possible.

You mentioned considering buying a house, so I'm curious how much houses cost in your area? I'm guessing you're not in the GTA where an average house costs 700k.


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## marina628

With your Fico Score I would try getting a MBNA credit card to pay out your credit cards.I do not want to rehash the child support issue but I think you need to just file those papers and be done with it .It may motivate your ex to get a job if family responsibilities are on his back.Does he even offer anything to you for support?I think having some emergency fund as backup is a good plan ,I do not know if i would drain your savings to apply to the card.


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## financialnoob

If you're able to tackle the CC debt in 5 months, then probably not. I was just factoring it based on your $150/month figure in the budget, which works out to around 20 months and almost $450 in interest. By switching to one of the cards with say 0% balance transfer for 10 months, you could reduce that interest payment to less than $70. 

Again all figures based on the $150/month but it sounds like you're planning on being more aggressive so maybe it's not necessary.

The RRSP GIC thing sounds weird, you should double-check all the details on that. Usually they do automatically renew unless you advise them otherwise. You should at least find out when it matures in case you don't want to keep it in GICs but rather invest in something else. 

The part about not being accessible until you retire sounds a bit off to me, though I don't know all the details of this since you said it came from a previous employer. But in general, for withdrawing RRSP contributions, you'd have to pay tax on that amount if you pulled it out, since you didn't pay tax on it going in. However, in your current circumstances, you're in the lowest tax bracket now so any tax deducted would be returned when you filed your taxes. Again, it's not an absolutely essential thing to do, just might alleviate some pressure sooner is all.

As for groceries, I don't religiously flip through flyers like I used to, and you don't have to spend hours on this or anything crazy like that  There are things we need and things we love but can live without. If it's not essential, I will check to see if it's on sale somewhere, and then buy a few whenever possible. 

Each store tends to have a section or area where all the "sale" items are grouped together, so you can just take a quick walk through there. They're often at the end of aisles as well. I can usually walk around the perimeter and then down one aisle to see all the sale items at once, then double back to grab any items I may have missed.


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## MoneyGal

financialnoob said:


> The part about not being accessible until you retire sounds a bit off to me, though I don't know all the details of this since you said* it came from a previous employer*.


It's probably a locked-in retirement account. Basic Wikipedia entry: http://en.wikipedia.org/wiki/Locked-In_Retirement_Account


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## petulantfem

Sherlock, we are not in the GTA. We are pretty intent on staying in one specific school district (we don't want to make the boys switch school again), so prices in that district go from around $120,000 for a town house up to around $360,000 for some really huge, beautiful new builds. We don't really want a town house because parking is an issue (only one spot), but there is a huge gap between town houses and detached homes in the area. I'd say detached homes start around $240,000 ... I feel like we are so far away from that right now. It is discouraging.

Still, we are meeting with a mortgage specialist tomorrow (or, I am anyway) to at least make sure that we are on the right track, even if it will take us some time to get there. I wonder if we could somehow qualify for a town house now - we are dealing with the parking issue while renting anyway, and the mortgage might even be a little cheaper than our rent (or about the same anyway).

Right now we are in the process of trying to figure out how I can work and not pay all my income to child care - maybe work the overnight shift, but that still gives us an overlap of about 2 hours (5:30 am to 7:30 am) where we would both be out of the house, so I don't know how we would solve that issue yet. Still brainstorming.

As for paying the credit card debt, we could put a few hundred on the cards each month instead of into savings (except, maybe, for next month because I just realized that I need new tires and a transmission filter change yesterday.)

Moneygal - Maybe that is what the RRSP thing is. I honestly never paid it much attention because they told me that I couldn't touch it until I retire. I do feel embarrassed that that is all that I have for retirement so far!


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## MoneyGal

PF: we are going to turn you from PetulantFem to PersonalFinance. 

Listen - I went back and read this WHOLE thread again. Here's what I think:

Forget about buying a house right now. It just isn't workable for you. Where would the downpayment come from? And if you have this level of worry about roughly $32K in debt, how is adding several hundred thousand dollars of debt to your personal pile going to help?

On another note, I said earlier that bookkeeping and tax preparation are GREAT work-at-home jobs. I still think that. I know several different self-employed accountants (for example) who have part-time assistants, paying $25 per hour and working, say 20 hours per week. This is the kind of job you need - not an overnight job, but one you can do in short bursts, that pays well and can be worked around your kids' schedules. 

Also - this kind of job will pay a dividend of training you, if you are interested. Over time, you would be able to hire yourself out as a self-employed bookkeeper for small businesses. Now you are looking at up to $50 per hour, all of which you can retain. 

Well. My $0.02, and it is worth about that. When I look at your situation, that's what I see. I don't think it is what you see, though.


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## petulantfem

I can't believe you read it all again - I don't have that kind of energy lol.

Being a part-time assistant to an accountant sounds amazing. I feel incredibly intimidated and I have no idea where to start in terms of finding a position like that ... maybe they aren't in abundance locally? But I am not super far from the GTA, either. The accountants that you know - where are they hiring their assistants from? Temp agencies? Do they just post jobs like this in their area? I have been looking for those sorts of postings here. Maybe I should be going to temp agencies though?

I need to stop obsessing about a house, I know. My heart is so into the idea. I always have to keep reminding myself that I'm not close yet. Somehow the thought keeps sneaking in, I guess just because I want it so badly.


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## MoneyGal

I doubt you would ever see that kind of job advertised - that is ALL personal networking. I know a lot of accountants. 

Is their any kind of business networking group in your area?


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## Four Pillars

Agree with MoneyGal.

One other thing - don't just compare the mortgage payment to your rent. Owning a house has a TON of extra expenses. Trust me, you would be house-poor and you wouldn't like it. Just wait on the house and don't bother with mortgage specialists. Their job is to get you into a mortgage - that doesn't mean it's a good thing for you.


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## MoneyGal

petulantfem said:


> I need to stop obsessing about a house, I know. My heart is so into the idea. I always have to keep reminding myself that I'm not close yet. Somehow the thought keeps sneaking in, I guess just because I want it so badly.


Hmmm. I wonder, if you looked at what you want when you say you want a house, whether there is a way for you to get that -- or some of that -- without buying a house. What would owning a house give you? Are there any other available pathways to that feeling? 

And on another note, how was it that you were planning on using your bookkeeping certificate once it is complete? Were you planning on finding "a job", like a 9-5 gig? Would that work for you?


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## Sherlock

petulantfem said:


> I need to stop obsessing about a house, I know. My heart is so into the idea. I always have to keep reminding myself that I'm not close yet. Somehow the thought keeps sneaking in, I guess just because I want it so badly.


Just read Garth Turner's blog, he has a lot to say about houses: http://www.greaterfool.ca/


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## petulantfem

I guess that I equate home ownership with success? I hate the feeling of not being rooted somewhere, that the boys have lived in several rental places and never had their own childhood home. They have been in different schools - it just bothers me. My family keeps wondering when I will settle down and buy a house. It is part of being an adult to me, maybe. It's just the way I grew up. 

Renting was fine for a while, but at some point I am supposed to move on from that. I hope that is not offensive to any renters - it's just the feeling that I have for myself personally. It's obviously not rational, just emotional.

As for bookkeeping - I planned to eventually work full time ... I assumed at some point it would pay off (even though it might be difficult with daycare until all the kids are in school). A 9-5 gig right now would probably result in me just paying daycare costs to work, but over the long term it would be a good thing.

FP -Yes, I see your point about all the extra costs with home ownership. Just struggling with the sense that I *should* be able to do this, so many people do it, and I should have been there by now. Yet I am still not ready and that is discouraging for me.

Sherlock, I will check out that blog.


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## Four Pillars

There is absolutely nothing wrong with wanting to have your own house. However, owning a house is not the "default" position.

In your case, you have three kids, your hubby doesn't make a lot of money and you aren't working. Buying a house now would be a disaster. You guys can't even handle a car repair without putting it in the visa.

That said, you are definitely working on improving your financial position by cutting costs and increasing income (book keeping) and reducing debt, so you just have to be patient.

There will come a time when all the kids are in school full time, you are working full time, your hubby is making more money, your debts are gone and then you can start planning and saving for house ownership.

It will happen.


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## petulantfem

Four Pillars said:


> There will come a time when all the kids are in school full time, you are working full time, your hubby is making more money, your debts are gone and then you can start planning and saving for house ownership.
> 
> It will happen.


I need to pin this up on my fridge. Yes, so logical. I need to be patient.


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## MoneyGal

Well, you could "settle down" and buy a house if you were willing to live in a place where houses are much, much cheaper. 

Life involves tradeoffs. Being an adult means making choices about what is most important to you. If owning a house is really important to you, you can find a way to make it happen. But it will likely come at the cost of something else. 

I'm sorry if that comes off as harsh. It isn't intended to. It's hard. A lot of the values that were relevant for my parents' generation aren't any more, and there aren't a lot of guideposts now. So the idea of "settle down and buy a house" was much more relevant and useful when housing was (relatively) much more affordable. Would your parents have bought a house if they were faced with the same conditions as you?


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## Homerhomer

MoneyGal said:


> So the idea of "settle down and buy a house" was much more relevant and useful when housing was (relatively) much more affordable.


I think it was also more relevant in times when real estate was "always" a great investment and you could never go wrong, now we all know it's not the case ;-)


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## MoneyGal

Yeah. I've been thinking about these issues quite a bit lately - a lot of the "old advice" about how to make your life work financially doesn't fit any more. This is also true in the field of retirement income planning.


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## R.O.V.

Sherlock said:


> Just read Garth Turner's blog, he has a lot to say about houses: http://www.greaterfool.ca/


Not to hijack this thread ( if find it very interesting) but just read Garth Turner's new book, 'Money Road' and started reading his blog. Is he legit?...or are his books and blog primarily marketing tools (all hype) to entice individuals to hire him as their personal financial advisor?


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## petulantfem

MG, it's not harsh. It makes sense.


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## Saniokca

R.O.V. said:


> Not to hijack this thread ( if find it very interesting) but just read Garth Turner's new book, 'Money Road' and started reading his blog. Is he legit?...or are his books and blog primarily marketing tools (all hype) to entice individuals to hire him as their personal financial advisor?


R.O.V. I started reading his blog about 4-5 months ago. I have yet to see him asking people to hire him as an adviser... He gives out books sometimes but never tells you to go and buy one. I actually agree with most of what he is saying. I wish more Canadians read that blog. We wouldn't all be slaves now...


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## marina628

One think you can consider is doing income tax returns or looking for small business owners who may need a hand with their DIY accounting.I am sure there must be some people in your town with unfilled tax returns.Maybe advertise that sort of thing int he grocery stores , laundromat etc.I would imagine with your studies so far you can manage some of these task working from home.Maybe go talk to local accountants to see if they can give you some work ,even if it is filing to get your foot in the door.


