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It seems I’m on a blogging vacation

Hello friends,

Apologies for the long, silent, absence. I’m not sure where the time has gone, but life has been eventful.

Although some of the stuff that’s gone on may sound a bit off-kilter, all is pretty good around here. Just for some brief highlights:

– I drove my scooter into a tree and the insurance company has written it off (yep, I’m okay, it was low speed)

– I’ve ordered a new scooter.

– My eldest had a bad patch of health, which resulted in me calling 911 and a brief stay in the local hospital, but she seems to be better now. No word on what the ‘event’ was, just one of those things.

– The youngest turned 18.

– The youngest left on a plane for Paris the next day. She’s on a 3 week vacation with her BFF around Europe. (She saved the money herself).

So, while all is reasonably well, I find myself even more tired than ever. I’ve got just enough energy to work, sleep, and sometimes cook a meal. I haven’t been tracking my money very well in the last month or so. In fact, American Express gave me a call to see where my payment was. The nice fellow said “you always pay on time, we’re just wondering if it was an oversight?”  Yep, it sure was.

Seems best that I just hang up my blogging hat until Labour Day, and hopefully get enough rest and fiscal control back to be able to share my journey again with you.

I hope you’re having a good summer so far, and I’m still checking in on your blogs every so often. Take good care, and we’ll see you in September!

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Good news & new goals

There’s some good news to share.

My ex-husband has called and reports that his employer health care plan will cover the youngest until she’s 21, regardless of her status as a student or otherwise.

If she is a student, it’ll cover her until she’s 25. A couple of weeks ago I considered the option that her prescription drugs wouldn’t be covered which would amount to about $10K per year.

I have some not so good news to go along with it:  by the time he told me this, I had already made myself sick worrying about it.

Last Friday I woke up with a terrible headache, nausea and dizziness. Actually, I thought I was hungover but also thought that was odd given that I only had two conservative  glasses of wine. Still, I spent the day on the sofa, unable to be vertical at all.

The weekend (yes, the long weekend) wasn’t much different. I had moments of being upright, but not many. I didn’t cook. I didn’t buy groceries. I didn’t fill my outdoor containers with annuals. I didn’t care.

By the third day I knew it wasn’t a hangover. I started getting a familiar feeling that I got decades ago when I suffered from anxiety. As I googled anxiety, I noticed a common definition: “worry about every day life events with no obvious reasons for worry.”

Logically, I know I’m not going to be homeless. I know that my odds of being reliant on social services now or in the future are quite slim. I know I’m smart and I know I’m disciplined.

Why do I persist in worrying myself to the point that I can’t get off the sofa for 5 days? Was it a ploy to ensure I didn’t miss the last few episodes of Oprah?  No, it wasn’t (although that was a perk).

Before my little sofa-stint last week, I also broke and re-wrote one mortgage product with Scotiabank. The time I spent considering my options and negotiating saved me not only about $40K in interest over the life of my mortgage, but I also just shaved nine years off the amoritization. Two weeks ago it was being paid off at 25 year amoritization pace. Now, it’s at 16 years. Sounds like I’ll have that money to take my fantasy trip to Florence, Italy when I’m in my sixties after all.

More good news is that I’ve directed my RSP folks to take $400 per month (instead of $100) toward my RSP investments. Yes, that’s still in the plan and no, I’m not compromising on that.

Finally, the good news is because I keep a budget, and because I do pay attention to my numbers, I could see the change in income coming. While I predicted it to be worse than it turned out to be, the knowledge of the pending change gave me an opportunity to make some changes and trim about $6K off our household budget proactively. People who should have anxiety over money don’t do those sorts of things.

I have two goals over the next couple of weeks, one financial and one personal.  The financial goal is to make a decision about how to invest TFSA contributions at my local bank branch to help boost my savings there.  The personal one is to really focus on not worrying about day to day things when there is no obvious reason for worry.

The last thing I want to do is fulfill the prophecy of my worry. There is entirely no need. Besides, daytime TV really isn’t worth it. What’s the point of having the world by the tail and only seeing the sofa?

Note to self: print out one of those “Keep Calm & Carry On” signs. Read it. Live it.

Why I trimmed $6K off my budget for the next 12 months

About a week ago, I realized that I’d have a 15K hole in my budget for the year or so ahead. I was pretty quiet about what transpired in order for me to arrive at this sudden conclusion.

Now that I’ve had some conversations about it in my home, I can share it with you.

You already know that I’m single, and that I’ve been divorced. In my divorce settlement, the agreement I have with my ex-husband is that one of us will pay the other child support depending on who has a child, and based on our income from our most recent Notice of Assessment. (There are tables for the rates published by provincial governments.) This is to continue until the child is 25 or no longer in school.

