Debt Update: spending money like water

Pile of debt

I’m either frantically packing, canceling our electricity or in-flight today.  I won’t be able to moderate comments – hopefully back online next week.

At the end of February our non-mortgage debt was down to $21,392 from $81,607 a year previous. I’ve written a lot about how we killed over $60,000 in debt so quickly. It was hard work + luck. We cut our monthly bills by over $1000, we sold our car, we sold clutter, we sold some investments and we got a small inheritance. We cut our casual spending and we stopped buying things we didn’t really need. There was always room for improvement so in March I gave myself a challenge. With some public accountability and all the encouragement and suggestions from you, it went quite well.

Confession: our April and May finances have been a mess.

The expenses involved with moving overseas, preparing our home to be a rental and being overly busy with getting it all done has killed my budget. I’m down to tracking just our costs associated with home repair, transportation and profit from selling our stuff. There’s been a few too many Thai takeout nights and lunches on the go. We’re taking every chance we can to see family and that’s involved a few restaurant meals and more car rentals/ ZipCar use than usual.

And I’m okay with this.

For now.

We’re still eating at home mostly, walking for errands when possible and I’m trying to get as many home repair projects done myself as I can.

Our finances right now very much mirror my nutrition in the last two months. Not great but doing the best I can. Much like my budget tracking, I haven’t stepped on the scale in two months. I’ve been lucky to get to Crossfit twice a week and one run in (usually it’s three runs). There’s been a steady supply of chocolate in our cupboards. I’d guess I’m up 4-5 pounds.

And I’m okay with this.

For now.

It’s not often that you move out of the country. Sometimes you have to make concessions that you can’t “do it all” and still get enough sleep. I’ve been sacrificing runs to visit Home Depot for window latch screws. I figure it’s splitting the difference as I get a 40 minute round trip walk in.

Some numbers:

  • Costs associated with renting our home out: $1921.88*Includes new washer dryer, plumbing maintance and repair, blind repair, and general parts for small home repair.
  • Profit from selling our belongings: $3644

Good news: we found what we think are great renters. A school is renting and furnishing it for visiting faculty. We met some of the faculty. Nice quiet older men. I am doubtful they will throw any raging parties.

Debt Update

After that ramble you may wonder why my debt ticker reads that we paid off $7674 since February and our non-mortgage debt is now down to $13718. Chris and I made the decision that with the move overseas we wanted a fresh start and simpler finances. If we were trying to pay off $21,000+ in debt in Canadian dollars while living in the UK and earning pounds sterling, it was going to get complicated. We’d be losing money on exchange rates and wire transfer fees.

We decided to cash out retirement savings to reduce our debt and to assist with the costs of our move. We’re still not sure where the dust will settle on all of this once we move and pay our start-up costs on the other side. We’re hopeful that a good chunk of our remaining debt will be gone and we will pay the last of it off before the end of 2011.

I’m tired of debt. I’m tired of paying it off and I’m tired of talking about our debt pay down strategies with Chris. I want to start saving. I want that debt ticker to be a savings ticker. Patience has never been my strong suit.

Anyone else working on debt? Victories or set-backs to report? Strategies that are working for you?

Photo Credit

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  • That sounds totally normal to me, and it’s been my experience as well. Moving is a hassle–few people can maintain the discipline in finances and nutrition and fitness while they have such a huge to-do list. I think that you’re doing great!

  • That’s awesome that you’ve paid off so much debt! We have a mortgage and two car payments. I’d love to go car free but we live in the Rocky Mountains of Colorado where we received a lovely two feet of additional snow this past Saturday. I would love to also downsize our home (we’re now in a 1700 sq ft townhome with 1 car garage) but my husband doesn’t think that’s a good idea. We have a toddler and hope to have another in the future. Hopefully, we can figure all this out. Anyway, congrats again on your progress!

