Where the money went in 2010: Part 5 – Debt Repayment

Today marks the final statistical report of where my money went last year. Today, I have the most uncomplicated area of spending to report, and it was my primary focus for last year – Debt Repayment.

I came into the year owing $13,579.29 on a line of credit that most would have to call “consumer debt”. In addition, I had a credit card debt of about $1500. The line of credit was born in 2006, shortly after my husband and I parted, and I was terrified that I had no fall-back position as a single mom. We had sold our marital home, and both of us purchased small little bungalows. I loved that little house, and I was committed to making it my own, and started a bunch of renovations to it. (It had been a rental property previously, and although the bones were reasonable, it needed a few things done to it in order for me to be really at ease there). In the aftermath of that renovation, I actually paid everything off and managed fine. I was actually saving for a new Jetta in those days!

In 2007, I made the decision to move to Toronto, and purchase a house with my then-boyfriend. Let’s just say the sale of a property in Barrie Ontario doesn’t really set a person up with enough equity to purchase even half of a house in Toronto Ontario. Still, for various reasons, some smarter than others, I made the move. At this point, my line of credit was dipped into and I haven’t seen zero since.

When my eldest went off to college, I dipped into some more credit. I was responsible for half the college/residence/meal plan price-tag, and I didn’t have any savings. I borrowed from myself to help put her through college. She graduated without any student loans. In 2008 I left my Government job and became self-employed. Now add setting up a home-office to the line-of-credit debt. New computer, new printer, filing cart, bookcases, etc. I converted a bedroom to my office, so there was paint, a little carpet, etc. Cha-ching to the line of credit. By 2009 my relationship with the boyfriend was done, and he moved out. This means I actually bought out his interest in the home, and had some serious furniture/home needs to recover from – again.

By January 2010, my line of credit was $13.5K. Now you know some of the reasons why. Oh sure, I also spent money on stupid stuff too. Not trying to give you a great excuse for every cent.

In January 2010 I also got another taste of that fear over whether or not I’d be able to make it or not. I knew this debt was a threat to my stability now, and I wanted to knock it dead in 2010. In the end, I didn’t knock it dead, but I’ve certainly got it on life-support.

In 2010, I paid off $11,998 of debt, for a total of 12%. The recommendation is 15%. (My ‘life’ pie ate the percentages left over from transportation and debt reduction). That credit card debt was retired early in the year. My line of credit now weighs in at $3,543.35. I managed to knock just over $10,000 off the principle of this beast.

During the course of the year, I went back and forth on whether or not I’d be able to pay it off entirely in 2010. There were times I was confident I could, and then times I wasn’t sure. By the fall, I pretty much knew it couldn’t happen. I made some decisions that diverted money away from debt repayment, and there were a few things unplanned.  Failing to plan for the unexpected was a critical flaw in my budgeting for 2010, a mistake I will try not to repeat in 2011.

As it sits now, my new goal for debt retirement is March 2011. I have some cash flow crunches at the beginning of the year that prevent me from being any more aggressive earlier. I even toyed with the idea to draw it out even further, because I no longer see it as a threat, merely a job that needs to get done, and it will be done at some point. But I want so bad to see that at zero when I open my online bank statement. I want so badly to put $0 in my spreadsheet where I record how much I’ve paid in interest to the bank on this. I want to focus my attention on SAVING for other things, like a family vacation and my longer term savings.When Mr. Carney raises the overnight lending rate again, I want to be less exposed.

I need more breathing room in our family operating budget. There will be two kids in post-secondary concurrently. That won’t come cheaply. While I think we’re in pretty good shape as we prepare for this, I don’t want to feel the constant nag of that debt on my shoulder.

I’m still a single woman with a whopping mortgage debt. Don’t think for a minute that I won’t still be aware that I have debt – I just don’t want any more consumer debt. I’m also mindful that I live in a house that will soon mark it’s 100th birthday, and stuff always needs fixing and replacing. I have to put myself in a position where my financial back isn’t against a wall.

Frankly, I’m proud of what the girls and I have accomplished. I’ve even prepared a power point presentation for them to show them what we’ve done together in 2010.

I’m thankful to all of you as well. I started blogging in February. This wasn’t really part of my plan for 2010 when I started getting serious. I was reading some of your chronicles, and I felt comforted not to be alone. I also thought others may see themselves in my story. Primarily, I wanted to be accountable to more people for my outcomes.

Tomorrow, I’ll do a more narrative wrap-up of the year, and then focus on the year ahead. Frankly, I’m excited for 2011. I already know there will be some changes. Let’s hope most of them are positive!


11 responses to this post.

  1. I’ve really enjoyed reading your last several entries on where your money went. As for killing the debt, you’ve done a terrific job just getting it paid down by $12,000 in 2010. That’s amazing, especially knowing you are a single income family and have two daughters that still need a lot of monetary support!

    It really won’t be long till the debt is dead and gone forever! I can’t wait to celebrate that major success with you!


