# 2014 is gonna be a good year



## petulantfem (Dec 13, 2010)

I can't even read my old thread because it is so long and all over the place. So I am starting a new thread just for 2014 to track this year's progress and keep accountable.

What we accomplished in 2013

Paid off credit cards
Paid off vehicle loan for van
Established some savings
Paid off motorcycle
Purchased our first home
Set up life insurance and wills
Husband increased his income by around 30%
I have invested in my future earning potential by taking courses while home with baby

Overall it was a successful year for us, with our greatest accomplishment being that we both have made permanent changes to how we monitor spending and use credit, and we are operating as a unit with common goals and expectations, where we used to have very different attitudes about money and spending.

*January 2014*

Liabilities
Mortgage - $159,213.91
Personal Loan - $5,990.00
Car Loan - $24,544.99
His Student Loan - $5,997.13
My Student Loan - $4,760.49

Total Liabilities (including mortgage) - $200,506.52
*Total Liabilities (excluding mortgage) - $41,292.61*

Physical Assets and Savings
RRSP (Locked In) - $586.02
TFSAs - $1607.07
General Savings - $2,811.11
2008 Dodge Grand Caravan
1997 Yamaha YZF600

*Total Savings (not including physical assets) - 5,004.20*

Goals for 2014

Pay off Personal Loan by the end of the year ($500 monthly) - Total $5,990.00
Pay off both students loans by the end of the year (use vacation pay + income tax returns) - Total $10,757.62
Increase savings by another $5,000 by the end of the year
Myself to be bringing in some income this year
Finish the following renovations to the house by the end of the year: Replace insulation and repair drywall where needed, repaint entire house, fix vent in upstairs bathroom, replace trim as needed, install light fixture in living room, replace door bell and front door hardware.

2015 goals will be to pay off the car loan and potentially look into adding a garage to the property.


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## Spudd (Oct 11, 2011)

Congratulations!! It sounds like you are making great strides forward.


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## Ponderling (Mar 1, 2013)

Hate to be a downer, but wife at home with kid, going to school at the same time, and there is a motorcycle kicking around paid off, and money owing on student loans and a van, and personal loans outstanding as well????

I don't have the full back story here, but coming at this cold, sell the bike, unless it is used as a more cost effective way to commute, and leaves you with a vehicle to get aroud doing your thing in. 

Congrats on making progress on the financial front though.

Being free of personal loans is a really good feeling, and cleared the air for me with those who I once borrowed from.

Then attack student loans. 

Added income can help; don't chase it if child care costs are going to swallow all your earnings, unless the job is on a stepping stone path to the career path you are trying to achieve.
In those cases a 'loss leader job' if your family budget can take the bleed until child care costs drop, can be worth it.


Don't fret the house repairs unless the insulation is missing. 
Do get the bathroom venting fixed. Mold is a long term ***** once it takes hold, and is bad for you to boot.


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## techcrium (Mar 8, 2013)

Congrats!

Question if you don't mind, age?


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## Pigzfly (Dec 2, 2010)

Wow! 2013 really came together for you folks, so glad to see it!

Best of luck with 2014, those look like some fantastic goals. I wish you the best of luck on generating some income, as it will help immensely in achieving your goals


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## Fraser19 (Aug 23, 2013)

Ponderling said:


> Hate to be a downer, but wife at home with kid, going to school at the same time, and there is a motorcycle kicking around paid off, and money owing on student loans and a van, and personal loans outstanding as well????
> 
> I don't have the full back story here, but coming at this cold, sell the bike, unless it is used as a more cost effective way to commute, and leaves you with a vehicle to get aroud doing your thing in.
> 
> ...


I do not see a point in selling the bike. It is likely worth very little so selling it would make little difference in terms of debt. Insurance on it is likely pretty cheap and the use of a motorcycle is fun. To me I feel that the joy my bike brings me is worth the cost.


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## petulantfem (Dec 13, 2010)

Yes, the motorcycle is worth very little. He would be, I think, lucky to get $1,000 for it. For the pleasure it brings him, it is not worth it to me to sell. I am feeling very confident that we can shave off the personal loan and the student loans by the end of this year.

We have priced out child care and between the four children it would be enormous. However, this will change over the coming couple of years very drastically, as our oldest will be at an age where he can handle before and after school for 3 of them, which would leave us with only full day daycare costs of one child at that point. Until then, I am hoping to find some other solutions to bring in some income - it is tricky because my husband's work schedule is not always predictable and he is usually on call and/or working late. However, I have been approached to do some photography (my hobby) here and there which could be a good option for us in the meantime.

