A Look at My Financial Priorities

The future looks bright :)

The future looks bright :)

The thing I love about personal finance is that it is just that- personal. I love hearing about how and why people choose to do things with their money. Even if I can’t relate I’m curious to know what makes people tick when it comes to their finances. Though I’m pretty clear about our goal to pay debt off, I’ve never really talked about my financial priorities as a general topic and so here they are:

1) Pay off debt. Obvious I guess, but we’re almost halfway there with a goal to have the remaining $70,000+ paid off in 2.5 years.

2) Buy a second car, with cash. We need a second vehicle. We’ve made it work with one vehicle for now but it is less than ideal. When Mike goes out of town for work I am 100% reliant on our family (thanks guys!) which works for now but it’s not great. Maria is also starting to get involved in things (I’m officially a soccer mom) which means getting me from work and having her at the field at the same time won’t work. Buying a second car might happen before the debt is entirely paid off. I suspect in 12 or so months we’ll start saving for one.

3) Start long term savings. We have savings for short term goals and emergency fund but no retirement savings. I’m not worried about it though since we’ll have over $2,000/month to play with when debt is gone- and incomes will increase. Living a life where we we’re required to live on so little has also put retirement into perspective for us. I don’t think we really need 70-80% of our pre-retirement income. I think we’d be happy with 45-50% of our pre-retirement income though I know we’ll achieve more.

4) Have more kids. Though this isn’t directly ”financial”, it also is in many ways. Kids aren’t cheap and we need many things in place before we have more (see 1-3 above).

5) Increase travel fund, significantly. Travel is important to us. I’d rather spend money on experiences and travel than things, any day of the week. We currently have little to no travel fund, we save for small events like out-of-province family reunions but no current regular travel fund savings. We won’t be a couple that flies south every winter either. I’d rather spend two weeks in Europe every two to three years and really learn something then get a sunburn every winter in a sunny destination. We’d love to eventually attend a winter Olympics too.

6) Increase post secondary savings for kiddo. We’re putting aside a small amount every month now but will increase this once our debt is paid off.

7) Move. We have a goal to move in 3.5-4 years. I’ve said it before but this house just doesn’t work great for us for many reasons and so we’ll move. I’d like to have 20% down when we move into next property which we should be able to do between our personal savings and nine years of equity in current property. We’re not necessarily looking for more home just better layout and away from this particular street.

Even though these are things we won’t start acting on for a few years, I think it’s important to see beyond the initial goal of paying debt off and project where you want your life to be within a five year window. I don’t want to wish time away by any means but I’m excited to see how we accomplish everything!

What do your financial priorities look like?

6 Tips for Safe Corporate Travel

Heading off on a business trip? Hopefully, your employer is wise enough to use great travel vendors like Hipmunk. How will you truly know if you’re being taken care of on while traveling for business, though? Read on for must-know tips about corporate travel safety.

1. Know what to expect. If you’re not used to traveling for business, you may be expecting the best. However, it’s rare that you’ll have any downtime during your trip or time to unwind afterward. You’ll have to hit the ground running the moment you arrive at your destination and head back home as soon as you’re through. If you plan to be busy and, frankly, exhausted, it won’t come as such a surprise.

2. No matter where you’re traveling, there’s an element of danger. Tourists are easy targets. From crime to natural disasters, any number of things can go wrong when you’re away from home. Plus, if you’re traveling with sensitive company information, it’s even more disastrous if your laptop gets stolen or your Internet connect is hacked. Before visiting an unfamiliar area of the world, read about staying safe in that location. By simply knowing the risks, you can take steps to prevent them.

3. Business travel doesn’t just pose a risk to your belongings, but also to your health. Long flights, switching time zones, and living life on the road means it’s difficult to get adequate sleep, exercise, and nutrition. Find a way to get comfortable enough on planes to log some hours of sleep. Melatonin, relaxing music, and a neck pillow may make it easy for you to drift off. Pack healthy snacks that you can nosh on in a pinch and figure out the healthiest meals from fast food chains. Try to have your employer book your room in a hotel with a gym so that you can get in at least a half hour of exercise before your day starts.

