# 29yo majorly in debt, starting this thread to keep me honest in paying it off....



## cutchemist42 (Oct 15, 2012)

29yo working a municipal gov. job, after taxes I make $1100 bi-weekly. Slipups here and there have led me to this situation, and Im tired of it. Im using this to keep me honest with updates every payday. Basically, Im planning on cutting out a lot of activities I normally did that friends with more money could easily handle better. Sucks to admit but thats my reality. Also, Christmas really killed me, along with my gf's parents kinda co-ercing me into taking a big trip with their family which I couldnt afford, but couldnt say no to, to maintain a good relationship with them.

My other major problem was buying a lemon of a Mazda 3 years ago. Paid $5000 for it and within 3 years, I pissed away $2500 repairing it, as well as the local insurance agency/police legally taking it off the road for rusting itself into an unsafe car. In the end, I got rid of it for $350. Worst financial decision of my life, buying that car...



Assets:
-Old BMW already on Kijiji, expecting only $500 from it TBH. Dont need it anymore, share my gfs car and take the bus to work
-$2400 Questrade account ( $553 of LWC(Corp Bonds), $631 of XIU (TSX 60), $606 of CGR (Global REIT), rest is cash)

Liabilities
-$4700 LoC TD 
-$1500 on Amex
-$1000 on Smart Cash


I will get out of this, first update will be tomorrow about what I do with that paycheque.


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## Letran (Apr 7, 2014)

My suggestions below will require that you keep discipline and not fill up any debts that you clear

1. Empty any savings or investment (questrade) and dump it off to pay your both your Amex and Smart Cash

2. OR Ask for an increase in the TD LOC and empty both your credit cards

3. Set a time REALISTIC CALENDAR schedule of when the TD LOC will be cleared. I say calendar because there are certain expenses that comes up at any given event or season plan accordingly. 

I personally try to rid of debt every end of the year by December.

Good Luck, you are on the right track already.


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## OptsyEagle (Nov 29, 2009)

Just so you know, 3 years use of a car for $7,500 beats the cost of a new car, hands down. Perhaps it could have gone better but you made the right financial decision buying used and not new.

A decision to buy new, which is where I am worried you may be going, will simply quadruple your outstanding liabilities in the time it takes for you to sign your name.

If you want your new life to work out well financially, at least don't do that.


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## uptoolate (Oct 9, 2011)

Very good news is that you recognize 'bad' debt when you see it and that you haven't dug a hole that is very deep. Great news actually. 

If you can manage to go with no car for awhile then you should really be able to knock the debt off quickly. The cost of car ownership is pretty impressive when you actually cost everything out. Especially for young unmarried males in urban areas. See if you can do without. Otherwise just get at it and then get to work on TFSA and RRSP. Good work.


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## Mortgage u/w (Feb 6, 2014)

Agree with previous posters. Pay off current debt as quickly as possible and don't take on new debt.

Maybe list your expenses so we can give you pointers on where you can save? Best way to save money and get out if debt is to know where your money is currently being consumed. Then establish a budget to limit your spending. 

You need to be smart about spending and you need to learn how to say NO - just like the trip with your gf's parents. You'll be amazed at how much you can save by simply using a 2-letter word.


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## JordoR (Aug 20, 2013)

I know you see your Mazda 3 purchase as a bad decision, but as OptsyEagle pointed out - $7500 (mins $350 for selling) for 3 years isn't bad. Works out to about ~200/month which would be a pretty normal (if not a bit low) lease rate.

Looking forward to reading more!


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## cutchemist42 (Oct 15, 2012)

OptsyEagle said:


> Just so you know, 3 years use of a car for $7,500 beats the cost of a new car, hands down. Perhaps it could have gone better but you made the right financial decision buying used and not new.
> 
> A decision to buy new, which is where I am worried you may be going, will simply quadruple your outstanding liabilities in the time it takes for you to sign your name.
> 
> If you want your new life to work out well financially, at least don't do that.


That Mazda has completely turned me off car buying for a long time, I'm talking at least a decade. I take the bus to work (cheap buss pass through my work), and getting rid of my old BMW beater. Might not be fair to hate cars because of one bad experience with an unreliable brand, but it's just how I feel.