Insulation is missing in the basement rec room on one wall. We will have to replace it and the drywall. We tore it down to repair a crack in the foundation shortly after moving in and it was moldy. That and the bathroom vent are next on the list to tackle in terms of expenses for the house.

techcrium, I am 32 and my husband is 28. We're a little late to the game in cleaning up our act financially, but I'm feeling good and positive.


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## petulantfem (Dec 13, 2010)

We will also be taking legal action to pursue child support from my ex this year. That money will go directly into a bank account for the kids, if we ever see it.


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## mind_business (Sep 24, 2011)

Congratulations on your progress to date. I remember portions of your past diary. Great to see you have a positive outlook.

Question - are you tackling the high interest loans first? Are the car loans the smallest interest rate?


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## cfriesen46 (Jan 3, 2014)

*Never too late*

I don't think it's late in life to tackle your financial outlook. Better now tha. When you are 50. Besides I'm 33 and have recently in the past few months started tracking our expenses. I still have $7500 in credit card debit which we are tackling this year, and am currently weighing options on downsizing my mortgages


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## petulantfem (Dec 13, 2010)

Student Loans - 5.5%
Car Loan - 3.06% 
Mortgage - 2.89%
Personal Loan - 0%

We're paying off the personal loan this year, and I know it's interest free but owing money to family just makes me uncomfortable. We were planning on paying off the student loans this year with income tax and vacation pay (estimate getting around $8,000 by year's end for vacation pay). So we should be down to just the mortgage and the car loan by 2015.

It's the car loan that keeps me awake at night though. $450 every month just being pissed away for a car that we aren't even using. We checked black book value for it and it sells for around $12,995. We owe twice that. We discussed taking out a loan/line of credit to pay it off, sell it at a huge loss and then just pay off the remaining $12,000 or so. But that doesn't seem very smart either. The other option is to sell our van, which we own outright. I think we'd be lucky to get $8,000 for it though. We could apply that to our car loan, however that leaves us with a car that does not fit our entire family of six. So for now we are just making our payments and taking our lumps as they come because we got completely snowed when we bought that car and it's our own fault for going in totally unprepared.

In other news, we have been contributing to our retirement savings regularly and are in the process of setting up savings for the kid's education.


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## hboy43 (May 10, 2009)

petulantfem said:


> It's the car loan that keeps me awake at night though. $450 every month just being pissed away for a car that we aren't even using. We checked black book value for it and it sells for around $12,995. We owe twice that. We discussed taking out a loan/line of credit to pay it off, sell it at a huge loss and then just pay off the remaining $12,000 or so. But that doesn't seem very smart either. The other option is to sell our van, which we own outright. I think we'd be lucky to get $8,000 for it though. We could apply that to our car loan, however that leaves us with a car that does not fit our entire family of six. So for now we are just making our payments and taking our lumps as they come because we got completely snowed when we bought that car and it's our own fault for going in totally unprepared.


No, the correct move is to sell the car! The bit about "not very smart ..." has already happened, you got yourself into the wrong car. That money is already gone. Look at it this way: Either way you are paying back a loan of 24000. If you sell the car now, you get 12000, next year say 9000, year after that say 6000. It just goes down forever. Plus you have to insure it. Plus if you sell now and apply against the loan, you pay less loan interest on a smaller loan.

Another possibility. How often do you need to transport all 6? If only occasionally, maybe sell the van works, then rent a van the odd time you need to move 6.

Or maybe the family member you owe money to needs a gently used car?

But holding onto a car you don't use just loses. End of story.

hboy43


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## petulantfem (Dec 13, 2010)

These are all really good points hboy43. The person we owe money to has a vehicle already. 

We do frequently use the van as a family, probably a couple times a week and we also make several road trips to visit family every year. Ugh, the car was so stupid. I mean, it wasn't stupid at the time, because DH needed a commuter car. But then a few months later he got a company vehicle and since then he hasn't used the car at all. We just didn't know the company vehicle was coming. At any rate, it was so stupid to buy new. So, so, so stupid.

I know what you mean about how fast the car will depreciate if we are thinking of selling it. But in the back of my mind, I'm wondering - what happens if DH loses the company vehicle for some reason? But, then, is that chance worth $12,000? I don't know. We should sell it. It's a great little car. Dammit.


