# Time to get on track!



## Fisherman30

Hi Everyone,

First time posting here. I'm not in the worst possible financial situation, but I have a fair amount of debt that I want to get paid off as quickly as possible, and allow myself and Wife to reach financial freedom as quickly as possible. This is mostly a motivational thread for myself that I'm posting in order to hold myself to account, hear advice from all of you, and also track my progress as time goes by. In my budget, you will notice there are some pretty frivolous spending categories (alcohol&bars, restaurants, entertainment etc....I created this budget based on what we have normally spent per month up until now. I realize this is not great, and we are trying not to spend nearly that amount of money this month. We will adjust these budgeted figures as time goes on. All extra money will be put towards paying off these two credit cards as fast as possible. I will be cancelling the $1400 credit card once that's paid off, and my Wife and I will just share the one remaining credit card account. Once the credit cards are paid off, we will pay off my Wife's student loan, followed by my student LOC, since the balances on these two loans are relatively low and could be paid off fairly quickly. I do get lump sum bonuses from work about 3 times a year, which I have not factored into my budgeted revenue. Those bonuses will be put directly towards debt repayment. I'm also assured a substantial increase in pay this coming April, and will maintain this same budget, while putting extra earned money towards debt repayment. We plan to sell our rental property in the Summer. There can be arguments made back and forth about the pros and cons of having a rental property, but in my case, I can pick up 2 days of OT at work, and make the same amount of extra money a month as what my monthly net gains are from owning the rental property. Less headaches, and I can get liquid cash rather than having it tied up in property. 

Also not budgeted in my planned revenues is my savings plan through work. They match 10% of my gross income every pay cheque, and I can withdraw that money after holding it in the account for one year. I currently have $7500 in a non registered savings account, and the remainder of contributions will be going into a TFSA. I plan to withdraw quarterly (about $2000 every 3 months), and all of this money will go directly towards debt repayment. 

The car loan will be paid off September 2020, and the SUV loan will be paid off September, 2023. I realize new vehicles are a terrible investment.....It's just a choice we're living with, and hopefully these vehicles will last us a very long time. 

Thanks for following! I will provide updates monthly, and I look forward to hearing your advice! 

First, I will start with my assets and liabilities, and then give a breakdown of my planned budget.

I have a motorcycle worth about $2500 which I plan to sell in the Spring and put that money straight towards paying off debt. I just sold my old boat for $1600, and put that $1600 straight on one of the credit cards. 

Assets:
House - Worth $290 000
Rental Property - Worth about $155 000
Car - Worth $11 000
SUV - Worth $30 000
Non registered savings account - $7500 (funds not accessible for another year, as it is locked in for a minimum one year in my savings plan through work)
Locked In RRSP from previous job - $16 000 (I have transferred these funds to my personal bank into a self directed RRSP, and plan to invest this money in ETF's long term)

Total Assets: $509 500

Liabilities:
Wife's Student Loan - $5000 Interest 4.95%
My Student LOC - $8074 Interest 5.45%
Line of Credit (used it to make some substantial renovations to the house) - $50 000 Interest 7%
Car Loan - $5660 Interest 0%
SUV Loan - $28 029 Interest 0.9%
House Mortgage - $236 000 Interest 2.64%
Rental Property Mortgage - $136 606 Interest 2.94%
Credit Card #1 - $4500 Interest around 19%
Credit Card #2 - $1400 Interest around 19%

Total Liabilities: $475 269

Assets - Liabilities = $34 231

*Income*
Monthly net household income from work: $6580/month
Monthly revenue from rental property: $1265/month
Total Monthly income: $7845/month

*Fixed Expenses*
Auto Insurance - $282/month for both vehicles
Car payments - $750/month
Internet - $75/month
Mobile Phone - $136/month for both of us
Loan repayments - $609/month ($120/month for Wife's student loan, $89 for my student line of credit, $400/month for general line of credit)
Housing - $2765/month ($1420 house mortgage, $920 rental property mortgage, $423 rental property condo fees)
Bank Fee - $10.50/month
Home Insurance - $85/month
Crash pad - $250/month (I work in a city away from home quite a bit)
Utilities - $306

Total Fixed expenses: $5268.50

*Variable Expenses Budget*
Fuel - $170/month
Auto Service - $50/month
Entertainment - $250/month
Alcohol and Bars - $160/month
Restaurants - $200/month
Groceries - $400/month
Gifts - $145 (mainly just for the month of December)
Pharmacy - $40/month
Home Supplies - $100/month
Hair - $20/month
Pet Food/Supplies - $60/month
Clothing - $100/month
Hobbies - $100/month
Travel - $150/month 

Total Variable Expenses Budget: $1945

Total Budgeted Monthly Expenses: $7213/month
Income - Expenses = $632/month left over for savings and debt repayment


----------



## moderator2

Welcome to the forum! I think looking at your current spending patterns, as you've done, is great as a starting point.

Is the "crash pad" something like a room in an apartment or shared house, a place to occasionally sleep at?

Ignoring the rental property expenses (since you plan on selling that), it looks like you and your wife currently spend around $5871/month or $70,452/year


----------



## Just a Guy

Well, your rental property is costing you money every month without factoring in taxes, maintenance and vacancy, so selling it is a good idea. Hopefully the market in your area is better than most of Canada right now and you’ll be able to sell it early next year.


----------



## scorpion_ca

There are lots of online bank (Simplii, EQ, Motive, Tangerine) who offers no fee banking. Why would you pay $10.50 monthly? Little drops of water make the mighty ocean…


----------



## humble_pie

caution: this will sound a bit draconian ... but imho you have way too much debt!

it looks like you've already hit the debt recognition wall though. It's clear you've taken the first steps to get the family/couple debts under control & you've formed an excellent plan. Makes me wonder if posting a diary thread here is another way to reinforce the anti-debt campaign going forward. If so, welcome! we will cheer you on as best we can

first, re the assets: it's customary to not include vehicles or other personal property in asset lists. Some parties don't even include their real estate. In your case, subtracting the vehicles' estimated value tips you into the red, ie on paper there would be no net worth at all.

obviously the first debts to trim are the credit cards. Looking over your budget, there are 3 items that could easily be trimmed: entertainment $250, bars $160, restaurants $200. That's $610 per month, or a grand total of $7320 per annum. How painful would it be to cut that in half?

might it be less painful to eliminate 2 out of the three totally on a rotating basis, ie this month you could do entertainment but no bars or restos, next month you could do restos but no bars or entertainment, etc. This rotating feature could save you roughly $4000-5000 per annum.

it would likely increase the household grocery/beer/wine bill somewhat but the total effect over time should be negligible when compared to the savings achieved. As for entertainment, there are plenty of zero-cost sports & cultural events in every canadian municipality for your two-month tours of duty going cold turkey, check em out!


----------



## lonewolf :)

I would replace the SUV with a cheaper economy car get a set of rims from a wrecker put snow tires on it for winter. Auto service seems high get oil changes @ Walmart & do not use the dealership for service. If economy car you buy is not worth much take off collision plus make sure you get the cheapest car insurance & double check every year if still the best deal. Agree with JAG, SC & HP


----------



## james4beach

I think by cutting back some spending (especially on entertainment & going out) and selling that rental property, you can get into good shape. I agree with everyone above.

Your overall scenario looks promising. Not counting the rental property, you have a household net income of $6580/mo and you're spending $5870/mo. This is good news... you're spending less than you make.

So while you currently are able to save about 8K a year, I think that by reducing debt and trimming your spending a bit, you can easily get to 12K annual net savings. In just 7 or 8 years you could see your net worth rise by 100K as a result!


----------



## Fisherman30

Thanks for all the replies, everyone! This is definitely very motivating! As soon as my tenants move out, I plan to sell the rental property. Hopefully I can get a reasonable price for it. As for the entertainment, bars, restaurant budgets....we are on track to spend way less than that this month, so I look forward to revamping the budget next month! With the money saved in these categories, I plan to completely pay off and cancel credit card #2 this month.

As for the SUV, I admit it was a slightly unnecessary purchase, but we plan on having kids soon, my Wife loves it, she drives a lot on the highway in lousy winter conditions, and it is just way safer than the old vehicle she was driving. I do tire changes etc. myself, and hopefully it will last us a long time.

As for the crash pad....I spend 2-3, sometimes 4+ nights in this city away from home, so it saves me money not having to get hotels. I also take the bus to and from the crash pad, rather than uber/taxi.

Another thing too is that there is almost unlimited overtime for me, so I will try to do about 8 hrs OT/month and put that money straight towards debt repayment. I've also started contributing $50/month to a high inrerest savings account, just to start boosting my liquid cash a little bit.

Thanks for all the tips, and I look forward to sharing an update on Jan 1st!


----------



## james4beach

Fisherman30 said:


> As for the crash pad....I spend 2-3, sometimes 4+ nights in this city away from home, so it saves me money not having to get hotels. I also take the bus to and from the crash pad, rather than uber/taxi.


I'm intrigued by the crash pad and might be able to use something like that myself when I'm hopping between cities. Can you share any tips on how to find this? Yours appears to be cheaper than a standard apartment. Do you use motels? Air B&B?


----------



## Prairie Guy

Fisherman30 said:


> TAnother thing too is that there is almost unlimited overtime for me, so I will try to do about 8 hrs OT/month and put that money straight towards debt repayment. I've also started contributing $50/month to a high inrerest savings account, just to start boosting my liquid cash a little bit.


If overtime is almost unlimited, why not do more than 8 hours a month? Even for a short period of time...perhaps long enough to clear the CC debt?

I remember working ridiculous overtime (20+ hours a week...and I'm not suggesting you do that much) for a while a few years ago, and although I had no CC debt, my goal was to pay off the last $10k on my mortgage and be debt free. The mortgage was low enough that the monthly interest was negligible, but getting rid of that last payment was very satisfying.


----------



## peterk

Prairie Guy said:


> If overtime is almost unlimited, why not do more than 8 hours a month? Even for a short period of time...perhaps long enough to clear the CC debt?
> 
> I remember working ridiculous overtime (20+ hours a week...and I'm not suggesting you do that much) for a while a few years ago, and although I had no CC debt, my goal was to pay off the last $10k on my mortgage and be debt free. The mortgage was low enough that the monthly interest was negligible, but getting rid of that last payment was very satisfying.


Indeed. Why not work 8hr+ OT per week instead of per month, for a few months? I would consider paying off the credit cards enough of an emergency to work excessive hours until paid.

Ditching the 2nd house and SUV sounds like a great idea, buying another cheap 10k car in its place Honestly, and it might just be me, but vehicle safety, including winter tires, is an excess luxury that is not even close to mandatory IMO (except in quebec lol). Just drive slower. A modern sedan car with modern traction control, modern airbags and bumpers, and modern all-seasons is I'm sure much safer than the cars we rode in as children 20 years ago, whether they had the winter tires of the day or not.

Lastly, with the 2nd mortgage and credit cards gone, and maybe the huge SUV loan gone too (but maybe not), I wonder if you'd qualify for a better rate on a Home equity line of credit at around ~5% to replace that 50K at 7% ?

All in all it's great to hear that another young Canadian is working to become financially responsible and will soon start having kids.


----------



## lonewolf :)

It would not surprise me if you added up the cost of winter tires & compared it to the money spent from not having winter tires. More money would be spent by not having winter tires i.e., lost wages, increased insurance costs, repair bill or having to buy a new car. Plus your other tires last longer.


----------



## Prairie Guy

peterk said:


> Honestly, and it might just be me, but vehicle safety, including winter tires, is an excess luxury that is not even close to mandatory IMO (except in quebec lol). Just drive slower. A modern sedan car with modern traction control, modern airbags and bumpers, and modern all-seasons is I'm sure much safer than the cars we rode in as children 20 years ago, whether they had the winter tires of the day or not.


Traction control doesn't make all season rubber grip better on ice, and since the OP changes tires himself then the only cost for winter tires is for the rims because the tire wear is spread out over 2 sets of tires rather than 1 set. The traction advantage of winter tires is well documented and is not a place to try to save money.


----------



## Fisherman30

Lots of great discussion here. Thanks everyone! With the SUV....I understand it is a luxury, but it's the only real possession my Wife has, she loves it, and she's not really into any expensive hobbies, and she never really spends money on herself. I'm just thankful she's 100% on board with this whole budgeting plan. She spun out in the Winter and was almost involved in a very serious car accident when the weather was bad while driving our older car. When that happened, I basically said screw that, and we got an SUV with all wheel drive and winter tires. She drives about 30 minutes on a highway in the prairies each way to and from work, where the wind can get really strong and winter conditions can be brutal. Again, I realize lots of people do that drive in small, older cars. There are also a lot of people who die in car accidents on that highway...It's just one of those things. I was paranoid about her safety after that incident in our older car. She feels much safer now, and to me, that's worth a fortune. 

I sold my old boat which was a big step for me last week, and put that money on credit card #2. I will have credit card #2 completely paid off and cancelled by Friday! All of our Christmas shopping is done now, and we were able to stick to the $145 budget for gifts for our whole family. We only spent $20-$25 on each person that we got gifts for. I am going to phone the bank today where my LOC is held, and try to negotiate a lower interest rate. I'll let you know how it goes!

So far this month, we have spent $0 on Entertainment, and $18 on restaurants. I'm expecting that we will have at least $300 more left over than what we budgeted for. The following months should be even better, since we don't have Christmas to worry about etc.

That was a good point about the overtime! With the nature of my work, there are certain rules pertaining to how long I have to be off work between each work period, so it's not really possible to pick up 8 hrs OT/week, but I could probably do 12/hrs month instead of 8, which would give me a good amount of extra money.


----------



## Prairie Guy

Don't completely decimate your entertainment budget...you still have to live. It's no fun saving if you can't enjoy yourself on occasion. Just be selective and choose low cost entertainment.

Your auto loan interest rates are so low that it makes no sense to pay them off quickly but lowering the LOC interest rate will help. My LOC is prime + 1%, so yours at 7% seems high.

It's a small expense, but can you reduce the cell phone plans? You're paying almost $70 a month for each phone.


----------



## Fisherman30

Prairie Guy said:


> Don't completely decimate your entertainment budget...you still have to live. It's no fun saving if you can't enjoy yourself on occasion. Just be selective and choose low cost entertainment.
> 
> Your auto loan interest rates are so low that it makes no sense to pay them off quickly but lowering the LOC interest rate will help. My LOC is prime + 1%, so yours at 7% seems high.
> 
> It's a small expense, but can you reduce the cell phone plans? You're paying almost $70 a month for each phone.


Very good point! You definitely have to live a little. Can't let budgeting take over my life. For this month, I budgeted $250 for entertainment, since it's Christmas, and my friends/family may want to do some activities over the holidays. So far, we've spent $0 on entertainment this month, and I'm expecting it to for sure be less than $150 by the end of the month. I'm thinking going forward from January, I will reduce this budget to $125, and see how that goes. We've started doing things that are free entertainment. I make my own beer and wine at home. We are about to bottle 23 litres of beer, and 23 litres of wine this week. This should allow us to not buy anything from the liquor store, and also be able to just have friends over for board games, etc. My Wife and I have also enjoyed cooking together at home this month. We've been enjoying some nice meals for low cost, and actually prefer this over eating out at restaurants. 

As for the cell phones, we are definitely looking into this! I travel all over the country for work, so it's important to have a nationwide plan, and this pricing is about a 20% corporate discount. When I go to renew the phone contracts, we can get an additional 10% off, since our phones will be already paid off. I will look at reducing out data coverage though and see how much cheaper I can get the bill, since my Wife and I almost always have access to wifi. 

I just got back from a bank appointment. The bank I do my personal banking with (RBC) might be able to take my LOC from BMO, and give me a lower interest rate. I also just got off the phone with BMO, and they are going to make an application for a lower interest rate. They said I should hear back in 1-2 business days. The lady at RBC said that if I opt for a secured LOC, they may be able to get me as low as prime +1%, which would be 4.95%. 

As soon as my credit cards are paid off, I will most likely increase my payments on the LOC from $400/month to $600, as well as taking any excess money I earn from OT etc. and just putting it directly towards debt repayment. I've also come up with a plan to just save up a bit of emergency cash in a TFSA. I'm going to put $50/week into the TFSA, and just make sure I don't touch it. I will also be able to start withdrawing from my savings plan at work (none of it is locked in, or in an RRSP, so no penalty for withdrawal) starting in May. I plan to withdraw quarterly, and this will be an extra $2000+ every 3 months, which I will put directly towards dept repayment. I also get 3 bonuses/year, each of which is not part of my budget, and I will just treat as "found money", and will also be put directly towards dept repayment. 

Also, my Wife and I both downloaded this app called "Mint", where we have a detailed run-down of our budget and spending (it's linked to our bank account/credit cards). My Wife and I both share the same Mint account, and every time we purchase something, we go into the app, and put the purchase under one of the budget categories. It's definitely helping to keep us motivated and looking for new ways to be frugal!

I'm looking forward to what I will have to share in this thread over the coming months/years!


----------



## peterk

lonewolf :) said:


> It would not surprise me if you added up the cost of winter tires & compared it to the money spent from not having winter tires. More money would be spent by not having winter tires i.e., lost wages, increased insurance costs, repair bill or having to buy a new car. Plus your other tires last longer.





Prairie Guy said:


> Traction control doesn't make all season rubber grip better on ice, and since the OP changes tires himself then the only cost for winter tires is for the rims because the tire wear is spread out over 2 sets of tires rather than 1 set. The traction advantage of winter tires is well documented and is not a place to try to save money.


Great list of only the positives.

Though, insurance savings is minimal. Lost wages (you mean from the wreck?) How about lost wages every six month to change the tires or pay someone to do it?
Storage? Sure if you are already living somewhere large. Apartment folk have no place for tires. Probably better not to pay for a new house just to store tires.
More expensive than all seasons. There is no way it costs less to maintain two sets of tires and change twice a year instead of just running one set all the time. 
And traction control improves the performance of all tires. My point being that modern cars are super safe already, and we all made it here just fine in those old unsafe cars.

We've been driving on all-seasons in northern Alberta for 5+ years and all is well (knocks on wood). At first I was like you guys and thought she was crazy (her car) but I grew into it and it's hardly a concern anymore. The ABS kicks in at a moderate rate maybe twice per year and allows you to feel the limit of where the tire grip is.

I'm not saying that winters aren't better, just that they aren't some miracle improvement to safety or life necessity, and that they come at a cost and a hassle. Perhaps if someone is concerned with saving money and paying off credit cards, winter tires aren't something that they _need_, like food or rent, which is how many people think of winters, especially parents. 

Anyways I'm sure Fisherman already has winters, and I'm not recommending he gets rid of them now.


----------



## Prairie Guy

peterk said:


> Great list of only the positives.
> 
> Though, insurance savings is minimal. Lost wages (you mean from the wreck?) How about lost wages every six month to change the tires or pay someone to do it?
> Storage? Sure if you are already living somewhere large. Apartment folk have no place for tires. Probably better not to pay for a new house just to store tires.
> More expensive than all seasons. There is no way it costs less to maintain two sets of tires and change twice a year instead of just running one set all the time.


The OP previously stated that he changes his own tires. He also owns a house so the cost to change and store tires is $0. If he lived in an apartment with no storage and didn't change the tires himself it would be a different story.

He also stated that his wife has 1 hour daily highway commute on the prairies...skimping on winters is foolish under those conditions. I have driven in 40 prairie winters and would never do so without winter tires.


----------



## humble_pie

great progress in a nothing of time!

but we could already see from the first post that you had taken the all-important first step, which was to face up to the debt & Deal With It.

hope you`ll be patient while your profile morphs gently from red into green. Then you`ll be saving in earnest. Did you say you`d put your first $50 into a TFSA? good idea, those TFSAs. In a future chapter your wife should have one too.


----------



## Fisherman30

james4beach said:


> I'm intrigued by the crash pad and might be able to use something like that myself when I'm hopping between cities. Can you share any tips on how to find this? Yours appears to be cheaper than a standard apartment. Do you use motels? Air B&B?


It's not something I use for various cities, it's the same location in one particular city that I am based out of for work. The person basically rents out bunks in each room of their rental property for transient tenants like myself. I pay them $250/month, and I get my own bed in a room. I can come and go as I please, use the kitchen, laundry etc. There are 2 beds in the room I stay in. I've never seen the other person who has the other bed in the room. There's a floor to ceiling divider between the two beds, so there's a reasonably level of privacy.