4. Most employers are legally responsible for your care when traveling. Your employer should give you the necessary training before you leave, with information about how to stay safe in the specific location and how to conduct yourself in different cultures. They should also arm you with emergency contact information and provide updates on both transportation problems and weather. This is especially important when traveling to high-risk destinations. Some employers will require you to use tracking equipment, not so that they can keep tabs on you, but so you remain safe.

5. Know your rights. According to the United States Occupational Safety and Health Administration laws, employees can refuse any work that puts them at risk of serious injury or death. This is especially true if your employer doesn’t provide you with the necessary safety precautions.

6. Follow your employer’s travel guidelines. For example, don’t book a hotel room on your own. Your employer will book a hotel room for you so that they know exactly how to contact you in case of an emergency.

In movies, business travel is often depicted as glamorous. After all, you get to visit unfamiliar cities, meet new people, and get immersed in a different culture, right? In truth, though, traveling for business is much more work than play. If you’re a frequent business traveler, you deserve to be treated fairly by your employer.

This article was contributed by Fiona Moriarty of Hipmunk, a travel website that offers customers a fast and easy way to find the best travel deals.

Breaking Free From Your Financial Upbringing

There is truth in the saying that you are a product of your upbringing. You are more likely to become the type of person based on what you know, and the environment you were brought up in. This doesn’t have to be true though.

Though I have some traits of my upbringing I am so far from my environmental circumstances it amazes me. I’d like to think I grew up with the ability to learn the good and learn lessons from the bad. I truly believe we’re put though situations (good and bad) to learn from them and especially when it came to finances, I had a lot of lessons to learn. When it comes to my financial know-how I am not a product of my upbringing.

The Frugalwoods had am amazing post recently about their how their upbringing gave them a privileged advantage over most. Something I would argue most of the personal finance niche can relate to. I can to some degree but not all points. Yes I grew up in a house where education was important and, academically, was probably more inclined than most of my peers (as a population not just my friends) but there were limitations too.

Though I grew up in a house where getting a good deal was exciting and credit cards were paid off in full every month, I learned nothing about finances. My mom (single parent) meal planned and shopped sales like it was a hobby but didn’t repair things around the house like she should have. Though she hoarded money in her retirement account like the apocalypse might happen tomorrow, I’m certain she had no access to emergency funds, and to her a credit card would be the answer (even if she could pay it off in a reasonable time frame). She had an extremely distorted relationship with money and financial priorities.

When I realized this truth I also realized that I couldn’t let this be my reality. I had to educate myself on everything I could to break free from what I knew in my upbringing. I wasn’t going to let my upbringing be an excuse to not obtain the life I wanted and needed for my family.

You don’t have to be a product of your financial upbringing. Just because it wasn’t taught to you isn’t an excuse to not make it a priority. Too many people use ”I didn’t know” as an excuse. You know you need to pay debt off. You know you need money for retirement. You know you need an emergency fund. If you don’t know how to achieve these things, educate yourself.

It didn’t take me long to figure out that I needed to do all of these things but it did take time for me to figure out how to do it. I Googled, I read blogs, I took out books from the library. Everyday I continue to improve my knowledge about my finances and I have no one but myself to blame for my situation. I didn’t want to be a product of my financial upbringing so I did what I needed to do to change it.

Have you needed to change anything about your financial upbringing?

 

Top 5 Benefits for the Self-Employed

Self-employment is something many people strive for; it’s the chance to own your own business. However, there are often plenty of stigmas involved with being self-employed and whether or not it is actually such a great option. But rest assured that there are many positive incentives to look forward to when becoming a business owner. Below are the top five benefits you get to enjoy from being self-employed.

1. Choosing Networks

Being self-employed means you are no longer constrained by the resources or the networks of your employer but are free to choose your own path in regards to what partnerships will help you provide the best services to your clients. For example, if you’re self-employed in the telecommunications industry, you can make the choice to use a wholesale provider like Telcoinabox rather than managing distribution of services through the major networks yourself.

