# Getting out of debt........



## cutchemist42 (Oct 15, 2012)

26, live at home still in Winnipeg, work for civic government. In debt and embarrassed about it and want to get out.

*Assets:*

2003 Mazda Protege5, 160,000 kms: Maybe $3000?
1985 BMW 318i, 250,000 kms:...................$ 800?
Oiko Credit Account:................................$ 250
Questrade TFSA....................................$ 3500

Total:...................................................$ 7550

*Liabilities*

TD Line of Credt @ 12%:.........................$ 4900
Smart Cash CC @ 18%............................$ 1800


I make $ 1,000 every 2 weeks after taxes. Every paycheque has the following deductions: $250 for rent, $100 to pay off university loan from parents, $30 to charities I support. Owe $70 and $100 every month for cell and car insurance.

Psychologically, it's easier for me to save. When I save, I never touch because its so in-accessible. Once I get my CC lower, I will get reduction on credit limit. My chequeing account has no OD availability since I got rid of it.

Wish me luck!


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## Spudd (Oct 11, 2011)

Good luck! It's great that you have the mindset of saving. 

But there's no way you're making an 18% return on your TFSA, so you should withdraw enoough TFSA money to pay off the credit card ASAP. 

You have $450 left over after every paycheck by my calculations, so let's say you spend half of that on whatever, you have $225 left to save. Put that $225 directly against your LOC when it comes in so you don't have time to think about it first and get tempted to spend it on junk. 

Also, I would ask why you need 2 cars. Can you sell one? It would save you money on insurance as well as giving you a small lump sum from the sale.


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## cutchemist42 (Oct 15, 2012)

Spudd said:


> Good luck! It's great that you have the mindset of saving.
> 
> But there's no way you're making an 18% return on your TFSA, so you should withdraw enoough TFSA money to pay off the credit card ASAP.
> 
> ...


I'll be honest, my job changed from one where I needed a car ONLY for my winter driving (Winnipeg reaches -30 sometimes). With my old job I biked in the summer. With my new cityjob downtown, I now buy a $40 buspass and barely use my car, I only fill up the Mazda every 2 months. I only need a car basically to fit my goalie equipment in for hockey.

I'm giving it the winter months to decide which car to drop after having seen life with a buspass in the summer. I can write it out more when I'm home.


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## Lephturn (Aug 31, 2009)

Sell one or both cars right away. If you only occasionally need a car look at selling both of them. Do you guys have VirtuCar or something out there?
Do you do maintenance on the BMW yourself? Normally I'd say dump it, but at this point if it's not costing you much and you only need a car once in a while, maybe keep it and sell the Mazda to pay of debts.
Or sell both - you are a goalie so they need you. See if somebody can pick you up. 

$70 for your mobile plan? You should be able to do better than that, although I understand you may be locked in at this point.

The TFSA does not make sense with these debts. Pull that and pay off the highest interest CC debt right now. Sell one or both cars to get rid of most of the rest. If you find life on the bus too tough then suck it up for the one year and find something cheap and used next year if you must. By doing that you will get rid of your debts and with careful spending be cash flow positive.


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## cutchemist42 (Oct 15, 2012)

Spudd said:


> Good luck! It's great that you have the mindset of saving.
> 
> But there's no way you're making an 18% return on your TFSA, so you should withdraw enoough TFSA money to pay off the credit card ASAP.
> 
> ...



Just a little more about the car situation.

The older BMW came into my possession from a relative who had no need for it anymore. The storage insurance on it it sit in my driveway is $10 a month, I do all of my own car repairs on both the Mazda and the a few things I noticed on the BMW (I have done mostly everything on a car except engine/tranny swaps, I've done them on a motorcycle though)

It's for that reason that I might not mind making the BMW my main car this coming summer, I can fix it. I just want to wait it out this winter to decide my car situation with my new bussing daily routine.

The thing is, the Mazda Protege might be hard to sell because of the rust problems they are known for. The only car work I won't do because inadequate tools and work area is bodywork.