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## canehdianman

_Ok, I'm a little late to the party. I got to page 5 and got too frustrated at the "he doesn't want to pay, so I leave it alone" attitude, so I cranked out the below post. I am glad to see that the OP was going to contact the Family Law Office to get some info on how to get some child support. I'll leave my post unedited._







You need to go after your ex for his fair payment ASAP. 

It sounds as though he is lying to you about him income. Have him give you his T4 for the past XX years. If he refuses, contact your maintenance enforcement office (Not sure what your province would call this office) and have them force him to share it. 

I don't care if it makes him mad or poisons the relationship you have with him. He poisoned it the minute he stopped caring for HIS children.

I have several friends in the same situation. For some reason they cannot understand that their inaction is hurting their children. They pretend that allowing their baby daddy/mommy to avoid sharing the costs of raising a child is somehow strengthening the (now dead) relationship. It's not. He's using you. I don't understand how anyone can be so accepting of this situation. He is denying proper care to HIS children, and you are enabling him!

Sorry if that came across as harsh, but I have seen this situation play out too many times. There are many tools you can use to get him to pay up his fair share, I suggest you use them.


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## petulantfem

I have emailed my ex this morning asking for clarification of his income or if he is on EI or welfare. We'll see what happens with that and then I guess that I will just go from there ... I had been hoping that I could wait for a Wednesday when my husband is off to go to the Family Law clinic (they have information sessions on Wednesdays) together, but he said this morning that he has no idea when he'll have a Wednesday off, so to go ahead without him. So, next week, I guess.


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## petulantfem

On the money front, we started physically using the jar system a few days ago. I am blown away by how much money we _haven't_ spent in those few days.

I forgot to mention that the meeting with the mortgage specialist was cancelled. I never bothered to re-schedule it and I will put it on the back burner while we just focus on getting our debt down and money in the bank.


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## petulantfem

I received an email from my ex this morning stating that his income amounts for the last three years are:

2010- $6,200 
2009-$15,175
2008- $14,134

He is offering to pay $200 per month right now although he is unemployed and says he currently has no income. I suppose he means that it would come from his girlfriend's income then?

I am confused, as according to the tables, based on no income he would be obligated to pay nothing and based on an average of three years he would be obligated to pay $138 per month. Maybe he is offering more because he is feeling guilty, but would that not cause undue hardship for him considering that he is unemployed?


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## financialnoob

MG: Thanks for the clarification and info. 

PF: Maybe the $200/month is also to compensate for the lack of helping out over the years? I get the feeling if all those factors are true, the payments won't last long, but you should get whatever you can to help out for now. 

On the home front, I know a lot of people think of it as part of adulthood, but it really isn't. MG posted a great article a short while ago which I think is worth reading:

http://www.canadianbusiness.com/article/33638--rental-complex

I'm not saying home ownership is bad, just that it isn't essential. But if you do want to, you're really not that far from it. You have to focus on paying down debt right now, but once that is gone, you could easily save enough for a decent down-payment within a year or two, even quicker once you start working. So don't get too down about it. You've made some huge steps over the last few months and should be proud of all of that.


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## petulantfem

financialnoob said:


> I get the feeling if all those factors are true, the payments won't last long, but you should get whatever you can to help out for now.


This is a really good point. Thanks.


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## petulantfem

MG, I missed your post about business networking groups somehow. I don't know of any, but that is something that I can start looking into. Would a hiring agency be any help in that sense?

I've just calculated out how much I need to take my final two courses for my certificate, so we can work that into our budget. One of the courses is a monthly intake, but the other one I have to wait until semester start (January) to begin.


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## MoneyGal

For the type of jobs I am thinking of, a hiring agency would not be appropriate. 

I'm just thinking of business networking groups in your area. There are usually lots of Chamber of Commerce-type get-togethers focussing on providing a space for small business owners to meet each other.


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## petulantfem

Okay, thanks for that tip, I will see what I can find out here and in the nearby cities. I still have 2 courses to go, and they are pretty relevant to being able to do the work (Simply Accounting and Taxation). I can start one course on November 1st but I have to wait for January 1st to start the other because of intake dates (and it will also give me time to come up with the money to pay for the courses anyway). The courses are 4 months long, so I will have completed the program by May 2012.


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## mind_business

I just finished reading this entire thread. Wow! I have to say we're seeing someone mature financially in front of our eyes. petulantfem, I'm impressed with your determination to move your family into a better financial position. Actually it sounds like your husband is onboard with these changes as well. Congrats to you both.

I love seeing young people understand the necessity of reducing / eliminating debt. It's the main reason people are unable to move forward with bigger plans (ie: house purchase). 

Mid-way through the thread I was frustrated by your willingness to give excuses for your ex. However I see you are becoming more resolved in holding him to his obligations. My only comment regarding his unemployement situation is that he is likely not telling you the whole truth. I also live in SW Ontario. There is absolutely no excuse for a person in their 20's and 30's not to have a job. My guess is that he is either lying or extremely lazy. Either way, make sure you stop enabling him by making excuses for him. He owes it to his child to make money, and help with expenses. Having said all that, I see that you are starting to make some headway here. Keep it up.

As for your dreams of owning a house ... don't give up on it. Most people struggle financially early on in their lives. Give it some time. You're closer than you may think to being debt free. After that, you'll see your savings grow quickly. Someone on another forum had posted a link to a calculator to help decide whether renting or home ownership makes more sense financially. Here's the link: http://www.nytimes.com/interactive/business/buy-rent-calculator.html

Be careful with using any type of calculator. They're only as good as the information you put into it. 

Keep it up. You're on the right track


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## petulantfem

Thanks m_b. The jar system is working pretty well so far, and I am excited to see what a difference it will make over the next little while. My husband is on board with all the changes we are making, so that makes it easier.

My ex has agreed to start paying child support as of October 1st based on the tables (an averaged out income from the past three years). I am not sure how he will manage it when he is not working, but I imagine it will come from his girlfriend. This makes me uncomfortable, but I don't really see that it is any of my business either - whatever way they are making it happen is their issue, I guess. I don't think that he is lying about being unemployed, but I do think that he could be working if he wanted to be working.

I am going to admit that I secretly am still stalking houses on MLS. But I am also keeping my immediate goals at the forefront - reduce debt/spending, increase income, build savings. We'll be house-ready when we are house-ready and no sooner, so I am just accepting that and I'll be happy when it finally happens.

My husband wants to make a goal board where we can pin our goals up (a house, a motorcycle, consumer debt-free, X amount in the bank, etc) and track how close we are getting to them. This might be fun to do?


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## petulantfem

Goal #1: Tackle debt (in order of importance):

1) Credit Card: $2,054.20 @ 19.99%
2) Student Loans: $15,288.90 @ 5.5%
3) Vehicle Loan: $14,472.02 @ 4.99%

1) Budgeted $500/month (over 4 months) for Credit Card Debt. (Realistically, this might take 5 months with Christmas being stuck in there).

2) As soon as the credit card debt is paid off, we will increase our student loan payments.
Instead of $125.04, I will be paying $200.00 per month.
Instead of $90.62, my husband will be paying $200.00 per month.
At our current payment, we have over 8 years remaining on these loans. If we make this increase in February, we will have them paid off in two years.

3) On our vehicle loan and we have 54 months remaining. I have no plans to increase our payments at this time, but we do have the option to make an extra payment any time. Once I am working, we can start making extra payments as/if we are able.

In order to tackle this debt, I am not going to focus on savings as much - all I have set aside is $100 per month for an emergency fund, and $100 for savings (at least until I am working). We will also have an additional $150 per month coming in beginning October 1st for child support.

Once I am working, we can revisit this plan and see how we can further accelerate debt repayment and/or build savings.

Does this seem realistic?


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## petulantfem

Here is the budget I am working with:

Monthly Income
His: $3,250.00 (Usually he makes more than this, but I am being safe)
Hers: $300.00 (I watch my nephew)
Gov't Benefits: 641.27
Child Support: 150.00
*Total Monthly Income: $4,341.27*

Monthly Expenses
$900 Rent
$200 Hydro
$58 Gas
$25 Water Heater
$110 Phone/Internet
$125 Cell Phones (2)
$35 Charity
$250 Insurance
*I took out parking because we just paid the year in advance instead.
*I increased Hydro to be safe because winter is coming, and a couple others to be on the safe side too.

Monthly Variable Expenses
$600 Groceries and Personal Care
$75 Clothing and Gifts
$550 Fuel
$50 Vehicle Repair
$100 Entertainment
$20 Miscellaneous (Medical, Bank Fees, etc)

Monthly Debt Payments - $665.00
$300 Vehicle Loan 
$125 OSAP 1
$90 OSAP 2
$500 Credit Card Debt

Monthly Savings - $150.00
$100 Emergency Fund
$50 Savings
*Total Monthly Expenses: $4,303.41*

I can move the variable money around, but maybe I am being too optimistic - perhaps I should decrease the credit card repayment by $100 or $200 and just suck it up and pay it off a little longer.

I'll give it a shot and see how it goes, anyway.

I haven't included a budget for Christmas at all ... any surplus of my husband's income over what I calculated could go to that, I suppose. We already have their Hallowe'en costumes ... but they will need new snowsuits this year, and our clothing budget will not cover that.

I think the realistic solution, though, is that income needs to increase. So that should maybe be goal #1. On that thought, I just realized I didn't budget for my last two courses. I need to start over.

Okay I need to take a break and I will come back to this.


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## MoneyGal

This is good stuff. 

Others may pipe in with different opinions, but here are a few from me: 

- I would nix any "savings" budget until you have your credit card paid off completely. 

- I don't know the rates on your car loan and student loans, but if they are OSAP loans the interest gives rise to a tax credit, which means the effective after-tax rate on the student loans is lower than the stated rate. You might want to figure this out. If you haven't claimed student loan interest in the past, you can carry forward the amount for up to 5 years. (I can't recall, though, whether you can transfer the credit to a spouse...if you have no taxable income, a tax credit is of no use to you.)

- So, depending on the rates, I would probably pay down the car loans faster. 

- You are spending a lot on gas. Is there any way your husband can get his employer to complete a form T777 so he can deduct some of those gas costs? I don't know enough about your husband's employment situation to know whether this is viable. Is he just travelling from your house to a fixed work location, or is he "on the road" for work? (Or are these gas expenses yours?)

- Is your husband claiming you / your kids as dependents on his tax return? Does he typically get a tax refund when he files? Did he get a refund last year?

Finally, Elizabeth Warren is getting a lot of press lately. With her daughter, she wrote a fantastic personal finance book called "All Your Worth" which I highly recommend. She really demystifies the plain old budgeting exercise that you are going through right now, and her book is very helpful and very eye-opening - and I suspect the budgeting work you are doing right now is very eye-opening for you personally.

Editing to say: I looked it up, and you can't transfer the student loan interest credit to a spouse or any other person.


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## petulantfem

Yes, the savings has to come after the debt repayment (or the bulk of it) ... that makes sense. 