2. Flexibility

Working for yourself brings the flexibility of designing your own schedules and work standards. This doesn’t mean only working a few hours a week though. For example, if you have a family, you can structure your workload to fit around school hours. It also means you can be as flexible as you choose for your clients. Working for someone else might mean you are not available when your customers need you. Your own business will allow you to restructure this to hours of work that might be better suited to your clientele.

3. Your Own Business Plan

Before being self-employed, the final say on business decisions would rarely have been your own. And elements you didn’t quite agree with would have had to stay in place because you’re not in a position to change them. Having your own business also means creating your own business model, including how you choose to develop it and showcase the services you have to offer.

4. Job Title Preference

You may spend years working your way up the ladder just to finish in the middle, even though you know you are capable of so much more. A benefit of being self-employed is that you choose where you start and what you want your title to be. This could mean jumping forward in leaps and bounds in a much shorter period of time.

5. Employee and Client Choice

A huge benefit of being your own boss is that you also have the final say on who is involved in bringing your business to fruition. The employees you choose will be the ones you feel are best suited to the job, and the people you can actually see yourself working with to support your end goal. Client and target market is also entirely up to you. With your own business, you get to design what demographic you want to bring in, and what sort of clients you want to work with to get your brand out there.

Contrary to popular belief, the benefits of being self-employed do not involve slacking off and holidaying all the time; it is actually incredibly hard work. And although there are plenty of difficult obstacles to overcome from being a business owner, the fact that this business is your personal achievement is enough to outweigh them all.

If you’re self-employed, what are some of the benefits you enjoy? Share your thoughts in the comments.

A Snapshot at Our Debt (Almost Half Gone!)

wpid-20150318_101631.jpgThough I do my monthly debt repayment updates, it’s been a while since we looked at our overall debt. Given that I’m currently sitting under a massive amount of snow (see picture), and avoiding my income tax, I decided to write this instead. Back in October I decided I wanted to payoff $70,000 in 36 months (of remaining $81,500), something we’re still working towards. I have ambitions of knocking off a few months so this is a ”worst case scenario” plan.

To remind people…

Our highest non-mortgage debt, back in  winter of 2010/11, was at around $135,000. This included traditional student loans, student lines of credit, some credit cards (used for tuition…) and a vehicle.

Given that the interest rate is so low on our debts (all under 5%) even making minimum payments had an effect and we were able to pay off thousands with little to no effort. It wasn’t enough though. We were still going to be in debt for 10-15 more years if we didn’t ramp up our efforts.

During my maternity leave in 2012, we decided that we finally needed to quit making minimum payments (as we were since January 2010) and get real. We cut our expenses, made many budgets, consolidated some debt and came up with a plan. We wanted to live our life with our daughter and that life didn’t include any debt. Given that I was on maternity leave until end of May of 2013, and needed to make up a bit of lost income when I did go back to work (ie deal with some expenses that came up while off that we couldn’t afford at the time and added daycare costs) our efforts didn’t truly start in full swing until end of 2013/beginning of 2014.

As of today, our total non-mortgage debt is sitting at $72,756.98.

In just a few months our debt will be more than half gone. Half of $135, 000 is a lot of money! It will have taken us five years to pay off the first half and only 2.5 years to pay off the remaining half. It’s amazing what you can put your mind to when you really want. It’s also amazing to me to think that if we had put this much effort in from the very beginning I wouldn’t be writing this right now as we’d likely be debt free.

Mike and I have learned a lot on this financial journey and continue to learn every day. The last five years have flown by so I know the next 2.5, though I feel like may go on forever, will also go fast. Maria turns three in less than three months and that scares me. I’m excited that by the time she starts her education we will have finally paid our (post secondary) off. It’s not been easy but it’s been so worth it!

How To Avoid Being House Poor

I love real estate. Though sometimes I wish I was still a renter, for the most part I enjoy owning a home (or mortgage at this point). Though we currently own a home, have careers, a kid and all those other ”grown up things” I don’t feel settled in my life yet I think part of it is because I know, in the not too distant future, we will be moving.