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## Nemo2 (Mar 1, 2012)

hboy43 said:


> No, the correct move is to sell the car!


+1


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## hboy43 (May 10, 2009)

Hi Petulantfem:

Ok, so a car was not a mistake. You needed something at the time. Maybe the car (new) was a mistake, but in the totality of life it isn't fatal. Stop beating yourself up. You made a reasonable decision based upon the situation then ... and the situation changed. Don't compound the mistake by holding onto the car if it is truly surplus to your requirements. I assure you that if you can be a one car family for 5 or 10 years, you will be so far ahead of the average family, this episode will be but a footnote.

As to what if DH loses the company car, well that is possible, but not probable. This is one of the biggest financial mistakes I see people making, giving undue consideration to what is possible without regard to the probability. The classic example would be the HUGE numbers of people who are counting on a lottery win to help out with retirement funding. I saw this in a recent article. Bloody sad. Isn't the more likely scenario is he loses the company car because he loses the job - in which case you will really appreciate not having a second car on the payroll. Plus for arguments sake say he does lose the car but not the job, so you buy the equivalent used car again for $12000 or whatever. 

hboy43


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## petulantfem (Dec 13, 2010)

That makes sense. I have not taken a loan at a bank before. Right now we are paying 3.06% on the car - I think prime is 3%? Would I expect to pay more than prime if we were to take out a loan? Is it dependent on credit score?

Actually if we could get a similar interest rate and got a loan or line of credit to pay it off, and listed the car and it didn't sell, we'd be no worse off anyway, right? Ok, thanks for making me think on this further. I'm feeling more solidified in the idea that we should sell it. I will make an appointment with the bank.


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## hboy43 (May 10, 2009)

Hi again:



petulantfem said:


> That makes sense. I have not taken a loan at a bank before. Right now we are paying 3.06% on the car - I think prime is 3%? Would I expect to pay more than prime if we were to take out a loan? Is it dependent on credit score?
> 
> Actually if we could get a similar interest rate and got a loan or line of credit to pay it off, and listed the car and it didn't sell, we'd be no worse off anyway, right?


I have never had a bank loan either, just lines of credit secured by the primary residence. I doubt you will get 3% unless it is secured. But then worst case would be something like putting the car proceeds into a HISA and paying the loan off as scheduled. Still way better than losing 25% by holding the car another year you don't need it. Or perhaps the car proceeds would be put against the student loan at 5.5% or the mortgage at 2.89%. More than one way to skin this cat.

Talk to the car finance people first as you likely cannot sell the car without them signing off on it as it is their collateral. They just might take the car sale proceeds and allow you to continue on with the balance at 3.06%. Put on your negotiation face. 

hboy43


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## petulantfem (Dec 13, 2010)

I have no negotiation skills, as evidenced by my car. 

We won't qualify for a HELOC because we don't have enough equity in the house yet. I'm not sure what interest rate we would get (prime +?) but it can't hurt to find out. Our car loan is open, so we can pay it off any time if we have the funds to do so. I just need both of us to be home to go to the bank, so we probably can't find out anything until Saturday. The car is financed through BMO. So I should call them first to see what options we have?

ETA The loan was co-signed by my mother, which I imagine limits our options outside of paying the entire loan off or continuing with the loan payment as agreed?

Thank you for all of your advice!


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## hboy43 (May 10, 2009)

Hi petulantfem:

With the loan open, to my thinking the only issue is collateral, and even that should not be an issue: whatever value the car has as collateral, the bank should/will be delighted to take the cash equivalent upon its sale. I would go in with the goal of selling the car, giving the bank the proceeds with your mother still guarantor and continuing on with the balance of the loan at 3.06%. I would suggest if they do not agree to this, bring back whatever they give you and let the gang here come up with some new ideas.

Let us know how you make out.

hboy43


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## petulantfem (Dec 13, 2010)

Okay, I will update after I talk to the bank.

ETA I called the finance people and just got a basic run down of our options. I can't discuss this loan in particular, as I'm looking at the paperwork and it is all in my husband's name. But I was told that the best option would be to get a loan for the remainder (less the value of the car), then sell the car with the stipulation that it will take 5 business days to get the letter of release from the finance people that the car is paid off.