----------



## Fisherman30

humble_pie said:


> great progress in a nothing of time!
> 
> but we could already see from the first post that you had taken the all-important first step, which was to face up to the debt & Deal With It.
> 
> hope you`ll be patient while your profile morphs gently from red into green. Then you`ll be saving in earnest. Did you say you`d put your first $50 into a TFSA? good idea, those TFSAs. In a future chapter your wife should have one too.


Yes, opened a TFSA to use as an emergency fund. We'll be contributing $50/week to it. This money will not be put towards any debt repayment etc. It's really just to be used if something really bad happens.


----------



## humble_pie

Fisherman30 said:


> Yes, opened a TFSA to use as an emergency fund. We'll be contributing $50/week to it. This money will not be put towards any debt repayment etc. It's really just to be used if something really bad happens.



afaik there's no such thing as a spousal TFSA so if one exists it has to belong to yourself or else to your wife. Would there be a reason for making conjoint contributions to a one-person TFSA?

as it happens though i feel it's too early for TFSA. It doesn't make sense to shelter funds in tiny startup TFSA while paying 19% on credit cards. Better to pay down CCs, then LOC interest rates. By this way of thinking it will be a year or more before you can launch a real savings investment plan.

from my POV, all that a TFSA does while investor is paying 19% on credit card is increase the period of time it will take to get that CC paid off

.


----------



## AltaRed

A number of good thoughts and recommendations. I have only one additional comment on expenses. $282/month ($3384 per annum) seems a lot for insurance for 2 vehicles even if both are listed as commuter vehicles and one as a work vehicle. May be a region specific issue, but a thought to shop around for perhaps $200-500 savings there.


----------



## Fisherman30

AltaRed said:


> A number of good thoughts and recommendations. I have only one additional comment on expenses. $282/month ($3384 per annum) seems a lot for insurance for 2 vehicles even if both are listed as commuter vehicles and one as a work vehicle. May be a region specific issue, but a thought to shop around for perhaps $200-500 savings there.


Yes, unfortunately I've got the cheapest possible insurance. In Manitoba, auto insurance is public, so MPI (Manitoba Public Insurance) basically does whatever they want with insurance rates, and you're stuck with it. There's no competition. I've even got my vehicle listed as "pleasure use" which means I'm not allowed to drive to work more than 4 times a month with it (saves about $30/month). Every year I go without a claim, I go up a "driver safety level", which usually gives me an additional 2-5% savings the following year. Unfortunately, MPI has recently been raising the rates each year at a higher rate than the annual safety discount you get. It's a little ridiculous. You go up a safety level, but still pay more the following year.


----------



## james4beach

Fisherman30 said:


> It's not something I use for various cities, it's the same location in one particular city that I am based out of for work. The person basically rents out bunks in each room of their rental property for transient tenants like myself. I pay them $250/month, and I get my own bed in a room. I can come and go as I please, use the kitchen, laundry etc. There are 2 beds in the room I stay in. I've never seen the other person who has the other bed in the room. There's a floor to ceiling divider between the two beds, so there's a reasonably level of privacy.


That's very neat, thanks for sharing!


----------



## Fisherman30

Just picked up 13.5 hrs of OT($908) over the next 3 days, plus $183 of non-taxable meal allowance (which I won't spend).


----------



## Jerm

If I were you I wouldn't focus so much on cutting back "unnecessary" expenses. It doesn't sound like you're living extravagantly by any means and you still wanna live a decent life with your wife. Getting rid of the rental condo sounds like a good idea.

I bet a lot of people would jump at your setup. Unlimited OT at a decent paying job and a crash pad nearby? That's how you pay off debt without impacting your family. Especially if you're gone for days at a time anyway... it wouldn't impact them whatsoever unless you start spending more time away from home than usual.


----------



## Fisherman30

Jerm said:


> If I were you I wouldn't focus so much on cutting back "unnecessary" expenses. It doesn't sound like you're living extravagantly by any means and you still wanna live a decent life with your wife. Getting rid of the rental condo sounds like a good idea.
> 
> I bet a lot of people would jump at your setup. Unlimited OT at a decent paying job and a crash pad nearby? That's how you pay off debt without impacting your family. Especially if you're gone for days at a time anyway... it wouldn't impact them whatsoever unless you start spending more time away from home than usual.



Very true! I'm definitely thankful to have a decent combined income with stable work. Getting rid of the condo will relieve some stress and give me an extra $175/month.

Just got credit card #2 paid off and cancelled as well as picking up 17.5 hrs of OT!


----------



## Fisherman30

I opened a TFSA, where I am putting $100/month away. Over the next year, it will be worth over $1000 and I won't touch it unless there's an emergency. We also opened a high interest savings account, where we are putting away $200/month. This will just be general savings for random things we might want to save up to buy down the road. We will try to always keep over $1000 in that account. Also opened an RRSP where I will contribute $100/month in order to pay off my HBP installments and help my tax return. 

Next month, we will get over $1000 more than our budgeted income, because I have been picking up OT. I plan to keep doing a minimum of 12 hrs/month of OT(did 17.5 this month) in order to build up some savings and pay off our debt more rapidly. 

I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense. It's just a mental thing for me. I want to only spend money from now on that I have in hand saved up. I find it's way easier to spend money on a line of credit than it is to spend money you have. So even though it doesn't make logical sense, I think it will be worth it just in the sense that it will make me more frugal.


----------



## humble_pie

Fisherman30 said:


> I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense. It's just a mental thing for me. I want to only spend money from now on that I have in hand saved up. I find it's way easier to spend money on a line of credit than it is to spend money you have. So even though it doesn't make logical sense, I think it will be worth it just in the sense that it will make me more frugal.



if that's how it'll work for you ^^ then go for it

i hadn't thought of OT to pay down debt but still ... it'll be harder to work OT once you start having kids & become a family, so might as well develop a few habits now that will help to curtail spending in the future


----------



## Eclectic12

Fisherman30 said:


> I opened a TFSA, where I am putting $100/month away. Over the next year, it will be worth over $1000 and I won't touch it unless there's an emergency. We also opened a high interest savings account, where we are putting away $200/month ... I realize that saving money in accounts with lower interest return than the cost of interest on the LOC doesn't make a lot of sense.


Maybe I misread ... but unless what seems to be a taxable HISA is paying a large enough rate to beat the TFSA, after taxes (which may vary with OT), won't you be further ahead to max out the TFSA?

TFSA withdrawals can happen at any time (unless you locked the money away). The only down side is that putting the money back in the same year means other TFSA contribution room gets used up. The withdrawn amounts need the calendar year to change to become contribution room that is added to the annual amount granted.


Keep in mind that you can have multiple TFSAs so you can setup a cash deposit one for the "buy down the road or emergencies" and a second TFSA at say a discount brokerage for longer term stuff or different investments. The contribution limits have to be respected across all of one's TFSA accounts.


Cheers


----------



## humble_pie

^^ he already posted his reasons for building the TFSA/HISA accounts while paying down debt at the same time ... see post No. 29 just upthread

evidently the combo works for him & that is what matters after all, no?


----------



## Fisherman30

Alright, here is my first monthly update!

Overall, it was a good month. I failed to budget for the fact that there were three biweekly SUV payment in December, instead of two. We went about $100 over budget on Christmas gifts, but we were way under budget for restaurants, entertainment and a few other variable budgets.

*December Income*
$10 124 (including $1600 from selling my boat)

*December Spending*
Fixed Expenses: 
$5673 - Over original budget due to 3rd SUV payment and quarterly water bill that I forgot to budget initially

Variable Expenses: 
$1671

Total spending - $7344
I also paid off Credit Card #2 completely and closed the account. 

I did 17.5 hours of OT which will be paid to me on my mid Januay pay cheque. I expect I will be able to do at least 20 hrs of OT in January.

January Outlook:
Income:
At least $8545, maybe a couple hundred more.
Fixed Spending:
$5211
Variable Spending:
$1605
Total Spending: $6817

I reduced the gift, restaurants, entertainment and alcohol budgets. 

Should have at least $1728 left over for credit card repayment.


----------



## Fisherman30

An update on accounts:

*Liabilities*
Condo Mortgage: $136 178
House Mortgage: $235 780
SUV Loan: $27 583
Car Loan: $5300
Wife Student Loan: $6000
Student LOC: $8023
LOC: $49 500
Credit Card: $2400

*Total Liabilities* $470 764

*Assets*
Chequing Account: $1616
Non Registered Work Savings Account: $7500
TFSA (work savings plan): $500
LIRA: $15 000
Condo: $155 000
House: $270 000
*Total Assets* $449 616

Net Worth: $(21 148)

I didn't include the value of our two vehicles as assets this time. I plan on selling my motorcycle in the Spring, and expect to get about $2500 for it. One thing I'm proud of is how fast we are shredding credit card debt. We have cut our spending way back, and have paid off and cancelled one credit card, and have nearly cut the last one in half. I expect by next month, it will be paid off. My Wife and I are doing more free activities around the city like going for more walks in the park with the dog, playing games at home etc. 

Another thing I have been doing is going through all of our excess crap in the basement that will never be used again, and putting things for sale on kijiji. It's freeing up a lot of space in our house, and giving a few hundred extra dollars to pay off the credit card. It's also helping to keep me in the mindset of only buying things that are going to be useful in our every day lives. I don't want any more items that are going to sit in the basement for eternity.


----------



## hfp75

Hey, Good Job ! being frugal and productive can be a real drag. By doing fun free stuff your excelling at it !

Before you know it the debt will really start to melt away - if you stay disciplined.

You will be way better off - you will sleep better knowing that you are getting ahead of the game !

I am assuming your plan is to pay down the highest interest items first and let the student LOC be last - I think there is a tax credit for the interest you pay...

Good Job !


----------



## Fisherman30

I'll give an update on accounts by mid month, but here's a recap on January's spendings/earnings.

Income: $8770 Net
Spending: $6595 (budgeted spending was $6817)
We made $2175 more than we spent. 

Breakdown of spending:
Fixed Expenses: $5244
Variable Expenses: $1351

We were able to scrape $250 off of our variable spending budget. One thing I noticed is that because we almost completely stopped eating out, we are having to buy slightly more groceries as a result. With that being said, it would have been very hard to meet our $400 grocery budget. We spent $487 on groceries in January, while still managing to eat quite well (although a lot of repetitive meals, cooking in big batches for leftovers etc.) I expect to have our last remaining credit card paid off in full by mid month. 

Next month, I expect the following for our budget:
Income: $8545 (Give our take a couple hundred)
Fixed Spending: $5211
Variable Spending: $2000 (hopefully less)


----------



## humble_pie

Fisherman30 said:


> One thing I'm proud of is how fast we are shredding credit card debt. We have cut our spending way back, and have paid off and cancelled one credit card, and have nearly cut the last one in half. I expect by next month, it will be paid off. My Wife and I are doing more free activities around the city like going for more walks in the park with the dog, playing games at home etc.
> 
> Another thing I have been doing is going through all of our excess crap in the basement that will never be used again, and putting things for sale on kijiji. It's freeing up a lot of space in our house, and giving a few hundred extra dollars to pay off the credit card. It's also helping to keep me in the mindset of only buying things that are going to be useful in our every day lives. I don't want any more items that are going to sit in the basement for eternity.



spectacular progress, félicitations!

the leisure activities sound like fun. "The best things in life are free," they say.

not acquiring marginal items in the first place is also a great policy.

i'm still dwelling on the idea of NOT using overtime as the best single solution to debt. So sorry if it sounds like nagging, i don't mean it so.

still, linking increased overtime pay to continued conspicuous consumption means running faster & faster in the treadmill, no? whereas what you are doing is applying corrective measures in every direction. Looking good!

btw keep in mind that OT is income taxed; whereas $$ saved by not buying version 5 of that expensive widget have zero tax

.


----------



## peterk

humble_pie said:


> btw keep in mind that OT is income taxed; whereas $$ saved by not buying version 5 of that expensive widget have zero tax


"A dollar saved is two dollars earned". The modern version of "A penny saved is a penny earned", due to inflation and taxes. Plus give it a few more years and no one will remember pennies.


----------



## Fisherman30

Update on accounts:
*Liabilities*
Condo Mortgage: $135 750
House Mortgage: $235 119
Wife Student Loan: $5900
SUV Loan: $27 136
Car Loan: $5000
Student LOC: $7970
LOC: $49 200
Credit Card: $200

*Assets*
Chequing Account: $1400
Savings Account: $250
Non Registered Work Savings Account: $7600
TFSA (Work savings plan): $2100
LIRA: $15 300
Condo: $155 000
House: $270 000
RRSP: $100
TFSA: $150

*Net Worth* : ($14355)

An increase of $6793 since last month. I don't expect next month to be quite as fruitful, as I am starting to feel burnt out from all the overtime, and I have been away from home a little too much the last few weeks. It is definitely nice to see the results of our hard work though. If we can keep it up for another year or so, we should start to notice some dramatic results. Thanks for following!


----------



## Fisherman30

Well, February was a fairly productive month. Managed to get the credit card completely paid off, and got quite a bit of OT pay. As for the current outlook - We are about to go on a vacation to Mexico in a couple of weeks, but going to try to spend as little as possible while there. We booked our room and paid for it for 5 nights about 4 months ago (before we were really passionate about getting back on track). I am able to get flights very cheap, so hopefully we can get away without spending too much. If we could go back in time, we wouldn't have booked this vacation. 

I am starting a course at work next week, where assuming I am successful in the training, I will get about an 80% raise. If all goes well, I will be starting in that position in May or June. 

Also, because of my foolish lack of RRSP planning throughout the year, I owe about $2500 in income taxes. This is because I live in Manitoba where taxes are fairly high, and I work in a province where taxes are low, and the payroll department deducted taxes based on the tax rate in the province I work in. Also, this is from my rental property. This year, I will plan my RRSP contributions accordingly so I don't take a hit next year. Thankfully, the money I have in my non-registered account through my work savings plan will have been vested for a year, and I will be able to take about $2500 from that account to pay my taxes. 

Anyways, here's where things are at:
February Net Income: $8918

Fixed Expenses: $5234
Variable Expenses: $1217
Total Spending: $6451
Original Budget: $6731
= $280 under budget

Income of $8918- Expenses of $6451 = We made $2467 more than we spent.

Accounts:

Liabilities:
Wife student loan: $5000
Student LOC: $7915
House Mortgage: $234 406
Condo Mortgage: $135 287
LOC: $49 100
Car Loan: $4720
SUV Loan: $26 689
Credit Card: $0
Total Liabilities: $463 597

Assets:
Chequing Account: $1410
Savings Account: $453
TFSA: $200
RRSP: $250
RRSPL: $15 459
Work non-registered, RRSP and TFSA combined value: $9886
House: $270 000
Condo: $155 000
Total Assets: $452 658

Net Worth: ($10 939), an increase of $3416 since last month. 

Projections for March:
Budgeted Income: $7550
Budgeted Spending: $7310

This budget includes a $300 limit for spending in Mexico, as well as our airfare, however, I'm optimistic we can do it much cheaper. 

Thanks for following!


----------



## Fisherman30

Hi Everyone,
It's been quite a while since I posted an update. Things have been hectic lately. I recently passed some pretty substantial training, and have been awarded a promotion, which includes a 78% raise. I'm very thankful for that, as it will help me get this debt paid off way faster, and with this new position, there is even more opportunity for overtime. The trick for me is going to be to stay focused on putting the extra money towards debt repayment, while keeping our spending to a minimum, and avoid spending this extra money. 

Last month was quite costly, as I had to pay $2500 in income tax. I work in Alberta, but live in Manitoba. My employer deducts Alberta levels of income tax from my pay cheque, but taxes in Manitoba are quite a bit higher than in Alberta. This year, I will be smarter, and contribute more to my RRSP's to avoid the tax hit next year. I currently have my motorcycle listed for sale, and am hoping to get about $2500 for it. Also, I renewed the term on my condo mortgage, as the tenants chose to renew their lease for another year. I got a good rate of 2.96% for 3 years on it. Hopefully the value of the property will go up in that time. While I was renegotiating my renewal, I was able to get the bank to stop paying the property tax on my behalf. This gives me an extra $165/month. This is good, because the bank over-estimated my property tax significantly last year, so when I renewed my mortgage, the bank cut me a cheque for the property tax money that I over-paid to them. 

One thing I am wondering if anyone can give me some advice, is which debt I should pay off first? I will have about $4000 of extra cash around the end of the month (after paying all bills and credit card). The LOC is the highest interest, but I could pay off my car loan (which is 0% interest), and that would free up an extra $283/month to put towards paying off the LOC. Would it make sense to do that? Or should I just put that $4000 on the LOC right away, and keep making the $283 monthly payments on the car until it's paid off in September 2020? Thanks!

Here is an update on where we're at:

Assets:
Chequing Account: $4311
Savings: $104
RRSP: $250
TFSA: $100
RRSPL: $15 976
Work non-registered/TFSA/RRSP combined: $17 030
House: $270 000
Condo: $155 000
Total Assets: $462 771

Liabilities: 
Wife Student Loan: $4700
Student LOC: $7719
House Mortgage: $233 060
Condo Mortgage: $134 414
LOC: $49 200
Car Loan: $4154
SUV Loan: $25 346
Credit Card: $1841 (I pay it off in full every month)
Total Liabilities: $460 434

Net Worth: $2337 (finally in the green!)


----------



## Mukhang pera

If the LOC is still anywhere near 7% (as you said aways back), I'd pay it first. Paying $4,000 on it will start saving 7% on that amount right away.


----------



## AltaRed

Mukhang pera said:


> If the LOC is still anywhere near 7% (as you said aways back), I'd pay it first. Paying $4,000 on it will start saving 7% on that amount right away.


Agree completely if interest rate remotely approaches 7%. There is a huge amount of debt there to retire. Do the highest interest rate first.

Added later: If I recall correctly, your rental property was not cash flow positive if you included all costs. Why would you have not put it up for sale about 3 months before tenant lease was up, rather than carry it 'cash in red' for another year? Why do you assume it will go up in value over this next year?


----------



## hfp75

Whatever the highest interest rate is.... put the money there.....

$4,000 @ 7% is $280 / Yr that you dont pay out anymore... so that means that you are effectively saving $280 / yr of taxed income.... or paying down the LOC $280 / Yr faster.... (if your payments stay the same.)


----------



## Fisherman30

In Manitoba, you can't just choose not to renew the tenant's lease. You are legally required to offer them a lease renewal 3 months before the end of the existing lease. If you don't, then the lease automatically renews on a month-month basis. The only way you can get your property back is if you decide to move back into the place yourself, you sell it and the buyer is going to move in, or you are going to perform major renovations (in which case, once the renovations are complete, you are required to let them move back into the place).

I figured to try selling it with them still living there would be a huge pain, considering how slow the Winnipeg condo market is in the first place.

I was able to get the bank to stop taking about $165/monthly for my property tax, so I am no longer giving the bank an interest free loan with that money at least, so I just pay $1800 in a lump sum payment to the city for my property tax each year. I am increasing the rent each year as well. 





AltaRed said:


> Mukhang pera said:
> 
> 
> 
> If the LOC is still anywhere near 7% (as you said aways back), I'd pay it first. Paying $4,000 on it will start saving 7% on that amount right away.
> 
> 
> 
> Agree completely if interest rate remotely approaches 7%. There is a huge amount of debt there to retire. Do the highest interest rate first.
> 
> Added later: If I recall correctly, your rental property was not cash flow positive if you included all costs. Why would you have not put it up for sale about 3 months before tenant lease was up, rather than carry it 'cash in red' for another year? Why do you assume it will go up in value over this next year?
Click to expand...


----------



## Gruff403

Congratulations on decreasing your debt by almost 15K since you started this thread. You are moving in the right direction and that's awesome. One thought is when is your mortgage due? If it's soon you might be able to add the higher interest debt to the mortgage and lower the interest rate. If you do that reduce the LOC to a very small amount. LOC are to easy to use and can be dangerous if you are not careful. Make sure that you can make Principal payments anytime. Banks have lots of different mortgage products and it's worth the conversation. Don't rush into this. The best thing to do is develop good money habits and it looks like you're moving in that direction.


----------



## Fisherman30

Thank you! That's good advice! My mortgage is not due for renewal for another 2 years yet, so I will keep that in mind. With my new position, I will be taking home about an extra $2000/month (not including OT), and I plan on putting pretty much all of that money towards debt repayment. So I'm hoping to be able to quickly chop down this mountain of debt. 