This home was always our starter home. We bought knowing within a 10 year max window we’d sell and settle into what would likely be our forever (or at least super long-term) home. I remember meeting with our mortgage broker the first time and having him spit out the number we could ”afford”, I was blown away. Even with, at the time, close to $100,000 worth of debt we were told we could look at homes more than 5x our combined gross income, and this is how people get in trouble.

Being ”house poor” insinuates you can have the home you want and basically afford nothing else in life, which, isn’t any fun at all. What’s the fun of owning a super nice home with a kick-ass kitchen with no money to entertain in it? And while it may be nice that you own a pool, it’s the last pool you’ll ever swim in because you can’t afford a Rec membership or any trips. Being house poor is NO fun which is why we knew we needed to avoid it at all costs.

Don’t Spend Your Max Budget

One thing is for sure, had we purchased at the max budget we’d be in a lot of trouble right now. There would be NO money to pay this debt off and we’d be cranky miserable people sitting in our unfurnished house with no friends left to have fun with. It would suck. When our debt is paid off, our max budget will mean our mortgage payment is four times what it currently is, if we let this happen we’d put the rest of our lives, and retirement in serious jeopardy.

Be Realistic About How Much House You ”Need”

I feel like I’m constantly cleaning, something Mike and I manage between us but I can’t imagine adding another 1,500 sqft to this to clean. I don’t need a lot of space, I need functionality and well-laid out floor plan to make my life easier but I don’t need to double the square footage of my current home when we do move. Especially since having a kid my list of wants and needs has drastically changed.

Do a Mock Budget

Before you buy that house, do up a budget that includes various mortgage payments to see how it will affect everything else. This will give you a better idea of how your life will look depending on the size of the mortgage payment. If you really want that larger home, you may need to cut back on other things. Doing up a mock budget will show  you everything laid out.

Save a Larger Downpayment

Especially when it comes to your first home, it can be tough to wait but the fact remains that the larger the downpayment the more affordable your home becomes so sometimes a few months can make a big difference.

Owning a home can be a lot of fun but if you let your home own you, you’ll quickly start resenting it. It will likely be the largest debt you ever take on so make sure you’re able to afford the payments with the lifestyle you want.

What to Do When the Debt Collectors Come Knocking

There are few things worse than that sinking feeling you get in the pit of your stomach the moment you realize you are in over your head. Though I am referring to debt, the metaphor references being in a body of water that is greater than your ability to swim. You feel safe enough when the hard sand is beneath your feet. You dog paddle, you dive underneath, then come up for air, ever confident that the solid ground will be there to support you. And everything is fine — until it isn’t.

Without realizing it, you find that you have drifted away from the shallows. You go to put your feet down, only to discover that the bottom is no longer where you thought it was. Sinking, you have to deal with the realization that you are quite literally in over your head. Whether in water or in debt, drowning seems like a very bad idea. If you are going to make it back to shore, here is what you have to do next:

Stabilize

Perhaps Scott Adams said it best: Don’t Panic!  You’re still alive. And you may not be as far from safety as you think. When drowning in debt, stabilizing means to stop taking on new debt. Many desperately try payday loans to deal with current debt. That is always a bad idea. Never take on more debt to get out of debt.

The constant phone calls from creditors induce panic. If you want to be able to make clear-headed decisions about your next moves, you have to make them stop. The bad news is that you probably don’t have the power to do that on your own. You’re going to need some help.

Drain the Ocean

The most extreme way to stop a person from drowning is to drain the ocean. No water, no drowning. Unfortunately, that’s not possible. In the case of debt, it is. Bankruptcy, depending on which variety, is a way to drain the ocean. It is a legal procedure requiring some subtlety. You will need a firm that knows what they’re doing. A botched bankruptcy can be worse than no bankruptcy. So be sure to check the attorney’s record.

