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August 03, 2013


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My boyfriend is in a similar situation with debt and is also working to get rid of it all. It's a tough process, but it's absolutely worth the feeling of accomplishment when it's gone. I went through it myself a few years ago, and learned a lot about myself in the process. Good luck!

You have a moderately tight budget. I see savings but I don't see retirement accounts. You should be continuing to invest even if only a little in retirement accounts.

I don't know the mortgage rates in Canada but in the US, you would be a candidate for a refinance. 5.75% is several points high here.

It's hard to give further advice without knowing total balances, equity and interest rates on CCs. I do commend you for bringing your finances to the blog and seeking advice.

I am sure that you work very hard but is there any way you would consider not having a housekeeper and putting that money towards debt?
I would pay off the highest interest rate debt first but if the snowball method is working for you that's great too. It doesn't have to be forever, just while you're paying off your debt. You're still young. It will feel like such a load off when all you have is a mortgage and no other debt.

If Dave were here he'd say...
Cut the housekeeping service.
Cut back on the grocery bill (even if it means eating generic, cooking more from scratch, using coupons, or going meatless for your meals- BEANS AND RICE!)
Also, since its just you, do you need life insurance?

Best of luck.

Joseph, think bigger. Sell the condo, the financed car, pay off the debt, adopt a lifestyle like the one below, and start shoveling $50k/year into mostly tax-sheltered accounts. Ten years from now you'll have a million in the bank, and a family you can spend generously on.

Hi Joseph,

I am assuming the 4000K is your net income because then otherwise you would have negative cashflow. Even if it's net, I imagine it is a struggle to save that $580 per month because we all know that every month we make discretionary purchases that fall outside of the monthly budget. True?

As you mentioned 80% of the battle is behavior, that's why I think one should automate as much of that behavior as possible. I have a very firm philosophy that you should have your paycheck directly deposited into at least 4 bank accounts. I won't take up too much space here detailing the plan but email me if you want me to elaborate.

Joseph, you are doing the right thing in taking steps to trim the budget and pay down the debt as quickly as possible. I know your overall debt feels like a lot but keep throwing as much cash as you can into paying it off and it really will get easier as the principal amount shrinks. I echo what some of the others have posted re: housekeeper and trimming other discretionary spending if you can. Also, your condo fees seem high to me (depending on the amenities offered). I don't have experience w/condo fees, only HOA fees so it might be different but I pay about $120/mo for our rental house's no-frills HOA that maintains front yards and a community pool, and $177/mo for our primary residence's HOA with a guarded gatehouse, full yard maintenance, community pool/jacuzzi, gym and lighted tennis courts). Something to consider: if you think you could sell the condo without a loss and can find a 1 bedroom apt to rent for less than the $1500 you are currently paying (mortgage + ins/fees/taxes) it might be worth it. Also if the apartment you find is closer to your work it would help pare down the petrol bill as well. This is just a suggestion for you to think about; only you can decide if you want to stay put or change the living situation.

Also, as an ERP consultant myself, have you looked into doing additional remote consulting in your off hours? I consult independently and there are clients out there who will pay upwards of $100/hr for the right technical resources. It depends on the ERP package and your skill set (programmers seem to make more than configurators for some reason) but it's worth looking into. As FMF frequently points out, maximizing the income stream makes all the saving/LBYM-ing easier. Best of luck to you/bonne chance!

Now that you've got a sizable emergency fund, you may also want to consider reducing what you put in savings to pay off debt faster.

Kudos for including housekeeping, knowing every person (including me) would suggest cutting that.

I do believe so. I do believe your article will give the individuals a good reminding. And they will express thanks to anyone later

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