Gruff403 said:


> Congratulations on decreasing your debt by almost 15K since you started this thread. You are moving in the right direction and that's awesome. One thought is when is your mortgage due? If it's soon you might be able to add the higher interest debt to the mortgage and lower the interest rate. If you do that reduce the LOC to a very small amount. LOC are to easy to use and can be dangerous if you are not careful. Make sure that you can make Principal payments anytime. Banks have lots of different mortgage products and it's worth the conversation. Don't rush into this. The best thing to do is develop good money habits and it looks like you're moving in that direction.


----------



## AltaRed

Fisherman30 said:


> In Manitoba, you can't just choose not to renew the tenant's lease. You are legally required to offer them a lease renewal 3 months before the end of the existing lease. If you don't, then the lease automatically renews on a month-month basis. The only way you can get your property back is if you decide to move back into the place yourself, you sell it and the buyer is going to move in, or you are going to perform major renovations (in which case, once the renovations are complete, you are required to let them move back into the place).
> 
> I figured to try selling it with them still living there would be a huge pain, considering how slow the Winnipeg condo market is in the first place.


You are going to have to do that eventually if your tenants never decide to leave. Are you prepared to be cash flow negative until perhaps 2025? When do you stop the bleeding? I only did cursory mental math in my head from your numbers on the opening page of this thread, but it seems you have to be in the red by hundreds of dollars per month (mortgage, condo fee, property taxes, property insurance, repairs). The condo market could actually get worse. 

Landlords sell properties on an ongoing basis all the time. I don't know anything about Winterpeg, but I would sell it when 'timing' is right rather than when the lease expires and hoping the tenants won't renew.

P.S. I'd never be a landlord in a province where I cannot terminate the lease upon completion of the term. Well, actually, I'd never be a landlord at all.

P.P.S I second Gruff's encouragement on good progress! You are coming out of what was a pretty big hole. Lesson learned?


----------



## Fisherman30

Those are good points. Perhaps I will look at selling the property next Spring. I'm currently paying off about $5500/year in mortgage principal on the rental property. However, yes, on a monthly basis, I am down about $170/month with all expenses added up. I am increasing the rent by the maximum allowable amount each year, so that monthly loss is slowly shrinking. 

Yes, lesson definitely learned! My goal is to pay off about $25 000 of the LOC over the next 12 months. Perhaps more, but I know $25 000 is doable. 12 months is somewhat of a long time, so I've split that goal up into quarters. So by the end of August, my goal is to have about $7000 paid off. Try to get the balance down to $42 000 by the end of August. I'll just keep focused on my goals one quarter at a time, and watch this mountain of debt slowly crumble. 



AltaRed said:


> You are going to have to do that eventually if your tenants never decide to leave. Are you prepared to be cash flow negative until perhaps 2025? When do you stop the bleeding? I only did cursory mental math in my head from your numbers on the opening page of this thread, but it seems you have to be in the red by hundreds of dollars per month (mortgage, condo fee, property taxes, property insurance, repairs). The condo market could actually get worse.
> 
> Landlords sell properties on an ongoing basis all the time. I don't know anything about Winterpeg, but I would sell it when 'timing' is right rather than when the lease expires and hoping the tenants won't renew.
> 
> P.S. I'd never be a landlord in a province where I cannot terminate the lease upon completion of the term. Well, actually, I'd never be a landlord at all.
> 
> P.P.S I second Gruff's encouragement on good progress! You are coming out of what was a pretty big hole. Lesson learned?


----------



## Fisherman30

Alright, so a small update. I switched our banking to Tangerine, and will save $11/month in fees. Also, the chequing account/savings account have a higher interest (still very low, but better than nothing I suppose). I also made a $3300 lump sum payment on my LOC, which felt great. Yesterday, I had a $190 unexpected vehicle repair, but that's life I suppose. Two wheel studs broke off, so didn't have much of a choice in getting it fixed. Thankfully it didn't end worse. I also spent $240 on a new weed whacker, after my cheap, low quality one bit the dust. It was on sale, and came with a 2-year warranty at least. It's a STIHL, so hopefully it will last for many years. I have a $1900 property tax payment coming up, and a $100 speeding ticket (which was originally $250, that I got back in December for going 12 km/h over the limit. I got it reduced to $100, and got the due date extended until the end of June). Otherwise, things are going well, and I expect to be able to continue paying off about $1600/month off my LOC, if I don't do any OT. Any OT I pick up will go directly to the LOC, to try to get it paid off as quickly as possible.


----------



## Fisherman30

Monthly update:
Assets:
House - $270 000
Condo - $155 000
Chequing - $3491
Savings - $404
RRSP - $250
RRSPL - $16 484
Work non-registered, TFSA, RRSP combined - $14 389
Total Assets: $460 018

Liabilities:
Wife student loan - $4600
Student LOC - $7755
House Mortgage - $232 393
Condo Mortgage - $133 982
Credit Card - $2879
Car Loan - $3871
SUV Loan - $24 897
LOC - $45 839
Total Liabilities: $456 212

Net Worth: $3806


----------



## Fisherman30

July update:
Assets:
House - $270 000
Condo - $155 000
Chequing - $1045
Savings - $455
RRSP - $250
Non-Registered - $250
RRSPL - $16 166
Work non-registered, TFSA, RRSP combined - $15 580
Total Assets: $458 746

Liabilities:
Wife student loan - $4500
Student LOC - $7620
House Mortgage - $231 708
Condo Mortgage - $133 539
Credit Card - $2953
Car Loan - $3588
SUV Loan - $24 449
LOC - $45 000
Total Liabilities: $453 357

Net Worth: $5389


----------



## Fisherman30

Made a substantial step today. Sold my motorcycle. Wasn't easy mentally, but I got pretty much what I was asking for it, and I put the money directly on my line of credit, which felt good.


----------



## Fisherman30

August update:

Assets:
House - $270 000
Condo - $155 000
Chequing - $1225
RRSP - $250
Non-Registered - $250
RRSPL - $16 286
Work non-registered, TFSA, RRSP - $16 690
Total Assets: $459 701

Liabilities:
Wife studen loan - $4400
Student LOC - $7655
House Mortgage - $231 038
Condo Mortgage - $133 104
Credit Card - $1844
Car Loan - $3305
SUV Loan - $24 000
LOC - $42 450
Total Liabilities: $447 796

Net Worth: $11 905


----------



## peterk

Great job! Do you have any other things you can sell laying around the house?


----------



## Fisherman30

Thanks, Peter! About $3400 in my non-registered account at work will be maturing in about 2 weeks. I'll be taking that and putting it directly on the LOC. We've got a baby on the way (due in January), so getting this debt paid off is top priority. As far as possessions go, we have sold a tonne of stuff on kijiji already. We now have a pretty minimal amount of possessions. I'm going to my Sister's wedding next week half way across the country, and I have a trip to San Francisco coming up this month for a competition with one of my hobbies (which I'm doing as much on the cheap as possible), and that will be about it for large expenses until the baby comes. We will make about $800 more than we spend this month (mostly due to the wedding and trip to SFO)....Next month, and going forward until January, we will be taking in about $2000/month more than we are spending. This excess money will be going straight to the LOC. Also, the full $17 000 in my work savings will be maturing in the next few months, and I plan to put all of it (except for the small amount that's in RRSP) on to the LOC. I'm hoping to have the LOC completely paid off by next summer, or hopefully sooner, depending how much OT I can pick up.


----------



## Fisherman30

September update. Making some headway, and it feels great! January will be one year into this, and we are on track to have made a huge improvement in 2019!

Assets:
House - $270 000
Condo - $155 000
Chequing - $1758
Savings - $650
RRSP - $250
Non-Registered - $253
RRSPL - $17 507 (made some decent gains here selling stock. Reinvested in TD, RY, CU and FTS. Held on to WFT.)
Work non-registered/TFSA/RRSP combined - $14 312 (cashed out some non-vested money from non-registered to pay off LOC. Planning to keep doing this every 3 months, as money becomes non-vested. Doesn't cost me anything to do this.)
Total Assets: $459 730

Liabilities:
Wife Student Loan - $4350
Student LOC - $7605
House Mortgage - $230 367
Condo Mortgage - $132 669
Credit Card - $746
Car Loan - $3022
SUV Loan - $23 550
LOC - $38 590
Total Liabilities: $440 899

Net Worth: $18 831


----------



## Fisherman30

October update:

Assets:
House - $270 000
Condo - $155 000
Chequing - $3225
Savings - $926
RRSP - $250
Non-registered - $270
RRSPL - $17 774
Work non-registered/TFSA/RRSP combined - $15 619
Total Assets: $463 064

Liabilities:
Wife Student Loan - $4300
Student LOC - $7554
House Mortgage - $229 677
Condo Mortgage - $132 222
SUV Loan - $23 101
Car Loan - $2739
LOC - $38 390
Credit Card - $2141
Total Liabilities: $440 124

Net Worth: $22 940


----------



## Fisherman30

Looking for some advice! So the payments for my car loan are $283/month. That loan is scheduled to be paid off next September. I have enough money in the bank to pay it off completely right now. That loan is 0% interest. Would it be worth it to pay off my 0% car loan all at once right now, that so it frees up an extra $283/month for payments to my LOC?


----------



## nobleea

Fisherman30 said:


> Looking for some advice! So the payments for my car loan are $283/month. That loan is scheduled to be paid off next September. I have enough money in the bank to pay it off completely right now. That loan is 0% interest. Would it be worth it to pay off my 0% car loan all at once right now, that so it frees up an extra $283/month for payments to my LOC?


No. Keep on paying the 283/mo and use the excess cash to hit the LOC now.
Then when the car loan is paid off, transfer that 283 to the LOC as well.


----------



## Fisherman30

Ok will do, thanks. I'll keep putting all of my extra money on the LOC. Should be able to get another $6-7k paid off on the LOC next month.


----------



## AltaRed

Fisherman30 said:


> Ok will do, thanks. I'll keep putting all of my extra money on the LOC. Should be able to get another $6-7k paid off on the LOC next month.


The key is to pay down highest interest debt first., then the next highest interest debt when the first one is gone, and so on. So yes, put the excess to LOC buy down.


----------



## Fisherman30

November update:

Still feeling very motivated! I'm picking up $1200/month of overtime, which is helping. I could do about $2500/month of OT, but I'm already away from home 16 nights a month in different cities all over the place with a pregnant Wife at home, so it's a balance. I wanted everyone's opinion on this: We haven't really treated ourselves in a long time....Just been focused on paying off debt and saving. I was thinking for Christmas and our birthdays, it would be nice to treat ourselves a little bit. I was thinking $250 for Christmas each, and $250 for each birthday....Which would be $1000 total. Is this a terrible decision?

Anyways, here's the November update:
Assets:
House - $270k
Condo - $155k 
Chequing - $5400
Savings - $1304
Work TFSA/RRSP/Non-registered combined - 17 050
RRSP - $250
RRSPL - $17 900
Wife's RRSP - $500
Total Assets: $467 404

Liabilities:
Wife student loan - $4280
Student LOC - $7450
House Mortgage - $229 003
Condo Mortgage - $131 785
SUV Loan - $22 651
Car Loan - $2456
LOC - $39 000 (Yes, I know this is higher than last month....I made a mistake on my last entry...It was $39 300 last month....Going to pay off another $6-8k on it when I get my bonus this month)
Credit Card - $1715
Total Liabilities: $438 340

Net Worth: $29 064

Thanks for following!


----------



## AltaRed

No. There needs to be some reward to go with rigorously 'staying on track'. We always did that in some form, usually an inexpensive local vacation, in our early days when paying off student loans and a 2nd mortgage.


----------



## Fisherman30

December update: One year in, and I'm really happy with the gains we have made! Our debt has gone down substantially, and our income has gone up quite a bit. At the end of the month, I'll have about $12 500 becoming unvested in my work TFSA and non-registered accounts, plus about a $1400 bonus at the end of the month, so by January, I hope to have the LOC paid down to about $15 000. My goal is to have all of our debt, except the SUV loan and mortgages paid off in the next 12 months. Thanks for following!

Assets:
House - $270k
Condo - $155k
Chequing - $1651
Savings - $1531
Work TFSA/RRSP/Non-registered combined - $14 857
RRSP - $250
RRSPL - $18 000
Wife's RRSP - $900
Total Assets: $462 189

Liabilities:
Wife student loan: $4250
Student LOC - $7400
House Mortgage - $228 310
Condo Mortgage - $131 336
SUV Loan - $22 200
Car Loan - $2173
LOC - $28 625
Credit Card - $1391
Total Liabilities: $425 685

Net Worth: $36 504


----------



## Fisherman30

January Update: A bunch of my savings at work became unvested, and I was able to cash it out to pay off a good chunk of debt. We just had our first baby a few days ago, so this will reduce the amount of OT I can do, and my Wife is now on EI for the next year, while she is on mat leave. If I manage to do 8 hrs/month of OT, it will make up for her lost income. So I will just try to make the best compromise for being at home with the new baby, while controlling costs, and doing the odd bit of OT where it is convenient to do so. I was lucky enough to receive nearly a 100% raise compared to this time last year. So even with no OT, and my Wife being on EI, our monthly take home pay is still about $2500/month more than it was last year. My new years resolution is to reach $100k net worth by the end of 2020, and elimate the LOC, student LOC and my Wife's student loan. It will require continued penny pinching, but I think it is doable based on our performance over the last year. 

Assets:
House - $270k
Condo - $155k
Chequing - $2672
Savings - $1908
RRSP - $5300
LRRSP - $17 493
Wife's RRSP - $1040
Total Assets - $453 413

Liabilities:
Wife student loan - $4230
Student LOC - $7400
House Mortgage - $227 633
Condo Mortgage - $130 896
SUV Loan - $21 524
Car Loan - $1890
LOC - $14 700
Credit Card - $1770
Total Liabilities: $410 043

Net Worth: $43 370


----------



## Fisherman30

I've been working on cutting costs, and I made a major gain today with our cell phone bill. Our contract with Telus ended this month, and we were paying $129/month for both of us for unlimited calling/texting, and 8GB of shared data. I did some digging, and discovered that we were only using about 800 MB each of data, since we are pretty much always in range of WIFI. I decided to get our phones unlocked, cancel our service with Telus, and switch to Lucky mobile. We went to Dollarama, and paid $4 each for the Lucky mobile sim cards (the sim cards are $10 each everywhere else), and we each now pay $25/month for unlimited calling/texting and 1GB of data each (it's 500MB of data each, but we each got an additional 500MB for signing up for the pre-authorized payments). No data overage charges (it just goes to a very slow download/upload rate off 144 kbps once you exceed the 1GB), no contract. It's only 3G data speeds, but when I'm outside of WIFI, I only use data for checking emails, sending messages, some basic tasks for work etc, so we should each be able to easily stay within the 1GB limit. With tax for both of us, our cell phone bill is now $56/month. Savings of $73/month, or $876/year. 

For internet, I have been calling my internet service provider every 6 months to continue getting my promotional rate of $75/month (tax included) for the fibre optic 150 MBPS internet (normally about $140/month), and so far, they keep extending that promotion every time I call them. We cut cable a while back, and just subscribe to Netflix, disney plus and amazon prime. Those three combined is still significantly cheaper than cable, allows us to get free shipping with amazon, and gives us more shows to watch than you could ever know what to do with. 

One other thing I'm proud of with our cost cutting is a change we made with our groceries. We got a PC optimum card (we live right near a superstore), and I discovered that with a PC insiders subscription, we can get 20% back in PC points for all the money we spend of diapers and wipes. I got a referral code from someone, which allowed me to get the PC insiders membership for $75, instead of the normal $100. This is allowing us to essentially get diapers/wipes for much cheaper than even Costco or Amazon. It also allows us to use click and collect (PC express) without having to pay the pickup fee, which is great for my Wife, having the baby on her own while I'm away for work for 3-4 days at a time. It allows her to order online, and just park at the superstore, and an employee loads the groceries into the SUV, without her even having to get out of the SUV. It also came with a code that gives $10 off each of the first three orders over $50. 

Over the last year, I have given a summary of assets, liabilities and net worth each month, but realized I haven't given a summary of our budget since I started this thread. I'll do that tonight. Thanks for following!


----------



## Fisherman30

Here is the summary of our monthly budget:

Take home pay: $8400/month (While Wife is on EI mat leave, and includes $1290/month rent. This is assuming I don't pick up any OT.)

Expenses:
Car insurance - $275/month (can't negotiate or find better deals, because it's public insurance in Manitoba)
Car Payments - $749/month (will be going down to $467/month in September once the car is paid off, and we will just have the SUV to pay off)
Fuel - $110/month
Auto Service - $20/month (this is what we budgeted for next month since there are no oil changes etc....this is just for car washed next month)
Internet - $80/month
Mobile Phone - $56/month
Utilities - $228/month
LOC/Student LOC/Wife's student loan payments - $605/month
Entertainment - $100/month
Alcohol/bars - $100/month
Coffee shops - $20/month
Groceries - $500/month
Restaurants - $150/month
Gifts - $50/month
Pharmacy - $50/month
Home Insurance - $91/month
Home Supplies - $100/month
Mortgages (for house and rental condo, including condo fees and property tax payments on the house) - $2628
Baby Supplies - $150/month
Hair - $20
Pet food/supplies - $80/month
Clothing - $70/month
Hobbies - $40/month

Total Expenses - $6272
Income - Expenses = $2128. This is with no OT. If I pick up OT, I can usually add about another $1000-$1500. With the baby at home now, I'm going to be limiting the amount of OT I pick up. 

I have been putting $75/week into our savings account, which I didn't include in expenses. It just gets transferred from chequing to savings automatically every Friday. The remainder of the excess money typically goes straight on to the LOC. Once the LOC is paid off, I will start paying off my student LOC, and then followed by my Wife's student loan. Once the car, and those three loans I just mentioned are paid off, that will free up an extra $888/month, reducing our total monthly expenses down to $5384, allowing us to save money at a pretty good rate, especially once my Wife goes back to work.


----------



## Tayls77

Fisherman30 said:


> Here is the summary of our monthly budget:
> 
> Take home pay: $8400/month (While Wife is on EI mat leave, and includes $1290/month rent. This is assuming I don't pick up any OT.)
> 
> Expenses:
> Car insurance - $275/month (can't negotiate or find better deals, because it's public insurance in Manitoba)
> Car Payments - $749/month (will be going down to $467/month in September once the car is paid off, and we will just have the SUV to pay off)
> Fuel - $110/month
> Auto Service - $20/month (this is what we budgeted for next month since there are no oil changes etc....this is just for car washed next month)
> Internet - $80/month
> Mobile Phone - $56/month
> Utilities - $228/month
> LOC/Student LOC/Wife's student loan payments - $605/month
> Entertainment - $100/month
> Alcohol/bars - $100/month
> Coffee shops - $20/month
> Groceries - $500/month
> Restaurants - $150/month
> Gifts - $50/month
> Pharmacy - $50/month
> Home Insurance - $91/month
> Home Supplies - $100/month
> Mortgages (for house and rental condo, including condo fees and property tax payments on the house) - $2628
> Baby Supplies - $150/month
> Hair - $20
> Pet food/supplies - $80/month
> Clothing - $70/month
> Hobbies - $40/month
> 
> Total Expenses - $6272
> Income - Expenses = $2128. This is with no OT. If I pick up OT, I can usually add about another $1000-$1500. With the baby at home now, I'm going to be limiting the amount of OT I pick up.
> 
> I have been putting $75/week into our savings account, which I didn't include in expenses. It just gets transferred from chequing to savings automatically every Friday. The remainder of the excess money typically goes straight on to the LOC. Once the LOC is paid off, I will start paying off my student LOC, and then followed by my Wife's student loan. Once the car, and those three loans I just mentioned are paid off, that will free up an extra $888/month, reducing our total monthly expenses down to $5384, allowing us to save money at a pretty good rate, especially once my Wife goes back to work.


I have been following your progress and it is very inspiring, congratulations on the new family member and once your debt is gone and you are able to swing that to investments you will be in great shape come retirement. Congratulations on taking control of your future!


----------



## AltaRed

Likewise. Good progress and it appears by the end of this calendar year, the balance sheet will be looking a whole lot better. It is amazing the weight that comes off one's shoulders when debt payments and outstanding obligations have been eliminated and there is additional free cash flow to then tackle other debt like incremental mortgage pre-payments and/or building an investment portfolio.