In addition, it’s my ex-husband’s workplace that provides the prescription benefit for my youngest daughter.

Fast forward to last week.  The post-secondary institution that my youngest really wanted to go to has turned her down. Since they only accept 20-odd students into the particular program she was interested in, the odds are greater that a student isn’t successful in their quest to get in.

I was financially prepared for her to go to post-secondary. Over the past number of years, I’ve managed to tuck away almost $15K in RESPs for her. I know her father has about the same amount saved. The kid is on easy street as far as paying for University goes. 

What I didn’t anticipate was the financial shift if she didn’t go to school. Come July, she will no longer be a student (bye bye child support) and she will no longer be covered by my ex’s employer health care coverage. The combination between the loss of revenue and the additional expense I calculated to be about $15K.

I went into a little fiscal tailspin in my head. Perhaps you noticed?  

At the same time, I actually think it’s best for my youngest to take a year off. There’s been more and more studies to reveal that kids actually do better when they take a year off. They’re not forced into studying something that wasn’t their first choice, and they have a chance to earn some extra money and save themselves from their own financial tailspin upon graduation.

The other factor in my house is obviously health. It’s been a rough few years health-wise. When you miss a month or so of school at a time, it takes a lot of energy to catch up. Sometimes that expenditure of energy causes another flare and another month off. It’s a cycle that is not only tiring, but pretty stressful. Somehow, the kid has managed to stay on the Honour Roll throughout school. No small feat.

I have no doubt in my head that she’ll go to University, she’s just not going in September 2011. As it turns out, neither of my daughters will be a full-time student in September 2011.

They’ll both be able to work and pack away some cash and prepare for the admission cycle next spring.

Meanwhile, I’ve had a conversation with my ex-husband. He actually would prefer to send the child support anyway because he knows that it actually goes to good use. His wife (whom I adore) is of course counting the pennies they’ll be saving in their own house. I would do the same. I’ve promised him I’m not going to create a situation.

He did, however, inform me that their benefits plan has changed at work. He’s under an impression that our daughter will be covered until she’s 22, whether she’s a student or not. I’m still waiting for word on this. If that’s the case, we’ll all exhale a bit.

Meanwhile, I’ve gone on the chopping block and I’ve found about $6K through expense reduction and a request for more income.

  • $963 saved through downgrading cable, and getting other discounts from Rogers
  • $110 saved on cancelling one more service from Rogers that I used rarely
  • $132 saved by giving the youngest her own cell phone bill to pay (starting July)
  • $1,360 saved by letting the housekeeper go (insert sad face here)
  • $2,220 saved by cancelling my disability insurance (and crossing my fingers)
  • potential $1,300 in extra earnings by taking on one more shift per week with my part-time job (requested, not confirmed)

Meanwhile, there are things I have not compromised. I have continued with my plan to increase my RRSP contributions (starting June) and I am still planning to take the girls on a Disney vacation this year (through savings).

I’ll await the word on the drug plan with my ex’s employer. If he’s right, it means I’ve already re-balanced the budget. If he’s wrong, we’ll just have to roll with it and come up with a few more strategies. I have to remind myself, we’re still way better off than many.

Mortgage decision made: Scotia keeps my business

Despite the fog and rain in Toronto on the weekend, the fog in my head has cleared over my mortgage options.

I’m going to give Scotia a call this morning and let them know they can keep me, but I’ll be making some changes.

Here’s the low-down:

  • Break my smaller mortgage from 4.15% to 2.15% variable (for 5 year term)
  • Use up the equity they’ll give me to drag $33k of my unsecured LoC (mortgage debt – not consumer debt) into the new traditional mortgage product (reducing the interest rate from 5.5% variable to 2.15% variable
  • Reduce the interest rate on the small balance that will remain in the unsecured LoC from 5.5% to 4.5%

There were too many issues swirling in my head when this whole scenario arose. Now I’ve had a chance to deal with each issue one by one.

I was torn about whether or not to sell the house and try and downsize a bit. I’ve decided to stick it out here.

I was delusional about living some simpler life somehow. I can do this, but not right now. So I’ll carry on.

In the near future, I saw a $15K gap in my expenses/revenue that I hadn’t prepared for, and I went into panic mode a bit. (More on that in future posts).

While CIBC did tempt me with their offer (both the cashback offer as well as streamlining my banking to one branch which helps simplify my life), it’s not the best offer financially.

In the end, I’m glad I didn’t rush this decision. I really wasn’t thinking straight for a while there. (I’m not sure I am now, but at least this option seems clear).