While bankruptcy is sometimes the best option, all bankruptcy specialists should be able to provide a full suite of options. According to Doan Law Firm, such a specialist can help:

…determine what non-bankruptcy alternative is right for you, including debt settlement, collection defense, short sales, mortgage modification, and RFDCPA/TCPA Lawsuits. Our arsenal of non-bankruptcy alternatives may be just what you need without the need to file for Chapter 7 or Chapter 13 relief.

Chart a Course for Shore

When you are in over your head, you don’t want to just stop drowning; you want to get back to shore. Not dying is the first goal. But getting to a place of safety is the ultimate goal. Getting out of debt is only the first step. Setting up a life worth living that is well within your means is the ultimate goal. If you skip this step, you will only end up back in debt.

Learn to Swim

People drown when their skill is not equal to their situation. The best way to keep your kids from drowning is to teach them to swim. Most likely, your financial woes are not entirely your fault. The education system has failed to make financial literacy a priority. It is tough to swim without someone teaching you. It is even tougher to navigate the current economic reality without being similarly educated.

When the creditors come knocking, don’t panic, get help, arrange your life based on budgetary realities, and utilize all available resources to educate yourself in matters of personal finance.

February Debt Repayment and Life Updates

I just realized that it’s the second week of March and I forgot to do this….

Considering it’s the shortest month of the year it was, without a doubt, the longest month I have experienced, possibly ever. We were having a pretty amazing winter until the first week of February. I’m not normally one to complain about the weather but my God Mother Nature- give it up! She’s been a nasty woman the last month for us. It hasn’t been the total amount of snow, rather the ice. Our driveway and walkway to the house is under a solid 8″ of rock solid ice. The last three days have been a bit warmer so things are looking up (though I’m refusing to look at the forecast for the weekend (SNOW!))

In February I had a talk with the office manager at our second location and I’ve signed up to work five days per week more frequently which means more money for us! I’m only doing two per month (and now have added daycare costs for these days) but I’m happy to report that between my raise at the end of the year last year and me working two more days per week I have managed to increase my net income by almost $500 per month from my job alone.

In terms of debt repayment, February was pretty straight forward, we managed to put $2,025 towards debt repayment and $550 towards our various savings goals (having a heat pump installed being the biggest one, adding a little more to ER fund and a top secret savings goal I can’t yet discuss ;)) I’m hoping to do a post with our current debts soon, there are two loans I don’t have access to online though and finding time to call (and be put on hold for 6 hours) is tough but its been a few months since I’ve done an exact check-in. Our next loan to be paid off is 68% paid off and will be paid off in full by October (though hoping for sooner ;)) I can’t wait!!

I had to laugh because next week I budgeted having the oil changed, and winter tires changed over and balanced, given the weather this past month all I can say is hahahahahhaaha. I’ll have these tires on until July I think!

How did everyone else do in February? Who’s done with winter?

Becoming Wealthy: Not Such a Distant Possibility

A dream widely shared among today’s youth is that of becoming wealthy. But, in light of the economic downturn of 2008, many people have become skeptical about this possibility. Although securing meaningful and profitable employment is in some ways more challenging than it used to be, it is far from impossible. Read on to learn how you can set yourself up for financial success.

The Facts: Achieving Financial Success in 2015 is Possible

Although North America underwent a sharp economic depression in 2008, and it has struggled ever since to recover, there are many individuals and businesses who have achieved success. This is especially so with regards to the supremely wealthy, millionaires and billionaires alike.

According to a recent and exhaustive survey, there are a recorded 1826 billionaires worldwide. Among this group of individuals, the survey determined that they had a cumulative net worth of 7.05 trillion dollars. This figure is up from the 6.4 trillion dollars that was recorded only one year ago. These statistics suggest that entrepreneurs in different sectors and of varying degrees of success have much to be hopeful about. So, if you are a hopeful entrepreneur who is feeling skeptical about his or her prospects, do not despair. Many other people are actually doing what you may have been told could not be done.

