# Financial rut and trying to get out



## Myrian (Aug 8, 2014)

Hi all
I have been lurking in here for while and I love the amount of information shared here.

I need some real life feedback please.

I have so much financial issues and then life just took an interesting turn.

I have a huge debt approximately $9000. All on credit cards that I am desperately trying to clear up by next May, 2015.

I also want to have a baby in the next year. No option here as I am certain age and time is running out.

My boyfriend and I make about $100K a year. We live modestly.

I just do not know how to save money.

Here is a break up of our finance: (any glaring mistake you see please let me know).


Rent	600 
hydro	25 
cable/internet	75 
cell	75 
laundramot	25 
TTC	133 
bank fee	15 
GYM	55 
food	300 
1303

*Debt:* 
limit	owe	interest	pay/month
m/c	6700	6000	24.99%	250
m/c	3000	2100	16.99%	250
visa	2000	1500	12.99%	100
11700	9600 600
No saving 
take home	2800/month 


My biggest problem is I do have some cash left (according to this) but not sure what I do with that. I do not go shopping anymore.

Any feedback appreciated.


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## nobleea (Oct 11, 2013)

$9K is not a lot of CC debt, but with 100K income and low expenses, there's no reason for it.
Your monthly expenses seem reasonable, and low. Are those expenses just for you? or combined for you and BF? The take home pay seems to be only for you.
Either way, if you take home 2800/mo and spend let's say 1400, you should have no problem paying back the 9600 you owe on cards in 7 or 8 months. Shouldn't be a problem to knock it out before May 2015. Put everything against the first M/C and pay minimum on the rest. Then once that's gone, pay off the second M/C, then the visa. Then cancel the first mastercard and reduce the limit on the second one to 500 or 1000.


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## yyz (Aug 11, 2013)

There is no way the take home pay is $2800 month an $100000 year.Sorry.
Your rent is low and expenses aren't extravagant so the money has to be going somewhere.


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## BoringInvestor (Sep 12, 2013)

yyz said:


> There is no way the take home pay is $2800 month an $100000 year.Sorry.
> Your rent is low and expenses aren't extravagant so the money has to be going somewhere.


OP - are you only giving a breakdown of your salary and expenses?
What does your bf spend his money on? Who manages the household's finances?


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## RBull (Jan 20, 2013)

Myrian, as others have suggested you'll need to clarify income and expenses to reflect both people. Otherwise the numbers you're posting doesn't make sense vs. claimed 100k income and all your debt.


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## Daniel A. (Mar 20, 2011)

I'd say look up Gail Vaz-Oxlade on google and start following the advice.

First step is knowing where the money goes.


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## Spudd (Oct 11, 2011)

If you sign up for mint.com that will help you track your expenses fairly automatically. Then you can find out where it's going.


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## MrMatt (Dec 21, 2011)

Spudd said:


> If you sign up for mint.com that will help you track your expenses fairly automatically. Then you can find out where it's going.


You need to know where your money is going. If you use cash, keep a log. If you use credit cards, categorize it.
I like moneydance (it is a paid app, but worth it)

I wouldn't touch mint.com. Giving your banking passwords to a third party is a VERY bad idea, and likely in violation of your electronic banking terms and conditions.
http://www.moneysense.ca/magazine-archive/april-2011/hidden-danger-at-mint-com
or more directly
http://www.td.com/to-our-customers/tdhelps/#psce|cid=871|lid=1|tid=001|vid=d021f2e04


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## lonewolf (Jun 12, 2012)

Daniel A. said:


> I'd say look up Gail Vaz-Oxlade on google and start following the advice.
> 
> First step is knowing where the money goes.


 ^
+ 1

Try also watching her TV show.


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## bds (Aug 13, 2013)

You can use mint.com to easily track where your money goes, just try to avoid paying for things in cash as that is hard to track.


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## Davage (Nov 14, 2012)

For a few years now, I have been a fan of Dave Ramsey. (The US version of Gail..) If you google Dave Ramsey, his web page shows up at the top of the list. Dave has a syndicated talk radio show from 2PM to 5PM Monday to Friday on a large number of US radio stations. His broadcast is also available here in Canada for free via streaming audio from his site, as well as a large number of the stations that he broadcasts on. I listened to his show, and quickly learned that this guy made sense. He has a set of "baby steps" that he suggests for getting out of debt, and he offers many suggestions on how to prioritize your spending. I find his show to be very informative and motivational - It's all about taking control of your money. A budget is telling your money where to go, rather than wondering where it went. Make a spending plan, and stick to it. There are also ways to 'surf' your debt to lower interest credit cards or lines of credit to gain more traction when paying off the debt. 9K isn't too bad, especially if you've got a 100K income to knock it out. Some people may find Dave Ramsey to be a bit extreme in his views on debt, but if you are looking to get out of debt, he can teach you how to do that.


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## nathan79 (Feb 21, 2011)

Those interest rates look pretty high. I would look into transferring those balances onto a single lower interest card. I don't know what offers are out there at the moment, but Capital One used to have a lower promotional interest rate for the first 6 months.