  • I too am very impatinet and got really tired of the whole paying off debts. In dec 2008 we consolidated every single debt we had (excluding mortgage) into a loan and paid it off over the shortest term we could afford (2 years) The only problem was with our regular monthly outgoings plus the loan this left absoloutly nothing. zilch. zero. Nothing for school uniforms, shoes (i have 4 kids=a lot of outgrown shoes) school trip, haircuts, vets bills, christmas, birthdays etc. I could go on but you get the picture. Sure we had enough to eat, and a roof over our head and we kept our heads above water. JUST. With a lot of hard work and even harder decisions we got through it. We emerged debt free, freeer, happier and more aware of stuff and waht it means, eventually arriving a happy family of debt free minimalists. Trust me, if we had a pension to cash in we would have done it!

    It’s funny how eating and spending habits are totally intertwined!? When we were miserable and paying off debt, we got fat. Now we have lost excess pounds and have a really healthy outlook on life. I am sure subconciesly they are linked.

    Good Luck, see you the other side when your talking in pounds sterling!!

    Sharron x

  • I so agree with you Rachel. Minimalism isn’t simply uncluttering our drawers and gettig rid of unnecessary stuff. It is also about streamlining and simplifying our lives so we are happy with what we have and how we live. Finances, career, home, relationships.

    Your non-mortgage debt is very small, and the end of 2011 is only a few months away. You are doing a great job reducing your debt!

    Hope you had a peaceful journey to the IofM!

  • Hi there,
    I think you are doing brilliantly, and great your’e not being too hard on yourself. As I learnt through a serious illness when my second child was born, it’s great to have standards but very unkind to oneself to try and meet high standards at all times.
    How about starting a small savings nest egg at the same time as reducing your debt. Lots of financial gurus seem to advise this. My only debt is now my mortgage and although I’m trying to get it down as fast as I can I realised that I felt happier and more secure if I was building up savings at the same time as reducing my debt. The amount doesn’t have to be big, the point is that you just automatically put it away each week in a high interest online account, and before you know it it’s growing and snowballing.
    Good luck and I hope this helps.
    Have a beautiful day everyone, Madeleine

  • When you have debt, sometimes the process of paying it off can feel like it goes on forever. But you haven’t been at this forever, so I think it’s fair to not be too hard on yourself.

    It can be easy to fall into the rut of feeling like we’re not paying down the debt fast enough, but sometimes the process (as long as it may feel) is where the learning takes place – if the debt was gone overnight, would you feel as strongly about avoiding going into debt in the future? Maybe, maybe not.

    Hope you had an enjoyable trip to the IOM, can’t wait to hear about this new adventure!

  • Congrats on the move and getting your debt paid down! I completely know how you feel. I have student loans and mortgage debt (but no credit card debt, yay!), and I have an ambitious plan to get those paid off in 5 years each. But still, I want it gone now so I can enjoy what I’ve worked so hard for already. I’d say stay strong and make it to the finish line, but sometimes you need a break to remind you why you’re doing this in the first place (my partner and I decided to take a two week European tour that will set our debt eliminating plan back three months). It’s not good to indulge regularly (and hence no longer an indulgence). But like you said, “And I’m okay with this. For now.”

  • I want to echo Sharron’s comment on the links between diet and debt-reduction (and minimalism). I started getting interested in all of these issues around about the same time and thought it was coincidence until I noticed several other people like you doing the same thing – I guess I’m not a unique snowflake afterall :) I think these issues have much more in common than would seem at first.

    For you, in the end, a little (necessary) slacking on the diet and spending front will be totally worth it when you get to live in a very cool place – I’m terribly envious by the way!

  • Hi Rachel,

    Well at least you got to eat a lot of Thai food! It’s been out of our budget for a while now, and we get to do Thai only 3 or 4 times a year right now. Uh… it used to be almost weekly before we got serious with our budget.

    Congratulations on your big move and working your debt down so much! You asked for stories. Patrick and I, after 10 years of working on it, just finished our last creditor. Now except for a modest land payment we are completely debt free. I didn’t think it would ever happen!

  • You definitely need to cut yourself some slack when moving overseas. It takes some time to find your feet financially in a place where things cost different proportions to what you’re used to. We moved to the UK nearly 7 years ago now, and are preparing now to move back to Vancouver… three weeks from now! Let me know if you have any questions about living over here.

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