One Key to Success: The Quest for Continual Self-Improvement

Becoming financially wealthy largely depends on an individual’s training and education. This education occurs not only before an individual enters the workforce, but while they are gainfully employed as well.
In fact, research indicates that millennials really rely on being trained and coached on a consistent basis. This owes in part to the widespread sense of anxiety that has been built up and around the professional sphere, as the media constantly reinforces how difficult a job market it is. Take the coaching that you receive at work and make a conscious effort to reflect on it and how it relates to your daily life. Do you tend to lose patience? If so, then practice calm patience even when sitting at a traffic light. Being able to make connections between work and life through coaching is essential to both professional and financial success.

Find a Role Model to Inspire You

Last but not least, it is quite important that you select a role model that you can look up to. This business person is one that you rely on, whether directly or indirectly, as a source of inspiration for your own business ventures. Perhaps you look up to Warren Buffet’s business philosophy, or perhaps Charles Phillips, renowned CEO of Infor, proves inspiring insofar as he marries his successful business practices with engaged philanthropy. More often than not, you will not have to consciously decide on a role model but will be drawn to one over time. Select an individual and work on mirroring their best attributes in your own professional life.

If you have long dreamed of becoming financially wealthy, do not allow yourself to give up on this dream. Through hard work, role models and a commitment to self-improvement all things are possible.

5 Reasons Your Peers Are More Successful Than You

I think there has been a point in all of our lives that we’ve compared ourselves to our peers at least once. Good or bad we do it. It’s a way that we measure our lives, and though we shouldn’t, we try to define our success and failures against theirs. Successful people are vital to have in your lives. They can fuel you and I believe that surrounding yourself with positive and high-achieving people can have a positive effect in your own life.

There are common reasons to why some people seem to be able to do it all and have it all. My experience is that most of the successful peers in my life genuinely deserve it. They work hard and reap the benefits of doing so. Here are five things your peers are likely more successful than you:

They use their time incredibly wisely

When I say no minute is wasted I mean it. I think we’d all be surprised how much time we waste in a day. When I committed to losing weight and specifically doing my family in weekly FitBit challenges I couldn’t fathom where the time would come from for me to walk and get on the treadmill as much as I knew would be required. I was busy enough with full-time work/mom/wife/house/blog/freelance work and now needed 30-60 minutes per day taken away from something to do this. I did it though and it was easier than I thought. Though I consider myself an incredibly busy person I wasn’t using every minute of my day to max efficiency and now I’m much closer to that. Limit unnecessary social media. Turn off distractions. Make lists and actually do them rather than thinking about doing them. Just get it done.

They don’t care what you think

Caring what other people think about you is exhausting and time consuming in so many ways. Successful people do what needs to be done and don’t really care if you like them or not. I’m not suggesting all successful people are heartless a-holes but they certainly aren’t wasting time logging into Facebook to update their status in hopes to gain a few ”Likes”. The most successful people let their work do all the talking and they don’t need to boast in any way. They are confident in their lives and they don’t need your validation.

They prioritize

Everything. Their day, their friends and family members, their extracurricular activities. They have to. When you stay as busy as very successful people (and I’m not suggesting it’s not all work and no play), you need to form a hierarchy with everything you do. No success was built by logging into Instagram before emptying your inbox at work and no happy successful family man ever puts a friend over their child’s needs.

They don’t compare success stories

Success is such an individual and personally defined term. My level of success can’t be compared to anyone else because it’s a personal motive. They day I realized there was no way I was going to be one of those people who paid off $150k in 12 months, and that I would have to forge my own personal debt-freedom path, was they day my life got much easier. I stopped comparing myself and started putting this time and energy into actually implementing the necessary steps required to get the results I needed.

They are surrounded my like-minded individuals

Most really successful people have a network and support system in place (most, not all). It doesn’t mean your mom and dad are on the phone to congratulate you on your endeavors, it can be an online community to cheer you on- most successes are not made without some support and continued encouragement and challenges (which supports growth).

Success is never just given to someone. True success takes a lot of hard work and my experience is that most people don’t come close to putting in the required effort for the results they desire. Do it though and reap the rewards.