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## Feruk (Aug 15, 2012)

Took me a while to make sense of your numbers... Your COMBINED income is irrelevant if you're only gonna put it against your expenses. Your combined income is likely ~$6,300/month after tax; your income is $2,800/month. Go back, and either put all the numbers to gross (you and your bf combined) or net (just your share) as right now I can at best guess which costs are which. If the $9K you owe is against just your income, it's a totally different story than if it's against both.


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## Mechanic (Oct 29, 2013)

As was already posted, I would pay minimum on the 2 cards with lower interest and get that high interest M/C paid off then cancelled, then work on the other cards. I never put more on a card than I can pay off when the bill arrives  With 100k in income you guys should be able to take care of that pretty quick. Write down EVERYTHING you spend money on and you will soon figure out where your money goes.


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## steve41 (Apr 18, 2009)

There is a far simpler way to determine spending.... Itemize your before tax income (salary, normally) and tax paid.

Determine how much went to your RRSP, taxable and TFSA savings. Ditto loan payments. Take these amts, additively, and what is left over is the amount you spend annually for living expenses (beer, groceries, gas, etc).

This is a heck of a lot easier than the soul-sucking exercize of tracking your daily starbux etc expenditures.


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## Nemo2 (Mar 1, 2012)

steve41 said:


> This is a heck of a lot easier than the soul-sucking exercize of tracking your daily starbux etc expenditures.


Yabbut, more time tracking means less time _spending._ :biggrin:


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## Afp (Mar 19, 2013)

*start with tracking your monthly expense,*

Please excuse me for my horrible writing. English is not my first language.

Myrian,

Given your take home net income 2800/month, killing this debt is doable within a year. 

The first step you must do is to keep track of all your expenses. Just use an excel program, write down every single purchase as an entity on one side, another side you make few columns for: house hold(cable/internet/rent/hydro/...), food (groceries/lunch/dinner/snack/...), luxury (gym/gift/dine-out/...), etc... you want to be as detail as possible so that when you look back, you can tell exactly where your money goes to. Then, you can easily decide where to trim according to NEED vs. WANT.

It sounds a lot of work but in fact, doesn't take more than 10 minutes a week to do. I always keep receipts for everything and for things I don't have receipts, I type the transactions into the note app in my phone so that I can report them to my excel file later. Do this for a couple of months and look back, you will have an ideal of where you spend your money on. Trust me, it will be a life changing experience and habit.

Talking about saving, I like to refer my personal finance budget to a company budget. The company net profit is taken into account after all expenses and taxes. Same with me, I consider the money is my money only after taking my net income minus all expenses. Consider a person bring home a net 2800k per month, living expenses take away 2000k (2k is not a lot) so he/she is left with $800. Take this $800 / by 20 work days = 40. So that is the $40 bucks to keep for slaving the whole day. Think about the $200 dinner at the Keg, it's a full work week for a meal for two. Crazy isn't it? But there are many co-workers of mine are doing that weekly. Many people making over 100k/year are in fact only netting less than $25 a day after all expenses. This kind of thought gives me all the motivation I need to save money to invest for early retirement like Jon_Snow. And by the way, Pluto, hboy43 and Jon_Snow are my heroes.

Think about how many extra work days per month you have to work just to pay the credit card interest, you really want to pay them off ASAP. Take the first step tracking your expense, it will lead you to where you want to be. By the month 2, you will have a rough ideal when you can kill off this debt. It's funny how everyone knows exactly how much they make but not a lot know how much they spend. Yet, the 2nd part is such an important attribute to a financial success.


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## johnt78 (Aug 12, 2014)

If you want to change your financial attitude and get out of a financial rut, there are three steps you can take to get it done once and for all.
First, think back to your childhood. When you were growing up, your mom and dad had a thing or two to say about who you spent time with. Right? It may have made you angry at the time, but it turns out that they were on to something.


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## Myrian (Aug 8, 2014)

Feruk said:


> Took me a while to make sense of your numbers... Your COMBINED income is irrelevant if you're only gonna put it against your expenses. Your combined income is likely ~$6,300/month after tax; your income is $2,800/month. Go back, and either put all the numbers to gross (you and your bf combined) or net (just your share) as right now I can at best guess which costs are which. If the $9K you owe is against just your income, it's a totally different story than if it's against both.



I want to clarify the 9K is against only my income which is net 2800K a month. (this is take home of 1400/biweekly).
I accumulated this debt so I want to pay it off alone.

Thank you so much for your insights.


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## Myrian (Aug 8, 2014)

*The reason I mention my boyfriend's income*



BoringInvestor said:


> OP - are you only giving a breakdown of your salary and expenses?
> What does your bf spend his money on? Who manages the household's finances?


I like to clarify few things:

I am sorry first and foremost that my posts are not posted in live and take a while. I was having a lot of technical issues with this site so I may have posted same problem twice without knowing the other one was still being approved not denied.

My debt is against my income alone.
My boyfriend also makes about 54K and the reason I mentioned this is because we are trying to have a child...timing is not optional as I mentioned. So his income will be more beneficial for the having a child part. I only included that part because I thought people may ask why I want to have a child if I am so broke....

Now the 9k is all mine. I did it and I am responsible of paying it off. ALONE.

This is why I feel stuck.


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