    • Thanks Tay. A secondary reward to being a good tracker of where the money goes, is to be able to do a reasonably good annual review like this. I never would have guessed that I’d be able to accomplish all that. Sure, I wished I could, but my past experience was to just wish and not DO. This time, the appropriate behavior went first, the great results followed.

      You’re right, it won’t be that long until the consumer debt is gone. I’ll have to figure out how to hold fireworks online by then!


  2. Good job on paying down that much debt last year. Soon enough, you’ll be consumer debt-free!


  3. A power point presentation lol!! (sounds like something I would do:) You can definitely see the light at the end of the tunnel – amazing! In spite of some major obstacles like affording ANY house in Toronto and living car-free you have done a fantastic job of keeping a home together for your family. As a single parent for years I know what a challenge that can be. Job well done Tracy!!


  4. Posted by renaye on January 16, 2011 at 2:09 am

    Great job at paying it down …how did you do it? Did you have to make cuts in any area or was it just budgeting with contingency built into your plan?


    • Hi Renaye,
      Oh, yes, I made all sorts of cuts. For the first half of the year, I put all of my variable expenditures in an envelope (in cash) in the cupboard, and was pretty dedicated to only spending what I had. I didn’t just shop for the sake of shopping. Groceries has usually been a wild card for me, so I continue to keep my grocery money in a jar in my cupboard. (That’s the only variable expense that I still do this with).

      In addition, I took a lot of extra shifts with a part-time job and tried to earn more money. It’s a minimum wage job, but it still adds up when you do a little extra here and there.

      Sadly, I had no contingency in 2010, but I hope to be smarter in 2011. Thanks for dropping by!


  5. Posted by renaye on January 16, 2011 at 1:08 pm

    Thanks for your reply. That’s a good idea, I didn’t think of actually taking the money out of the bank and placing it in a jar for visual impact (actually see and feel it, as it goes out the door).

    I don’t know if I would physically be able to take on an extra job, as I was in a serious car accident a while ago and lost my business. To make matters worse the insurance company cut me off six months early, and the doctors would not permit me to go back to work, which sent me into an even deeper dive (we are still at war).

    I have physically recovered and I am back to working full time, but have not recovered financially; my company does not pay overtime and I can work up to 65 – 70 hrs per week which leaves me exhausted on all levels.

    I have changed my career path in the hopes it will eventually bring in more money, but I have not reaped the benifits yet; I am only at an intermediate level and my company does not hand out promotions easily.

    This has drastically increased stress and I am already noticing the impact on health and taking steps to offset and / or minimize the damage. I may have to jump ship once I have more experience, if I don’t see progress soon. This s not a desirable option, as I have built a career with this company and have many years of seniority, which I may lose during the negotiation process with a prospective employer.

    As such, I have become a tracking master. To acheive this I have built a complex spreadsheet, so I know where my money goes down to the penny, but now not only do I still feel the squeeze of the debt load, I see it as well…lol.

    I have broken the expenditures into main categories…housing, living, pets, personal, loans, banking, etc. to help juggle / balance the budget when necessary.

    It has a yearly summary sheet, which reports how well I do month over month year over year – helps to pinpoint problem months and plan for it. It calculates net pay, bank and cash on hand balances and compares to expenditures with running monthly totals for each category, so I can tell if and where I am trening overbudget in a given month week by week and taken to avoid an overrun.

    It also tracks how much interest I am paying to loan companies, so I know how much they make off of me each year (it makes me sick). Approaching the financial companies for a consolidation loan was a waste of time, as they would only offer and approve very high interest products with variable rates over a long term. The really crappy part is for the most part I am only able to pay the minimum payment, which as everyone knows does not reduce your debt load.

    I contacted Credit Canada and my understanding is that it is primarily for people who are falling behind on payments and want to negotiate a lower debt. Again this is not desirable, as it screws you over for about 6 – 7 years; even their financial adviser advised me against it…ha ha ha! A girlfriend of mine did it and her life is a nightmare now; she has very little contingency built into her plan and is constantly using loan guppies.

    The idea of using coupons to offset high grocery costs has me excited, as I have only been able to get my food budget down ~ $400 / month and my pet budget down to ~ $150 / month. It mystifies me that other people can eat the crap in the middle isles and stay healthy; are these the people who only spend $50-$60 / week on groceries? I am very strict with my diet now as I am noticing impact to health due to stress (not a weight reduction diet just a healthy one – I don’t need to lose any more weight).

    My hope is that I will be able to find coupons for the healthy food and non-chemical household items. Canada appears to have stricter policies when it comes to the use of coupons with weekly promotions. Has anyone started to compile a list of the store policies and / or does anyone post a weekly sale list for the GTA grocery stores?

    Suggestions would be greatly appreciated.


    • Hi Renaye,

      I don’t often see coupons, per se, for fresh foods. However, there are places on the web that often summarize sales/promotions at major chain stores. I know you can find threads about this at http://www.redflagdeals.com. Some of my other readers may know some other soures too.

      I tend to just read the flyers when they come to the door, and make a list of what’s on sale where, then make my trek on the weekend.


  6. Posted by renaye on January 17, 2011 at 9:07 pm

    Thanks for the lead! I will definately check it out =)


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