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## cutchemist42 (Oct 15, 2012)

Spudd said:


> Good luck! It's great that you have the mindset of saving.
> 
> But there's no way you're making an 18% return on your TFSA, so you should withdraw enoough TFSA money to pay off the credit card ASAP.
> 
> ...



Just a little more about the car situation.

The older BMW came into my possession from a relative who had no need for it anymore. The storage insurance on it it sit in my driveway is $10 a month, I do all of my own car repairs on both the Mazda and the a few things I noticed on the BMW (I have done mostly everything on a car except engine/tranny swaps, I've done them on a motorcycle though)

It's for that reason that I might not mind making the BMW my main car this coming summer, I can fix it. I just want to wait it out this winter to decide my car situation with my new bussing daily routine.

The thing is, the Mazda Protege might be hard to sell because of the rust problems they are known for. The only car work I won't do because inadequate tools and work area is bodywork.


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## cutchemist42 (Oct 15, 2012)

Lephturn said:


> Sell one or both cars right away. If you only occasionally need a car look at selling both of them. Do you guys have VirtuCar or something out there?
> Do you do maintenance on the BMW yourself? Normally I'd say dump it, but at this point if it's not costing you much and you only need a car once in a while, maybe keep it and sell the Mazda to pay of debts.
> Or sell both - you are a goalie so they need you. See if somebody can pick you up.
> 
> ...



-No car share plans in Winnipeg, atleast in my part of the city.

-All car repairs done myself. I own the factory service manuals for the BMW and Mazda and am an active poster on message boards for both brands/cars. There has been no (except bodywork) that I can't do myself. Front/rear suspension, replacing whole power steering, windsheilds, carburetors/engines/trannys on motorcycle, fuel injectors, and computer diagnostics; I can handle them all as along as I have the manuals. My dad has a lot of tools!

-I am very likely selling the Mazda come Spring, just wanted to wait it out a bit longer to decide.

-I have no problems with the bus in the winter

-Manitoba smartphone plans are notoriously bad....

-I probably will withdraw some of the TFSA, i might keep enough in it though to avoid the hassle of reopening the account by keeping the minimum in.


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## cutchemist42 (Oct 15, 2012)

So a $2,100 withdraw request has been submitted to my TFSA. $1,400 is being kept behind. When the request is in my chequeing account, it will be put towards the CC. With payday being Friday, I already feel great about the huge chunk that will be taken out of my debt. Will update later when it happens!


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## the-royal-mail (Dec 11, 2009)

Hi, since you asked for our opinions...

I don't understand why you're clogging up your driveway with 2 cars, aka money pits. Even if you only need one car, it makes no sense to keep a nearly 30 year old car when you already have a much newer car. Cars take space and there might be some bylaw against having dead cars in your driveway. Regardless of doing work yourself, it's still a lot of effort and money in parts etc when there are a lot better things you could be doing with your time. I say keep the newer car and scrap the older one and move on.

You might also eventually get tired of being jammed into sardine cans that are modern buses with very little seating left and constant musical chairs. At least if you keep your newer car you will have one that has a better chance of surviving the commute dance.

P.S. No need to quote your replies - we've already read the comments, kindly just use the reply button. You can address the person by name if need be but can generally follow the conversation without needing to quote.


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## MoneyGal (Apr 24, 2009)

the-royal-mail said:


> Hi, since you asked for our opinions...
> 
> *I don't understand why you're clogging up your driveway with 2 cars*, aka money pits. Even if you only need one car, it makes no sense to keep a nearly 30 year old car when you already have a much newer car. Cars take space and there might be some bylaw against having dead cars in your driveway. Regardless of doing work yourself, it's still a lot of effort and money in parts etc when there are a lot better things you could be doing with your time. I say keep the newer car and scrap the older one and move on.


He responded to this point three separate times.


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## cutchemist42 (Oct 15, 2012)

@theroyalmail

Our house has a 2 car garage, so it does not violate the bylaw. Plus it's not a dead car, I can move it anytime I want. I was driving it on the road with a temporary permit just 2 months ago. If I like working on cars and motorcycles, then it's actually time I don't mind spending. I am a car guy deep down so don't see it as a waste at all. Some of my fave Saturdays and Sundays have been waking up at 6am to watch live F1 and get to working on the cars by 8am.