I don't know how the tax credits work for student loans - but they are through OSAP and they are both at 5.5% while the vehicle is at 4.99%. Do you think that we should focus on the vehicle loan instead first?

For the fuel, H works about 1 hour 15 minutes away (could be closer to 2 hours on days with bad traffic into the GTA). So his daily commute is anywhere from 2.5 - 4 hours (usually somewhere around 3 hours total though). He is travelling to a fixed location, but it is a contract (I believe the contract is 5 years) - after which he could be placed anywhere, so it doesn't make sense to move closer. He does get reimbursed for mileage on weekends. He works most days, he doesn't take many days off.

H does generally get a tax refund - we both always have gotten something because neither of us have ever made very much. We have been common law for a couple of years, so we have filed together.

I just remembered that we also have to get winter tires for the van in the next couple of months. The credit card may take me longer than I had hoped it would. Slow and steady wins the race, right?


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## Four Pillars

Very good stuff indeed!

I agree with MoneyGal - put everything you have into the credit card. This could mean backsliding sometimes if you have extra expenses, but even temporary savings at 20% is worthwhile.

I'm not sure if it's wise to include the ex-husband's $150/month in the budget. He sounds like a deadbeat, so I'd want to see that payment coming in for a couple of months before starting to count on it.

The $300 for looking after your nephew is highway robbery if it's for full time. I realize you are already looking after your own kid as well, but I would find out the going rate in your area and charge that amount. You need the extra money.

The $50 vehicle repair is probably not realistic. However, you might have $1,000 in repairs over the next six months and you might not have anything for the next two years - difficult to predict and therefore hard to budget for efficiently. If nothing else I would try to mentally be aware that a car repair could throw things out of whack for a while and if it happens - it's just one of those things and you have to deal with it and continue with the plan.

Regarding your education costs - I believe you are in a temporary situation with high education costs and lower income. If you can make some progress on your debts, that's great, but don't get discouraged if your progress is minimal until you get a job. It will be easier after that.


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## MoneyGal

petulantfem said:


> I don't know how the tax credits work for student loans - but they are through OSAP and they are both at 5.5% while the vehicle is at 4.99%. Do you think that we should focus on the vehicle loan instead first?


How much interest did your FH (is he now just "H" or even "CH" for current husband?) pay on his student loans last year?



petulantfem said:


> For the fuel, H works about 1 hour 15 minutes away (could be closer to 2 hours on days with bad traffic into the GTA). So his daily commute is anywhere from 2.5 - 4 hours (usually somewhere around 3 hours total though). He is travelling to a fixed location, but it is a contract (I believe the contract is 5 years) - after which he could be placed anywhere, so it doesn't make sense to move closer. He does get reimbursed for mileage on weekends. He works most days, he doesn't take many days off.


Take a look at page 8 of this document: 

http://www.cra-arc.gc.ca/E/pub/tg/t4044/t4044-10e.pdf

He may be able to deduct, from his taxable income, some/all of his gas costs through the week. This isn't about moving, and it is not about mileage reimbursement - this is about deducting from his taxable income the costs of his gas. If he can do this, it would make a big BIG difference to his taxes. If he is spending $500/month on gas, and he is in a 34% tax bracket, that's an extra $170 in your pocket every month. Where else can you find that kind of savings in your current situation?


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## petulantfem

Four Pillars said:


> The $300 for looking after your nephew is highway robbery if it's for full time. I realize you are already looking after your own kid as well, but I would find out the going rate in your area and charge that amount. You need the extra money.


I should have clarified, my brother works shift work, so I don't always have my nephew for a full day. At any rate, I had offered to do it for free. I'm really not comfortable with taking money from my brother at all since I was already home all day, but they insisted on paying something.

Point noted on the extra $150. I'll count it as a bonus when it comes for now.

Thanks for your thoughts - temporary backsliding sounds like it could happen, but as long as I keep in mind that overall progress is happening, I won't be so down about it. We had a very expensive car repair that we weren't prepared for last month or so, but we'll keep slugging forward. Eventually it won't be such a shock to the system when it happens, once we have some savings and more income.


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## petulantfem

MG, I will look into that. I'm not familiar with any of it, but if it could help I am game with checking it out. Would he have to be tracking every km and whether it is for work or not? We definitely have not been doing that.

I'll have to look up H's interest paid on student loans - I've got our last year's income tax info kicking around (it would be on there, right?)


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## MoneyGal

It's there if he claimed it. 

As for the T777, you do need to keep records of all kms driven in the year, and all kms driven for business. That should take about 1 minute per day x 5 days per week. That's $170 per month (tax-free) for 20 minutes' work per month, giving you an effective rate of $510 per hour. 

I defy you to find another way to make $510 per hour (legally, easily and painlessly).


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## petulantfem

Okay that is definitely something that we should start tracking asap.


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## MoneyGal

You need to set it up with his employer. Seriously, read the link I posted and see if this potentially applies to his situation. THEN start tracking his mileage.


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## hboy43

petulantfem said:


> For the fuel, H works about 1 hour 15 minutes away (could be closer to 2 hours on days with bad traffic into the GTA). So his daily commute is anywhere from 2.5 - 4 hours (usually somewhere around 3 hours total though). He is travelling to a fixed location, but it is a contract (I believe the contract is 5 years) - after which he could be placed anywhere, so it doesn't make sense to move closer. He does get reimbursed for mileage on weekends. He works most days, he doesn't take many days off.


The fuel number jumped out at me. That much fuel would run my Jeep Patriot 60,000km/year! Are you really travelling this kind of distance annually? At the CRA rate of $0.52/km, your vehicle costs are potentially $30,000/year. Might be worth another look at the ecomonics of moving closer to the work location. Or perhaps some combination of driving and Go train or something.

I maintain that not owning a car from ages 16 to 35 paid for my first house. Vehicle costs are crushing, and most people don't really understand the costs. Around here people will occasionally do a 70 km round trip commute for a 4 hour shift at minimum wage. Makes no sense, but they don't understand. 

hboy43


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## MoneyGal

For the T777, you can deduct from employment income a portion of your actual expenses (you don't use a set rate). 

But yeah, great points. I think people mentally write off car costs as "fixed" or something.


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## petulantfem

MG, according to that document:

TRAVELLING EXPENSES
"Travelling expenses include food, beverage, and lodging 
expenses but not motor vehicle expenses." - Page 8

MOTOR VEHICLE EXPENSES
"If you use a motor vehicle for both employment and 
personal use, you can deduct only the percentage of 
expenses related to earning income. To support the 
amount you can deduct, keep a record of both the total 
kilometres you drove and the kilometres you drove to earn 
employment income. We consider driving back and forth 
between home and work as personal use." - Page 18

Unless I am misunderstanding, I don't think this will work for us - it seems like it is applicable to people who travel for work as opposed to travel to work. But maybe I missed something?

hboy - Distance from home to work is 105 km, so 210 km round trip. He works most days (I actually forget when he was off last - it has definitely been more than 12 days at any rate). Some time is also spent idling in traffic as he spends time on 401/403/QEW. So he burns a lot of fuel.

Maybe we should consider the go train option - but he leaves here for work at 5:30 am, does go train run 24 hours? I guess he could taxi or bus from the go train to work as well. Recently, when he can, (when he works with a certain co-worker) he has met up with a co-worker about halfway and carpooled.

I don't want to move closer to his work because it is a temporary assignment and we have already moved the kids so much (this is the 4th school for my oldest and he is only in grade three) - our objective is to keep them in their current school for the duration of elementary school if possible.

I also think that we need to talk about him cutting back on his hours more - with what gets taken in taxes and what he is paying in fuel, maybe he isn't even making much for all of those extra hours he is putting in. I think that he is only reimbursed for fuel on weekends.


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## MoneyGal

From page 8:

*Allowable motor vehicle expenses (including 
capital cost allowance) *

You can deduct your motor vehicle expenses if you meet all
of the following conditions: 

■ You were normally required to work away from your 
employer’s place of business or in different places. 

■ Under your contract of employment, you had to pay 
your own motor vehicle expenses. 

■ You did not receive a non-taxable allowance for motor 
vehicle expenses. Generally, an allowance is non-taxable 
when it is based solely on a reasonable per-kilometre rate. 

■ You keep with your records a copy of Form T2200, 
Declaration of Conditions of Employment that has been 
completed and signed by your employer. 

For more information, see Interpretation Bulletin IT-522, 
Vehicle, Travel and Sales Expenses of Employees.

Here is a link to that interpretation bulletin: 

http://www.cra-arc.gc.ca/E/pub/tp/it522r/it522r-e.html#general

The "in different places" qualification is explained in section 32 of that bulletin.


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## petulantfem

Okay I have been playing with the go train website, and the closest go train station that I can find is still 35-40 minutes away and then it would take an additional almost two hours to get near his workplace, because it would all be bus. Maybe I just don't understand go train.

We actually thought about via rail before, because we have a station in town, but he has to be at work by 7:30 am usually.


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## petulantfem

How do I miss these things? Thank you I will look that over.

It just occurred to me that there are company trucks at the site - some guys live near there and drive company trucks to work. H does not do this because it would take an hour to drive to the company site and then over an hour to drive to the contract site. He would still put almost as many km on his car, but his commute would be even longer. I suppose if we were to move at all, it would have to be towards the company site - still not sure if the chaos for the kids would be worth it though (also, farther from my family).

But would the company vehicle thing exclude him from this? I should probably have him just ask his boss.


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## MoneyGal

PF. This is why, based on what you've written, I think he will be able to deduct the actual cost of gas, repairs, capital cost allowance, insurance, etc. 

It sounds as though the company has "a site" and then a temporary location where your husband is working. Because this is a temporary location, and is subject to change, he will likely fall under the conditions outlined in T777 as someone who can deduct vehicle expenses. 

This would allow you (him) to keep your (his) current routine, while deducting from taxable income a large fraction of his vehicle expenses. You could possibly even amend past returns to get money back. 

There is no cost to the employer to do this, which is part of the reason it can be easy to do. In fact, because you can deduct more than the cost of gas, your per-hour compensation for this might go way, way, up - maybe even up to $1000/hour.


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## financialnoob

Since the student loan interest credit can't be transferred, would it make more sense to increase H's student loan payment to $275 instead of increasing both of your payments to $200? That could potentially provide some additional money when filing your tax returns. If he didn't claim for the past 5 years, he should also do that. And I'm assuming since you were common law and filing jointly that he was claiming your unused tax credits, but if not, that's something else you can do.

I think the idea to skip the savings and use it to aggressively pay down the credit card is a great idea as well. And you should call Revenue Canada and get the nitty gritty details about the student loan interest credit and the T777. Since you're pursuing a career in accounting, think of it as homework that may pay off bigtime


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## MoneyGal

I like the cut of your jib, noob.


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## petulantfem

Okay, great advice thank you! 