Now that I am thinking about it, that leaves me confused. Who is going to want to pay for the car in a private sale, and then wait 5 business days for the legal release of the car? I guess there must be some way to do it - I couldn't imagine giving someone money and not leaving with the vehicle legally at the same time. Maybe they would have to come with us to the bank and pay the bank directly, instead of us, and then have the bank forward the release to them as well as us?

Anyone have any experience selling a car with a lien on it?


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## petulantfem (Dec 13, 2010)

I have another thought. 

Once our income tax return arrives, we will have $8,664 in our savings. (Not including our TFSA, this is just our general savings).

Should we first apply that to the open car loan, bringing the total owing to around $15,490? Or is it foolish to wipe out so much of our savings? It just seems to me that it would make more sense to pay down as much as possible of the loan at 3.06% before rolling it over to a higher interest rate when we attempt to sell the car. We would still have about $5,000 of savings between our TFSAs and my husband's vacation pay account through work. Yes? No?


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## hboy43 (May 10, 2009)

petulantfem said:


> Once our income tax return arrives, we will have $8,664 in our savings. (Not including our TFSA, this is just our general savings).
> 
> Should we first apply that to the open car loan, bringing the total owing to around $15,490? Or is it foolish to wipe out so much of our savings? It just seems to me that it would make more sense to pay down as much as possible of the loan at 3.06% before rolling it over to a higher interest rate when we attempt to sell the car. We would still have about $5,000 of savings between our TFSAs and my husband's vacation pay account through work. Yes? No?


Looks like a bit of a quagmire to discharge the loan. I have no experience and thus no advice there.

As far as using savings, this becomes an issue of adequacy of emergency fund and personal comfort. Some here will tell you to discharge the loan, others will tell you that your emergency fund is underfunded by $50,000 (Hi TRM). You will have to decide for yourself.

You could certainly use the tax refund as bridge financing, and then replace the $8000 with car sale proceeds if you decide that you should keep some cash around.

hboy43


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## petulantfem (Dec 13, 2010)

That's true. I know our emergency fund is low as it is, but realistically I also know that the likelihood of having an emergency requiring substantial amounts (like $50,000) is incredibly low. In a very worst case scenario, such as if my husband lost his job, I do know that we would be welcome to live with my parents while we got back on our feet. Currently, his job is at it's most stable that it has ever been. So, in that sense, I feel like we would survive.

I think I'd rather just eliminate the debt at this point, while leaving a minimum of $2,500 in savings/emergency and not touching our retirement funds. I'll sleep better when it is all gone and we can focus more fully on just building savings.


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## Four Pillars (Apr 5, 2009)

petulantfem said:


> Maybe they would have to come with us to the bank and pay the bank directly, instead of us, and then have the bank forward the release to them as well as us?


This is what happened for one car I bought - we went to the bank together. I can't remember the details about if I paid part to the bank and part to him or not. I think I just gave him a bank draft for the entire amount and he deposited it at the bank where the loan was at and they handled the loan repayment/deposit etc.


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## petulantfem (Dec 13, 2010)

Coming to update and check in on myself. 

What we accomplished in 2014
Replaced the flooring in the upstairs of our home (DIY, total cost roughly $3,500)
Decreased our debt load
I have been earning a small amount while at home through photography (about $5,000 collected or billed out currently)
Opened an RESP for the children

November 2014

*Liabilities*
Mortgage - $155,072.60 (Have increased our mortgage payments starting Jan 2015 by $200/month)
Personal Loan - $500.00 (Making our final payment to clear this in December)
Car Loan - $20,565.98 (Still trying to convince my husband that we should sell this car and eat the loss)
His Student Loan - $5,345.54
My Student Loan - $3,687.93
Gov't Debt (from Income Tax Reassessment) - $2260.00 (Paying in $566/monthly increments)

*Total Liabilities (including mortgage)* - $187,432.05 (Decreased from January by $13,074.20)
*Total Liabilities (excluding mortgage)* - $32,359.45 (Decreased from January by $8,933.16)

*Physical Assets and Savings*
RRSP (Locked In) - $590.56
RESP (Group) - $2,493.03
TFSAs - $32.32
General Savings - $23.39
Chequing Accounts - $2,801.75
2008 Dodge Grand Caravan
1997 Yamaha YZF600
(2013 Kia Rio 5 - Not owned yet/under financing)
*DH has a pension plan through work ... I believe that it is currently somewhere around $400/month payout at age 55 but I'd have to double check

*Total Savings* (not including physical assets) - $5,941.05

Goals for 2015
Pay off both students loans by the end of the year - Total $9,033.47
Pay for husband's braces - $6,800.00
Increase savings by $5,000 by the end of the year
Make $10,000 through photography business
Finish the following renovations to the house by the end of the year: Replace insulation and repair drywall where needed, repaint entire house, fix vent in upstairs bathroom, replace trim as needed, install light fixture in living room, replace light fixture in upstairs bathroom, replace door bell and front door hardware.