Thanks to all of you for listening to me wax on about it. Now it’s time to get on with it!

One phone call, almost one thousand dollars saved.

Before my realization yesterday that I’d have a $15K hole in my budget, I decided to cut the cable in our house.

After we all had a long day on the weekend, the girls and I plunked ourselves on the sofa to watch some TV. Imagine our disappointment when there was nothing on.

Disappointed? Yes.

Surprised? Not at all. It seems this happens a lot, and we even have a PVR.

Sitting on the couch, I moaned about the price of cable, and my general lack of time. For the umpteenth time I crabbed “I’m cancelling our cable”. For the first time, I was met with two variations of “go right ahead”. There was a time last year when I struggled with this decision. Last year when I called Rogers, they reduced my rate a smidgen, but not a lot. Up until Monday, I was still paying $62 (including taxes) a month to watch bad tv. That’s more than $700 a year. A serious bit of coin in my books.

There are two TVs in our home. The one in the family room is a proper, 15-year-old Sony Trinitron. It’s the one that’s hooked up to cable. In my bedroom I have a $9.95 bargain from the thrift store, that’s not hooked up to cable, but my rabbit ears pick up CBC, CTV, CityTV and Global. Enough channels to lull me off to sleep when I’m laying in bed.

To ride the wave of my daughters discontent with TV, I called Rogers on Monday. When you call and tell them you want to cancel anything and they transfer you to their customer retention center. As soon as I told the nice lady I wanted to just cancel cable, she offered me basic cable at $18.98 (15.99 for basic cable, 2.99 digital service).

Although that was nice of her, I did complain a bit that I have to call and threaten to cancel for them to roll out their customer red carpet for me. “Why is that?” I asked. “We’re working on being more proactive to our customers in the future” she promised. I let her know that I was still frustrated. After a quick calculation, I said “even if Rogers hands me a $100 penalty for cancelling, I’d still save $600 a year by saying no to your offer”. It took her a minute, but she caught up with my math.

I politely grumbled a bit more…reminded her what my total bill was to Rogers, as a subscriber to just about every service they offer. Her lightbulb went off.

“If I could save you money on some of your other services, would you reconsider basic cable?” she asked. Naturally, she piqued my interest.

She went on to offer $10/month off my home phone, and a 30% discount ($15.30/month) off my internet service and modem rental. After some more speedy math at my end, I knew the whole deal would save me more than $800 a year. Guess who has basic cable now?  🙂

How do the savings shake down:

  • $183.60 per year saved on internet services and modem rental
  • $120 per year saved on home phone services
  • $548.76 per year saved on Cable TV
  • $110.80 saved on HST on all of the above…for a total savings of $963.16

The only frustrating part:  I didn’t call them sooner and tell them I wanted to cancel.

I would imagine that CableTV is a declining revenue source for Rogers. Customers with only one service with Rogers can watch Rogers Cable online. There are more and more affordable gadgets to allow me to show my computer screen on my TV. Why not do more of that?

The nice lady at Rogers customer retention did mention one thing that may concern some folks. She said that by August, the CRTC will make it impossible for folks like me to pick up local channels with their rabbit ears, without also paying for cable. I’m not sure if that’s true or not, but it’d be a shame for those who rely on those local channels and really can’t pay for basic cable.

In the days ahead, you’ll hear more about what I’ve cut from our budget and how the savings will help me shore up the gap in my new $15k deficit.

Enough is enough.

Yep, that’s my white flag.

I’m having one of those “I give up” mornings.

Despite the little victories and opportunities that I’ve had with my finances, and the ones that lay ahead, I’m really feeling like I’m pushing a rope. Given my degree of fatigue, that rope is getting a bit heavy.

Yesterday I had this overwhelming “I want to hold onto my house” feeling. I love my house, I love my neighbourhood, and the fact that the garden is coming up makes everything seem a bit better. You’ve heard me go on about how I love it here, and you’ve also heard me whine about the cost of staying here. Yes, I have an opportunity to save money on interest as two banks put their best offers in front of me. That’s all good.

Today I realize that in the year ahead, I have a $15,000 gap in my budget. I’m not going to elaborate on what it is specifically, but between additional expenses (not optional) and lost revenue (again, not optional) I’m looking at a significant hit. I’m mindful that it took me about 15 months to pay off just less than that on my line of credit.

It’s kind of like the Universe’s way of saying “You? Fantasizing about retirement? Ha!”. 

What do I have on my side? I have a good job and I have a part-time job. I’m  generally employable (or at least I have been in the past). I have good kids. I’m reasonably smart and reasonably disciplined about most things.

Perhaps it’s a good thing that I have an option to look at my mortgage now. Looks like I’ll need some flexibility.