I just called CRA and a woman there informed me that H is not eligible for the T777 because he is travelling "to" work. T777 is only for people who are required to have a vehicle by their employer and who go to work and then travel to different locations from there.

Crud.


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## MoneyGal

No, if I understand your posts on this board, that is not correct. 

It is difficult to do this via message board, because there is not enough opportunity for back and forth. 

If I read your posts correctly, your husband's employer has a fixed place of work, "the site" (from your posts). 

However, that is NOT where he works. You have said he works at a "temporary" location, the "contract" location. 

By definition then he meets the criteria in the interpretation bulletin. 

The problem is that you get on the phone with the CRA person and you say "my husband drives to work, can he deduct his mileage costs?" and the CRA person does not ask you the questions that uncover the details about the place of work, the fixed location and the temporary locations, etc. 

At the very least he should be able to write off the costs associated with the difference between the fixed location and the temporary locations. 

I'm not totally sure why you phoned CRA and if I recommended you do so, I was feeling loopy at the time. I think you should speak to an actual accountant. 

Don't speak to one CRA person once and rule this out.


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## petulantfem

MG - Yes, I did tell her that it was a contract site, but the issue is that he does not drive to the fixed site first, he drives directly to the temporary site (because of the additional time that would be added to his commute). If he went first to the fixed site, he would have the option of taking a work vehicle to the temporary site. So either that disqualifies him or else she is mistaken - but I will look into it further.


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## MoneyGal

Hmmmm. I am going to have to look for rulings on that specific point. I think she is relying on the word "requires" - as in, his employer requires him to take his own vehicle because no company vehicles are available. 

Anyways. It is worth investigating.


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## Four Pillars

petulantfem said:


> MG - Yes, I did tell her that it was a contract site, but the issue is that he does not drive to the fixed site first, he drives directly to the temporary site (because of the additional time that would be added to his commute). If he went first to the fixed site, he would have the option of taking a work vehicle to the temporary site. So either that disqualifies him or else she is mistaken - but I will look into it further.


I would keep phoning to see if other reps say anything different.


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## MoneyGal

I re-read the interpretation bulletin. I stand by my interpretation. 

At this point I would suggest speaking to a CA. I believe your husband may be entitled to deduct from his income some of the expenses associated with his commute. You don't need CRA's "permission" (delivered via a phone attendant) on this point, but you do need (really, he needs) a signed form T2200, _Declaration of Conditions of Employment_. 

My only advice at this point is to not let one conversation with one CRA phone attendant stop you. Or, at least I would not stop at that point.


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## petulantfem

I will have H ask his employer about this tomorrow then. Maybe it would be easier to fire off an email to the main office about it.


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## Helianthus

I agree with MoneyGal. Furthermore, the clowns that answer the phone on the main line often have no idea what they are talking about. I would be very careful about taking advice from these low level individuals because if they advise you to do something incorrectly, there is no recourse. In the end, the burden is on you to know the correct taxation treatment.


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## financialnoob

MoneyGal said:


> I'm not totally sure why you phoned CRA and if I recommended you do so, I was feeling loopy at the time. I think you should speak to an actual accountant.


I think that was my stupid idea  I wasn't thinking clearly obviously 

The accountant is a good idea, plus it is part of networking for the future career in that field.


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## Homerhomer

MoneyGal said:


> I re-read the interpretation bulletin. I stand by my interpretation.
> 
> At this point I would suggest speaking to a CA. I believe your husband may be entitled to deduct from his income some of the expenses associated with his commute. You don't need CRA's "permission" (delivered via a phone attendant) on this point, but you do need (really, he needs) a signed form T2200, _Declaration of Conditions of Employment_.
> 
> My only advice at this point is to not let one conversation with one CRA phone attendant stop you. Or, at least I would not stop at that point.


I agree with MG.

Since I deal with CRA all the time I can tell you that most of the time they are helpfull, however you do not call them for advise on your tax situation, they are there to tell you what is the balance in the account or direct you to a different desk. 

Now, to stop the back and forth, the easiest thing is to print the T2200, take it to the employer to have it filled out properly, once this is done and signed prepare your tax return based on what's allowed as per employer.


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## petulantfem

So I just sent an email to the company office requesting that they sign off on the T2200 form, and all the links to the information so that they can look it over. Keeping my fingers crossed that they are willing to sign it and then we can start tracking mileage here.

No child support yet, got an email that he thought he could pay it on the 1st but he screwed it up and he will pay it in two weeks. So we will see what happens with that. This situation has actually gotten to be a headache, and I almost feel like it is not worth the $150 that we might get a month out of it - he's acting funny and I suspect (based on some recent emails) that he is actively looking for ways to reduce his payment already and he hasn't even started paying. But if that money comes, it will be a bonus, I guess.

Another look at where we are now:

*October 6 2011 Snapshot*

*Income*- $4,571.94
_September Income Breakdown
H's Employment Income - $3,930.67 
CCTB + UCC - $641.27_
*I haven't added babysitting money in, because I wasn't tracking it - they gave it to me in cash, but I will start adding this in this month.

*Debts* - $30,878.19
Vehicle Loan - $14,231.96
_Vehicle Loan Details
$299.75/month with 53 months remaining
Variable Rate 4.99%_

H's OSAP - $7,635.64
_H's OSAP Loan Details
$90.62/month with 102 months remaining
5.50% Interest Floating_

My OSAP - $7,456.39
_My OSAP Loan Details
$125.04/month with 99 months remaining
5.50% Interest Floating_

Credit Card Debt - $1,554.20
_Credit Card Debt Details
$1,554.20 at 19.99% Interest_

*Savings* - $582.27
TFSA 1 - $1.58
TFSA 2 - $6.78
RRSP GIC - $573.91

*2011 Financial Goals*
1) Pay off Credit Card Debt
2) Pay an additional $1,500 on Vehicle Loan - _Going to put this on hold for now, until the new year, I think. I forgot we have some other expenses coming up shortly (Transmission Fuel Filter change (est. $150), Winter tires (est. $600-$700), 2 more courses for me ($593.75), and Christmas. _

1) $930.47 paid of $2,484.67 = 37% Complete
2) $0.00 paid of $1,500.00 = 0% Complete


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## petulantfem

Got an email back from a woman at the office and she said that she doesn't think he'd qualify because of the reimbursement that he does get for weekends (or however it works). 

Here is what she emailed back:

_Not sure excatly what expenses would you want to claim on your income tax, so maybe if you want to give me a call at the office sometime tomorrow (I am here till 3pm) or Tuesday…

But looking at the requirements, the 3rd bullet might be an issue, since you have been reimbursed for mileage this year (total YTD mileage claimed was 9864km – the first 5000 was reimbursed at $0.50/km, above the 5000km is being reimbursed at $0.46/km) This amount is being paid out as an “Expense Reimbursement” and right now being deposited the alternate weeks from payroll.

“You did not receive a non-taxable allowance for motor 
vehicle expenses. Generally, an allowance is non-taxable 
when it is based solely on a reasonable per-kilometre rate.” - which you did…
If this is not what you ment in your question, please give me a call to clarify and I will look into it further…_

If I am remembering correctly, he gets reimbursed mileage on weekends, but maybe I have misunderstood how it works. 9864 km is the equivalent of about 47 round trips (210 km) to work, so he has certainly made a lot more trips than that so far this year.

There has been some talk that they will be eliminating the mileage reimbursements altogether, so I guess we can hold onto this form in case that happens.


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## MoneyGal

You should probably run the numbers to figure out whether he would be better off with the tax deduction vs. the expense reimbursement. 

There is NO impact on the company if he goes for the tax deduction - it does not cost them anything.


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## petulantfem

Oh, good point.


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## petulantfem

There is some indication at H's work that they might be losing the contract that he is currently working on. This is the company's big contract, and currently they don't have much else going on.

He was approached by an engineer from another company, who asked him if he might be interested in working for them (not an official offer of employment, but just feeling him out, it seems) as a field technician or consultant or something. It would be salary, but I don't know how much. H doesn't want to leave his current company as he enjoys his job and likes who he works for/with, but the rumours that are circulating do make him uneasy. So right now we feel a little anxious.

H's supervisor asked him if he was thinking of leaving, and encouraged him to stick with them as they should have some more work coming up. His supervisor has been very good to him.

No child support deposited on the first, as agreed. On the 5th, I was told via email by my ex's girlfriend that it would be deposited in 2 weeks time. Today I got an email from him saying that he will pay on Friday. We'll see. He finally gave me copies of his last 3 years of Notice of Assessments and the amounts were slightly different than he told me. The actual amounts would have him paying $202 per month for the two kids, so I said we could do an even $200, but he has told me that he cannot afford that much and he will pay $150 on Friday. I feel a little annoyed, but mostly not surprised. He is still not working, but he says he is looking.

Paid for the transmission filter change and flush yesterday, but still have to buy winter tires - that will have to wait until November. All three of the boys need new winter snow suits and gear, and I'll have to do that in the next couple of weeks. We cancelled our cable and cut H's cell phone down to a basic plan this month.


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## kcowan

petulantfem said:


> I feel a little annoyed, but mostly not surprised. He is still not working, but he says he is looking...


Does he pay out of his EI? Do you have any formal agreement?


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## petulantfem

No he has told me that he is not collecting EI. My understanding is that he quit his last job and I don't think he worked enough hours to be eligible anyway. 

We do have a signed parenting agreement as of this month that states that he is to pay table amounts of child support on the first of the month, and I was told by legal aid that this is a legal document when signed. His table amount would be $202, I have been told that he will pay $150 tomorrow.


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## Four Pillars

I would remove the company name you mentioned from the last post. 

From what I've heard from friends who are divorced (so take with a grain of salt), you can proceed with getting reasonable support payments based on what the person should be making.

In other words, your ex can't quit his job and live off his girlfriend/parents etc and avoid paying you.

If he's really unemployed, of course he might not be able to make payments but at least they would add up and might be payable some day.


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## marina628

She can go to court and they will order support based on his income tax , OP is continuing to let ex get away with child support.There comes a time you have to take action ,if your husband loses his job that extra 50 bux will matter .Maybe if his license comes up for renewal and he cant get it because of un paid child support he will get off his *** and work like the rest of us have to.


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## petulantfem

FP - I edited the post, sorry about that. What you have heard from your friends is right, I could go to court to have his income imputed. The courts would do this if there was indication that he is intentionally remaining unemployed or underemployed. 

But he did deposit $150 today. 

Based on the financial information that he gave me - without imputing income and without going back to the date that he actually moved out of town (in fact, only to the date when he decided he was not moving back) - I have calculated out what he would have been paying. Without adding any interest, and including the few payments that he made last year, he owes $2,178.00 in back pay.

Now, I hate to be petty, but I've been growing increasingly impatient with him lately. I have been gathering information so that we can move forward through the courts if it comes down to it.