A few changes, obviously. We didn't get any of the planned work on the house done this year, but hopefully next year. We ended up eating our savings during a slow period, so we have to be more mindful of that and replenish those savings as well. But, overall, I feel okay about how we did. Looking to improve a lot next year, though. There is still a lot of room for improvement.


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## My Own Advisor (Sep 24, 2012)

There's always room for improvements, I suspect that's why we're all here in this forum 

I wouldn't worry about your RRSP or TFSA or even RESP for that matter, until you can get your emergency fund in place. Only you can decide what that should be but I think everyone should have one, at least a few $k.

Then that brings up the subject of the debt, re: student loans. No point in having an emergency fund when you already have loans. Do what you can to kill off both student loans by end of 2015 and have a small emergency fund. Then you can tackle more home renos when your mortgage is your only debt. 

Keep up the work and progress...


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## petulantfem (Dec 13, 2010)

Slow and steady wins the race. I'd like to be more aggressive and extreme (and sell the car), but my husband gets twitchy if I go too far too fast, so we meet in the middle. 

I like to see it all laid out like this. It refocuses and motivates me. My goal is just going to be to pay more on our consumer debt in 2015 than we did in 2014, so we have to beat $8,933.16. I'd like to aim for $10,000+.


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## petulantfem (Dec 13, 2010)

Work on our 2015 Goals:

One student loan knocked off this month. Hopefully we will have the other (plus the government debt) obliterated in February.
We have enough saved up for DH's braces in the spring, which will cost $6,100.00 (Savings of $680.00 because we will be able to pay cash upfront rather than financing).
I have contracted out $4,079.00 so far for 2015 photography clients. Almost half way to my goal for the year.

I feel like we are on a good roll already this year. I hope that we can really make huge progress this year.


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## petulantfem (Dec 13, 2010)

My Own Advisor said:


> There's always room for improvements, I suspect that's why we're all here in this forum
> 
> I wouldn't worry about your RRSP or TFSA or even RESP for that matter, until you can get your emergency fund in place. Only you can decide what that should be but I think everyone should have one, at least a few $k.
> 
> ...


Another update, and I think you'll be impressed! 

DH has been working a lot - an obscene amount, really, for the last few months. It has been incredibly shitty. The only silver lining is that we have been able to make more progress than we anticipated financially. So, February isn't even over yet, and here we are:

- Both student loans are completely paid off.
- Government debt and personal loan are paid off.
- This means our only debt left is our car loan and mortgage. We increased our monthly mortgage payments by $150 in January and shaved over 4 years off of our mortgage!!
- DH is finally in total agreement about selling the car (he was hesitant before), so we will be discussing with the bank and dealership next week the best way to sell it - hopefully we'll get more information than last time as the bank wouldn't talk to me without my DH there.
- We did get some renovations done on the house, but only what felt "urgent". This included replacing the dangerous stair railing, finally insulating and drywalling the wall that we took down to repair the foundation crack when we bought the house, and installing the trim that we haven't had since we replaced the floors upstairs last summer.
- We have been contributing $250 each to our TFSAs since January.
- We have managed to accumulate almost $5,000 into our emergency fund and have almost $12,000 in DH's vacation pay account ($6,100 still earmarked for those braces - bonus that we will save $700 because we saved up and will be paying in cash)

I know that we are still very far from the people who started out making good choices, but I feel like we have made a lot of progress in the past few months.


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## mind_business (Sep 24, 2011)

I've enjoyed watching your guy's progress. Impressive! If you ever get discouraged, just take a look at what you have accomplished in the last year.

Keep plugging away at debt, and building up the emergency fund. I read earlier where you saw only a small chance of needing large sums of money in an emergency. You may be right, but it could be catastrophic financially if it does happen, and you don't have the funds needed. Having said that, you're headed in the right direction. Nicely done!


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