I acknowledge 2 cars is not needed, but I just need more time to decide. I'm leaning towards keeping the BMW since the body is galvanized and the Protege is rusting away in some parts of the body.

My pay pretty much means I cannot justify paying $150 a month simply to drive and park downtown. Downtown WInnipeg in rush hour is atrocious and doing that in my manual car would be too annoying. As long as I'm working downtown, I will be bussing. Passing up a $40 buspass would be dumb. Plus I actually enjoy the bus, get lots of reading done.


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## Young&Ambitious (Aug 11, 2010)

Wow that's cheap! In Vancouver we're paying $90+ for a monthly bus pass, valid only for the core of Vancouver too, for the outer bits you have to pay more :S


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## cutchemist42 (Oct 15, 2012)

Young&Ambitious said:


> Wow that's cheap! In Vancouver we're paying $90+ for a monthly bus pass, valid only for the core of Vancouver too, for the outer bits you have to pay more :S


It's a city employee discount, even my university pass was $15 more.


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## Lephturn (Aug 31, 2009)

cutchemist42 said:


> -No car share plans in Winnipeg, atleast in my part of the city.
> 
> -All car repairs done myself. I own the factory service manuals for the BMW and Mazda and am an active poster on message boards for both brands/cars. There has been no (except bodywork) that I can't do myself. Front/rear suspension, replacing whole power steering, windsheilds, carburetors/engines/trannys on motorcycle, fuel injectors, and computer diagnostics; I can handle them all as along as I have the manuals. My dad has a lot of tools!
> 
> -I am very likely selling the Mazda come Spring, just wanted to wait it out a bit longer to decide.


Great deal learning to work on them yourself. If the BMW is in decent shape and you can maintain it I'd sell the Mazda ASAP. The waiting the winter part is going to cost you - not so much in terms of the cost of the vehicles, more in terms of interest paid that you could clear up right away buy selling the Mazda. Reading your recent posts... it kinda sounds like you have already decided.  Don't under value the feeling you will get when you sell the Mazda and then pay down a big chunk of your debt.

You are already making a great start, well done.


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## lonewolf (Jun 12, 2012)

No scientific test on my part just based on my observation electronic rust control seams to work. Been using it since 2000 & I think they might be right about it taking 4 times longer for a vechile to rust out. Its not that hard to put on & can be taken off & put on a differnt car. Might want to consider using it on the Mazda


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## Lephturn (Aug 31, 2009)

lonewolf said:


> No scientific test on my part


Right, because if it was scientific you would know it doesn't work.

I'm sorry you wasted money on that device, but please don't justify it by recommending it to others.


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## jamesbe (May 8, 2010)

Proteges are known to rust into oblivion, the bmw will be a classic if in good shape.

Sounds like you are on the right track.

@trm not everyone sees cars as a money pit, some enjoy it as a hobbie. I have four in my driveway at most times but each serve their own purpose.


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## the-royal-mail (Dec 11, 2009)

Fair enough. Not sure if the OP ever takes his cars to Krown (maybe he does that with his BMW) but that is something I've been doing for quite a while now. In our hemisphere it's pretty much a must.

It does keep the rust at bay until I can get the car to a dealer to trade it in.


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## Maybe Later (Feb 19, 2011)

One point about the two cars: A Kijiji ad is free. Saying that the Protege won't sell is just making excuses. I understand you wanting to wait until spring/summer and I would probably do the same thing (I have a truck I haven't driven in five years sitting beside my garage), but be aware of those internal voices that might lead you astray.

You haven't listed how much you owe your parents. If that's not in your liabilities you may be deluding yourself as to your real financial situation. Also, no one has asked about the root of your debt and what changes you've made to avoid repeating past mistakes.