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## Four Pillars

You're not being petty - he's not taking responsibility and it's up to you to get him to do that. Good luck!


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## petulantfem

H just called me from work to tell me that the company that he works for has lost the contract that he works on as of this Saturday. I don't know if they have enough work to keep him busy now, and I am feeling really discouraged and anxious. Everything feels up in the air - it's very unsettling.

I have a pile of resumes that I have printed out and I am off to a job fair this afternoon. Wish me luck.


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## Four Pillars

petulantfem said:


> H just called me from work to tell me that the company that he works for has lost the contract that he works on as of this Saturday. I don't know if they have enough work to keep him busy now, and I am feeling really discouraged and anxious. Everything feels up in the air - it's very unsettling.
> 
> I have a pile of resumes that I have printed out and I am off to a job fair this afternoon. Wish me luck.


That sucks. Good luck with the search.


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## marina628

It seems that child support is even more important now .I am sorry but you need to take the bull by the horns and file these papers,hopefully your husband will get another job soon as well.


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## financialnoob

Hope all is well PF. I know you mentioned before there were hints of this happening, and your H's supervisor encouraging him to stay, so hopefully he will be able to help the situation.


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## marina628

Yes hopefully his work will only lay him off for short time and then get him back there.


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## petulantfem

Don't want to make this update, but I'm going to force myself anyway.

The Good:
After H's hours basically dwindled to nothing, he networked with an old employer and was offered a position to start immediately. This happened around the last week of July 2012. His new position pays considerably more ($33/hour vs $19/hour) and he is in a union, though his commute is still atrocious. His hours are steadily over 40 hours a week, though they bank anything over 50 hours with few exceptions. His health benefits kicked in this month as well. He is much, much happier in this job.

My ex moved basically behind us in March 2012. I am not receiving child support from him as he is now actively parenting 50/50, which includes feeding and clothing the boys. They are spending every other week with him. He is also contributing now to extra expenses like prescriptions and extra-curricula.

I found some contract work, though it paid dismally and my income was basically eaten up by daycare costs. However, it gave me some more experience and contacts to network with. It also substantially improved my emotional state.

I am set to write my final exam for my final course on November 8th. Since we paid upfront for all of my courses, we have no outstanding debt from this program. I will still have about 4 more courses to take over the course of the next 5 years, but no rush on them.

We've cancelled our land line and gotten a better deal on our Internet service. Still no cable. Our insurance dropped very slightly. Total savings - roughly $80/month.

The Bad:
H bought a motorcycle. I will duck while you throw things at me. I know that this was stupid, but he was so unhappy that I couldn't stand it. However, since he bought it and realized how little he actually gets to use it, he has agreed to sell it in the Spring when there is a market for it. I am anticipating a loss of about $1,000 once it is sold.

In early August, I registered for my final course. This cost us about $500 and we were very careful to budget for it. We also knew that we had his sister's wedding to attend, which we were standing up in and it cost us about $1,000 all said and done (more than I expected!). So it was a tight, tight month. And then H's vehicle broke down. And then it broke down again. And then it broke down again. It was three incredibly expensive repairs right on top of each other and given that it had 300,000+ km on it, we decided to get rid of it after the third break down that month. And then my vehicle broke down too. We do have 2 vehicles but DH needed his own because of how much commuting he does and I needed my own because of the kids and the fact that ...

The Ugly:
We are expecting again, and he is due to arrive next month. With H gone so much, and myself having appointment after appointment 30+ mins away, we replaced his car with something new. I thought that would be smarter than having two old vehicles out of warranty again. Now I am not so sure, but what is done is done.

Getting pregnant was not in the plans, and I have been trying to make peace with it. I started my contract a couple of weeks before I found out that I was expecting, and my contract ended in July. I was offered a 4 week extension, but we had given up our daycare spot because they waited until my last day to make the offer. As I didn't have child care arranged at that point, and I wasn't actually making money working, I didn't take the extension. But I haven't been able to find anything else in the meantime, being obviously pregnant. Since birth control has failed us, we are making a permanent decision not to have any more children - I don't know if I am emotional about it because I am pregnant, but I am sad that we have to make that choice now simply because of money. At any rate, that is that.

So, in short, things are a little complicated at the moment. Our household income has increased, but so have our expenses. I have a debt spreadsheet that will have us debt free in 4.5 years - that is everything (both vehicles, motorcycle, student loans, consumer debt). But it is very tight and I am a little worried that I am being over zealous with it.

By the time the new baby is a year old, my current youngest will be in school full time. So we will have just the baby in daycare. I feel like all I think about is money right now. I obsess about it, and how we will save it and make it and spend it. I have become, recently, almost militant about it, and I think it is causing some stress for H. Every week I am putting every available penny onto our debt, because it scares me more than ever now (since it increased so much with the vehicle purchase). It looks like we also won't have any choice but for me to run a home daycare again for the upcoming year. Even though I worked over 600 hours this year, I won't qualify for any EI for a maternity leave because my contract ended in July and you must have been working within 13 weeks of your baby's birth. I think I will miss that cut off by just a couple of weeks. (If I had realized this at the time, I would have taken that damn extension). I am waiting until the baby arrives as I'm not going to be able to get set up and get clients when I'm likely to go into labour at any moment. I figure within the next two months I can have it running, and with 3 children I can expect around $1,000 a month. 

The big, scary number is now $62,424.31. I die a little every time I look at it.


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## Homerhomer

You make your own bed and you sleep on it, that's how it goes.

If I understand correctly your debt when you started posting was $34K, now it is $62K.

I think you will be declaring bankruptcy, which infact is a cost to everyone.


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## MoneyGal

Ugh. Why would anyone post personal details here, so they can get this kind of mean-spirited finger-wagging?

They have substantially decreased costs (participation by ex-husband in caring for the kids), substantially increased income (from $19 - $33/hour - that's an increase of an almost incredible 74% per hour!), laid good groundwork for future income (school, planning for home daycare), and replaced an aging vehicle with a more reliable one. 

Potentially useful information: if you are in school, your daycare costs can be deducted from your husband's income, not yours. Daycare costs are deductible dollar for dollar (to a maximum) making them fairly tax-efficient dollars spent.


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## Homerhomer

MoneyGal said:


> Ugh. Why would anyone post personal details here, so they can get this kind of mean-spirited finger-wagging?
> 
> .


Not mean spirited at all, just calling spade a spade without sugarcoating.
When she first started posting I was one of the first poeple to offer help and advise, and if my memory serves me correct I also shared the fact that in the past I was in debt, hence first hand experience in getting getting out of it. Increasing debt by close to $30K, buying motorcycle and having more children is not the best option for anyone trying to get out of debt.


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## MoneyGal

Sorry, HH; I was mostly thinking of TRM's post in the other thread on this topic. I've certainly made posts which could be read as "calling a spade a spade with no sugarcoating." But I do see some sugar in her post. 

An unplanned child may not be the best financial decision but somehow we've managed to muddle through as a society without the capacity to plan children effectively except for the last 40 years or so (and all of the current methods have drawbacks, including failure rates!). What I hear in PF's posts is a sincere desire to learn and "do the right thing" for herself and her growing family, and I think that deserves acknowledgement and validation. There are so many other threads here over the years which present much more distasteful situations - I am going to strip away the sugarcoating on those posts, not on these ones.


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## mind_business

Yes your debt number has gotten bigger, but it's not the end of the world. However now is the time to get very serious about it. As MG pointed out above, you guys have made significant improvements in other areas, so I'm sure you'll be able to get control over the debt. 

The first thing I'd recommend is getting a strong agreement between you and your husband that debt repayments are your priority for the next few years. Create a realistic budget .... sounds like you already have a good start ... allowing for some entertainment (keep it conservative), and don't forget about emergency funds. From that you should be able to target milestone dates for your debt repayments. Reward yourselves when you achieve your target milestones (every 6 months or so) ... but make sure the reward is a simple dinner-date out, or something that doesn't further add to debt. Paying off debt for my wife and I became a fun challenge eventually. It really becomes rewarding when you start to see larger decreases.

You should also discuss needs vs wants with your husband. I think you've now realized that a brand new vehicle was not the wisest choice for your guy's situation. I have to admit I do understand your husband wanting a motorcycle. Up until about 5 years ago I've always wanted to buy one. I used to drive one in my 20's, and they're a LOT of fun. But, luckily I've gotten through my mid-life crisis without buying one  Honestly I would have rarely rode it. Don't beat him up too much about it, but definitely get it sold in the spring.

Good luck! I'm pulling for you guys


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## Four Pillars

Thanks for posting. As MG said, your increased income is a huge improvement even if there were a few other 'step backs'.

I can understand the car thing - I got so tired of all the repairs/unreliability from buying used cars that I bought new last time. No regrets at all! Admittedly, my finances were in better shape than yours, but I do understand where you are coming from.

Pregnancy - That's not your fault. If you were using birth control and it didn't work then c'est la vie. 

Motorcycle - You had mentioned before that you & your hubby weren't exactly on the same page financially. The bike is a good example, but the fact that he wants to sell it is a great indicator. 

Yes, your debt is up a lot, but the bike debt will disappear in the spring - you have a lot more income to service it and you also have a bit less liability in that your car won't need any major repairs for a few years.

I'm not going to say 'well done', but I don't think you have done poorly. You were in a real tough situation a year ago and even some of the 20/20 quarterbacks in here probably couldn't have done much better in the same circumstances.

Just keep going and working on improving your finances and things will get better.


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## Four Pillars

Homerhomer said:


> You make your own bed and you sleep on it, that's how it goes.
> 
> If I understand correctly your debt when you started posting was $34K, now it is $62K.
> 
> I think you will be declaring bankruptcy, which infact is a cost to everyone.


Homer, what value do you think this comment has for the OP?


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## Homerhomer

Four Pillars said:


> Homer, what value do you think this comment has for the OP?


I don't know.
I also don't know what value any comments in this thread had for the OP since the debt and expenses have increased drastically?

Where is the value in saying that she is doing fine, or that this and that is not her fault (how do you know that?), when clearly she is not doing ok (doing ok in some aspects, but doing so bad in the others that it more than offsets the good, the proof is in the numbers)?

I can see the effort to change things for the better, and desire to learn and improve and why many of you have more sympathy for OP than for others, however I really don't see how beneficial it is to hear it's not your fault, you are doing well, when it actually may not be the case.

If you read throught this thread OP has posted number of issues she encountered over the years and reasons why they are in bad financial position, I don't recall reading about anyone being disabled, house burned down, or anything else that the OP had no way of preventing, everything that affects her financial position seem to have been preventable, going from one relationship to another with a partner who is financially irresponsible, knowing that children cost alot of money and having more, buying motorcycle, even going further back and not getting education or entering into profession that would allow better compensation to meet the current financial needs.

Mike, how are you doing her any favours by complementing on her accomplishment, isn't that like every child at school getting a medal just for being there and not for winning or being in top three? Encouragements and positive attitude are fine, there are about 15 pages of that here, problem is the debt didn't go down by half (now that would be something worth celebrating), it actually doubled.

