Debt is NOT forever

get out of debt

At least mine wasn’t.  Good morning Loves.  It’s a New Year and that means we’re all checking our credit card statements and bank accounts to see just how much of an impact the holidays had on our finances.  Did you know that money resolutions are the third most common goal people set in the New  Year, right after getting healthy and organizing their life.  Yes it’s true.

My friend Jackie at The Debt Myth is starting a crusade to help people realize debt doesn’t have to be forever.  When she told me about the idea I was immediately on board because 1. I really like Jackie and 2. I survived my debt so I want to let people know they can too.

Personal confession:  My debt is not forever because I want to use my money to travel more, especially to New York City.

When you’re in debt it seems like you’ll be in debt forever, trust me there were a lot of tears.  If you’re in debt or you’ve ever been in debt you know this is true.  When you have credit card or loan debt it seems like the statements are infinite and there’s just no light at the end of the tunnel.  But that’s just not true.

Do you want to be debt free this year or at least start on the path to becoming debt free?  This is how you can do it.  How do I know? Because this is how I did it.

3 ways to get out of debt this year:

Start making payments.  I know this sounds simple but it’s true.  Complaining and crying about debt doesn’t make it go away.  Cut some expenses (yes you can live without cable for a year and Netflix is cheaper) and put that money towards paying off your debt.  Set up automatic payments to coincide with your paycheck and always pay more than the minimum payments.

Get a second job.  Yes you will have less time to sleep and you will have less time with your friends but you’ll save hundreds, maybe thousands, of dollars on interest costs.  Find a part time job or start a side hustle and use all the income from your second job towards your debt.  It’s that easy.  When you get too tired or fed up just keep telling yourself it’s a temporary situation.

Stop spending.  The definition of crazy is repeating the same behaviour expecting a different outcome.  That was me 7 years ago – I was totally cray-cray!  I set up automatic payments onto my three credit cards and I got a part time job working at Victoria’s Secret but my debt wasn’t going down.  Why?  Because I was still spending.  After about six months of torturing myself I realized that my money mentality and spending habits had to change along with my behavior.  I quit spending money on anything that wasn’t necessary to live and it sucked, but it helped me become debt free.

The feeling of being debt free is like no other – it’s the ultimate high of satisfaction and accomplishment.  I still cried but this time they were tears of happiness not defeat.  Are you in debt?  If so I’d love to hear how you’re getting out of it.  Always remember #debtisnotforever

If you’re debt free how did you feel on the day you made your last payment?

Photo from Flickr

I’m finally getting an online bank


As 2014 comes to an end and the New Year quickly approaches you may be setting a list of all the things you want to accomplish, places you want to go and new experiences you want to try in 2015.  I want to go to NYC and California next year and I want to save $5000.  Actually I would like to only save $2500 and have the wonderful benefit of compound interest do the rest – but that’s probably not possible.

This is a goal I set for myself each and every January and by this time in December do you know how much money I have saved?  $300.  Yep that’s it.  Between travelling, conferences and buying pretty things for my new apartment I managed to save absolutely nothing this year.  I know what you’re thinking – that’s pathetic.  Trust me I agree!

If money is there I’ll spend it

So next year I’m going to do it big a.k.a. I’m going to treat my money completely different than I did in 2014.  One way I’m going to do this is enrol with an online bank.  I currently bank with TD Bank and I absolutely LOVE them, but with a chequing and savings account attached to my debit card – Debit Visa no less – the temptation to spend is always there.  Gosh how I love the Debit Visa feature.

I’ve decided in the next couple of weeks I’m going to open an account with an online bank and start saving money in a place where I can’t touch it.  What better place to do that than with an online bank account that has no affiliation with my everyday expenses and can only be accessed within 48 hours.

Making a change in my money habits

I’ve never had an online bank before because I thought it was really inconvenient to transfer money between different institutions when I could just do it all at the same bank – but now I see the benefit.  Now that I’m 34 years old I’ve decided to get an online bank and get serious with my money.

In true Libra fashion I of course couldn’t decide if it was a good idea to keep my savings in a completely different institution or if I should just act like a responsible adult and stop spending money.  So I decided to turn to my friend Andrew from Money Crashers.  I picked his brain about online banks and here’s how the conversation went:

ME: What’s the main advantage of having accounts with an online bank?

ANDREW:  “(You) can save time over having to make trips to a traditional bank, there’s easier access to your accounts, and you might be able to find better interest rates as well.”

ME: Are there any downsides to using an online bank as opposed to a traditional bank?

ANDREW: You won’t have any face-to-face interactions with staff members – that’s important to a lot of folks. And if you are paid with traditional checks or in cash, that can make using an online bank quite difficult.

ME:  Why do you think people hesitate when it comes to online banking and using virtual banks?

ANDREW: I think some people just don’t trust the Internet, or aren’t comfortable with trusting their money or sensitive information to a website rather than an actual business – they might be concerned with security breaches. Others simply prefer the peace of mind of depositing their paycheck and managing their money through a traditional bank.