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## cutchemist42 (Oct 15, 2012)

lonewolf said:


> No scientific test on my part just based on my observation electronic rust control seams to work. Been using it since 2000 & I think they might be right about it taking 4 times longer for a vechile to rust out. Its not that hard to put on & can be taken off & put on a differnt car. Might want to consider using it on the Mazda


These devices have actually been installed on other Mazda models, I should look into this MAYBE for the winter.....thanks for jogging my memory since I forgot about these.


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## cutchemist42 (Oct 15, 2012)

Maybe Later said:


> One point about the two cars: A Kijiji ad is free. Saying that the Protege won't sell is just making excuses. I understand you wanting to wait until spring/summer and I would probably do the same thing (I have a truck I haven't driven in five years sitting beside my garage), but be aware of those internal voices that might lead you astray.
> 
> You haven't listed how much you owe your parents. If that's not in your liabilities you may be deluding yourself as to your real financial situation. Also, no one has asked about the root of your debt and what changes you've made to avoid repeating past mistakes.


I lost my last job for 10 months, and ran through my savings during that time despite EI. I'm now back on my feet with my new city. Before unemployment, I was only $1,000 in debt while being with the same job for 2 years after buying my Protege. The unemployment saga taught me how much more savings you truly need to survive such a terrible period.

I owe $11,000 to my parents for my degree from Manitoba. I have paid off $5,700. They have no set time limit on paying back, and am shocked whenever they see the spreadsheet showing how much I have actually paid off already. They are not upset with that money repayment schedule at all.

I have sold a car on kijiji, and will do so with the Protege. It's just, I need to get the rust fixed first, and I know it needs a rear brake calliper to pass a Manitoba Insurance safety inspection. My plan is get the rust sanded off by someone who I know actually does good bodywork, then replace the caliper myself. After that, once I feel comfortable with how the BMW will work as a future winter car, only then will the Mazda go on the market.

In terms of price, it's worth it to sell a car safetied vs not-safetied when I look at non-safetied Proteges vs safetied Proteges.


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## YYC (Nov 12, 2012)

the-royal-mail said:


> P.S. No need to quote your replies - we've already read the comments, kindly just use the reply button. You can address the person by name if need be but can generally follow the conversation without needing to quote.


I notice you comment on this a lot. Do you really think that every person who comes here is completely new to the internet and doesn't know how to use a forum? Sometimes there are perfectly good reasons to reply with a quote, it makes it easier to tell who you are responding to. There's no need to 'police' everyone's reply styles unless they get out of hand.


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## MoneyGal (Apr 24, 2009)

YYC said:


> I notice you comment on this a lot. Do you really think that every person who comes here is completely new to the internet and doesn't know how to use a forum? Sometimes there are perfectly good reasons to reply with a quote, it makes it easier to tell who you are responding to. There's no need to 'police' everyone's reply styles unless they get out of hand.


I agree. I just read a TRM comment that said, "I agree with [some other poster]" but the post with which you were agreeing was on a previous page, and I wasn't going to go back and find (which?) post with which you were agreeing. So it really undermined the effectiveness of the post!


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## Four Pillars (Apr 5, 2009)

Troll - Someone who repeatedly posts off-topic comments pushing their own agenda(s). Doesn't read any other posts (including the original post past the title) and generally adds little to no value to any discussion.


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## Rusty O'Toole (Feb 1, 2012)

If you are 26 and have a college degree and a positive net worth you are doing better than most people.

Suggest you use your investments to pay off the debts (highest interest first). You aren't going to beat that as a sure thing investment (12% or more).

Then start thinking and mapping out a financial plan for the future.


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## cutchemist42 (Oct 15, 2012)

After my last paycheque and withdrawal from my TFSA

Assets:

2003 Mazda Protege5, 160,000 kms: Maybe $3000?
1985 BMW 318i, 250,000 kms:...................$ 800?
Oiko Credit Account:................................$ 250
Questrade TFSA....................................$ 1371
TD chequeing........................................$ 100

Total:............................................ .......$ 5521

Liabilities

TD Line of Credt @ 12%:.........................$ 4500
Smart Cash CC @ 18%............................$ 0

Total....................................................$4500


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## Spudd (Oct 11, 2011)

Good job! Must feel great to have that paid off.


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