Just so you know this is the copy of what I posted right after she started this thread:



Homerhomer said:


> I can relate because few years back we were in a comparable situation, now we are paying significant lump sum payments towards reduction of the mortgage/debt and putting away savings, have enough savings for a rainy day and emergencies and everything is paid cash (I have started using cc again couple of years back for pionts and pay it off each month).
> 
> Good news is it can be done ;-)))))
> 
> The bad news is there is no magic bullet, it is simply a matter of making more money than you are spending.
> 
> You need to:
> 1) increase your revenues (no buts here, it has to be done, no excuses please ;-)
> 2) decrease your expenses, coffee should be drank at home or at the office, visiting timmies every day when you can't afford it is stupid, list all of your expenses and cut ...... then cut some more.
> 3) consolidate your debts to one managable payment with option of paying more when it is possible
> 4) getting each adult in the family to agree to the plan, that may be the most difficult of all.
> 5) no more credit cards, cash only
> 
> It can be done, you just have to figure out how and quickly ;-)


I have been in her shoes, my spouse was quite reluctant to changes and I still have to remind her that there are reasons why we are paying for everything only when we have money (although she did purchase a car on credit which I think was a stupid idea), our situation wouldn't have improved over the years if the desire to change, and simply realization there is a problem, wasn't followed up by actual actions. Just like many of you I felt for her and offered suggestions that work.

I don't make millions of dollars just like many of you here and it is my fault only, all the bad decisions I have made were my fault, nobody elses.


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## marina628

A child is a blessing regardless of the situation so no negative vibes about the baby .I feel the OP needs to stand up to her husband on the spending issues ,she rolled over and let him buy a motorcycle.Sometimes it is easier to get approved for a new car than a used one so that may have been a factor.I know this as my husband worked in management for a dealership many years ago .The income is good and hopefully there will be good things ahead for the family.


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## Four Pillars

Homer, I agree that we shouldn't be patting her on the back. And not every child should get a medal - that's why I said "I'm not going to say 'well done'". 

There is no question that her and her husband have made a ton of incredibly bad choices over the years.

However, I'm not going to keep commenting on decisions that might have been made 5/10 years ago. I agree with you that their debt is much worse than a year ago, however their income is much higher and I'm not convinced that they have gone downhill from one year ago.

Maybe I'm overly-optimistic, but I'm hoping that if they can use the increased income wisely, they can make some progress and will be able to report some improvement in their finances one year from now.


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## Maybe Later

I do far more lurking than posting on this forum, but I think it worth noting that the comments such as those from MG and FP on this thread that are thoughtful, honest and that can provide constructive critique and suggestions while remaining positive, are the reason why many people frequent this board.


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## Homerhomer

Four Pillars said:


> but I'm hoping that if they can use the increased income wisely, they can make some progress and will be able to report some improvement in their finances one year from now.


Me too (despite the fact what I have said may have sounded cold hearted and mean), it's never too late ;-)


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## Plugging Along

Jumping in to say that I think the FP and MG were right on the money.... their posts were not sugar coating, but rather encourgaging, honest, and did not pass any sort of judgement.

It looks like for the OP it's been 2 steps forward, and 1 and half steps back. However, they are still 1/2 step ahead than before. Though their debt is worst, (ouch), and there are have been some bad decisions, here are some things that I don't think should be discounted:

OP recognizes there is a problem, and really wants to do something about it. This is huge. She has been putting every cent they have towards their debt. 

They impoved their financial capacity by making more money. That's a plus too. 

She is willing to open a day home later, because she realizes that sometimes people need to do things they don't like to move ahead. 

Another piece that others critisized her for was giving up vacation time for money, because they didn't have an emergency fund. Sure it would be better, but you can't change the past. However, it was missed that she showed some financial maturity by understanding that to get out of debt, she has to make some choices. Her choice was to cash in vacation. How many others have we seen would not have done this, and probably, spent more money to go on a vacation during the vacation time.

Sure the OP has alot things to work on, but at least she is trying, and many of us don't get it right the first or second time.

Here are some things that I do suggest for OP though -

You really need to get stronger and not cave with your husband. You are essentially temporarily exchanging his misery (not getting a motorcycle), with yours which is longer term (now you have the debt in the motorcycle that is making your situation worse). You allowing your husband to make himself 'happier' with material items at the expense of your future and security, therefore happiness, this is one of the biggest challenges I see with your posts. 


In terms of your decision making processes, I see some gaps. You seem to be looking not far enough into the future. I am just assuming by your posts that when situations arise, you don't look at them objectively. For example, leaving your contract without signing. You were already pregnant, so you knew that you needed mat leave, did you find out what the requirements were before, and did you calculate what you lost in mat leave compared to child care. I am guessing not. I would suggest that when you are making such financial decisions you take a look at least a year or two in advance, and see what the assumptions are, and validate them first, and understand the situation a little better. Same with the cars breaking down, I know what you mean about having 3 break downs. Did you even look at the price differences for a year or two out. I think sometimes people get into an 'emergency' situation, and they react with out fully investigating and thinking it through. I would challenge you to try and do this a little more, I do think it will help. 

It may even be helpful to post any decision you are thinking about that will have longer than a 1 year impact  prior to making it. I have a feeling if you were really willing to listen, the people hear probably would have talked you out of the new car. 

Finally, I won't say that I am sorry to hear about your unplanned child. As I do think that if you provide child love, a stable environment, things will all work out, and the intrinsic payoff will be greater than any financial one. It may be a tough little while, but if you keep plugging along at the debt, you will be fine. Just don't be too discourage and use each one of these choice you have made as lesson to do better next time.


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## MoneyGal

(I loved your tangents which I got to read before you deleted them! I was all, "my people!" when I read about your 5- and 10-year plans.)

Listen: by moving his hourly salary from $19 to $33 Mr. PF has added over a million dollars to the present value of his human capital. This is no small thing.

Editing to add link to human capital calculator: http://www.qwema.ca/calc/humancapital.aspx


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## petulantfem

Thanks to everyone who responded, even if it was hard to hear some of it. I can confidently say that if it was just myself, I wouldn't have bought the new car. I know that I do let H talk me into things a lot, and I recognize that I need to be more assertive in that sense. I was really overwhelmed by the process - it seemed to happen really fast and the final price that we are paying for this car is almost double what the sticker price was when we looked at it. I lack the ability to negotiate, obviously, and I feel like I should have slowed it all down so that I could have given it much more thought. PA, you are right that I sometimes panic and make decisions without doing enough research. 

I am a work in progress, though, and I feel like I am improving (albeit slowly).

I saved every month so that we could pay for the courses that I needed and now I am just about to finish that program. I have learned to meal plan and shop sales for our groceries. I spend virtually nothing on myself aside from the schooling - I haven't had a haircut in over a year, I don't buy new clothes unless absolutely necessary (and bought my maternity clothes all used on kijiji). I am adverse to spending on anything that I feel like I can get away without spending on now. H is still much different in his habits, but he is getting better over time as well and doesn't keep his credit card or debit card with him. We haven't built up our savings yet, but we are no longer using credit cards either. We have cut H's commuting costs in half by having him stay with my sister closer to his work every other week for the time being. 

For the baby, unfortunately I had donated everything that we had except the crib (which our youngest was using as a toddler bed) because we weren't planning for more. But I have managed to obtain a swing, stroller, car seat, and many other things just by asking people if they would loan them out. I also put the word out to everyone I know that we would take any clothes that their children were outgrowing, and I have accumulated enough that we can probably get away without buying clothing for the first year at minimum, probably two years (and I still have hand me downs for him from age 2 up because our youngest has just outgrown that). So far, we have not spent a dime on this new baby. We were even donated cloth diapers, which I am intimidated by, but determined to give a try.

HH, I am sick about our debt because I hate owing money, but I also feel like we will be able to do this. And, actually, your posts just make me more determined to prove it, so it's probably a good thing that you don't like to sugar coat.


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## MoneyGal

I cloth-diapered two kids. My TOTAL outlay on diapers for two kids was $200. As a bonus, they both toilet-trained quite early (which I think may have been related to them being in cloth - which is not very absorbent like disposables are). In fact, my older daughter toilet-trained my younger daughter. :02.47-tranquillity:


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## Homerhomer

petulantfem said:


> HH, I am sick about our debt because I hate owing money, but I also feel like we will be able to do this. And, actually, your posts just make me more determined to prove it, .


That's the spirit ;-)


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## Plugging Along

I do wish you the best of luck. It sounds like you are attempting to make changes and have desire. 

As you said, you need to be assertive with your hubby, and develop strategies that allow you to think things through and research and stop him from convincing you to do things. This takes time. One thing I would do is since you said you already worry and obssess about finances, is to instead of worrying which really doesn't do much go, is take the time to reflect and plan. Start mapping out scenarios of things that could happen to your 4.5 year plan. Think about the major life events that will happen to your family and think about how you could deal with them. Write these down, and your plans. What this allows is that if something does happen you already know some options, and it's less over whelming. (I do this professionally, and at home in 5-10+ year chunks, and it really helps me)

Sounds like you are on the right track for baby. A couple of savings we did was making our own wipes, getting diapers at super cheap (cloth may not work if you are going out), check freecycle, breastfeeding, etc.


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## petulantfem

PA, how elaborate should this planning be? Can you give me examples of how you would plot it all out?

Off the top of my head, I am thinking just a generalized plan of action regarding debt payments and savings, considering what I know (or estimate) our monthly living expenses and our income to be. Beyond that, I am thinking that we should have a plan for:

- If DH gets laid off, sick, injured, etc
- If I cannot find work as soon as I would like
- If our landlord decides to sell and we have to move
- If myself or one of the kids becomes seriously sick
- If a vehicle becomes unusable

Those are the things that I can think of as possibilities that would impact our finances and ability to maintain the debt repayment plan we have over the next 5 years. Am I missing anything obvious? 

In the next 5 years, I anticipate being able to pay off all of our debt, assuming that we stick to the payment plan we made. In order to do this, I will:

- Complete my course and program by the exam date of November 8 2012. Research how to network with professional organizations for contacts.
- Prepare for a day home (contact the agency and prep a plan to open in January 2013). Accept 3 children with an estimated boost to income of $1,000/month. Run this day home for one year to be home with the baby. Following this, begin looking at the option of working outside the home with day care costs vs maintaining the day home for a while longer and compare income levels of the two options.
- DH will look into the possibility of transferring to the Operators Union in the future (income boost of $4/hour) or continuing in his role to a supervisor position (use of company vehicle). Continue to have him spend alternate weeks with my sister for the time being to cut down on commuting costs.
- Breastfeeding (barring unforeseen circumstances), cloth diapering, and minimizing the need to buy "stuff" for the baby or kids (buy used if possible)


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## Plugging Along

I think the level of detail depends on how big certain impacts will be on your overall plans. Since I have healthy 'float', I tend to not think about the little things right now, and just focus on the risks that may derail my plans for a longer period of time. When money was really tight, I was looking at things much more in detail. I don't look at just financial impacts, but things that could have a financial impact

Here's some examples of what I am looking at right now (keep in mind this is really specific for me at the current stage of my life)...

