Sledward's Goals

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sledward
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Sledward's Goals

Postby sledward » Mon Sep 15, 2008 12:40 pm

Hello!!

I have been reading this website / forum off and on for the past few months, using it as a motivational tool to get out of debt, and to start a retirement fund.

Basically here is my situation:

Age: 23

My income per month: $3000 after taxes.
My RSP Contribution: $100 per month
Pension: 5% of my pensionable earnings with the employer paying an additional 7% (My 2% required with them doubling, at 4%, plus my 3% voluntary, and they match that 3%)


My Gf/Spouse's situation:

Age: 24

Income per week: ~$500 per week; take home.
RSP: none (she was also was just promoted to Full-Time, and we have yet to find the details on her pension)



Our debts:
$6500 in credit card debt.
$50,000 (this could be wrong, but it's a guess) for a 2008 Jeep Rubicon ($14,000 of that was due to a Kia we owned, and had to trade in....do not buy a Kia if you want a car that keeps its value)


We have received a lot of criticism on the fact that we owe so much on the Jeep, but really... that’s what we love to do, it, along with boxing, are our hobbies.


We have set aside $300 a week every Thursday to go onto the Credit card from her pay.
My $3000, cover all our bills (Which include $200 going into ING Canada savings account, my $100 RSP contribution and $200 a month for fuel to go to work / the gym etc)

Because we enjoy having fun, we're members of the Royal Canadian Legion, I am a member of the Shriners, we have decided to give ourselves $100 a week each for allowance, for our membership fees, and any other expenses we wish to save for....clothes, new CD's what ever it may be.

Our goal is to have no CC debt by Feb. 5th 2009, and have our emergency fund well underway (the $200 a month savings)

After we're out of debt, we plan on investing $150 each per week into our own mutual funds (unless we're advised otherwise).

We are new to this, but look forward to being debt free and well on our way. (But, as my mother advises me....there should be a Ring for her thrown in the mix in a short while....so....as it stands now, our goal is Feb. to be debt free....any advice on this part?)



BOTTOM LINE:
---------------------

CC DEBT: $6500
JEEP DEBT: ~$50,000

CC PAYMENTS: $300 per week
JEEP: regular $771 per month payments (maybe doubled when we're out of CC debt?)


I will be updating this as things happen; I hope this plan works, and we're willing to ANY suggestions!!

Lee Edward

mallow
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Postby mallow » Mon Sep 15, 2008 2:12 pm

Code: Select all

Income:
$5000 a month

Savings:
$ 200 for EF
$ 100 for Retirement
------
$ 300

Debt Repayment:
$1200 CC
$ 771 Jeep
------
$1971

Income - Savings - Debt Repayment = Expenses:
$2729


So you guys are living off of about $2729 a month? That's pretty good... but I think the elephant in the room is this $50k car debt. If you paid off your CC debt and had an EF tomorrow and had $2171 a month to pay on your Jeep, it would still take you 2 years to pay it off. That's 43% of your takehome pay going to pay off your Jeep for two years, not including interest. I don't know about you, but even though I love my hobbies, I wouldn't drop 43% of my paycheck on them for two years. Not to mention some short term expenses (ring, wedding). Ever think of buying a house?

But hey, as JD would say, do what works for you.

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Greenewashed
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Re: Sledward's Goals

Postby Greenewashed » Mon Sep 15, 2008 6:52 pm

sledward wrote: we're willing to ANY suggestions!!


Are you sure? :twisted:

Because frankly, I think it's a little shocking that you are so determined to pay off $6500 in credit card debt and you don't seem troubled at all by the $50,000 elephant in the room.

Am I reading that right that your monthly payment on the jeep is $771? Lee, can I put that into perspective for you? I graduated from law school with six figures in student loan debt, much of it at a variable interest rate, and my payment never got that high. And even with a medium-six-figure income, the debt was stifling to me. (I finally got out from under it, and was able to leave a soul-numbing job, and let me tell you, I will never again put myself in the position of HAVING to earn a certain income. The annoying people who scream about how repaying debt equals freedom? Now I know what they mean.)

Just something to consider, because you make a decent income, and there is still an opportunity to pare down your expenses (like the $800/month fun allowance) to get really serious about tackling the debt. But I agree with the balanced take that mallow gave. In the end, it's your life.

sledward
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Postby sledward » Tue Sep 16, 2008 6:35 am

Having to earn enough to pay for the elephant is a pain, you're right....

But that was/is a life lesson I have learned.... and wont let that happen again.....I bought it with all the wrong reasons....plus this is my first real 'job' where the pay is very well, and first thing in my mind was 'Get something cool" which was soooo wrong, and it took reading a few books to realize that.

SOOOO...... thats why I am on here....writing what I have to deal with, and what my plan is to fix it.

What would you do? Pay the jeep down, or the CC? I chose the CC because it's smaller, and I can then do what ever needed after.....with the extra $300 a week....wedding etc....

sledward
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Postby sledward » Tue Sep 16, 2008 8:38 am

Today I decided to sign up for Scotia Bank's "Bank the rest" thing.....

basically, every debit purchase is rounded up to the nearest $5.....and deposits the difference into a savings account.