I still think based on comments I think I expressed many months ago that you need to deal with that condo in one form or another. If I remember correctly, it was not cash flow positive on an 'all in' basis and if correct, that is an albatross. Imagine what the dead equity in the condo would do buying down your home mortgage in addition to not having a 'cash in red' situation on that 'investment'. Investment RE is a terrible investment if it does not have clear and certain positive cash flow by a significant margin.


----------



## Fisherman30

Thanks guys! It definitely feels like a big weight gradually being lifted off of my shoulders. I agree - The condo is a thorn in my side. I'm just waiting for my tenants to move out, and I'm going to sell it as soon as they do. In Manitoba, you can't just choose not to renew the lease. If you don't renew the lease, it just continues month to month after that until the tenants decide to move out. The only options to have them move out are if I move back into the condo myself, or I make extensive renovations, requiring them to leave (in which case, I'm required to offer to rent the place to them again after the renos are done). Also, if they refuse the annual lease renewal, then the lease terminates at the end of the leasd, and they would have to move out. Now, I can sell the place while they're living there, and then the new owner could require them to leave within 3 months of the sale. However, this would make it harder to sell, and condo prices for older condos like mine are already down the drain for now, and vacant condo units in my development are staying on the market for a long time without selling. The rate of condo fee increases is going down finally, and I'm going to try to make a case with the city to have the assessed value decreased for property tax purposes. I've also been increasing the rent each year. All in right now, I'm losing $150/month, which is definitely not good. But, I think it's better than the headache of trying to sell the place while the tenants are still living there. Hopefully they will move this Spring, and I can put it up for sale. 

Thanks for following!


----------



## Fisherman30

February Update:
Assets:
House - $270k
Condo - $155k
LRRSP - $18 779
RRSP - $6367
Non-registered - $255
Wife's RRSP - $1187
Chequing - $2445
Savings - $2285

Total Assets: $456 318

Liabilities:
House Mortgage - $226 954
Condo - $130 455
Car Loan - $1981
SUV Loan - $21 073
BMO LOC - $14 400
Student LOC - $7351
Wife Student Loan - $4163
Credit Card - $1976

Total Liabilities: $408 353

Net Worth: $47 965


----------



## Fisherman30

March Update:
Assets:
House - $270k
Condo - $155k
LRRSP - $11 400
RRSP - $6866
Non-Registered - $255
Wife's RRSP - $908
Chequing - $5557
Savings - $2587
Total Assets: $452 573

Liabilities: 
House Mortgage - $226 224
Condo Mortgage - $129 980
SUV Loan - $20 622
Car Loan - $1698
BMO LOC - $14 100
Wife Student Loan - $4080
Credit Card - $3960
Student LOC - $7213

Total Liabilities: $407 877

Net Worth: $44 696

No big surprise in the few grand loss of net worth this month I suppose. Our investments are down about 30-40% since last month. This money is locked away at least, so the plan is to just hold it there. Currently facing the risk of temporary layoffs at work right now, unfortunately. Hopefully this passes in the next few months. Thankfully we buckled down and paid off most of the LOC this year before all this happened, and the car is nearly paid off. Each month, we're re-evaluating expenses, trimming back where we can.


----------



## Fisherman30

April Update:
Assets:
House - $270k
Condo - $155k
LRRSP - $13 492
RRSP - $7230
Non-registered - $255
Wife's RRSP - $995
Chequing - $6271
Savings - $4377

Total Assets: $457 620

Liabilities:
House Mortgage - $225 542
Condo Mortgage - $129 539
SUV Loan - $20 170
Car Loan - $1415
BMO LOC - $13 700
Wife Student Loan - $4000
Credit Card - $960
Student LOC - $7192

Total Liabilities: $402 518

Net Worth: $55 102

Did a tonne of OT in March in order to earn as much money as possible before possible layoffs happen. I'm an airline pilot, so as you can imagine, it's going to take a while for my industry to recover. I've got my seniority at a major airline, so if I get laid off, hopefully I'll be recalled within the year. Starting this month, we're taking a substantial salary cut in lieu of layoffs. We'll see what happens for May and onward....It's being negotiated on a monthly basis basically. My plan is to transfer excess money from Chequing to Savings. We've cut pretty much all unnecessary expenses. We will likely park one of the vehicles and take the insurance off, and just go down to one vehicle if I get laid off. My Wife is already on EI (for mat leave), so if I end up on EI as well, money will be very tight, but we've come up with a budget that would allow us to get by without having to dip into savings for about 10 months. Hopefully if I get laid off, it won't be for 10 months, but it's hard to tell at this point. We're preparing for worst case scenario. I really don't want to wipe out the savings we have worked so hard to build over the last year.

I spent a few hours on the phone negotiating lower rates on our monthly services. Managed to get our monthly internet bill down about 50%, put both vehicles on "pleasure use" insurance, since we are using them so little, that they qualify for those rates, we don't have cable or home phone, we're not buying alcohol or eating from restaurants, we've cut back on meat, got really cheap cell phone plans ($25/month each), and I negotiated lower premiums for house and condo insurance. At this point, other than the fact that we're still making car payments and insurance payments on two vehicles, we've got our expenses about as low as possible. If I don't get laid off, we'll be that much further ahead. If I do get laid off, we should be prepared at least.


----------



## Fisherman30

Well, I got my layoff notice effective June 1st. I maintain my seniority, and they can't hire externally for 10 years, or until everyone is recalled. So there is some protection there thankfully at least. Thing is, I have no clue when things will turn around and I'll be back to work. I don't want to dip into my savings or LOC, so I am trying to come up with a budget that would assume both my Wife and I being on EI. My Wife will be back to work full time in February, and I should be able to find something that pays more than EI for the summer, but we're budgeting for worse case scenario. With both of us on EI, plus our rental cheques, our net income monthly would be $5519 (down from the $13 000 we were bringing in with my Wife working, and even $10 800 this month with my Wife on mat leave). Pretty substantial hit, but a hit that pretty much the whole world is dealing with. Currently, our monthly budget is $6012/month. I guess I haven't given a breakdown of our spending in a while, so I'll share that now.
Car Insurance - $276/month
Car Payments - $749/month
Gas - $70/month
Auto Service - $20/month
Internet - $70/month 
Mobile Phone - $56/month
Utilities - $228
Loan payments - $605/month ($400 for LOC at 6.46% interest, 120 for Wife's student loan at 3.45%, $85, for student LOC at 3.95%)
Entertainment - $100
Alcohol - $100
Coffee Shops - 20
Groceries - $500
Restaurants - $100
Pharmacy - $50
Home Insurance - $80
Home Supplies - $100
Mortgages, condo fees, property tax - $2628
Baby Supplies - $150
Pet food - $50
Clothing - $40
Hobbies - $40

So we need to trim at least $500/month in expenses. We could sell both vehicles, have enough money to pay off both car loans, and go down to one cheaper vehicle. That would save $750/month in car payments, and about $160 in insurance, for a total of $910/month in reduced expenses. We could also just suspend the car payments on both vehicles for 3 months with no penalty (a special COVID-19 thing the banks are doing). This would relieve us financially for a few months, and possibly make it easier to sell the vehicles, when hopefully the social distancing/stay at home rules are less strict. We could reduce the LOC, wife's student loan and student LOC payments to the minimum payments to save about $350/month. We could trim the alcohol and restaurant budgets in half to save $100/month. I'm on reduced pay for the month of April, and then back up to full pay for the month of May. So I should be able to put a few thousand $$ in our savings account before June 1st at least. 

Thoughts?


----------



## Fisherman30

May Update
Assets:
House - $270k
Condo - $155k
LRRSP - $12 485
RRSP - $7100
Non-Registered - $255
Wife's RRSP - $1022
Chequing - $5809
Savings - $7684

Total Assets - $459 355

Liabilities:
House Mortgage - $224 842
Condo Mortgage - $129 085
SUV Loan - $19 719
Car Loan - $1132
BMO LOC - $13 350
Wife Student Loan - $4076
Credit Card - $2922
Student LOC - $7180

Total Liabilities - $402 306

Net Worth - $57 049


----------



## milhouse

Any update on the job front or cashflow/spend situation?


----------



## james4beach

And don't forget to apply to EI or CERB if eligible; this is exactly what it's for.


----------



## peterk

Fisherman30 said:


> So we need to trim at least $500/month in expenses. We could sell both vehicles, have enough money to pay off both car loans, and go down to one cheaper vehicle. That would save $750/month in car payments, and about $160 in insurance, for a total of $910/month in reduced expenses.


There's a very high chance your wife's job will still be there next winter, yes?
I'd think I'd just sell 1 car in your situation and keep the other. No need to sell both and go down to a beater. You're financially not that bad off even with the (hopefully temporary) layoff.


----------



## Fisherman30

Thanks everyone, I appreciate your responses! Sorry for the late response. 
Milhouse - We've shed some expenses (what little we could, since we've already been living fairly frugally to begin with, aside from having two vehicles), and I've negotiated lower service fees on things like internet etc. This month, we will spend about $2000 less than we bring in. 
J4B - Thanks! My company is keeping me on the wage subsidy until the end of August, when the wage subsidy ends. Works out to about $3700/month gross. More money than EI anyway. 
Peter - That's a good idea! We're considering selling one car for sure, and yes, there's a very high chance my Wife's job will be there in the Winter, unless there's a second wave of the virus that wreaks the level of havoc that this wave has caused. We will most likely sell the car instead of the SUV, since my Wife feels safer with the baby driving the AWD SUV in the winter. We should be able to get about $10k for the car anyways. We could use that money to pay off the LOC and most of my student LOC. With the car being paid off, and the LOC being paid off, that would reduce our monthly debt payments by $683/month. We may have to keep both vehicles though, as there is a temporary job I am looking at in a different province in the interim while I wait to be recalled to my normal job. I'll just have to wait and see how things are shaping up. If it looks like that's not going to materialize, then it will be an easier decision to sell the car. 

I've ran all the numbers, and if I'm still laid off by the time the wage subsidy runs out, and I end up on EI, we will be able to cover all of our expenses, without dipping into savings at all. During my time on the wage subsidy, we will be able to save about $500/month. I'm considering taking the $7000 from our savings account and putting it on the LOC. The interest rate on the LOC has gone down to 5.46%, but I will still save about $32/month in interest this way. 

Thanks for following, everyone! On the plus side, I get to be a full time Dad to our new baby, and I've been taking the time off to exercise outside lots. Been doing a lot of biking and running. Best part is that exercise is free, and it gives a priceless boost to your health. Thank goodness we took the steps at the beginning of this thread to get our budgeting under control! We would have been in a far worse situation right now otherwise.


----------



## Fisherman30

May Update:
Renewed my home mortgage, and went for 5-year Variable Closed at Prime - 0.5%, which for now works out to 2.10%. Also got them to stop paying the property tax on my behalf. So with the reduction of mortgage payments due to lower interest for now, and not paying monthly into the property tax account, it gives us about an extra $300/month liquidity. The car will be paid off the beginning of September, so that's an extra $283/month as well, so we'll have about an extra $583/month buffer come September. I know I still have to come up with the property tax money, but that's not due until next June. By then, my Wife will have been back to work for a while already, and I should be back to work this Fall I think. 

Assets:
House - $270k
Condo - $155k
LRRSP - $14 050
RRSP - $7174
Non-Registered - $297
Wife's RRSP - $1064
Chequing - $5752
Savings - $1560
Total Assets: $454 897

Liabilities:
House Mortgage - $224 157
Condo Mortgage - $128 640
Student LOC - $7120
SUV Loan - $19 267
Car Loan - $880
BMO LOC - $6400
Credit Card - $1167
Wife Student Loan - $4076
Total Liabilities - $391 707

Net Worth: $63 190


----------



## Fisherman30

Realized I had an error in my previous post. That should have read "June update". Anyway, here is the July update. Thanks for following! The wage subsidy was extended until the end of December, so hopefully my employer continues with it until after August. They have indicated that they plan to keep doing it as long as it's available, so I'm hopeful. I do think I'll be recalled by the Fall, but this is some security in the meantime, at least. Our expenses currently are $5640/month, and net income is $6457/month. That leaves us $817/month, and that includes paying $400/month towards the LOC and $85/month towards the student LOC. With the car being paid off in September, that will give us a buffer of $1100/month. We do have property tax due by the end of August of about $1800, and $2227 income tax due by the end of September. 

Assets:
House - $270k
Condo - $155k
LRRSP - $14 420
RRSP - $7569
Non-Registered - $218
Wife's RRSP - $1119
Chequing - $5719
Savings - $1860
Total Assets - $455 905

Liabilities:
House Mortgage - $223 455
Condo Mortgage - $128 183
Student LOC - $6990
SUV Loan - $18 588
Car Loan - $597
BMO LOC - $6050
Credit Card - $1351
Wife Student Loan - $4076
Total Liabilities - $389 290

Net Worth - $66 615


----------



## Fisherman30

August Update:

Assets:
House - $270k
Condo - $155k
LRRSP - $14 763
RRSP - $7653
Non-Registered - $96
Wife's RRSP - $1147
Chequing - $5845
Savings - $2236
Total Assets - $456 740

Liabilities:
House Mortgage - $222 723
Condo Mortgage - $127 735
Student LOC - $6996
SUV Loan - $18 134
Car Loan - $283
BMO LOC - $5700
Credit Card - $1490
Wife Student Loan - $4076
Total Liabilities - $387 137

Net Worth - $69 603


----------



## Fisherman30

CEWS is going down to $500/week for furloughed employees starting September 1st (which is actually $76/week less than EI, and doesn't make any sense to me at all). With my Wife on EI for mat leave, and me on CEWS, we will barely get by on our monthly expenses by the skin of our teeth, and that's assuming my tenants continue to pay rent on time. My final car payment on my car is coming out September 7th, and it will be all paid off. It's a 2013 Toyota Corolla. Our other vehicle is a 2017 Kia SUV, which we still owe $17 900 on. To me, it makes financial sense to sell my Corolla. I believe I would get about $9000 for it. I could use that money to pay off the line of credit, and put the remaining $3300 towards paying off my student line of credit. That would eliminate my monthly line of credit payments, and also save me $138/month on car insurance, as well as some maintenance costs. Thoughts?


----------



## AltaRed

That makes practical sense IF you will not need to be a 2 vehicle family again anytime soon. Otherwise, the buy/sell spread and transactional costs of buying a replacement in the near future will be hundreds if not $1000 or more. How much do you save each month by eliminating the 'interest' costs of the LOC buydowns (in addition to the $138 insurance savings)?


----------



## Fisherman30

AltaRed said:


> That makes practical sense IF you will not need to be a 2 vehicle family again anytime soon. Otherwise, the buy/sell spread and transactional costs of buying a replacement in the near future will be hundreds if not $1000 or more. How much do you save each month by eliminating the 'interest' costs of the LOC buydowns (in addition to the $138 insurance savings)?


That's a good point. On my LOC, I'm paying $28/month interest. It really depends how long I end up being laid off for, before we will need to have two vehicles. My Wife goes back to work in February. I could also just stop driving the car, and just leave fire/theft insurance on it until I need to drive it again. Storage insurance is only $15/month, so I would save $120/month by doing that.


----------



## AltaRed

If you don't know about when you will be working again, e.g. few months to a year, I'd suggest NOT to sell the vehicle, but store it at lowest cost of storage and non-driving insurance. Yes, there will be additional depreciation but the amount is getting smaller each year and it becomes more a case of vehicle condition and odometer that sets market price rather than model year.


----------



## Fisherman30

Yes, makes sense. I just took it off the road yesterday. I was paying $138/month for insurance (unfortunately in Manitoba, public insurance has a monopoly and I don't have the luxury of shopping around for better rates). I just left fire, theft and vandalism insurance on it, which is only $10/month, so this will help for sure. I also applied for a courier driver job to hopefully add a little bit of extra cash to tie us over to until we are back to work. I also phoned the bank and got them to decrease my automatic monthly payments on my line of credit down to the minimum amount. In total, with the car being paid off in September, removing the insurance, lowering my monthly LOC payments, and some other trimming as well, I was able to shave over $700/month off of our spending. This will allow us to save about $900/month more than we spend, even with both of us out of work. If I get this courier job, we will save about $2900/month more than we spend. My plan would be to put most of that towards debt repayment, and continue with my goal of getting it paid off.


----------



## scorpion_ca

You can speak with the loyalty department of your phone and internet service provider, they may lower the price.


----------



## Fisherman30

September update: I've been called back to work! Going back to sailing the friendly skies October 1st, and my Wife is returning to work full time January 6th. Very excited. Also, my car is paid off! It's been a busy month, as I have been installing new flooring and trim throughout my house. My Wife and I did all of the work ourselves, and it still cost us just over $3000. Saved about $2500 in labour doing it ourselves, and it makes our house look like a brand new place. It turned out amazing. I also had to install a new range in the condo, which cost about $800. So it wasn't a cheap month. I think I added well over $3000 to the value of our house with this new flooring/trim, at least. We had old hardwood flooring in rough shape to the point that the polyurethane was peeling off the floor, and I was concerned about our baby and/or dog ingesting a piece. 

Assets:
House - $270k
Condo - $155k
LRRSP - $15 015
RRSP - $7669
Non-Registered - $91
Wife's RRSP - $1119
Chequing - $6676
Savings - $2311
Total Assets - $457 881

Liabilities:
House Mortgage - $221 991
Condo Mortgage - $127 287
Student LOC - $6864
SUV Loan - $17 455
BMO LOC - $5620
Wife Student Loan - $4076
Income Tax Payable (this month) - $2227
Property Tax Payable (this month) - $1839
Credit Card - $5654
Total Liabilities: $393 013

Net Worth: $64 868


----------



## londoncalling

Congrats on getting back to work!


----------



## Fisherman30

Thanks, London! I used the 4 months off to get back in shape, lost 25 lbs, spent lots of time with the new baby, did some work on the house etc. Made the most of the crummy situation. I still have many thousands of colleagues who need to get back to work, so I feel lucky. Basically just starting where I left off before the layoff. My cash accounts are pretty low right now, but that's due to paying my property tax for both properties, as well as my new flooring last month. Now that our new flooring is installed and I'm back to work, I'm going to tackle trying to get the LOC fully paid off, followed by my student LOC, and then my Wife's student loan. Should be able to get all of those things paid off in the next 12 months or less, as long as I don't get laid off again. Once that's done, we will be aggressively saving money at roughly the same rate we were paying off our debt. I also opened a family RESP this month, but the minimum initial funding for that is $1000, so I'm just waiting until my next pay cheque to put $1000 into it. In doing that before January, I can at least get some of this year's government grant for the account. Here's the October update:

Assets:
House - $270k
Condo - $155k
LRRSP - $16403
RRSP - $7748
Non-Registered - $98
Wife's RRSP - $1154
Chequing - $1852
Savings - $12
Total Assets - $452 267

Liabilities:
House Mortgage - $221 244
Condo Mortgage - $126 826
Student LOC - $6794
SUV Loan - $17 227
BMO LOC - $5420
Wife Student Loan - $4076
Credit Card - $2436
Total Liabilities - $384 023

Net Worth: $68 245


----------



## Fisherman30

November Update:

Assets:
House - $270k
Condo - $155k
LRRSP - $18 006
RRSP - $7832
Non-Registered - $109
Wife's RRSP - $1188
Chequing - $1793
Savings - $12
Total Assets - $453 940

Liabilities:
House Mortgage - $220 509
Condo Mortgage - $126 376
Student LOC - $6769
SUV Loan - $16 773
BMO LOC - $5025
Wife Student Loan - $3986
Credit Card - $1737
Total Liabilities - $381 175

Net Worth: $72 765


----------



## Fisherman30

Tax Question - So by my calculation between my Wife and I, we will owe about $3400 in taxes. This is mostly due to the fact that my employer deducts Alberta levels of income tax from my pay, but I live in Manitoba, where taxes are much higher. 

I have extra money I can contribute to an RRSP before taxes are due, but we also have about $16 000 of debt we are trying to get paid off, with an average interest rate of about 5%. Am I better off putting my extra money towards dept repayment, or putting it away in the RRSP to avoid the tax bill? I'm thinking the latter, but just wanted other opinions.


----------



## fireseeker

The classic advice in such situations is to make the RRSP contribution and throw the refund at the debt.
However, in your case there may not be a refund per se -- you will be reducing/eliminating the extra tax owing. So that may call for a different strategy.