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## cutchemist42 (Oct 15, 2012)

JordoR said:


> I know you see your Mazda 3 purchase as a bad decision, but as OptsyEagle pointed out - $7500 (mins $350 for selling) for 3 years isn't bad. Works out to about ~200/month which would be a pretty normal (if not a bit low) lease rate.
> 
> Looking forward to reading more!


I just see it as bad because had I bought a used Honda/Ford/Toyota in the same car class (small hatchback Mazda) at the time, I likely would have sold the car because of not needing it anymore, but maybe would have got a little more money when I sold it.


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## NorthernRaven (Aug 4, 2010)

cutchemist42 said:


> I just see it as bad because had I bought a used Honda/Ford/Toyota in the same car class (small hatchback Mazda) at the time, I likely would have sold the car because of not needing it anymore, but maybe would have got a little more money when I sold it.


What model year Mazda3 hatch was it? I have a 2008 myself, not old enough to have any issues. Mazda 3s are a very popular compact in , and I hadn't seen anything to indicate they were especially lemon-prone. You can get a bad-un with any brand, of course.


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## cutchemist42 (Oct 15, 2012)

NorthernRaven said:


> What model year Mazda3 hatch was it? I have a 2008 myself, not old enough to have any issues. Mazda 3s are a very popular compact in , and I hadn't seen anything to indicate they were especially lemon-prone. You can get a bad-un with any brand, of course.


They start to have rust issues, the same carryover rust issue the Proteges before them had. Mine was a 2nd year 3, which makes it an 05 then. Body panels by the rear wheel wells were coming off in chunks every month, and in the last month, I could see the road by my feet.


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## atrp2biz (Sep 22, 2010)

A bike is always an option.


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## My Own Advisor (Sep 24, 2012)

You will get out of this....

Well, what I can say that really hasn't been included yet....good on you to recognize slipups. They happen. Congrats, you are human 

I wish some of my management team recognized that and had the same humility.

Anyhow, enough about my workday. Whatever you need to do, to keep you honest, is a good thing. I've always found writing things down helps. 

I think we've all had our a-ha moment, where enough is enough financially. Most of us here, participate in CMF for that reason, to share and help and learn.

Like others said, pay off current debt as quickly as possible and don't take on new debt. Debt is literally the worst four-letter word there is.


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## TK.61 (Mar 27, 2012)

Wow I came in thinking (majorly in debt) that I was going to see ten's of thousand's worth of debt. You situation is not that bad, and good to see that you recognized it and can now move forward in fixing it. I agree with other member's, if you feel comfortable posting your expenses that could help with identifying where you can tighten up.


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## Janus (Oct 23, 2013)

The numbers really do not add up to the title. Your debt is entirely manageable - get hungry and start enjoying the process of killing it off once and for all. Good luck!


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## cutchemist42 (Oct 15, 2012)

Payday was today; $1,098. This is also the payday where rent is due, along with the insurance on the car I split with my GF since I use hers now for hockey and other things. That payment will always be around $600.

$1,098
(600) Put aside to pay rent in a week
(490) Being put on the AMEX since they called me last week needing payment ASAP

Liabilities after
-$4700 LoC TD 
-$1010 on Amex
-$1000 on Smart Cash


I also use Mint and will start trying to showcase my expenses going forward.


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## nobleea (Oct 11, 2013)

Janus said:


> The numbers really do not add up to the title. Your debt is entirely manageable - get hungry and start enjoying the process of killing it off once and for all. Good luck!


As has been said, the debt numbers aren't scary. Close the investing account and pay off the two credit cards with the remainder on the LOC. I would guess you are able to save $400 a month to put towards debt. That should allow you to pay it all off in a year, with a little bit left over for some fun. Then with that 400 a month you were saving, maybe put 250-300 in a savings account/investment and have fun with the rest. Make sure the GF is happy.


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## Mortgage u/w (Feb 6, 2014)

Looks like you've been spending more than you should have. AMEX calling you for payment means your credit is poor. You need to get that fixed sooner than later. 

Here's what I would do:
1- Cash in your savings and pay off as much debt as possible.
2- Consolidate the remainder with the TD LOC. You want to close the other credit cards and only manage one. 
3- Establish a budget on a monthly basis. Income is at least $2200 per mth. Rent is $600 leaving you $1600. Calculate your food and other necessities and see what you have left. Dedicate the max to the TD LOC and a small portion to a savings account (as little as $100 would be sufficient).
4- Cut or reduce any expenses you can do without. Cell phone, Cable, Internet, etc.