$4.99 = 0.01 into savings. $5 purchase.
$5.01 = 4.99 into savings. $10 purchase.....this will take some getting used to, but I love the idea....sort of a forced saving.

We decided based on our past expenses that we can afford to slash the allowance in half....giving each other $50 a week to spend on what ever we want...which is good...allows for membership fees to be paid....donations to be made...

that adds another $100 a week onto debt while still enjoying ourselves.

I feel good about this....as one/two months ago we had 5 credit cards, and managed to pay 4 of them them off: (We nearly emptied our Emerg. Fund, but this way we feel like there is less weight on our shoulders)

$3500 on the Amex PAID
$2000 on her Student Visa PAID and closed.
$1000 on my Visa PAID
$1500 on my 'other' visa paid. and closed.
-------------------------------------------------

sledward
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Postby sledward » Tue Sep 30, 2008 5:35 am

Wow does saving the change up to the nearest $5 really add up, it's been two weeks and it already adds up to $30.


Jeep Debt: $54,000 (I called the bank and asked for the total remaining.)

CC Debt: $5,800.
------------------------------

Getting there slowly, come this thursday (the 2nd) I am putting another $500 on the CC
--------------------------------------
Lee Edward

peachy
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Postby peachy » Tue Sep 30, 2008 6:27 am

For a 54,000 dollar Jeep, I hope you guys never drive on paved roads in order to get your money's worth.
That is an unbelievable amount to pay for a Jeep. I am sure you're going to keep it forever with that price too.

I'm glad the "saving the rest" thing is working for you. You have to start somewhere.

sledward
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Postby sledward » Mon Oct 13, 2008 7:33 am

peachy wrote:For a 54,000 dollar Jeep, I hope you guys never drive on paved roads in order to get your money's worth.
That is an unbelievable amount to pay for a Jeep. I am sure you're going to keep it forever with that price too.

I'm glad the "saving the rest" thing is working for you. You have to start somewhere.


To answer to the "Never drive on paved roads" here is my Thanks giving story (we're in canada eh?)

So, We were driving down this nice little dirt trail before breakfast....and then without notice we're in a Bog....jeep has been in there for two days, and we're just now trying to get a bulldozer to come get it....

Hopfully this doesnt set back the CC debt!!!!!
--------------------------------------
Lee Edward

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Postby peachy » Mon Oct 13, 2008 8:02 am

No way!!

I hope you don't think I jinxed you. That sucks.

Happy Thanksgiving!

sledward
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Postby sledward » Wed Oct 15, 2008 11:44 am

Good news financially, the jeep only cost me $4 for a new fuse.

Thats so far, I am sure I will have to change all the fluids in the front end, but that's no problem.

Thanks for the thanksgiving wishes.....
--------------------------------------
Lee Edward

sledward
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Postby sledward » Tue Oct 21, 2008 8:03 am

So....Good news is never really that good.

$4 fuse, the dealership put the fuse in, and the jeep went up in flames.

We are now dealing with the insurance, and possibly Transport Canada....

Boy oh Boy this is stressful, I wont be posting for a while until I sort out these problems....

but we're still keeping on track as much as we can.
--------------------------------------
Lee Edward

sandi_k
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Postby sandi_k » Tue Oct 21, 2008 9:29 am

Wow. I hope that insurance covers being upside down on the car loan (AKA, "gap insurance). Or you're gonna be REALLY behind.

Best wishes - I hope it all works out in your favor.

Sandi

sledward
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Postby sledward » Tue Oct 21, 2008 11:10 am

GAP insurance?

OOOH, I think that's called "waiver of Depreciation" where they give me what I paid for the vehicle. Yes I do have that, thank god!!!

Worst case is I bring the dealership to court....I brought it there to get fixed not burnt.

Ironic that my Jeep is "Fire Red" and now it's "Fire black" haha!!! No need being upset about it anymore, as long as we're okay. Imagine had that happened while we were driving it.....


If infact it is a write off and we get the full value we paid for the jeep, it is a blessing.... we called the dealership and are going to get another 2008, but for cheaper, so infact we'll be saving almost $10,000

Ofcourse if it seems to good to be true, it probably isnt.




Update on CC:
------------------
Because we used it to buy gasoline and i went and bought a ring with it (I had to celebrate my initiation):
$5000 left on it, and we're still making $500 a week payments. Soon to be increased if all goes well with this Jeep.
--------------------------------------
Lee Edward

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Postby peachy » Tue Oct 21, 2008 6:29 pm

I'm glad you're going to get the full value of your Jeep. Have you looked in your papers for private sales? Maybe someone has a used Jeep that will do the trick, and will be much less than $40,000. If I were you, I would look into it before getting a 2008 Jeep at the dealership. Now is your chance to save some money and actually get a bargain instead of getting ripped off.

Why the initiation ring? I thought you were saving for an engagement ring for your fiance, not buying rings for yourself. Call me confused. *shrug*

sandi_k
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Postby sandi_k » Tue Oct 21, 2008 7:56 pm

I'm with Peachy - you haven't learned much if you go and buy another new car while you still have CCd debt. You could buy a 2 year old car, and literally save enough to pay off the CCd NOW!

It would get you way ahead...

Sandi


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