The 5% interest rate gives me pause. Any higher and paying the debt would be hard to resist. I note you say this is the "average" rate. Eliminating the debt with higher rate seems logical.

One of the arguments for making the RSP contribution is that the money compounds without tax for a long time. However, your debt is also compounding. So, for me, these net out.


----------



## Fisherman30

December update: Out of curiosity, I had my realtor start sending me sold listings in my area, and the housing market for comparable houses to mine has absolutely skyrocketed. It appears houses comparable to mine are selling for $320k. To compensate for sale expenses, I’m just going to keep calling the value of my house $270k. My Wife is going back to work full time in January, which will help. My company is also resuming my savings plan contributions, which is 10% of my gross income. 

Assets:
House - $270k
Condo - $155k
LRRSP - $18 275
RRSP - $8207
Non-Registered - $113
Wife’s RRSP - $1300
Chequing - $3759
Savings - $12

Total Assets: $456 666

Liabilities:
House Mortgage: $219 760
Condo Mortgage: $125 913
Student LOC: $6791
SUV Loan: $16 093
BMO LOC: $4920
Wife Student Loan: $3880
Credit Card: $1992

Total Liabilities: $379 349

Net Worth: $77 317


----------



## Fisherman30

January Update: I'm taking a temporary pay cut starting at the end of this month, probably until the summer. At the same time, my Wife is now back to work full time. So, it's not terrible given how much financial pain a lot of other people are in, so I'll just take it in stride, and hopefully be back to my normal pre-covid pay sometime in the next year. Despite still having some debt, I am going to transfer $1000 to an RESP account for our 1-year old, and we are going to start putting $40/week into that account. That way, we can start getting ahead, and she can start taking advantage of receiving some government money for the RESP. I would like to make sure she is in the best shape possible when she goes to University or College. One question - I'm assuming I shouldn't count the RESP in my net worth going forward?

Assets: 
House - $270k
Condo - $155k
LRRSP - $19 001
RRSP - $8325
Non-Registered - $113
Wife's RRSP - $1300
Chequing - $4495
Savings - $12

Total Assets: $458 246

Liabilities:
House Mortgage - $219 022
Condo Mortgage - $125 460
Student LOC - $6744
SUV Loan - $15 637
BMO LOC - $4820
Wife Student Loan - $3780
Credit Card - $1353

Total Liabilities: 376 816

Net Worth: $81 430


----------



## Fisherman30

February Update: I was able to pick up some OT to get some extra cash, and my Wife being back to work full time is helping a lot. Right now, we are just holding off on any large purchases, and still focusing on getting the debt paid down.

Assets:
House - $270k
Condo - $155k
LRRSP - $19 271
RRSP - $8435
FRESP - $1079
Wife RRSP - $2508
Chequing - $3265
Savings - $637

Total Assets: $460 195

Liabilities:
House Mortgage - $218 283
Condo Mortgage - $125 006
Student LOC - $6697
SUV Loan - $15 182
BMO LOC - $4500
Wife Student Loan - $3680
Credit Card - $2123

Total Liabilities: $375 471

Net Worth: $84 724


----------



## Fisherman30

Hello Everyone - Despite the not-so-fantastic investment property my condo has turned out to be, I'm determined to learn from my mistakes and keep investing in rental properties. Any tips, given my specific situation, as to how I go about funding my next rental property? Do I refinance my house mortgage, and follow sort of the "BRRR" method? Do I just spend time saving the cash? Any recommendations are appreciated! Looking to finish getting my debt paid off, and building a bit of a safety cushion over the next year or so, but trying to come up with a plan. As a pilot, and seeing that I am employed in one of the most unstable industries around, I feel the need to create an income stream separate from my job, and build up that extra income over time. Thanks!


----------



## scorpion_ca

Have you thought of REIT ETFs such ZRE? I have ZRE in my TFSA and planning to add ZUT once it drops another 5%-10%? This investment is for monthly dividends even though I don't need it now....setting it up for future income.


----------



## Fisherman30

Thanks Scorpian, I'll be looking into those for sure.

March Update:

Yesterday, I locked in my mortgage for 3 years on the house at 1.75%. I had a variable mortgage, but given my bank's somewhat high prime mortgage rate, it wasn't on favourable enough terms to stick with the variable mortgage. I had Prime - 0.5%, which worked out to 2.1%, but with prime rate likely to go up in the near future, I am happy with 1.75% for 3 years. That will allow me to get roughly another $28 000 paid off my mortgage principle over the next 3 years (if I only make the minimum payments) at quite a low interest rate, which is really advantageous, being still fairly early in my 25-year ammortization. I got another layoff notice at the beginning of the month, but it has since been rescinded, and I am safe from layoff for at least another 3 months. Hopefully in that time, the vaccine distribution ramps up, and the flying will start getting busier. I've been spending a lot of time reading this month. I read the book "rich dad, poor dad". It was okay, but I found it very repetitive. I'm now reading "Making Money in Real Estate 3rd edition", which is extremely well written, has a lot of very helpful information, and focuses on Canada. My house seems to have gone up in value quite substantially, looking at latest sales in my neighbourhood. It's good to see, but I will still continue to value my house at 270k, for the purpose of this exercise. It would realistically sell for about 315k in the current market, but then there are big expenses associated with trading real estate. Also, my work savings plan is starting back up in April, matching 10% of my gross income, and increasing to 15% match in December. I plan to put the majority of that money in a TFSA to boost my liquidity, as the vast majority of my assets are real estate and RRSP's. I didn't make any big debt repayments in the last month, because I had to contribute a good chunk of money to RRSP's in order to avoid an income tax bill. I will also have to pay my property taxes in June, so I likely won't be able to make much more than the minimum payments on my debt until July. Thankfully, I've paid back a lot of my debt, and my monthly interest is now way lower than it was a couple of years ago. 

Assets:
House - $270k
Condo - $155k
LRRSP - $18 728
RRSP - $12 337
FRESP - $1448
Wife RRSP - $3070
Chequing - $1350
Savings - $262

Total Assets: $462 195

Liabilities:
House Mortgage - $217 505
Condo Mortgage - $124 520
Student LOC - $6647
SUV Loan - $14 726
BMO LOC - $4420
Wife Student Loan - $3580
Credit Card - $1737

Total Liabilities: $373 135

Net Worth: $89 060


----------



## Fisherman30

I'm thinking about setting up my mortgage to perform the Smith manouevre. Anyone think this is a bad idea? Seems like a winning strategy from what I can tell.


----------



## Fisherman30

April Update:

Didn’t go ahead with the Smith manoeuvre, because given the low interest rate I currently have on my mortgage, it wouldn’t be very advantageous.
Assets:
House - $270k
Condo - $155k
LRRSP-$19 511
RRSP - $12 650
FRESP - $1749
Wife RRSP - $3758
Chequing - $1697
Savings - $762

Total Assets: $465 127

Liabilities:
House Mortgage - $216 763
Condo Mortgage - $124 064
Student LOC - $6599
SUV Loan - $14 271
BMO LOC - $4340
Wife Student Loan - $3480
Credit Card - 1759
Total Liabilities: $371 276

Net Worth: $93 851


----------



## Fisherman30

May Update:

Assets:
House - $270k
Condo - $155k
LRRSP - $18 493
RRSP - $12 329
FRESP - $1891
Wife RRSP - $3988
Chequing - $1527
Savings - $1137
Work Savings Plan - $700

Total Assets: $465 065

Liabilities:
House Mortgage - $215 980
Condo Mortgage - $123 596
Student LOC - $6550
SUV Loan - $13 815
BMO LOC - $3930
Wife Student Loan - $3380
Credit Card - $2440
Total Liabilities: $369 691

Net Worth: $95 374


----------



## Fisherman30

Can someone talk some sense into me? I've been paying off $1000/month+ towards debt for a long time now, and now I want this "gadget" that's not really necessary, but would be nice to have for a hobby of mine. It's $450, and I'm having difficulty stomaching parting with $450 for something not totally essential. Should I just say screw it and treat myself this month?


----------



## milhouse

It's such a balancing act. Money should be enjoyed but preferably not at the expense of putting your financial security/goals at risk. However, even if it's not essential, I think there's an argument to be made for a purchase if it's going to be used/enjoyed regularly. But if there's a chance the gadget ends up sitting there gathering dust, you might want to reconsider (at the risk of being on the receiving end of repetive spousal torment any time that gadget is seen and reminded about making a wasteful purchase... personal experience!  )


----------



## Fisherman30

Lol, exactly. That's kind of how I feel about it. This particular item would be used fairly regularly. (Once a month or so, and for one of my main hobbies). It's an electric, all in one, automated beer brewing device called a "brewzilla". It would just make home brewing so much more pleasant.


----------



## scorpion_ca

It depends on your mindset. I promised myself in 2013 that I would be delaying gratification until I reach 40 and hopefully become a millionaire by then. I don't buy stuff unless I really need it and buy most of the stuff on sale.

I read somewhere that Warren Buffett usually calculates the future value with 30 years before buying anything. $450 @ 6% with 30 years to grow would be $2,600. Do you want to spend $2,600 for the brewzilla?


----------



## Fisherman30

scorpion_ca said:


> It depends on your mindset. I promised myself in 2013 that I would be delaying gratification until I reach 40 and hopefully become a millionaire by then. I don't buy stuff unless I really need it and buy most of the stuff on sale.
> 
> I read somewhere that Warren Buffett usually calculates the future value with 30 years before buying anything. $450 @ 6% with 30 years to grow would be $2,600. Do you want to spend $2,600 for the brewzilla?


That's a good way to look at it. The opportunity cost over time is much more than the sticker price of $450. I also have been delaying gratification for the last couple of years while paying off debt, and I've seen a few things happen in that time that has not necessarily made me change how frugal I am, but has just given me a little more perspective. One of those things was having a friend of mine pass away in his 30's. You never know when your time is up. Being able to retire as early as possible is extremely important that so you can enjoy as many years with financial freedom as possible, but I also feel that you shouldn't deprive yourself of too much.


----------



## nobleea

Fisherman30 said:


> Being able to retire as early as possible is extremely important that so you can enjoy as many years with financial freedom as possible, but I also feel that you shouldn't deprive yourself of too much.


Absolutely don't be frivolous, but you only live once. You'll never be 35 again.
A guy in university was always talking about pleasure equity. A non-cash equity that is gained and accumulated by having something you cherish. For example, buying that car 2 yrs earlier than you planned. That's 2 yrs of pleasure equity. Not worth much at the bank of course. I've had several friends in the early 40's be hobbled by chronic injuries, require surgery for slipped discs or whatever and have never been the same. It's a balancing act.


----------



## Fisherman30

Thanks everyone, I’ll continue to think about it. I have a few things gathering dust at the house right now, which I think I will try to sell. Also, I have been guaranteed not to be laid off again until at least October 31st, my pay has increased a bit, and work is getting busier. I think by the end of October, I will be back up to my pre-pandemic pay. So I’m also starting to feel a little more financially secure now that the end of the pandemic is almost here.


----------



## milhouse

Fisherman30 said:


> I have a few things gathering dust at the house right now, which I think I will try to sell.


When my inlaws downsized from a house to a condo, my SIL was in charge of selling all the stuff that they wouldn't need at the condo. And I can't believe she was able to sell almost everything and what people were willing to pay for stuff. I'm so out of the loop as I thought Craigslist was still THE place to sell stuff but apparently Facebook Marketplace is the new IT tool to sell stuff.


----------



## Fisherman30

Okay, I caved and got the Brewzilla. I've been selling odds and ends this week on kijiji, and I also plan to pick up some OT this month to make up for it. I also have a massive update on our goals. Our plan is to move to Southern Ontario to be closer to family, which will be good for our Daughter, and any other kids we have in the future. I am able to live basically anywhere in the country with my job, and actually, being closer to Toronto will make my life much easier. We're thinking of moving about an hour to 1.5 hours North/Northwest of Toronto, maybe Georgian bay area. I grew up on the water, and would like my kids to be able to have a similar experience growing up. We would like to be less than two hours from Pearson. My Wife and I have already sat down, and written out our goals, as well as rough timeframes. I absolutely do not want to pay the current prices that we're currently seeing for housing in Ontario, and if prices stay the way they are, or continue to increase over the next year our two, we will most likely stay put. I'm not willing to delay my retirement by 10 or more years to achieve this goal. So here are our rough goals:
1. Pay off all debt, except for mortgages. Will be done by March, 2023 at the very latest. Most likely much sooner. This is based on my current COVID reduced pay (currently earning about 40% less than pre-covid. Expecting to be back to pre-covid pay by the Fall). Assuming I get back to pre-covid pay in the Fall, I expect all of our non-mortgage debt to be gone within 6 months to a year.
2. Save $36 000 in TFSA as an emergency fund.
3. 75% of what was previously allocated to debt repayment will go to filling up TFSA, and then to non-registered accounts. Money saved in my employment savings plan, and my Wife's employment savings plan will be put in RRSP.
4. Once we have $50 000 cash in addition to the $36 000 emergency fund, we can consider buying a new house. This will be 2024 at the earliest, our condo mortgage will be paid down to $106 000 by June, 2024, and the house mortgage will be down to $187 200. If we sold the house for $270 000, and the condo for $155 000, that would leave us with $131 800. Houses like ours are currently selling for well over $300 000, but I'm just trying to be conservative, and trying to account for closing expenses, etc. Let's call it $100 000 in the bank after selling both properties, in addition to the $50 000 cash savings, so we would have $150 000 to put towards a down payment. I don't really want to ever pay more than $500k for a house, and I also don't want to settle for a house for $500k that we're not absolutely in love with. So we'll see what the market does. 

You're probably wondering where all of this money will come from in a relatively short period of time. Currently, my employer is matching 10% of my gross pay into the savings plan, and will increase to 15% match in December. So 30% of my gross pay will be going straight to savings. I can choose whether this money goes to TFSA, non-registered or RRSP accounts, or any combination of the three, and I can transfer the money out into my personal accounts outside the employer savings plan once per year for non registered, and twice a year for registered. So especially once I get back to my pre-covid gross pay, I should be able to stash money away fairly rapidly. 

Any tips are more than welcome!


----------



## scorpion_ca

I wouldn't put emergency fund in TFSA as TFSA should be used for higher growth ROR. I made the same mistake from 2009 to 2012.


----------



## Fisherman30

scorpion_ca said:


> I wouldn't put emergency fund in TFSA as TFSA should be used for higher growth ROR. I made the same mistake from 2009 to 2012.


Ah yes, good point, thanks! I suppose an emergency fund should be invested more conservatively in a non-registered account, since I may need to use it on short notice.


----------



## Fisherman30

June Update:

We broke $100k net worth! I realize this is peanuts compared to what's required for financial freedom, but I feel like this was a big number to get past. Things are picking up at work finally, and my Wife got a 10% raise to take effect in September, which will be a big help. I also got about a 15% property tax rebate this month (Just over $650), which I put directly onto my LOC. I also sold a bunch of stuff that was sitting around in the basement to help recoup some of the money I spent on hobby stuff this month. 

Assets:
House - $270k
Condo - $155k
LRRSP - $19 642
RRSP - $13 074
FRESP - $2147
Wife RRSP - $4360
Chequing - $1194
Savings - $1137
Work Savings Plan - $1488

Total Assets: $468 042

Liabilities:
House Mortgage - $215 207
Condo Mortgage - $123 137
Student LOC - $6502
SUV Loan - $13 130
BMO LOC - $3200
Wife Student Loan - $3280
Credit Card - $2275

Total Liabilities: $366 731

Net Worth: $101 311


----------



## Fisherman30

Fisherman30 said:


> Ah yes, good point, thanks! I suppose an emergency fund should be invested more conservatively in a non-registered account, since I may need to use it on short notice.


Speaking of emergency fund. Glad I had that $1300 set aside as my emergency fund. A couple days ago, my Wife went to close the garage door, it jammed, buckled one of the tracks, and the door came crashing down. Thankfully no one was hurt, and neither of our vehicles were damaged. $724 to fix the door though. Ouch.


----------



## Fisherman30

July Update:

We spent about $1000 this month travelling to visit my parents and in-laws over about a week and a half who we haven't been able to see for about a year. It obviously impacted our finances, but we decided it was worth it. We have a property tax bill coming of $4900 which is due the end of September. I've been doing overtime here and there, and plan to do enough overtime by the end of September to cover this. After that tax bill is paid, I am going to return to rapidly paying off debt. We also managed to pull our daughter out of day care for July and August, since my Wife is a teacher, and they gave the spot to another family who only needs it for the summer. We still get to keep the spot secured at the daycare when my Wife goes back to work, and it saves us about $1200 over the summer. 

Assets:

House - $270k
Condo - $155k
LRRSP - $20 649
RRSP - $12 927
FRESP - $2437
Wife RRSP - $4900
Chequing - $2193
Savings - $0
Work Savings Plan - $2359

Total Assets: $470 465

Liabilities:
House Mortgage - $214 422
Condo Mortgage - $122 667
Student LOC - $6453
SUV Loan - $12 673
BMO LOC - $2750
Wife Student Loan - $3180
Credit Card - $2643

Total Liabilities: $364 788

Net Worth: $105 677


----------



## peterk

Your daycare only costs $600/month?? Sheesh I pay $1250!


----------



## Fisherman30

peterk said:


> Your daycare only costs $600/month?? Sheesh I pay $1250!


Hey Peter, sorry for the delay. Yep, $600/month in Manitoba, and $300 once she is potty trained. We do pay higher income taxes in Manitoba though than pretty well every other province, so I guess these things balance out a bit.


----------



## Fisherman30

August Update:

Did a lot of OT last month, so it looks like I should have no problem paying cash for my property tax bill next month.
Assets:

House - $270k
Condo - $155k
LRRSP - $20 783
RRSP - $13 113
FRESP - $2654
Wife RRSP - $5180
Chequing - $4011
Savings - $0
Work Savings Plan - $3296

Total Assets: $474 037

Liabilities:
House Mortgage - $213 646
Condo Mortgage - $122 206
Student LOC - $6405
SUV Loan - $12 216
BMO LOC - $2700
Wife Student Loan - $3080
Credit Card - $1913

Total Liabilities: $362 166

Net Worth: $111 871


----------



## Fisherman30

September Update:

Found out this month I will be getting promoted back to my pre-covid position, so I will be back to making about 40% more than I am now starting December 1st, thankfully. So I expect sometime around Q2, 2022, I should have the remainder of our debt paid off, aside from the SUV loan and mortgages. Possibly sooner, if I do enough OT. 

Assets:
House - $270k
Condo - $155k
LRRSP - $20 957
RRSP - $13 283
FRESP - $2851
Wife RRSP - $5631
Chequing - $3271
Savings - $2000
Work Savings Plan - $4358


Total Assets: $477 351

Liabilities:
House Mortgage - $212 869
Condo Mortgage - $121 743
Student LOC - $6356
SUV Loan - $11 759
BMO LOC - $2650
Wife Student Loan - $2980
Credit Card - $1632

Total Liabilities: $359 989

Net Worth: $117 362


----------



## milhouse

Fisherman30 said:


> September Update:
> 
> Found out this month I will be getting promoted back to my pre-covid position, so I will be back to making about 40% more than I am now starting December 1st, thankfully.


Good stuff!


----------



## Fisherman30

milhouse said:


> Good stuff!


Thanks Millhouse! Looking back on my early posts in this thread, I remember feeling like I had an impossible hill to climb. I'm finally starting to see faster and faster progress, which feels great.


----------



## Fisherman30

Well, sadly, my furnace just failed, and it will cost about $5400 to replace (still getting quotes, haven't really negotiated yet, but I at the most, I might be able to knock them down a few hundred $$. HVAC companies have high overhead costs, so I'm thinking there won't be a huge amount of wiggle room in negotiations.) So, I think I will pay for the furnace with my credit card, and bust my butt doing OT this month to make up most of the amount. Any extra that I haven't earned by the time my credit card bill is due, I will transfer from my line of credit, and keep busting my butt doing OT to get that debt paid off. Also, someone has expressed interest in buying my condo (rental property) privately. It would be great if I can get a deal done on that privately. I also just paid my $4800 property tax bill with cash that I had in the bank at the end of the last month. 