You will get back on track very quickly. Stay focused, determined and disciplined. You will quickly see your situation reverse for the better and eventually see yourself afford a car again! (By the way, I have a 2007 Mazda 3 and not a speck of rust. The rust issues were resolved with the 2006 model. I consider my car very reliable and a great buy)


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## Janus (Oct 23, 2013)

Sorry, I forgot to chime in with everyone else - sell your investments NOW and pay off the credit card debt. Paying off credit card debt is the exact thing as making a 20% guaranteed return on your investment account - something that's impossible otherwise. Sell all your assets and pay off those high interest liabilities. On a net basis, which is all that matters, you'll be far better off. And your stress levels will go way down.


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## cutchemist42 (Oct 15, 2012)

Mortgage u/w said:


> Looks like you've been spending more than you should have. AMEX calling you for payment means your credit is poor. You need to get that fixed sooner than later.
> 
> Here's what I would do:
> 1- Cash in your savings and pay off as much debt as possible.
> ...


Not trying to start a fight/argument, , but my understanding was it was only fixed with the 2nd generation Mazda3s which were mid2007s. (I believe its possible to have a 2007 1stgen and 2007 2ndgen) They changed the way the welds on the wheel arches were handled, and the angles that they connect with the rear fender with. I posted on Mazdas247 and that was always my understanding, and the understand collectively of the message board.

This is also still only concerning the very visible wheel arch area, there's still no conclusion yet if the floor problem has been fixed until these cars get older.


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## uptoolate (Oct 9, 2011)

I always loved the looks of the Mazda 3 though do remember seeing some with rust which is pretty unusual these days. Hearing this, I'm glad that I stuck with the Acura version of the Civic back then.


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## Ethan (Aug 8, 2010)

If a $7,200 debt qualifies a 29 year old as majorly in debt, what does my $375,000 debt as a 30 year old make me?

Your situation isn't that bad. As others have said, sell your investments, apply the proceeds to the credit cards and consolidate the balances onto your LOC. Develop a plan to pay off the LOC and build up a cash reserve for emergencies. Picking up a second job or reducing expenses would only expedite the process.


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## peterk (May 16, 2010)

Are you making any efforts to increase your income? The money difficulties you may be having (which don't sound that bad at all) could be rapidly eliminated by making more. Is there something additional you could be doing to accelerate your career in the government? Or some external development you can do to improve your position at your current job or make you more desirable in the private sector?


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## Westerncanada (Nov 11, 2013)

peterk said:


> Are you making any efforts to increase your income? The money difficulties you may be having (which don't sound that bad at all) could be rapidly eliminated by making more. Is there something additional you could be doing to accelerate your career in the government? Or some external development you can do to improve your position at your current job or make you more desirable in the private sector?


Another option would be to do something on the side.. part time.. Refereeing, Restaurant Industry etc.. lots of gigs available its just a matter of how bad do you want extra income to get out of debt fast. 

Smartest thing I ever did was take on a side job.. multiple side jobs..when I was in a similar position to you. I basically had all of my regular job income being spent with Child Support, Debt, and Rent and had to live and eat off the side income. It really put in perspective frugality because when you work one job just to pay your debt and the other just to eat.. you certainly respect money alot more and dont want to spend it on a night out at the bar etc.


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## cutchemist42 (Oct 15, 2012)

peterk said:


> Are you making any efforts to increase your income? The money difficulties you may be having (which don't sound that bad at all) could be rapidly eliminated by making more. Is there something additional you could be doing to accelerate your career in the government? Or some external development you can do to improve your position at your current job or make you more desirable in the private sector?


Well, my job does require education through UBC for further upward movement, which I currently am enrolled in. However, the upward jobs that require that education have not popped up in a while. (I wasn't qualified the last time they appeared) I would be now though. 

If curious, this is the program 


http://www.sauder.ubc.ca/Programs/R..._Development_Courses/Real_Property_Assessment


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## cutchemist42 (Oct 15, 2012)

Payday today, here is what I did. Should add that my income/expensises still has not normalized to what I want my new norm to be it because of still xmas gifts for a large family plus the vacation I never truly wanted. I still have a $500ish payment to my gf's mom for costs associated with that trip after she tallies up stuff so it might be another 2 paycheques before any xmas/vacation stuff is done with. Other than that, my Telus bill for $65 was done on this paycheque.