Do you have an online bank? Where should I open my account?

Photo from Flickr

Debt almost ruined my life


Almost.  But I didn’t let it.  In my 20s I went through five very rough years of financial stress because of overspending and taking my income for granted.  It came to a point where I was using all my income to make the minimum monthly payments on all my credit cards and loans then I was stuck living off credit until my next paycheck.  It was a vicious cycle of paying off debt and living off debt and I was stuck.

Personal confession:  I hit rock bottom and didn’t know if I would ever get out of debt.  I went to see a bankruptcy trustee to discuss my options.  I was convinced that declaring bankruptcy was my only way out of debt.

Bankruptcy wasn’t an option

It turns out bankruptcy was just not an option for me because it would wipe out a lot more than just my debt.  I was 27 years old and over $50,000 in debt from student loans, credit cards and a brand new car.  Oh and did I mention I was a financial planner?!

Declaring bankruptcy would have meant changing my entire life.  As a certified financial planner declaring bankruptcy would have meant losing my license…and my job.  The securities commission would have revoked my license and my employer would have fired me because clients don’t want to take advice from a financial planner who can’t even manage her own money.

Bankruptcy also meant giving up my new car .  My 2007 brand new Honda Civic was the first thing I ever really bought and having it taken away from me was more stress than I could handle.  I decided to sell it on my own instead of having it repossessed.  It was still a big hit to my ego, but at least it was on my own terms.

Debt causes emotional stress

I was at my ultimate low in life during my debt years.  I would wake up sad, stress about my debt all day and go to bed angry that I let my financial situation get so out of control.  Being in debt is an emotional roller coaster and if you’ve ever been in debt you know it’s true.

I ended up in debt because I spent money every day on material things because it made me happy.  But at the end of the month when I couldn’t afford to pay both my rent and credit card bills I would be in tears.  Then one day I had a revelation.  If being in debt made me sad, wouldn’t paying off my debt make me happy?  So that’s exactly what I did.

Being debt free is my happy place

I finally decided to make a change.  I decided  I didn’t want to live in debt anymore and I started to take my life back from my debt.

After selling my car I moved to a cheaper apartment, got a second job freelance writing, stopped using my credit cards and set up regular biweekly payments onto every single debt I had.  Watching my balances go down every month was the ultimate high.

I didn’t care that all my money went to debt repayment.  I didn’t care I couldn’t go shopping anymore.  I didn’t care that I couldn’t go out for dinner with my friends.  All I wanted to do was pay off my debt and pay it off as fast as possible. That’s the key to becoming debt free: make a plan and stay focused.  It won’t happen overnight, but you will become debt free if you stick to it.

Photo from Flickr

Are you a money prude?


Some people say I’m cheap, yes it’s true.  You know what I say to those people?  I’d love to tell you but this is family-friendly blog so I’ll just follow my friend Lyanne’s advice and not say anything because I don’t have anything nice to say.  Moving on.  When people say I’m cheap I usually think to myself “Well you’re careless” because the opposite of being a money prude, hhhmmm how do I say this nicely, the opposite of being a money prude is being too loose with your money.

Everyone talks about money, don’t they?

I personally talk about money all the time, but that’s because I’m a financial planner and all my friends work in banking.  We talk about money all the time, everything from our vacations to our dinner, but I understand we are the exception.  Whenever I talk about money with people who don’t work in banking they always look at me like I’m crazy.  Why is it that people are so afraid to talk about money?

Why don’t people talk about money?

I think it’s partially because people are sensitive when it comes to money; that doesn’t make them a prude it just makes them private… and a little bit cautious.  Not wanting to talk about money because it’s taboo makes you a prude, not talking about your money because you’re shy is completely different.

I think people don’t talk about money for a variety of reasons.  Actually let me rephrase that, there are 3 types of people who talk about their money:

People who brag about what they’ve got.  I find a lot of people who talk about how much money they earn or how much their net is worth are kind of bragging – well at least in finance anyways.  Every time I get in the elevator there is always some corporate douche bag talking about how much his suit cost or how much he paid for his car.  That is totally unnecessary in public – it seems like more of a private conversation. Talking about how much money you have also alienates everyone else who doesn’t have that much from the conversation and that’s just mean.

Those who show off with how much they spend.  I don’t spend $1000 nights at a club and I don’t have $5000 shopping sprees so I can’t talk about it.  I hate listening to people who talk about how much they spend because I can’t focus on the conversation.  When someone tells me they just spent $500 on one pair of shoes all I can think about is all the other things I would rather do with $500 than buy a pair of shoes.

People who don’t make their own money.  I personally don’t have someone who takes care of me so I don’t brag about everything my boyfriend buys me.  BF and I both have full time jobs – sometimes we spend money separately and sometimes we spend money together.  I hate people who brag about all the things other people buy for them.  I mean why do people think that’s an accomplishment? Not being able to take care of yourself or taking advantage of someone else is nothing to be proud of.  I admit it might be nice to have a boyfriend who takes care of me and pays my rent, but then what kind of girl would I be?

Photo from Flickr