Assets:
House - $270k
Condo - $155k
LRRSP - $20 663
RRSP - $13 410
Non-Registered - $278
FRESP - $3075
Wife RRSP - $5750
Chequing - $1304
Savings - $250
Work Savings Plan - $5170

Total Assets: $474 900

Liabilities:
House Mortgage - $212 000
Condo Mortgage - $121 270
Student LOC - $6307
SUV Loan - $11 301
BMO LOC - $2610
Wife Student Loan - $2880
Credit Card - $2622
Upcoming Furnace Expense - $5400

Total Liabilities: $364 390

Net Worth: $110 510


----------



## Fisherman30

Hi Everyone,

Looking for advice once again. We have a 2017 Kia Sorento we bought new for $40k, thinking it would be a nice reliable vehicle, Wife would be nice and safe etc. Well, 6 weeks after the warranty ran out, and with only 95 000 km, the check engine light is on, and it needs a variable valve timing motor cover/sensor replacement. Probably looking at about $700 for repair. Additionally, the engines on these things have been spontaneously failing catastrophically and even catching fire in some cases. Needless to say, I'm a bit concerned about this. We still owe $11k on the car loan, and they are being listed for about $20-$22k. 

Any advice on what I should do? I don't really want this thing in my possession if/when the engine bites the dust. Kind of thinking of just going to the Toyota dealership and trading it in for a 2017/2018 Toyota Highlander or something. If the dealership gave me maybe $18k for it, the loan would be paid off, I'd have $7k left over, I get a highlander for $30k, put it on my line of credit, and pay it off ASAP busting my butt doing OT. 

Certainly not an ideal situation, but I don't need the engine on this thing failing on the highway in the middle of winter while my wife is taking our 2 year old to daycare or something.

Thanks!


----------



## latebuyer

It seems like your wife's safety is really important to you so i would get the car. However i would advise you to do your research on the new model to ensure you have a reliable vehicle this time. Sorry i don't know anything about car loans.


----------



## latebuyer

latebuyer said:


> It seems like your wife's safety is really important to you so i would get the car. However i would advise you to do your research on the new model to ensure you have a reliable vehicle this time. Sorry i don't know anything about car loans.


I will add i drive a 1990 toyota corolla and its been very reliable with no repairs.


----------



## Fisherman30

latebuyer said:


> I will add i drive a 1990 toyota corolla and its been very reliable with no repairs.


Yep, I have a 2013 Corolla with 180 000 km, and it's still like new. Haven't had one repair done on it. I change my own oil every 8000 km, the odd air filter, and that's it.


----------



## peterk

I am not aware of Kia/Hyundai being unreliable. They seem great to me. Perhaps you got a lemon? What are you reading on the internet about "engines spontaneously failing"?

I'd probably just fix it. It's only $700. Regular breakdown maintenance.

If you're so concerned I'd probably go out and buy a brand new car. Not a used Toyota. Maybe you're a new car person. Lots of people are, and trade in every 5 years at 100k because of "peace of mind".

Also have you been to a dealer lately? There's a severe shortage of everything. Used cars are barely cheaper than new. And new cars you have to wait 6 months to get delivered (or pay $5k markup to buy whatever is in stock on the lot, which is almost nothing and dibs'd immediately by fast-acting buyers).


----------



## Fisherman30

peterk said:


> I am not aware of Kia/Hyundai being unreliable. They seem great to me. Perhaps you got a lemon? What are you reading on the internet about "engines spontaneously failing"?
> 
> I'd probably just fix it. It's only $700. Regular breakdown maintenance.
> 
> If you're so concerned I'd probably go out and buy a brand new car. Not a used Toyota. Maybe you're a new car person. Lots of people are, and trade in every 5 years at 100k because of "peace of mind".
> 
> Also have you been to a dealer lately? There's a severe shortage of everything. Used cars are barely cheaper than new. And new cars you have to wait 6 months to get delivered (or pay $5k markup to buy whatever is in stock on the lot, which is almost nothing and dibs'd immediately by fast-acting buyers).


Thanks Peter, those are all good points. I actually brought it in to the dealership today, and it looks like they might be able to get me a "good will warranty" repair, since my warranty only ran out 2 months ago, and I had them inspect it at the end of August when the warranty was running out to make sure nothing was wrong. So I might not have to pay anything at all for the repair. If I do have to pay out of pocket, it will only be $350, not $700.

It has mostly been the 2011-2015 Kia Sorento's that were having the engine failures. It was because of bearing failures, due to a manufacturing problem, where pieces of metal from the manufacturing process were left in the crankcase. They apparently fixed this problem for 2016 and onwards. Mine's a 2017. However, I also realized that I am entitled to a lifetime engine warranty if my engine fails due to bearing failure, as a result of a class action lawsuit. So maybe I'll just calm down and hang on to it.

I did check out some dealerships, and it is insane. In fact, I encountered one Toyota dealership here that was completely sold out of all SUV's and trucks. One thing I did realize though is that luxury versions of effectively the same vehicle seem to be the best way to go if you're buying used. For example, a 2017 Lexus RX 350 with low mileage is the same price as a 2017 Toyota Highlander with similar mileage. They are both mechanically almost identical, aside from the Lexus having better brakes and suspension. The Lexus also has a nicer interior (full leather etc.). The Lexus just depreciates much more rapidly.


----------



## peterk

I think mine had the same engine problem recall (2013 Santa Fe). But I didn't actually have an engine problem, just the recall check.

Yeah nobody wants an old luxury car, unless it's a sports car/collectible (not lexus) so that is not surprising.

Seems like trading your used car in nowadays is a decent deal though, if you want to order a new one and wait for it to be delivered (many months) and pay MSRP. Though I imagine the used car premium these days is only as much or less than the typical "dealer discount" - now a dealer markup - from precovid normal times.

I've concluded, for now, to wait it out and try to not get another vehicle until supply and pricing returns to normal (perhap not till 2023). Though I don't know if I can last that long (want a larger SUV or van).


----------



## Fisherman30

Alright, good news. The Kia dealership is doing a "goodwill warranty repair" since my warranty ran out so recently. So the job is getting done free of charge, which is great.


----------



## mind_business

Just reading your diary here for the first time. You've made some decent progress in 3 years. One thing I'll say from experience is that once you have paid down all the 'bad debt', and have at least a year's worth of emergency savings in place, the amount of stress in your life will drop dramatically. I'm curious as to why you still own the rental condo? Going back 3 years you mentioned that you would sell it once your renters move out. Has that situation improved, where the condo is not a money maker for you?

Also, I'm curious as to your approx age? It helps to put your financial journey in perspective. If I had to guess, I'd say you guys are in your early 30's??? That's the age I was at when we had approx the same net worth that you have now.


----------



## afulldeck

mind_business said:


> Just reading your diary here for the first time. You've made some decent progress in 3 years.


It is fantastic progress from (21,148) in Jan 2019 to 110,510 in Oct 2021 all in 33 months....


----------



## mind_business

afulldeck said:


> It is fantastic progress from (21,148) in Jan 2019 to 110,510 in Oct 2021 all in 33 months....


Sure. I didn't say it was 'bad' progress.


----------



## Fisherman30

mind_business said:


> Just reading your diary here for the first time. You've made some decent progress in 3 years. One thing I'll say from experience is that once you have paid down all the 'bad debt', and have at least a year's worth of emergency savings in place, the amount of stress in your life will drop dramatically. I'm curious as to why you still own the rental condo? Going back 3 years you mentioned that you would sell it once your renters move out. Has that situation improved, where the condo is not a money maker for you?
> 
> Also, I'm curious as to your approx age? It helps to put your financial journey in perspective. If I had to guess, I'd say you guys are in your early 30's??? That's the age I was at when we had approx the same net worth that you have now.



Thanks for the comments. We're both 31 years old. We still have the condo, and it's still losing us about $200/month, which is not great. Still have the same tenants living there. It's steadily going up in value, so I think I might just hang on to it. When they move out, I might hang on to it and rent it out for significantly more than they're currently paying for rent. The rental market has gone up quite a bit since they first moved in. We'll see what happens. I might have someone interested in buying it privately, so I would definitely be interested in that if it pans out.


----------



## Fisherman30

Well, I took a bit of a beating over the last month. New furnace was $5400, car repairs were around $450, had a plumbing issue at my rental property that was $610 to have fixed while I was away. On the bright side, I will be getting a 56% raise December 1st, and a cheque for about $5k at the end of December. My employer will also be increasing my savings plan match from 10% to 15% effective the end of December. So effectively, 30% of my gross income will be going to savings, and I'll be making at least $2k/month, probably $2500/month more after tax without doing OT. Each day of OT would be between $500-$1000, so hopefully I can pick up a fair bit of OT in the new year and finally get all of my debt and car loan erased. Once that happens, I'll just be on a mission saving as much money as possible. I'll probably keep that 30% in my savings to go to retirement, and our extra money can go towards building a $25k emergency fund that we'll keep in a high interest savings account that could be accessed immediately if necessary. I also started a "sinking fund" in my non-registered account with Questrade. This is to cover my property tax bill each year. I've just got it invested in very safe stuff that also pay a small dividend. Better than paying into my bank's "property tax account" every month and basically giving the bank an interest free loan. I also plan to start a "sinking fund" for vehicle repairs, house repairs, gifts, vacations, furniture/appliances, and recreational spending. I'll put a certain amount of money into each of these accounts each month to cover any costs for things that or somewhat more spontaneous in nature. (I have some reno's I'd like to get done, including finishing my basement, upgrading plumbing, electrical, etc.). I basically don't want my emergency fund being used for vehicle repairs, home repairs, and things like that which should be expected to be encountered over time. I want my emergency fund to be there for true emergencies. Like my house burning down, me getting injured, or other things like that that would be completely out of my control. 

Assets:
House - $270k
Condo - 155k
LRRSP - $21 209
RRSP - $13 853
Non-registered - $730
FRESP - $3361
Wife RRSP - $6382
Chequing - $10 971
Savings - $501
Work Savings Plan - $6340

Total Assets - $488 347

Liabilities:

House Mortgage - 211 302
Condo Mortgage - $120 805
Student LOC - $6258
SUV Loan - $10 614
BMO LOC - $8070
Wife Student Loan - $2780
Credit Card - $12 780

Total Liabilities - $372 609

Net Worth - $115 739


----------



## milhouse

Don't think I've heard the term sinking fund before. Had to look that one up.


----------



## Fisherman30

Alright, we now have eight different sinking funds, plus our emergency fund. The eight sinking funds we created are:

1) Property Tax - $98/week
2) Home Renovations/Repairs - $96/week
3) Vacations - $58/week
4) Wife's Recreation - $65/week
5) My Recreation - $65/week
6) Furniture/Appliances - $39/week
7) Gifts/Donations - $29/week
8) Vehicle Maintenance/Repairs - $32/week

We won't be putting much into our emergency fund until our debt is paid off, which I'm hoping will be this Spring. Once the debt is paid off, we will try to accumulate about $25k in it as quickly as possible. This coming year will be exciting, as our net worth should grow significantly faster once we are no longer losing money to interest on these loans. 

We're starting these contributions on January 3rd, once I've got my raise. These sinking funds will help us be prepared for surprise expenses, that so if we're faced with any surprise expenses, we aren't stuck putting it on the line of credit, and I end up busting my butt doing OT to cover it within the month. We made separate recreation accounts for my Wife and I since we both have our own different things we spend money on. My Wife gets her hair done, nails, has some of her own hobbies etc. and I have some of my own hobbies etc. The thing with these recreational things is that it's hard to budget on a monthly basis, because my Wife gets her hair done once every 6 months or so, and the budget for these kinds of things are different every month, and we find we often don't end up sticking to the budget. Either we spend almost nothing on recreation in a given month, or we end up going over what we budgeted. So having a fixed amount going into these accounts will give a specific amount of money available at any given time, and just makes it a lot easier for organizing the finances. My Wife was pretty happy with this idea as well. We have monthly budgets for things we enjoy together, like different events, going to restaurants etc.


----------



## Fisherman30

December Update:

Hopefully, with the travel restrictions that keep changing, and me being a pilot, I won't be demoted/laid off again. This is the first month with my 55% raise since before COVID when I was laid off, and recalled to work to a demoted position. I'm just back to my full pre-covid pay starting this month after 18 months of significantly reduced income. Fingers crossed. I haven't started putting anything in the sinking funds yet. I'm just waiting to get more debt paid off, and also to see what happens with my job. Thankfully, this month, we will make about $5000 over and above all of our expenses, so that allows me to pay back pretty much everything I took off of the line of credit to pay for the furnace. Assuming I don't get demoted/laid off before March, I should be able to make enough money to pay off all of our debt except the SUV loan and mortgages. 

Assets:
House - $270k
Condo - $155k
LRRSP - $20 578
RRSP - $13 506
Non-Registered - $1102
FRESP - $3490
Wife RRSP - $6622
Chequing - $192
Work Savings Plan - $7174

Total Assets - $477 664

Liabilities:
House Mortgage - $210 512
Condo Mortgage - $120 329
Student LOC - $6208
SUV Loan - $10 155
BMO LOC - $8000
Wife Student Loan - $2680
Credit Card - $2756

Total Liabilities - $360 640

Net Worth - $117 024


----------



## latebuyer

Hopefully omicron is a temporary blip and you won't be laid off. Just keep on focusing on your goals and adjust if necessary.


----------



## Fisherman30

latebuyer said:


> Hopefully omicron is a temporary blip and you won't be laid off. Just keep on focusing on your goals and adjust if necessary.


Thank you! They just announced yesterday they're calling back more laid off pilots in April, so it must not be looking too bad down the road, thankfully.


----------



## Fisherman30

January update:

Busted my butt last month and managed to earn $13 700 (before tax, and not including my Wife's income or rent from the condo). Combined, we pulled in about $20 000 gross. I won't earn anywhere close to that this month, because our daycare decided to close this entire week, and all of next week, due to having no staff. They are all isolating. This means I have no chance to be able to pick up OT on my days off. On the bright side, I get priceless time spent with my 2 year old Daughter, which to me is worth more than money. I'm making enough now, without doing OT, that we aren't hurting anyways. I did spend a solid chunk of money this month on things that we had been putting off for the last couple of years. I spent about $1000 on a new wardrobe, and a new fireplace/TV stand. For what I got, $1000 was a good deal....Still though, $1000 is $1000. I also paid off the remainder of my Wife's student loan all in one shot a few days ago. It wasn't the highest interest rate loan. It's just a thing that has been weighing on my Wife for a number of years now, and I wanted her to feel relieved of the debt. Whenever the daycare reopens, I plan to do as much OT as possible, and hopefully pay off my line of credit, and student line of credit in a matter of a few months. Then, I will tackle the SUV loan. It's only 0.9% interest, and mathematically, I would be further ahead to invest the money I would use to pay off the SUV. It's a mental thing though. I just want to be debt free ASAP. Once all of our debt is paid off, combined with the fact that my workplace is matching 15% of my gross income into savings, and the fact that I will put all of the money we were spending on debt repayment into savings, I think we should accumulate wealth very quickly. We want to move into a bigger house at some point in the near future, but it has to be done in a very calculated manor, and not in a way that will compromise our long term financial wellbeing. The housing market is so high right now, that the only way I can see us moving into a bigger house is by saving a massive down-payment. I can't stomach the prospect of having $400 000+ in mortgage debt associated with just my principle residence. At some point, I will update the value of my house for net worth calculation accuracy, but for now, I'll leave it how it is, for easier tracking on how I'm doing from a savings/debt repayment perspective. Houses in my area that are in worse shape than mine are now going for $50k more than I'm calling the value of mine. Once my debt is all paid off, I'll update this number. 

Assets:
House - $270k
Condo - $155k
LRRSP - $20 940
RRSP - $13 907
Non-Registered - $1525
FRESP - $3820
Wife RRSP - $6920
Chequing/Savings/Sinking Funds - $2657
Work Savings Plan - $9100

Total Assets - $483 869

Liabilities:
House Mortgage - $209 730
Condo Mortgage - $119 862
Student LOC - $6159
SUV Loan - $9697
BMO LOC - $7900
Credit Card - $3818

Total Liabilities - $357 166

Net Worth - $126 703


----------



## Fisherman30

Just renewed the mortgage on my condo today, and got a 5-year variable closed mortgage at Prime - 1.4%. Which at my bank works out to 1.2%. Pretty happy with that. The penalty for paying off early (no matter how early) is 3 months interest, plus a $200 admin fee. Which is a lot more bearable than the penalty if I went with a fixed mortgage. It's also a big change from my fixed rate mortgage that just ended, where my interest rate was 2.94%. It's a difference of $100/month. This combined with the gradual phasing out of the education property tax in Manitoba should put me very close to cashflow positive, if not slightly in the green. If my tenants move out in the near future, I might renovate the unit myself, and try to make it more desirable for someone looking to buy. I'm relatively handy with flooring, painting, trim work etc. So I think I could make the place look great for about $5-6000.


----------



## latebuyer

Fisherman30 said:


> Just renewed the mortgage on my condo today, and got a 5-year variable closed mortgage at Prime - 1.4%. Which at my bank works out to 1.2%. Pretty happy with that. The penalty for paying off early (no matter how early) is 3 months interest, plus a $200 admin fee. Which is a lot more bearable than the penalty if I went with a fixed mortgage. It's also a big change from my fixed rate mortgage that just ended, where my interest rate was 2.94%. It's a difference of $100/month. This combined with the gradual phasing out of the education property tax in Manitoba should put me very close to cashflow positive, if not slightly in the green. If my tenants move out in the near future, I might renovate the unit myself, and try to make it more desirable for someone looking to buy. I'm relatively handy with flooring, painting, trim work etc. So I think I could make the place look great for about $5-6000.


Unfortunately if analysts are right interest rates may be going up as soon as next week. Hopefully you will still save some money and the penalty is good.


----------



## Fisherman30

Well, I'm finally listing the condo for sale. The realtor figures I should get about $170k for it. I've looked at all of the comparable sales over the last year, and he is correct in his assessment. Not great, considering that's what I paid for it 8 years ago. Unfortunately for me, I bought it at the absolute peak of the market in 2013, and subsequently, condo fees increased dramatically, and the new condominium act in Manitoba made Condos less desirable to own. In any case, I will be rid of it, and I should be left with enough cash after the sale to pay off all of my remaining debt, except the house mortgage. Once the condo is sold, and my debt is paid off, I will easily be able to start doubling my mortgage payments on the house every month, while also saving money at a good rate. As lousy as the situation is with not being able to get more for the condo, I am looking forward to the future.


----------



## Fisherman30

Looking for some input on this. My Wife and I are planning to have another kid soon, and we are looking to get a slightly bigger home with more property just outside the city, and somewhere not on a busy street like we are now. I'm always worried about our toddler opening the front door, and being right on a busy street. Our house apparently has increased in value quite substantially since we bought it 6.5 years ago, with it most likely being able to sell for about $330 000 right now. We currently owe $208 000 on the mortgage. We are thinking about possibly using a bridge loan from the bank to cover a 20% down-payment on a newer, bigger house, and then using the proceeds of our sale to pay off the bridge loan. Our mortgage is currently locked in at 1.75% until Summer, 2024, and the bank said they could port the mortgage, and allow me to continue with a fairly low interest rate. $650 000 is the absolute maximum I would want to spend, and for that, I would get quite a large property, multi-level home with tonnes of space. After $130 000 down, that would leave me with a $520 000 mortgage, which is a lot. At the same time, I'm making enough now that with 2 days of overtime, I can make up the difference between my current mortgage, and a $520 000 mortgage. If I lock in a mortgage rate for the next 4 months, that gives me enough time to continue paying off all of my remaining non-mortgage debt before doing this transaction. We wanted to move to Southern Ontario to be closer to family, but housing costs are just too high for what we would be getting for the price. 

Am I crazy?


----------



## afulldeck

So I've been a WFH guy for 20 years. At one point, I lived outside the city in a calm, quiet neighborhood street. However, 1 block over was a major county road. Speeds near 80Km. One day while on a conference call I look out my window down to our street (My office was on the second floor) to see a toddler running down the street towards the major county road. I yelled "holy ****" without putting the phone on mute. Then ran down stair and down the road just catching this toddler when he was about 10 feet from that county road. I then went door to door for find the parents of this child. About 10 homes down our street, a very young mom came to the front door to answer it. When she saw her child she turned white as a sheet, nearly fainted and panicked while saying thanks for returning him. Interesting time.


----------



## latebuyer

I’m wondering if overtime is something you’d want to continue doing indefinitely, particularly when you have a new baby. Something to consider if it’s integral to your plan. Also will that work continue to be available?


----------



## Fisherman30

latebuyer said:


> I’m wondering if overtime is something you’d want to continue doing indefinitely, particularly when you have a new baby. Something to consider if it’s integral to your plan. Also will that work continue to be available?