Major events for my kids
- youngest will be in 'big kid' school in 3 years, this means that no more private school fees, however, a major change in school schedule which I am trying to determine if there is any impact on my work or my husbands
- Oldest will be in a different school, in 4 years, again, taking a look at the impacts on my work or husbands
- Oldest (and will be the youngest), rumors have it that the school will be making major changes in enrollment in when kids move to the next school. Looking at impacts 
- Nanny is expected to leave us in 3 years (when the youngest is in school full time). There will be impacts to schedule, in combination to the above.
- I look at the above scenarios and run different combinations of what would happen under different scenarios, and this could lead to me working part time in order to get my kids to and from school.
- Nanny's live in contract is done, and she could leave earlier. This has HUGE impacts for my family. I would have to leave work until my youngest is in school full time. I've looked at many scenarios, and negotiated accordingly when renewing her contract. The result was that she ended up with a very big raise almost double what she was making. I planned for the increase over a year ago. I knew all my numbers before I started negotiating with her, and knew what I could afford, in addition to at what point I was willing to let her walk. 
- Possible braces for the kids, especially with the youngest, as her teeth are really crooked. 
- My oldest can be quite turbulent in her personality. That being said, I have already started looking at options to be more available to her when she hits the even more turbulent teenage years. I have a plan that I may work part time in consulting prior to her becoming a teenager. 
- Kids in university, of course we have started saving for our kids for university.

House - 
Major repairs such as roof, furnance, etc. My hubby and I hate doing repairs, but we have an idea of what major things will need to be done. When we first bought our house, and money was tight, we just put a little extra aside each month to add to the hourse float. The first couple of years were fine, and then of course when I was on mat leave, our furnance, and roof went at the same time. We already had the money there, so we were okay.
Possibility of moving - we keep going back and forth on whether we should buy a larger house or not. Our house is a little small for now, and we think with kids growing, they tend to need more space. However, we also know we will have more room in 3 years when the nanny moves out. So right now we are weighing out the impacts of moving for more space with a mortgage, vs staying at our current place, being cramped, but mortgage free. Our plan is that we are saving for what a new mortgage payment would be, but have realized this is not the priority. 

Car -
This is our big one right now.
Our main vechicle is fine - so we just maintain
However, our business vehicle (2003) is starting to cause a lot of problems, and our other family vehicle which our nanny uses to drive the kids (a must for us), is a 99, that needs to be replaced. Our promise to our nanny was if she stayed with us to the required and promised time, she would get the vehicle.
We have spoken to our mechanic (trusted family member), and started to determine all the things that need to be replaced. I am running different scenarios of buy a vehicle vs fix for our nanny, and we are doing the same for my husbands business vehicle. This has been our toughest planning so far, as there are many unknowns. We are weighing out our needs over the next 10 years for vehicles in terms of our lifestyle, and the kids needs. 
In the meantime, we are starting to save for a new(er) vehicle for the business, but are still trying to determine used vs new, and what the impacts over time are.

Retirement home-
We are putty money aside for retirement, but the plan we had was actually to buy our retirement home when the right one comes up (we are at least 15 years away). We know the location and the type of home, and the intent is to buy a smaller bungalow in the area we want, and then rent it out as an investment. Then when we are ready to retire, we can do some small renos, and move in. For our planning, we have money set aside to for the downpayment in case the right house comes along. We have 15 years to find it though.

Career / Work -
This is a big one for us, especially me. I am positioning myself with as many options as possible. As I said above with the nanny and the kids, I am currently building my experience in certain areas with the intent that I will go out on my own as a consultant in about 3 years. In order to plan for this, we have set money aside, I am started to take on projects that I may not want to, but will build my resume, and position myself with the company to the next position, just in case.
I intentially left a private sector company for less money to do this. 
Everything I do at work is to position myself into a more flexible position or for me to be able to leave. 

That's sort of my 5 year plan, I do have other things, but these are the highlights of some samples.


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## Plugging Along

Now for you... some things you can consider...

Day home...
Do your research, make sure you can get the kids, and have all the insurance, etc ready
What's your plan if you lose a child, usually there is some sort of vacancies with no income, make sure you are ready for that
Did you factor in the extra costs for operations, what about things breaking etc.
You can start to make sure that your contracts are rock solid now, before you start, then you don't end up making rash decisions
Short illness, where you have to shut down your day home, what's your back up plan

Baby/Family -
Illness, extra costs of formula, diapers, allergies, etc. Babies and kids are unpredictable
Any major milestones with your other kids that may have an impact on finances, 

Car - repairs, getting a lemon, accident, etc

Work - hubby, having to move, job lost, etc

BIGGEST RISK - Your husband. Sorry, but what are you going to do to account for when you give into one of his whims? You can either put money aside, or start coming up with a plan. I see this is where are lot of progress has been slowed because of his spending. 

If you are finding this overwhelming, one of the best things you can do it set up a little float for yourself. (Sorry don't mean to make this sound like nagging). In your debt repayment plan, have you managed to budget to be able to put a little aside each month to put in an emergency fund? I know it seems counterproductive, but if you are able to put an extra $100 a month (or whatever), then when something does happen, then you will be able to still continue with your plan. Where the value is, since you admitted that sometimes you get a little overwhelmed in emergencies, this will make things not as big of a deal, and allow you to make better decisions, which in the longer term will cost you less.


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## Young&Ambitious

Where is all of this debt held and at what interest rates? Is there an ability to consolidate any of this debt or negotiate the rates? This could have a big immediate and long term impact on your budget. Sorry if I am stating the obvious, but it may be worth revisting and reconsidering, certainly can't hurt!


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## petulantfem

Thank you for all of the information! I'm going to go over it all next week (just have to focus on finishing up my course this week).

Y&A - The debt is credit cards, loans at 3 different banks (these are the 2 vehicles and the motorcycle) and our two student loans through OSAP. The rates range from 3.06% to 24.97% (one of the credit cards - I know, I know!). I haven't seen anyone about consolidating, but H and I were talking about that the other night. For consolidation loans, do they typically include all debts including credit cards? I'm not sure exactly how it would work. Aside from the cards, the rest are just standard loans, so we can't run them back up again. I have already cancelled one of the credit cards and we are cancelling another - we will be lowering the limit on the two the we keep so that they cannot be run up over $1,000 combined.


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## petulantfem

Another thought - if we consolidate the motorcycle loan, is it considered "paid off" by the insurance company? I wanted to cancel the insurance on the bike, but H was telling me that they can't so long as the bike isn't paid off. I'll have to get more information on that, because I don't know if it's true or not.


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## Homerhomer

petulantfem said:


> Thank you for all of the information! I'm going to go over it all next week (just have to focus on finishing up my course this week).
> 
> Y&A - The debt is credit cards, loans at 3 different banks (these are the 2 vehicles and the motorcycle) and our two student loans through OSAP. The rates range from 3.06% to 24.97% (one of the credit cards - I know, I know!). I haven't seen anyone about consolidating, but H and I were talking about that the other night. For consolidation loans, do they typically include all debts including credit cards? I'm not sure exactly how it would work. Aside from the cards, the rest are just standard loans, so we can't run them back up again. I have already cancelled one of the credit cards and we are cancelling another - we will be lowering the limit on the two the we keep so that they cannot be run up over $1,000 combined.


In your case it will be crucial to consolidate all loans you have (including CC, bike, car, osap) into one loan with favourable rate, but apart from the rate it is very important to get a loan that you can't increase again, and there are no penalties for prepayments. It is also important that the payment would be managable for you, but high enough that you will actually paying down the debt quickly. The issue is in your case it may be difficult to get approved, and even more difficult to get approved with good terms. Contact banks, debt consolidation councellors (free of charge, do not pay anyone any fees), and see what is the best option you can come up with.


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## MoneyGal

*My strong advice is to NOT consolidate student loans*. You lose all of the benefits of these loans if you convert them to a private loan, benefits which are not restricted to tax-creditable interest payments.


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## Homerhomer

MoneyGal said:


> *My strong advice is to NOT consolidate student loans*. You lose all of the benefits of these loans if you convert them to a private loan, benefits which are not restricted to tax-creditable interest payments.


I would agree, except that if the interest on private loans is lower than OSAP, the benefits of that would far outweigh the tax benefits, on top of that it is easier to manage one payment than multiple payments.


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## MoneyGal

The main benefit they would lose is the capacity to defer these loans outright. If one/either/both go back to school, repayment can potentially be put on hold. That's an even bigger benefit than a potentially lower repayment rate.

Other benefits include interest rate relief, repayment relief, interest rate holidays, and maximum monthly repayments. All of these are gone if they repay the loan with privately-borrowed dollars. 

I view keeping the student loans as student loans as a valuable hedge even if the repayment rate is at or above an equivalent private loan. If her situation changes, and she wants to go back to school (or potentially if her husband wants to go back to school), the capacity to defer/ forgive / re-negotiate / cap monthly payments could all be very valuable features.


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## Homerhomer

MoneyGal said:


> The main benefit they would lose is the capacity to defer these loans outright. *If one/either/both go back to school, repayment can potentially be put on hold.* That's an even bigger benefit than a potentially lower repayment rate.


That's good to know, wasn't aware of it.
Than you.


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## MoneyGal

HH: I just edited my post to list the other features she'd lose.


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## Homerhomer

MoneyGal said:


> HH: I just edited my post to list the other features she'd lose.


That's even better to know ;-)
I guess then one thing OP should do is see if she would qualify for any of the perks/reliefs and so on OSAP currently offers.


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## petulantfem

The loans that we currently have have interest rates of: 4.99% (vehicle), 3.06% (vehicle), 10.25% (bike) and the OSAP is 5.5%. The rest is credit cards, which are substantially higher, but the total amount owing on those is a small percentage and it is what we are focusing on paying off first. I know the bike loan interest is high, but are the other ones very unreasonable? All loans are open and we can make lump sum payments without penalty.

If we follow our payment schedule, we will have the credit card debt paid off in July 2013 (so less than a year) and pay somewhere in the range of $400 in interest. Still worth it to pursue consolidation?

As for OSAP: My loan has already been deferred to capacity (it is an old loan). I have no plans to return to school full time (if I did go back to finish my University, I only need 2 courses and would be part time), and part time does not qualify for those benefits. At any rate, we couldn't afford to go back to school full time - if either of us went back it would be on a part time basis (but I think this is unlikely in the near future). DH could not defer his loan based on his income now, so this would only be an issue if he were to lose his job. But his payment is only $92 a month as it is.