What I did
-$500 on the Amex
-$150 on the Smart Cash
-$65 on Telus
-$150 staying in chequeing for expenses for the next two weeks
-$200 on LOC


*Assets *
-Old BMW already on Kijiji, expecting only $500 from it TBH. Dont need it anymore, share my gfs car and take the bus to work
-$2400 Questrade account ( $553 of LWC(Corp Bonds), $631 of XIU (TSX 60), $606 of CGR (Global REIT), rest is cash)
-$150 in Chequeing


*Liabilities*

Liabilities after
-$4500 LoC TD 
-$760 on Amex (One last remnant from XMas resulted in this not being 500ish, an item I purchased for my gf for xmas just shipped last week, so the charge just happened a few days ago)
-$1000 on Smart Cash (after payment goes through)


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## Ag Driver (Dec 13, 2012)

cutchemist42,

Why is it that you are holding on to your minimal investments that can clear out your VERY HIGH INTEREST credit card debt? You will save MUCH more than you are earning with your investments by clearing the debt and starting from scratch. I see a number of people giving suggestions to do as such, but you are not following suit. Is there are particular reason?

Good job on paying down the debt, but this can be accelerated and save you a bunch of money by putting your investments towards the debt.


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## Tinman (Feb 17, 2014)

I'll second what others have already said - consolidate your cards down to 1. Go for a new card with an $8000 limit and gives 0 or minimal interest on balance transfers. PC mastercard is a great choice and offers 0.97% on balance transfers for the 1st six months. I'd look for a card that offers that service and offers a practical reward on purchases (like pc w/ groceries or canadian tire if they offer balance transfer to help with gas money) Once you consolidate, *close* the other cards. It's a small mental/subconscious victory to owe to 1 source credit card instead of several. Once you have the reward card, use it for *everything you can* instead of your debit card or cash which offers no reward - but you *have to have the discipline* to immediately pay it off via online banking either every day or every week. I was a long time PC mastercard user, the points really add up quickly.


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## Bowzer (Feb 25, 2015)

I gave up my car for poor finances for about 15 years. I really didn't miss it to much. The thing that really helped during that time was a Zipcar membership. I found an online deal for $35 annual membership. Then I had access to wheels if needed.

The other thing was I moved to the heart of the city. Walking, transit, etc. During my lean years not having to deal with car payments and insurance was a life saver. Only the bare essentials.


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## CalgaryPotato (Mar 7, 2015)

Cars are a very expensive thing. I think between $2500-$5000 a year for a car whether that is your initial payment (amortized) combined with your repairs is pretty typical. If you can get by without the car, that is a good thing financially.

$7200, is a very small amount of money in the big scheme of things. I helped my in-laws get out of $70K + worth of credit card debt in their late 50's and by retirement they were able to even manage around the same amount in savings, and at a very modest income too.

Also here is some good news for you, working in a government job, even though you are getting a lower salary, you are in a more stable job, you probably have defined benefit pension plan, and disability, life and health insurance. Those will really pay off over time!

Like others have said, there isn't any way your investments can reasonable beat a credit card rate, and even an unsecured line of credit rate, might be too steep of a goal. Get out of the debt, and then figure out what you want/need to save for and how to invest money over time to get to it. Remember again that you are paying into a pension plan, so you might be able to focus your savings into shorter term goals (emergency fund, buying a place, etc.)


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## mind_business (Sep 24, 2011)

I agree with many of the previous posters. However, I wouldn't sell your investments to pay off debt. Instead, I would maintain it as an emergency fund. The only issue is that it's currently not too liquid.

Keep reducing debt at the same rate you have been. You're doing very well. Once it's paid off, I'd recommend putting at least 75% of that amount into savings. Use the other 25% towards fun stuff.

Other than that, you should be able to find more lucrative work ... or, work on that additional course. Don't be afraid to make changes in your life to get further ahead. I've seen way too many people staying in the same position because it's 'safe'.


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## cutchemist42 (Oct 15, 2012)

Ag Driver said:


> cutchemist42,
> 
> Why is it that you are holding on to your minimal investments that can clear out your VERY HIGH INTEREST credit card debt? You will save MUCH more than you are earning with your investments by clearing the debt and starting from scratch. I see a number of people giving suggestions to do as such, but you are not following suit. Is there are particular reason?
> 
> Good job on paying down the debt, but this can be accelerated and save you a bunch of money by putting your investments towards the debt.