Well, I wouldn't be reliant on overtime. Even without it, I would still have about $1500/month leftover, even after contributing 15% of my gross pay to my savings plan. As far as the work being available - I think it should be. The company survived covid, which is a good sign I think.


----------



## latebuyer

You also have to consider interest rates are going up and that means mortgage rates are going up, variable or fixed. You need to factor that in your plan as you won’t be paying what you have now.


----------



## Fisherman30

latebuyer said:


> You also have to consider interest rates are going up and that means mortgage rates are going up, variable or fixed. You need to factor that in your plan as you won’t be paying what you have now.


Yes, that's a good point. I currently have 1.75% fixed on my current mortgage until sometime in 2024, and they said they would port this with newer rates. I'm hoping I would be able to get a fixed term for another 5 years at a relatively low rate, but that's something I'm definitely going to be watching. I'm thinking if I get pre-approved this week, then I should hopefully be able to lock in a fairly low rate for 5 years.


----------



## Fisherman30

February Update:

Things are going fairly well at the moment. We're hoping to sell the condo and the house at approximately the same time. We might sell the house first, and move into a new house before selling the condo. My logic being that the real estate market will probably heat up even more later in the Spring/early Summer, and buying a bigger house now could allow us to get a better deal than in the Summer. Hopefully around June, I can get top dollar for the condo. My house seems to be worth probably $50k more than what I'm valuing it at here, but that's just speculation. I'll update the values once it actually sells. 

Assets:
House - $270k
Condo - $155k
LRRSP - $21 035
RRSP - 14 224
Non-Registered - $1930
FRESP - $4095
Wife RRSP - $7200
Chequing/Savings/Sinking Funds - $3231
Work Savings Plan - $11 252

Total Assets - $487 967

Liabilities:
House Mortgage - $208 947
Condo Mortgage - $119 394
Student LOC - $6109
SUV Loan - $9237
BMO LOC - $7800
Credit Card - $5368

Total Liabilities - $356 855

Net Worth - $131 112


----------



## Fisherman30

Interested to hear others' thoughts on this. I'm having an internal debate about buying a bigger house. We don't live in the absolute best of areas, no driveway, back lane access. A teenager was randomly thrown onto the busy street into a transport going 50 km/h(he survived thankfully, but was obviously seriously injured) walking home from school. I'm not extremely comfortable raising my kids at this particular location. That's the non-tangible value of moving. Being in a nicer, safer neighbourhood with lots of room for kids to play etc. is appealing to me. On the financial side of it: I bought my house for $265 000. I owe $208 000 on it. I could have it paid off in about 7 years once my other debt is paid down (which should be in a few months), and I would be debt/mortgage free at 39 years old. If I spend $650 000 on a house now, and have a $520 000 mortgage (assuming I can get enough from the sale of the condo and house to make a 20% downpayment), at 2.5% interest (I don't currently have that, just assuming what my interest rate would be approximately), my payments would be $2329/month, not including property tax. And that's taking 25 years to pay it off. Also, if I just made those minimum payments, I would pay $698 826, in addition to the $130 000 downpayment. So the house would really cost me about $829 000. With that said, in 25 years, that house would probably be worth a heck of a lot more than $829 000. If I were to stay in my current house, pay off the mortgage in 7 more years, and invest the $2329/month I would have been paying for the bigger house for the remaining 18 years at even a 5% average return, I would have $813 000 saved, in addition to the value of the house I already have. Another thought is that if I pay off my house in 7 years, and max out my TFSA with my work savings plan, I could use the funds from my TFSA, and fully paid off house to make a $400-$500k downpayment on a nicer house in about 7 years, and then I could get away with a much smaller mortgage. In another thread, I was talking about moving to Calgary. We were even considering closer to Toronto. My options for bases to work out of are either Toronto or Calgary. In either of those cases, my Wife would have to quit working for a period of time, while she finds a new teaching job. She likes where she works in Winnipeg, has steady income, so we're thinking now, we will just stay in Winnipeg, and I will continue commuting to Calgary for work.


----------



## latebuyer

Isn’t there a middle ground where you could buy a house in a safer area but not spend so much?


----------



## Fisherman30

latebuyer said:


> Isn’t there a middle ground where you could buy a house in a safer area but not spend so much?


We might make an offer on a place in a town just outside the city. It's listed for $525k. Houses in this particular town on average are selling for about 5% over asking. Within Winnipeg is a totally different story. I saw one house in Winnipeg listed for $600k that sold for $732k. This town outside the city would allow me to have a nice big property, 3 car garage, lots of trees, lower property taxes, while still having municipal water and sewage. Also very close to good schools, and all kinds of other amenities. Close to some provincial parks I enjoy spending time at as well. 10 minutes to the place I enjoy cross country skiing.


----------



## banjopete

It's very subjective of course but feeling safe and secure in your own house especially when considering kids and the surrounding community is worth the costs. I'd assume you'd have lots of house and location options as you move up in price and staying within communities you'd like to be in sounds important to you. Personally I'd work hard to find places where you can reduce the amount of driving needed, it gives kids more freedom if they can get themselves around, and that early sense of autonomy plus frees you and your wife up a bit. Being as careful as you are with finances (like most on here really) means you'll likely achieve whatever the targets are in the end and you still have time on your side. Good luck.


----------



## Fisherman30

Well, housing prices keep going up by the week, so getting a bigger house seems out of reach. We're not going to go through the whole ordeal of buying, selling and moving just to have the same size house in a better area. If we're going to move, it's going to have to be to a much bigger house in a nice area. So I think what we will do is sell our rental property in June as planned, pay off all of our debt, and then see where things are at.


----------



## Fisherman30

So instead of spending a whole bunch of money buying a bigger house, we're considering finishing our basement really nice for $40k or so, using a HELOC. Thoughts?


----------



## milhouse

Fisherman30 said:


> So instead of spending a whole bunch of money buying a bigger house, we're considering finishing our basement really nice for $40k or so, using a HELOC. Thoughts?


Are you just going to accept the location concerns or do you have a plan to address them? It seemed like that was one of your key motivations for considering a move.


----------



## Fisherman30

milhouse said:


> Are you just going to accept the location concerns or do you have a plan to address them? It seemed like that was one of your key motivations for considering a move.


I might just accept them for the next year or two. In the meantime, I'm thinking we could add about another 1000 sqft of living space by finishing the basement, and even if I put $40k on a HELOC to finish the basement, it seems in my area that having a nicely finished basement would add at least $40-50k to the value of the house, so I would get a good chunk of that money back eventually when I do sell.


----------



## scorpion_ca

I think that's a good idea. This is the worst time to buy a house in Canada.


----------



## Fisherman30

scorpion_ca said:


> I think that's a good idea. This is the worst time to buy a house in Canada.


Yeah, last thing I need is to end up underwater on a mortgage if I buy at the absolute peak of the market. I figure for about $50k (hopefully less), I can have a beautifully finished basement, as well as getting some nice landscaping done on my property. When they finish my basement, I'll get the electrician to upgrade my panel to 200A, and run a circuit for a hot tub at the back of my house. I've already spent $5500 on a higher end new furnace, $3500 on flooring, $6200 on top of the line shingles on the house and garage, and about $2500 on a nice fence. I also put a nice stone fire pit in my backyard. It would be a shame to only have got a few years of use out of those improvements I spent all that money on. So if I do a $50k renovation, I'll have about $334 000 sunk into my house. Without this renovation, my house seems to be worth about $340k. After the renovation, I think it would be up closer to $380-$400k. Even if the market cools off after spending that money on the renovation, at least I'm not $500k+ in debt with a house that's worth less than what I owe on the mortgage. $50k is what I'm thinking would be on the absolute high end for my renovation. My basement is already spray-foam insulated, with the exterior walls already framed by the previous owners. That on its own should save a lot of money on my renovation. I've got a guy coming this week to consult on everything I'd like to have done.


----------



## Fisherman30

Also, when I sell my condo in June, hopefully the market is still red hot for selling, and I can get a pretty penny for it. I'm planning to use all of that money to pay off my debt, as well as a chunk of the HELOC I will use for this renovation.


----------



## Fisherman30

March Update:

Getting some quotes this week to have our basement finished with at least one or two more bedrooms down there, a nice bathroom, rec room, and office. I expect the renovation to cost around $50 000, and I am currently working on getting rate for HELOCs. Prime + 0.5% seems to be the going rate, but we will see if I can get better. Either way, it is a heck of a lot less money than realtor commission, land transfer tax and CMHC insurance compared to the value I will be getting. If I can get Prime + 0.5%, I think I will get an extra $20k or so added on to the HELOC in order to consolidate my higher interest debt as well. 

Assets:
House - $270k
Condo - $155k
LRRSP - $20 698
RRSP - $13 830
Non-Registered - $135
FRESP - $4320
Wife RRSP - $7150
Chequing - $2007
Savings - $1800
Work Savings Plan - $10 366

Total Assets: $485 306

Liabilities:
House Mortgage - $208 133
Condo Mortgage - $118 833
Student LOC - $4083
SUV Loan - $8778
BMO LOC - $7700
Credit Card - $4613

Total Liabilities: $352 140

Net Worth: $133 166


----------



## fireseeker

Fisherman30 said:


> If I can get Prime + 0.5%, I think I will get an extra $20k or so added on to the HELOC in order to consolidate my higher interest debt as well.


Suggestion: Get the biggest HELOC you can qualify for (assuming you won't be tempted to use it like it's free money).

It costs the same to set up a $50K HELOC as it does to set up a $150K HELOC. But the latter gives you more flexibility: Should you unexpectedly have to replace your roof or your car, the money is available immediately. 
So long as you are disciplined, you get a rainy day fund.


----------



## Fisherman30

fireseeker said:


> Suggestion: Get the biggest HELOC you can qualify for (assuming you won't be tempted to use it like it's free money).
> 
> It costs the same to set up a $50K HELOC as it does to set up a $150K HELOC. But the latter gives you more flexibility: Should you unexpectedly have to replace your roof or your car, the money is available immediately.
> So long as you are disciplined, you get a rainy day fund.


Thanks for the good advice! Actually, I'm with TD, and it looks like I can convert my mortgage to a readvanceable mortgage. That way, for every mortgage payment I make, the line of credit automatically increases by the amount of the mortgage principle I paid down. I could also use that money for a downpayment of rental property, and then claim the interest as an investment expense.


----------



## Fisherman30

Another idea I have is to get rid of my lousy condo rental property, and use the money from that sale to buy a better rental property that has good cashflow. I would use a property management company this time around. And also stay in my cheaper house I'm in now, and just build wealth through real estate over time. Going forward, I think I would use a property management company to manage my rentals.


----------



## Fisherman30

Fisherman30 said:


> Another idea I have is to get rid of my lousy condo rental property, and use the money from that sale to buy a better rental property that has good cashflow. I would use a property management company this time around. And also stay in my cheaper house I'm in now, and just build wealth through real estate over time. Going forward, I think I would use a property management company to manage my rentals.


Having a property manager and paying them 10% of my gross rent would free up time for me to be able to just go flat out working overtime at my job, and the overtime would make up the property management costs by far. I could use the Smith Manouevre, turning my primary residence's mortgage into a re-advanceable HELOC mortgage, use that money from the HELOC to invest in rental property, and then I can claim the interest from the HELOC on my taxes.


----------



## Fisherman30

Instead of buying a rental property with the HELOC, I could also just invest it in a couch potato portfolio.


----------



## Fisherman30

I could then take any dividend payments, put them towards the mortgage principal, and use the newly unlocked HELOC room to invest further. It seems like focusing on dividend paying ETF's and REIT's would be particularly advantageous if doing the Smith manouevre.


----------



## Johnny199r

Fisherman30 said:


> Instead of buying a rental property with the HELOC, I could also just invest it in a couch potato portfolio.


Do this. I can't imagine ever having a rental and the headache and uncertainty that can go along with it.


----------



## Forebiz

Fisherman30 said:


> Instead of buying a rental property with the HELOC, I could also just invest it in a couch potato portfolio.


I agree to do this instead of having a rental. I had a rental for 7 years, made money but not enough that it was worth the hassle.


----------



## peterk

I doubt a rental with fully exported management (is it really ever though?) would work out better than stocks + overtime.

I suppose if it's your business, or you're a retiree with part time rental income, then maybe it's good for some. Though obviously lots have gotten rich on RE capital gains in the last 30 years, and especially the last 10...

Overtime is often not just overtime, either, if you're in a good career at a good company. Overtime means more promotions and bigger bonuses later, not just the one time OT cash. 

Splitting attention away from your career for side-hustle schemes is a pitfall to be weary of, and often rationalized in many ways as a better outcome than just focusing on a career and making sure you work for a good company and are compensated for your extra efforts. But I think it's probably not true in most cases.


----------



## Fisherman30

peterk said:


> I doubt a rental with fully exported management (is it really ever though?) would work out better than stocks + overtime.
> 
> I suppose if it's your business, or you're a retiree with part time rental income, then maybe it's good for some. Though obviously lots have gotten rich on RE capital gains in the last 30 years, and especially the last 10...
> 
> Overtime is often not just overtime, either, if you're in a good career at a good company. Overtime means more promotions and bigger bonuses later, not just the one time OT cash.
> 
> Splitting attention away from your career for side-hustle schemes is a pitfall to be weary of, and often rationalized in many ways as a better outcome than just focusing on a career and making sure you work for a good company and are compensated for your extra efforts. But I think it's probably not true in most cases.


That's a good point, Peter. Now that I've been less concerned with the condo, I applied and had an interview for another promotion at work. The interview went well, and I should know within the next week. If I get it, it will be about a $25k raise. That alone is a bigger increase than the entire gross annual revenue from my rental property. 

On the rental property note - My tenants are officially moving out at the end of May. I will install new flooring, paint the place, and put in new trim, doorknobs and paint the doors to Spruce the place up a bit. Given the insane housing market, hopefully when I sell it in June, I can get a decent amount of money for it.


----------



## Fisherman30

Well, I got this promotion at work, so I'm excited for that new challenge, and also, the extra money that it will bring. Once the renovations are done on the condo in June, and I sell it, I will put the proceeds of the sale towards paying off the SUV loan, my student LOC, and personal LOC. With all of that debt gone, I will double my mortgage payments on the house, begin performing the Smith Manouevre, while putting money aside to renovate our current house to make the living space more enjoyable that so we can hold off on paying an arm and a leg for a bigger house. With the Smith Manouevre, in order to mitigate some of the risk associated with leverage investing, instead of investing the entire $70k that will be available immediately on the HELOC, I will deploy the funds into my investment account at a rate of $1000 every 2 weeks. This way, if the market tanks, I won't have put all the money into the market all at once at the market peak, and also, if the market tanks, I will have funds available that I can deploy all at once to scoop up some deals should the opportunity present itself.


----------



## Fisherman30

April Update:

Assets:
House - $270k
Condo - $155k
LRRSP - $21 320
RRSP - $14 250
FRESP - $4780
Non-Registered - $528
Wife RRSP - $7500
Chequing - $2714
Savings - $2267
Work savings plan - $11 500

Total Assets: $489 859

Liabilities:
House Mortgage - $207 348
Condo Mortgage - $118 306
Student LOC - $3957
SUV Loan - $8088
BMO LOC - $7600
Credit Card - $3868

Total Liabilities: $349 167

Net Worth: $140 692


----------



## Fisherman30

May Update:

Really excited at the moment. I found a buyer to privately buy my condo for $177 500, which is $22k more than I thought it was worth. Best part is that I don't have to pay any realtor fees. They are also looking for a near immediate possession, and will officially file all the paper work as soon as my tenants move out May 31st. Once I have the money from the sale of the condo, I will pay off my SUV loan, student LOC, and LOC, and I will then have no debt other than the mortgage/HELOC (for the Smith manouevre). I will then have about $40 000 leftover. I will invest that money in my non-registered account that's not associated with the SM. I will gradually deploy that money every couple of weeks in order to take advantage of dollar cost averaging in the market, instead of investing it all at once. 

Assets:
House - $270k
Condo - $170k 
LRRSP - $19 950
RRSP - $13 450
FRESP - $4745
Non-Registered - $625
Wife RRSP - $7800
Smith Manouevre Investment Account - $1910
Chequing - $3468
Savings - $767
Work Savings Plan - 13 500

Total Assets - $506 215

Liabilities:
House Mortgage (Term Portion) - $207 349
HELOC (for Smith Manouevre) - $2000
Condo Mortgage - $117 804
Student LOC - $2770
SUV Loan - $7858
BMO LOC - $7500
Credit Card - $4739

Total Liabilities - $350 020

Net Worth - $156 195


----------



## scorpion_ca

I see you don't have any TFSA account. Why do want to invest $40k in non-registered account and pay taxes on your gain?


----------



## Fisherman30

scorpion_ca said:


> I see you don't have any TFSA account. Why do want to invest $40k in non-registered account and pay taxes on your gain?


Because I have pretty much all of the money in my employer's savings plan going into a TFSA, which is about $25k/year, and that will have my TFSA room maxed out pretty quickly. Also, we might use this money for a downpayment on a house if the housing market experiences a correction, so I don't want to occupy all of that TFSA room, just to potentially use the money within the next year or 2 for a downpayment on a house.


----------



## Gator13

You should consider putting your surplus funds towards your mortgage. Speaking from experience, having no mortgage early in life does amazing things for your cashflow and ability to invest. Keep in mind that you have to service your mortgage with after tax funds. Good luck.


----------



## londoncalling

Not sure I follow your logic on the TFSA room. You would get the room back the year following withdrawal. I am struggling to find a situation where tax free money is better than taxed money.


----------



## Fisherman30

londoncalling said:


> Not sure I follow your logic on the TFSA room. You would get the room back the year following withdrawal. I am struggling to find a situation where tax free money is better than taxed money.


Ah yes, true. So you think I should put the proceeds in a TFSA then?


----------



## londoncalling

I would say yes depending on what you intend to buy with the proceeds. I wouldn't want to put risky investments in my TFSA that I am anticipating needing in 2 years for fear of having to cash out at a substantial loss and losing the room. I am not saying you need to buy a GIC but the yield on a 2 yr GIC is better untaxed than taxed.


----------



## Fisherman30

Well, unfortunately, the person who told me they were going to buy my condo (agreed on a price and everything) changed her mind and backed out. So, I am listing it with a realtor. The realtor wants me to paint the whole place top to bottom, fix up some flooring and trim etc. Seems like it will require about $5k worth of work. Additionally, in the time between when this person offered to buy my condo and now, the market has started to drop. 

Here's an update on my Smith Manouevre portfolio. Currently have the money split into equal percentages of the following stocks: CNR, BCE, TD, ONEX, MFC and ENB. Thoughts?


----------



## milhouse

Fisherman30 said:


> Well, unfortunately, the person who told me they were going to buy my condo (agreed on a price and everything) changed her mind and backed out. So, I am listing it with a realtor. The realtor wants me to paint the whole place top to bottom, fix up some flooring and trim etc. Seems like it will require about $5k worth of work. Additionally, in the time between when this person offered to buy my condo and now, the market has started to drop.


That sucks. Did she back out because she saw the changing interest rate/housing market conditions or no reason given?


----------



## Fisherman30

milhouse said:


> That sucks. Did she back out because she saw the changing interest rate/housing market conditions or no reason given?


She said she was nervous because my tenants were still living there, she couldn't see the place until May 31st as a result (due to an agreement I had with my tenants), was nervous about what work might need to be done, combined with the fact that she sold her condo with a closing date of June 15th. In any case, this was all clear to her before she made me this offer. She was going to pay cash. Elderly person with a paid off condo who just wanted to move to a ground level unit. There's no elevator in the place.


----------



## Fisherman30

June Update:

I decreased the value of the condo for the purpose of this calculation back down to $155k, to cover it potentially not selling for as much as I was hoping, as well as realtor fees, and the fact that I'm paying about $3500 to get it spruced up and ready for the market. Stocks are obviously taking a big beating this month, but given that I have quite a long time until retirement, I feel it's a great opportunity to scoop up some deals. In my Smith manouevre portfolio, I have invested in CNR, TD, MFC, ONEX, BCE and ENB. I will probably stick to those six stocks, and continue investing about $1000 every two weeks. 