I can ask for extra shifts in my part-time gig, but frankly, I’m not sure I can do it.

At the moment I’m thinking that another opportunity I have is an all-star credit rating, and I just may have to subsidize myself and my family with that. Yes, I need to go back to the budget and make some serious changes and look for yet more options.

The other opportunity I have is my age. Despite how old I feel, I’m still reasonably young. I’ve got a good opportunity to recover…as long as I stop dreaming about retirement and keep on trucking. Or I could do as my Mother advised…start buying lottery tickets.

Mom also noted I was smart and I’d muddle through all these decisions and issues. I’d like to be rescued from all the option weighing, decision making, action planning, execution and monitoring of it all. I’d like to stop feeling inadequate that despite my conquering of a good amount of debt, that I still don’t have an emergency fund or a home maintenance fund.

For today, I’d just like the Universe to cut me some slack.

New ingredient to the mortgage stew

Despite my thinking I’d assessed all my options, I have a new ingredient for the mortgage stew.

When I dropped into my local CIBC branch on Friday to do some day-to-day banking, my friendly branch manager nabbed me to go over her numbers regarding my mortgage. I indulged her, even though I had already run the numbers myself.

She was working with a different set of numbers.  Here’s the wrinkle:

If CIBC takes on a new mortgage that is $400K, the cashback offer is 3%, rather than 2%. As you might imagine I said “well, my mortgage isn’t 400K, and the cashback offer is a bit of smoke and mirrors to me right now.”  She asked me to indulge her, and since she’s a nice lady, I did.

She added up my existing mortgage, and of course, there’d be the penalties to Scotiabank. Then there was a bit left over. She said “do you have any work that you need to do around the house?”

Gee, the house built in 1923…is there work to do? Heck yeah.

Then I told her I really didn’t want to see a $400K mortgage. She told me the $12,000 in cashback could go right back on the principle, leaving me with a $388K mortgage, which is about $17K more than it is right now. IF I moved it from Scotia, the penalties would be added to my mortgage principle, so the extra 17K is partly penalty, and partly just extra that might be used for some home repairs.

Then she started showing me the math on a 25 year amoritization. Again I slumped in my chair. “What’s wrong?” she asked. “I don’t want to be paying off this mortgage in my 80s” I answered.

She reminded me of a trick that I had used once in the past and had forgotten. The trick is to take out a longer amoritization than you may want, but boost your payments up to the dollar amount that you can tolerate. This way, in the event that something happens to your income (job change, illness, etc) you don’t have to break your mortgage to go back to a lower payment. In theory, you could take a 25 year amoritization and pay it down like it’s a 15 year amoritization. I suspect that many people may think they’ll do this, but they take the long road to pay it down anyway.

So, on $388K over 25 years at 2.5% on a 5 year term, I’d pay $133,141K in interest over the life of the mortgage. That’s if I never paid an extra penny over the required amount. (Not gonna happen).

If I took that same mortgage and treated it like a 15 year amoritization, I’d only pay $77K in interest over the life of the mortgage. That’s almost cut in half. Scary stuff.  If I treated it like a 12 year amoritization, the interest would be just shy of $61K. That’s likely too aggressive for me to pay, but perhaps 13 or 14 years might be doable.

To answer my branch manager’s question – yes, there are things to do around the house. My front steps are crumbling more each day. This was already on the books as a 2011 home repair. Where is the money to come from? I have no idea. I’ve already paid $1600 for eavestrough an facia repair and squirrel eviction. The trouble is, I see the squirrel is back, and she has babies. I’m not happy, but I still have to get them out. Yes, there’s a big hole in my new facia. Do they sell chainsaws to squirrels?

Finally, the brick on my home needs repointing. If not this year, then certainly next year. Next year my driveway needs to be dug up and replaced, and the side of the house needs waterproofing. These aren’t the “nice to haves”, these are the “must maintain the home” things. It’d be nice to have properly sealed windows on my upper level too, but frankly, these can wait for a while.

So, I’m pondering the offer of the CIBC again. I do worry about a job change or a change in my income. After all, I’m the only one bringing home the bacon, and I have nobody to back me up on this stuff. I also worry that I’m tired, I mean really tired, and I have daily fantasies about my retirement.

There was a point in my life when I was thinking about advancing my career, being upwardly mobile, rocking the office. Now, I’m trying to find the path of least resistance. I wish I could see the way clearly. Sometimes I just wish I could moan about it to somebody else and have that somebody else present some options I could bat around.

All this turmoil over a mortgage. The only think I know for sure is this: I’m not rushing this decision, I’ll wait until I’m really sure about the path, and then I’ll take it.