Personal mindset; I did this once before with more money saved up, and I just ended up back in the same situation again. Psychologically, I cant handle it and need that money locked away in something thats inconvenient to draw from. Im sorry but I know it makes sense, but it just wont work out for me, since I failed badly the first time.


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## cutchemist42 (Oct 15, 2012)

Had not updated for a while, here we go. Since the last update, there have been a few paycheques and $2300 tax return. No major expenses really except for some clothes buying and such. Also, had $300 in an RRSP in Questrade, needed $1000 to activate it, so put in the $700 finally to be able that money to use; I wont put anything into savings for awhile now. Also, I realized after filing that I had forgot the RRSP contribution on my return (thought I had entered it) so the adjustment might be worth a little.

Assets 
-Old BMW already on Kijiji, expecting only $500 from it TBH. Dont need it anymore, share my gfs car and take the bus to work (Might just donate this to a Kidney thing, veerrry slow sell, but might be due to Winter)
-$3100 Questrade account ( $2100 TFSA, 1000 RRSP)
-$50 Chequeing

Liabilities

-$4300 LoC TD 
-$0 on Amex (Paid off!!! Plan on cancelling before Im charged for a yearly fee)
-$10 on Smart Cash (Paid off, had some interest appear after the fact, might look at a better credit card?)

Feels good knowing I can just focus on one account now! Just wondering if maybe I could look into something with the LoC currently at 10%?


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## cutchemist42 (Oct 15, 2012)

Well, it was an up-and-down year for me, but at the age of 30 I am setting myself straight. Since my last posting I have had a promotion with the job I work, as well as had a serious discussion about my gf and our expenses, and slightly what I expect from the relationship as she has now finished her Masters.

With my most recent tax return, I am now debt free, and now paycheques can go towards saving ASAP. Over the next few months, I might start thinking of other goals now. My goal is to monthly now save $1400 out of $2600 monthly after-tax paycheques

Another thing, should I close the line of credit now?

TD Savings Account: 253
TD TFSA: 47
TD Cheque: 177
Questrade TFSA: 386
Questrade RRSP: 276

Debts: 0
(Hold a SmartCash CC, the LoC from TD is still open)


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## youngdad3 (Jun 29, 2013)

Good job at clearing all of your debts, and congrats on your promotion!

If it were me I'd keep the LOC for now as a safety net in case of an emergecy. 10% interest is still better than a credit card. Of course a new TV, sofa or clothes would not qualify for an "emergency" 
No one knows you better than yourself. If you keep it, will you be able not to use it?
Did you cancel your amex?


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## cutchemist42 (Oct 15, 2012)

youngdad3 said:


> Good job at clearing all of your debts, and congrats on your promotion!
> 
> If it were me I'd keep the LOC for now as a safety net in case of an emergecy. 10% interest is still better than a credit card. Of course a new TV, sofa or clothes would not qualify for an "emergency"
> No one knows you better than yourself. If you keep it, will you be able not to use it?
> Did you cancel your amex?


Yeah, I got it for the free year plus Aeroplan, its been cancelled for a while now.

I actually dont see myself getting into trouble with the LOC now, as Im thinking differently than I was back then so I think I will keep it.


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## cutchemist42 (Oct 15, 2012)

Payday today; feels good to have the zero debt to institutions now. With me being out of debt, I will now go back to paying back my parents for university gradually. Manitoba tuition is cheap so overall my costs were about 12,000, and I had paid off $5700 before. Other than that, since my last update I needed a new suit for work which I paid out of the small savings account I had. Other than that, this was the paycheque where I pay for my cell. 

Other than that, my next paycheque is the one where I take rent out of ($600) so I might have about $400-500 to save at that time. Thinking I start building up my quickly accessed TD TFSA for emergencies. Update as of 3/18/20116.



TD Cheque: 50 (small spending amount I leave behind)
TD Saving: 60
TD TFSA: 50

Questrade TFSA: 860 (purchased 30 shares of VXC)
Questrade RRSP: 770 (purchased 28 shares of VCN)

All credit cards and my LoC at $0.


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## NorthKC (Apr 1, 2013)

Congratulations! Yes, definitely start building up that emergency fund and get started on future savings. Keep up the good work!


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