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## petulantfem

Just popping back in with a small update.

So, in January, we owed $62,424.31. We had nothing in our savings at all.

As of today, our debt is $53,366.49! We are hoping to cut that by another $10,000 by the end of the year. It makes me crazy to think that if we hadn't accumulated all of this debt, we could have been putting all of that money away in savings. But I feel like we are making progress.

We also have $2,468.40 in savings.


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## newfoundlander61

The hardest thing to track is where the ATM withdrawals go. Most of us don't keep receipts for coffee; Mcdondalds etc and you would be surprised how it adds up. Go back say 3 months in your banking and add up all ATM withdrawals just to see what it adds up to.


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## petulantfem

It's true! We have been tracking everything including coffee and bank fees for the past 4 months. What we have done is H has a Tim's card that we reload for coffee. We don't withdraw cash at all any more, really. Just use debit and credit and we have unlimited debit transactions. The only bank fee that really hurt us was the overdraft fees but we're out if overdraft for good in all accounts.


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## blin10

you're 50g's in debt and the guy can't sell his bike to help out family? and pays 10% interest on it, wow


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## cmoney

Congrats petulantfem on the solid effort thus far. Keep fighting tooth and nail to move things forward. Stay focused


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## mind_business

petulantfem said:


> Just popping back in with a small update.
> 
> So, in January, we owed $62,424.31. We had nothing in our savings at all.
> 
> As of today, our debt is $53,366.49! We are hoping to cut that by another $10,000 by the end of the year. It makes me crazy to think that if we hadn't accumulated all of this debt, we could have been putting all of that money away in savings. But I feel like we are making progress.
> 
> We also have $2,468.40 in savings.


Wow! That's huge. I can only imagine how great you guys must be feeling compared to when you first started this diary thread. Well done!


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## petulantfem

Another update:

DH's decision to move to another company last year has proven to be a good one. He doubled his income this year compared to last year. Benefits are good and union is good.

We have completed our wills and have put life insurance in place, on top of what is available to DH through his union.

Our life insurance agent is also interested in talking to us about savings and investments. I have no experience with this, but I know that we are still not putting enough into savings, so we will talk to him in a couple of weeks.

We had another baby who turned 1 this past November, so I am no longer getting maternity benefits. He was a surprise, and we have taken permanent measures to prevent a future pregnancy (but I still live in fear that it will fail somehow and I will get pregnant with #5). I could put him into daycare now and start looking for work again, but we priced out full time daycare for him, half days for our JKer and before and after school care for the other two and it would negate my income at this point. I think next year I will be comfortable with my oldest handling before and after school for the oldest three and we would only have to pay for the youngest's daycare.

We bought our first home in July for $165,000.  Our mortgage is $44 a month more than the rent that we were paying. We bought at the low end of what we were approved for and found an ugly but sound house that was selling in a great neighborhood. Not a significant change in our monthly expenses, but we can start building equity now, and we have already started fixing the place up.

The car that we bought was a total mistake, but only because DH was given a company vehicle a few months later. We didn't know this was going to happen - but now that brand new car sits mainly unused in the driveway. Not sure what to do about that except eat the cost of our mistake? Hindsight (though I know I was told it was a bad idea to start with). 

At the end of the month, we will have enough in DH's vacation fund to pay off our van (roughly $7,200). That will leave only the car loan and our student loans. Our credit cards are paid off (well, one has a small balance right now from Christmas shopping but will be paid off this month). We also owe DH's mom for the house down payment, but have an agreement to pay it off in monthly increments.

Current Debt load is now $51,260.90. It would have been lower, but that is including what we borrowed for the house down payment. This is not including what we will put on the van to pay it off in the new year - expecting it to then be in the range of $44,000 in January 2014, which is close to on track with what we were hoping to achieve over the year in total debt reduction.

We will end the year with only about $4,500 in savings. That is everything - RRSP, TFSAs, general savings. 

I am still unable to get child support from my ex for my oldest two boys. He has not found a new job since moving in June of this year. I have tried to talk to him about support, but he gets belligerent. He thinks he doesn't have to pay because he thinks that our household income is higher than his (which might be true, but I couldn't say for sure) and doesn't think we "need it". He has sent about $100 since June. I have trouble mustering up the patience and grace to contact him at all. DH would like to pursue this legally.

Questions: Should we focus more on savings next year over debt reduction? Or should we keep going in the same manner that we have been going? Should we consider getting a line of credit or something through our bank for emergencies until we have built up something in savings? We have $1,500 of credit, which isn't a lot, but I don't want more credit cards. Any suggestions or advice regarding the car - it is financed, and I'm not sure if there are any options for selling it. At the same time, we wouldn't get near what we owe, I think, anyway. Right now we are just continuing to pay it as planned and it is there in case the company vehicle is taken back at any time.


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## Janus

petulantfem,

I just spent the last hour reading the entirety of this thread. I've got to say, it's hard to read through this without rooting for you. First of all, congrats on the recent debt decrease. I want to address the debt reduction vs. savings question, which I'm knowledgeable about.

*Your Life Insurance Agent Wants to talk about Savings & Investment:* as a professional investor (I make the funds that those guys sell), I can tell you that you should not go down this road right now. First of all, insurance agents sell things to people while having virtually no knowledge of the products themselves. These guys are *not *experts and often know next to nothing about investments - they're selling you things so that they can make a commission. In the future you can use this forum to learn *yourself *about how to invest responsibly and for much less in fees, which I know is important to you. Buying investments through an insurance agent means useless advice and high fees, there's no other way about it. But aside from *who* to buy investments from, the more general question is whether you should be investing or paying down debt.

First there's the psychological factor - reading this thread makes it evident to me that debt causes you a great deal of mental distress, and to some extent it should (it's certainly a motivator). The peace of mind you'll get from paying down debt will be many times higher than the uncertainty of an investment that neither you nor the uninformed insurance salesman understand (I'm assuming you're new to investing here).

More importantly however, the reason you shouldn't get into investments right now is because your debt pile is so large. Think of it this way - if you put $5000 into an investment and it goes up 3% next year, is that good? If your average debt rate is 4%, then that decision actually *lost* you money, as you could have avoided that 4% cost by putting the $5000 towards debt. I'd say for now, with your investment knowledge level it's not worth it. Let me put it this way - there's no way you'll ever regret paying down debt with every spare dollar next year. There *is *a very real chance you will regret buying an investment instead of paying down debt, because if it goes down or goes up less than the interest rate you're paying on debt, then you effectively lost money.

I think getting into investments at this point would be a real distraction in what has become a focused journey on debt reduction. The sooner you pay off your debt, the sooner you can get into the wonderful world of investing (which you definitely should and will do one day). But redirecting debt payment money towards some crappy high-fee insurance company mutual fund is likely going to be a costly and confusing experience that delays the end-date of DEBT FREE, which I know is what means the most to you right now.

As a closing point - stay the course. Don't even go in to talk with the insurance guy about investments. Reply or PM me if you want to talk about this more. Based on your experience with the car (paying twice the sticker price likely due to saying "yes" to add-ons) I'm afraid what might happen. 

Good luck! I'll be following this with interest.


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## MoneyGal

What he said, to the word.


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## Four Pillars

MoneyGal said:


> What he said, to the word.


+1


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## petulantfem

Thanks so much for weighing in! I did definitely pay twice the sticker price for that stupid car. It makes me sick to think about it - it all seemed to happen so fast and we were just passed from room to room signing stuff until we walked out owing them twice what I expected to. In the future, I don't want to ever buy brand new again. I'd be so much happier to buy a couple of years old and save up to buy outright if possible. Our first couple of vehicles were old and we bought in cash and it was so much better that way.

The life insurance guy is supposed to come to our house in two weeks. I will just try to cancel it. These sorts of in-home consultations make me feel anxious anyway and you're absolutely right that I have no knowledge of investments at all and I would be taking his word as gospel. I will message you if/when I get to a point where I'm ready to tackle learning about investments. Thank you for the offer!

I'm feeling excited and energized to close out this year and start fresh again next year to see if we can keep the momentum going and make a lot more progress. It's such a different experience from what I was used to when I sort of kept my head in the sand and just hoped for the best.


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## MoneyGal

TRY and cancel it? Just cancel it, lady! It's your house.


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## petulantfem

Haha, yes - that is what I meant. I WILL cancel the meeting. I need to be more assertive, I'm such a mouse about things.

I just want to say how grateful I am to the members here and how pleased I am to have found this board - it's been a pretty steep learning curve, but I feel so much better now than I did when I first came to this place. It has helped tremendously to have a place to lay things out and look at it all critically and to ask for advice and information. 

Even though we technically owe more now than we did when I first posted, I feel like we have stabilized our financial foundation a great deal recently and I am no longer plagued by anxiety about money. I feel like we both make better decisions and we're much more on the same page than we ever used to be. In the past year, I have endeavored to make myself more employable, we have bought our first home, H doubled his income, we were able to take a trip to the East Coast which would have been impossible a year ago, we have steadily paid on our debt and started our savings. And we did this all with a surprise baby. I feel really confident that things will continue to snowball in a more positive direction as we are able to pay our debt down further and increase our savings, and I begin bringing in an additional income.

Our goals for 2014 are to finish our planned updates to the house (nothing major - mostly painting/repairing walls and installing new light fixtures), decrease our debt by an additional $15,000, increase our savings by $10,000 and for me to bring in an income again.

Thanks everyone. I really appreciate all the help that you have given to encourage us to get this far.


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## peterk

I remember being a kid before the internet, but I wonder what life was like as an adult back then. How did anyone ever get unbiased information about anything at all? (let alone personal finance stuff)??

I think internet forums are pretty much the best and most useful thing ever invented because of the internet. Where else can you get professionals and experts in any field offering free advice? And most importantly, anonymous, unbiased, experts offering free advice! Advice they may not offer up for any price in the real world due to professional retribrution for too much truth-telling...

I struggle to understand how young adults accomplished anything at all 15+ years ago! Trying to navigate their lives through a sea of schemes, misinformation, disinformation, and outright lies coming from every direction in life. From your neighbour or local shopkeep all the way up to your bank manager or government!

How did anyone get anything right without being taken to the cleaners? Just hope like hell you have a wise old uncle or dad that knows everything about life and is willing to "tell you like it is?"

It boggles my mind sometimes.


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## Taraz

For motivation, you might want to listen to the Dave Ramsey Show (even if you're not a Christian). There are a lot of people in your situation, and it may help to hear some of their stories and the mistakes they've made. Just note that he's a bit biased when it comes to real estate. Personally, I wouldn't (and didn't) hire a Realtor when selling, or use leverage (i.e. a mortgage) to buy a house.


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## fraser

The advice that Janus has provided is SPOT ON. 

Reduce you risk...concentrate on eliminating debt-most especially consumer debt. Be razor sharp in you focus. Every dollar of debt that you eliminate will lead to a better standard of living for you and your family in the future.


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