Assets:
House - $270k
Condo - $155k
LRRSP - $18 740
RRSP - $12 590
FRESP - $4676
Non-Registered - $625
Non-Registered (Smith Manouevre) - $5947
Wife RRSP - $7200
Chequing - $2257
Savings - $1400
Work Savings Plan - $15 500

Total Assets - $493 935

Liabilities:
House Mortgage (Term Portion) - $206 576
HELOC (Smith Manouevre) - $6500
Condo Mortgage - $117 328
Student LOC - $2711
SUV Loan - $7167
BMO LOC - $7400
Credit Card - $6600

Total Liabilities - $354 282

Net Worth: $139 653


----------



## Fisherman30

July Update:

Last month, I used $9800 from my personal LOC to pay for some renovations to put the condo up for sale, as well as the property tax bill for both properties. Once the condo sells, I intend to use the proceeds to pay off all debt, and then put the remainder of that money on to my house mortgage. I have 1.75% locked in for almost 2 more years, so if I can pay off as much as possible on the house before renewal time, that should help with the sting of the interest rate hike I will experience when I go to renew. I have also continued to do quite a bit of overtime. Watching some of my friends buy new vehicles made me want to get a truck, but coming back to this money diary brings me back down to Earth, which is the whole purpose of this exercise. By focusing my energy on saving and investing, especially during this lull in the market, I should come out nicely ahead. Instead of putting that money into a cash burning toy. 

Assets:
House - $270k
Condo - $155k
LRRSP - $18 547
RRSP - $12 409
FRESP - $4933
Non-Registered - $625
Non-Registered (Smith Manouevre) - $8822
Wife RRSP - $7414
Chequing - $1153
Savings - $400
Work Savings Plan - $17 500

Total Assets: $496 803

Liabilities:
House Mortgage (Term Portion) - $205 813
HELOC (Smith Manouevre) - $9500
Condo Mortgage - $116 891
Student LOC - $2520
SUV Loan - $6706
BMO LOC - $17 200
Credit Card - $1898

Total Liabilities: $360 528

Net Worth: $136 275


----------



## milhouse

Fisherman30 said:


> I have 1.75% locked in for almost 2 more years, so if I can pay off as much as possible on the house before renewal time, that should help with the sting of the interest rate hike I will experience when I go to renew. I have also continued to do quite a bit of overtime.


+1 Hopefully you can burn a lot of principal off before you renew. Gives you more flexibility in some ways.
That said, I think I was paying something like 3.x% back in the day and I thought that was cheap.  



Fisherman30 said:


> Watching some of my friends buy new vehicles made me want to get a truck, but coming back to this money diary brings me back down to Earth, which is the whole purpose of this exercise. By focusing my energy on saving and investing, especially during this lull in the market, I should come out nicely ahead. Instead of putting that money into a cash burning toy.


I feel ya. The missus and I share a car and it works for us 95% of the time. Seeing some friends with new cars and just nice cars around town makes me think about splurging on a new car. But it comes down to goals and priorities.


----------



## latebuyer

Yes that’s great you resisted buying a new car unless you need it. Cars are so expensive.


----------



## Calgary_Girl

I can totally relate about wanting to buy a new car but then my hubby talks me off of the ledge 😂. He is as happy as a clam drive his 2000 Toyota 4Runner (180K clicks on it) and I’m driving a 2012 Dodge Caravan. We usually hold onto our cars for a minimum of 10 years. I would love to get a brand new Toyota Sienna Hybrid but they’re close to $90K and I can’t make myself do it 😳


----------



## Fisherman30

Calgary_Girl said:


> I can totally relate about wanting to buy a new car but then my hubby talks me off of the ledge 😂. He is as happy as a clam drive his 2000 Toyota 4Runner (180K clicks on it) and I’m driving a 2012 Dodge Caravan. We usually hold onto our cars for a minimum of 10 years. I would love to get a brand new Toyota Sienna Hybrid but they’re close to $90K and I can’t make myself do it 😳


Thanks for the comments, Calgary Girl. This is a powerful statement coming from someone like yourself and your husband who have done so well financially. Good way to lead by example! Just because someone drives a new BMW doesn't mean they're rich. In fact, I think just the opposite is true most of the time. The truck I wanted would have been about $60k out the door. When I think about what that truck will be worth in 10 years, and what $60k invested in the market will be worth in 10 years, it makes the decision very easy as to what I should do.


----------



## Fisherman30

August Update:

I accepted an offer on my rental property for $162.5k. Obviously disappointing, since I paid $169k for it in 2013. In any case, it will be off my plate, and I will be able to realize the equity I earned while renting it out for 7 years. I can use the proceeds to pay off all debt except the mortgage. I should have approximately $35k left over after paying commission, the mortgage balance, and prepayment penalty. I have a variable mortgage on the condo, so the prepayment penalty will just be 3 months interest. I also had a job interview on Friday for a new job. The unfortunate part is that I would initially start earning significantly less than I am earning now, and if I resign from my current job, I will lose the entire company's match of my retirement savings plan from the last 12 months (about $12k), but long term job prospects are much better over time than where I am at now. Thankfully, if I get the job, I will be in a position of no debt other than the mortgage on the house. 

Assets:
House - $270k
Condo - $152 500
LRRSP - $20 314
RRSP - $13 612
FRESP - $5654
Non-Registered - $250
Non-Registered (Smith Manouevre) - $11 190
Wife RRSP - $7800
Chequing - $3824
Savings - $500
Work Savings Plan - $17 500

Total Assets: $503 144

Liabilities:
House Mortgage (Term Portion) - $205 039
HELOC (Smith Manouevre) - $11 037
Condo Mortgage - $116 521
Student LOC - $2435
SUV Loan - $6245
BMO LOC - $17 000
Credit Card - $4000

Total Liabilities: $362 277

Net Worth: $140 867


----------



## latebuyer

That’ll be great to pay off all your debt. Good luck with the interview.


----------



## Fisherman30

Well, good news and bad news. The good news is that I got the job, which I'm very excited about. The bad news is that the buyers of the condo backed out during the cooling off period. Also, my realtor was on vacation when the offer came in, so he had one of his associates dealing with my property, and she completely fumbled the handing over of the condo documents. My realtor is now back from vacation, and I quite clearly expressed my displeasure in his office's lack of professionalism. So hopefully it doesn't happen again.


----------



## latebuyer

Glad to hear about your job, sorry to hear about your condo. Didn’t this happen to you before?


----------



## Fisherman30

latebuyer said:


> Glad to hear about your job, sorry to hear about your condo. Didn’t this happen to you before?


Yes, the first time was a verbal offer to purchase privately, but she backed out because she needed a very quick possession date, and was nervous that it might not be possible. This last one was an offer on paper that my realtor dealt with. They backed out during the 7 day cooling off period, basically because they got cold feet. In Manitoba, with condos, there's a 7 day cooling off period and the buyer can back out of the deal for any reason they want during that time, and you have to completely refund their deposit. So it results in a lot of non-serious offers.


----------



## latebuyer

I think they may be implementing the 7 day cooling off in BC too so interesting to hear the impact.


----------



## Fisherman30

Update: NOW I have sold the condo. Got an offer, accepted it, cooling off period is finished, and the deal is final. Closing date is a week from now. After all of my debt is paid off, lawyer, realtor, bank etc. is all paid, we will have no debt except our house mortgage, and we will have about $24k left over, in addition to our other investments. My Wife and I love camping, but haven't been out since having a baby (who is now almost 3), because we figured tenting would be a nightmare. We discovered that campers have absolutely plummeted in price. We found a model of tent trailer we really like. It's a 2019. The person who owns it has used it only 4 times apparently, it's $25k new. They listed it for $18k, then dropped it to $16k, then $14k, and now $12k. We're going to look at it tomorrow, and I think we will offer $10.5k. It has a propane furnace, heated mattresses, cooktop, table, sink, electric pop-up/down etc. It's basically a brand new trailer. Am I crazy?


----------



## scorpion_ca

What was the asking and sold price of your condo? Is there any specific website for campers/RV? I want to buy an RV in the near future.


----------



## milhouse

Fisherman30 said:


> The person who owns it has used it only 4 times apparently,


Love these types of deals. 
But I've been the one dumping stuff too, though doesn't happen as often any more.  I've bought stuff with great intentions but then in practice didn't really end up using it much so decided to get rid of it to declutter.


----------



## Fisherman30

scorpion_ca said:


> What was the asking and sold price of your condo? Is there any specific website for campers/RV? I want to buy an RV in the near future.



Listing price was 169k. I took 161.5. 

Bought the trailer today for 10k. Pretty happy with the deal.


----------



## Fisherman30

So my personal line of credit is now paid off in full. Should I go ahead and close it completely? I don't plan to ever use it again, and I don't like being tempted by it. I feel like closing it completely would put pressure on me to continue being smart with my money. Thoughts?


----------



## AltaRed

Fisherman30 said:


> So my personal line of credit is now paid off in full. Should I go ahead and close it completely? I don't plan to ever use it again, and I don't like being tempted by it. I feel like closing it completely would put pressure on me to continue being smart with my money. Thoughts?


You got opinions in your separate thread but I will add here that I would close it IF you feel you would be tempted again, e.g. if you didn't have the cash to buy the camper, would you have possibly tapped into your LOC to buy it anyway? Never, ever use debt for consumption purposes. Save the LOC space for truly emergency purposes, e.g. emergency fund.

Congratulations by the way on closing on the condo and closing on that chapter of your financial history.


----------



## Fisherman30

AltaRed said:


> You got opinions in your separate thread but I will add here that I would close it IF you feel you would be tempted again, e.g. if you didn't have the cash to buy the camper, would you have possibly tapped into your LOC to buy it anyway? Never, ever use debt for consumption purposes. Save the LOC space for truly emergency purposes, e.g. emergency fund.
> 
> Congratulations by the way on closing on the condo and closing on that chapter of your financial history.


To be honest, I think I have developed the discipline where I won't use it unless there is some sort of absolute catastrophic emergency. So maybe I'll keep it open. I will just pretend it's not even there. 

And yes, thanks. The condo situation was a long process that I'm happy to have behind me now. It seems to be taking quite a while for the mortgage balance to disappear and for the mortgage to indicate closed. My lawyer sent the cheque/documents to the bank on October 4th. I'm not sure how long it usually takes to process the discharge.


----------



## Fisherman30

Ok, here's the October update now that the dust has pretty well settled on everything that has happened. Upon selling the condo and repaying our debt, we did spend a decent amount of money on certain things we had delayed purchasing. Things like some accessories for the trailer and various household items. Also had to pay for a $1700 surgery for our dog. He developed a benign tumor in his eye that was inoperable and causing him pain. We were able to treat the pain with medication for a while, but it got to the point where the vet recommended removing his eye unfortunately. I also bought some other "nice to haves" for my new job, such as a new pilot headset and new flight bag. My Wife will be on EI for maternity leave starting this month, and I have taken a pay cut initially with my new job, so thankfully the debt is all gone. The interest rate on my Smith Manouevre HELOC is now up to 5.9%, and I have taken $14 000 from the HELOC and invested it. Pretty much all of the stocks I have purchased in my Smith Manouevre account pay a 5%+ dividend. The current value of the portfolio is down about $700, but I feel like I have made some good purchases. My most recent purchase in the portfolio was $1500 worth of BCE.TO at around $56, which I think long term, will prove to be a good purchase. Given that rates are still increasing, I may hold off on taking any more off of the HELOC for the Smith manouevre for now. At 5.9%, after I get money back on my taxes, the rate will effectively be about 3.54%. For the SUV loan, I'm planning to use the money in my TFSA to pay that off. I'm just waiting for the money to be transferred from my work savings plan to Questrade before I can access the money to pay off the SUV. In the meantime, it's only 0.9% interest anyways. My net worth has dropped to $116 627 as a result of buying the $10 000 tent trailer (plus about $2000 in insurance, sales tax, trailer brake controller for the SUV etc), about $3200 getting the condo spruced up for selling, $1900 in lawyer fees, $1700 for dog's surgery, as well as 3 months of carrying costs waiting for the condo to be sold. I also previously over-estimated my work savings plan by about $5000 (as I am actually forfeiting that $5000 worth of the company's match by quitting). Now that that's all behind us, I'm hoping we can put away about $1000/month or more. 

Assets:
House - $270k
LRRSP - $18 570
RRSP - $14 210
TFSA - $10450
FRESP - $5787
Non-Registered - $250
Non-Registered (Smith Manouevre) - $13 308
Wife RRSP - $8200
Chequing - $1965
Savings - $1007

Total Assets: $343 747

Liabilities:
House Mortgage (Term Portion) - $203 507
HELOC (Smith Manouevre) - $14000
SUV Loan - $5090
Credit Card - $4523

Total Liabilities: $227 120

Net Worth: $116 627


----------



## AltaRed

Notwithstanding my belief that no one should carry consumer debt, it is easy enough to get ~3% interest these days in TFSA options, e.g. 2.9% ISAs, to benefit more than the 0.9% interest on the SUV auto loan. It may depend more on whether the insurance for the SUV would go down materially if there was no lien on it, i.e. bank loan. Find out from your insurer whether there would be a material decrease in insurance costs by removing the lien. The key to success though is ensuring you actually do get a ~3% return on an ISA in the TFSA.


----------



## Fisherman30

AltaRed said:


> Notwithstanding my belief that no one should carry consumer debt, it is easy enough to get ~3% interest these days in TFSA options, e.g. 2.9% ISAs, to benefit more than the 0.9% interest on the SUV auto loan. It may depend more on whether the insurance for the SUV would go down materially if there was no lien on it, i.e. bank loan. Find out from your insurer whether there would be a material decrease in insurance costs by removing the lien. The key to success though is ensuring you actually do get a ~3% return on an ISA in the TFSA.



That's a good point. I called the insurance company, and they said that paying off the SUV would have no impact on my insurance premiums. So maybe it is financially more logical to just keep the money in my TFSA and invest that money. There are GIC's now around the 4.5% mark.


----------



## milhouse

Sorry to read about the dog. Hope he's doing ok. 



Fisherman30 said:


> I am actually forfeiting that $5000 worth of the company's match by quitting


That sucks. I tried to grab everything I could on the way out the door but I still I had to forfeit / miss out on a few things myself.


----------



## Fisherman30

milhouse said:


> Sorry to read about the dog. Hope he's doing ok.
> 
> 
> That sucks. I tried to grab everything I could on the way out the door but I still I had to forfeit / miss out on a few things myself.


Thanks - Yes, he's back to his normal self. I don't think he even realizes he is missing an eye to be honest, and the cancer from his eye didn't spread anywhere else thankfully. 

I could have delayed being hired at my new job by a couple of months and got that $5k from my last job, but in the long run, the couple hundred seniority spots I would give up at the new job would be worth a lot more than $5k in the long run, given the unprecedented amount of hiring that is happening right now.


----------



## Fisherman30

Managed to decrease some of my expenses this week. My sirius XM subscription was $24/month, but I called and got it lowered to $11/month. Also called the insurance company and got my home insurance decreased from $90/month to $75/month.


----------



## milhouse

It's always nice win to be able to decrease reoccuring monthly bills.


----------



## latebuyer

Congrats on selling your condo!


----------



## Fisherman30

November Update:

Assets:
House - $270k
LRRSP - $19 526
RRSP - $15 164
TFSA - $10 773
FRESP - $6348
Non-Registered - $250
Non-Registered (Smith Manouevre) - $14 088
Wife RRSP - $8400
Chequing - $4237
Savings - $40

Total Assets: $348 826

Liabilities:
House Mortgage - $202 729
HELOC (Smith Manouevre) - $14000
SUV Loan - $4628
Credit Card - $4201

Total Liabilities: $225 558

Net Worth: $123 268


----------



## Fisherman30

So, currently I have 1.75% locked in on my mortgage until April, 2024. I still have about $75k of room available in my TFSA. Instead of doubling my mortgage payments, wouldn't it be a better idea to put that money in my TFSA, invest it in a high interest savings account ETF (like CASH.TO), earn 4% on that money, and then make a big lump sum payment on my mortgage when the term is up?


----------



## MrMatt

Fisherman30 said:


> So, currently I have 1.75% locked in on my mortgage until April, 2024. I still have about $75k of room available in my TFSA. Instead of doubling my mortgage payments, wouldn't it be a better idea to put that money in my TFSA, invest it in a high interest savings account ETF (like CASH.TO), earn 4% on that money, and then make a big lump sum payment on my mortgage when the term is up?


Yes, but 2% for 1.5 years on $75k is $2250, if interest rates stay high

Also if you pay off that money on your mortgage, you're saving 1.75% after tax, so the pre-tax return (savings) is a bit higher.

I like the idea of an extra $2k over that time, but keeping it simple has some advantages.
Doubling payments, and if you want also prepaying could really knock that mortgage amortization down.


----------



## AltaRed

It may be a wash between continuing the doubling of mortgage payments (and accelerating the principal buydown) and making the extra interest which may not hold until April 2024, albeit the funds could be in a 1 year or 15 month or 18 month GIC at maybe 5% today... until April 2024. You may want to compare the math but I'd tend to stick with what MrMatt suggests.... avoid the complications and simply continue on your path.


----------



## nobleea

Unless you're paying off the mortgage entirely this term, I've always considered the return on mortgage paydown to be the average interest for the remaining ammortization. Not the current term interest rate. And that's before tax as well.


----------



## Fisherman30

Thanks for the tips. I think I'm going to do a combination of both. I'll increase my savings rate by $540/month, and increase my mortgage payments by 50% (about an additional $540 in mortgage payments). This way I increase my liquidity, while at the same time, getting the mortgage paid down. So I'll be putting about $1040/month away in savings, in addition to $200 biweekly into my kids' FRESP. I'd like to increase my liquidity, as I only really have about $14000 in easily accessible cash. I'd like to increase this, as we would eventually like to buy a bigger house.


----------



## peterk

Fisherman30 said:


> The interest rate on my Smith Manouevre HELOC is now up to 5.9%, and I have taken $14 000 from the HELOC and invested it. *Pretty much all of the stocks I have purchased in my Smith Manouevre account pay a 5%+ dividend.* The current value of the portfolio is down about $700, but I feel like I have made some good purchases. My most recent purchase in the portfolio was $1500 worth of BCE.TO at around $56, which I think long term, will prove to be a good purchase. Given that rates are still increasing, I may hold off on taking any more off of the HELOC for the Smith manouevre for now. At 5.9%, after I get money back on my taxes, the rate will effectively be about 3.54%.


Be cautious about weighting your investment decision making too much based on hefty dividends as a primary criteria. Especially in your Smith manouver account with an ever present desire to "pay for the interest". If the rate keeps rising you might be yanked more and more towards high dividend investments that are poor choices. I would be perfectly happy with XIU myself, if I were smith manouvering a mortgage; dividends not being a factor at all other than for what tax advantages (or disadvantages) they bring.


----------



## Fisherman30

peterk said:


> Be cautious about weighting your investment decision making too much based on hefty dividends as a primary criteria. Especially in your Smith manouver account with an ever present desire to "pay for the interest". If the rate keeps rising you might be yanked more and more towards high dividend investments that are poor choices. I would be perfectly happy with XIU myself, if I were smith manouvering a mortgage; dividends not being a factor at all other than for what tax advantages (or disadvantages) they bring.


Thanks Peter. I actually just sold all of the stocks in my SM portfolio today, and I am transferring the money back to my HELOC. I came out a few hundred $$ ahead. I just feel that if we want to buy a nicer house in the next couple of years, a recession could really spoil our plans if I were in the middle of doing the Smith manouevre with our current house.


----------



## peterk

Fisherman30 said:


> Thanks Peter. I actually just sold all of the stocks in my SM portfolio today, and I am transferring the money back to my HELOC. I came out a few hundred $$ ahead. I just feel that if we want to buy a nicer house in the next couple of years, a recession could really spoil our plans if I were in the middle of doing the Smith manouevre with our current house.


Nice! Yes I'm sure that was a tough call - hard to know what will happen. Markets have been higher recently, yes, but they aren't "low" right now either. Probably best not to get too greedy with leverage. --- Neither a borrow nor a lender be.


----------



## Fisherman30

December Update:
Assets:
House - $270k
LRRSP - $19 323
RRSP - $14 694
TFSA - $10 817
FRESP - $6558
Non-registered - $250
Wife RRSP - $8500
Chequing - $3700
Savings - $1507

Total Assets: $335 349

Liabilities:
House Mortgage - $201 181
SUV Loan - $4165
Credit Card - $3763

Total Liabilities: $209 109

Net Worth: $126 240


----------

