Savings update: I’m changing my habits


Good morning Loves.  Well it’s the end of the first month in 2015 and you know what that means…time to check in on all the goals I set just 30 days ago.  My two major goals this year are to start saving money and lose 30 pounds.  Remember that?

My 2015 savings goal

I want to save at least $7000 this year and I mean really save.  I don’t want to put money in my savings account and then take it out whenever I “need” (I’m using that term lightly) to buy something.  I want to put money in my savings account every month and have it still all be there in December.  How does that sound?  It sounds pretty good to me.

I love it when people ask me why I don’t have savings, they’re like “But you don’t have debt?”  That is true but I still spend money and can’t save a dollar if my life depended on it.  There is always a bill to pay or always something to buy for the apartment or food to order.  I could rationalize eating out several different ways and yes I know this is a waste of money.

Why I’m choosing to save money this year

Every single January I grab a pen and paper and write out my finances for the year.  Of course they are never the same at the end of the year in December as they were at the beginning of the year in January, but it’s the thought that counts.  Every single year I set financial goals to save more, pay off debt and take a lovely vacation or two.  This year I’ve also added in the goal of buying pretty things for our new apartment.  So what’s the big deal?  Well I’m going to do all those things without using my credit card.  Why?  Because I’ve been in debt and I definitely don’t want to go back.

In my 20s I was over $50k in debt and by my early 30s I was out of it.  No it didn’t happen overnight but it did eventually happen.  It’s really easy to get into debt and it takes much more time to get out of it.  Those were very difficult years for me because I’m the type of person who wants everything done like yesterday.  I just wanted to snap my fingers or open my eyes and have all my statements show a $0 balance, but that’s not how debt works.

My savings in January

I’m proud to say this month I’ve successfully saved $1000.  That definitely puts me on the right track towards saving at least $7000 by January.  How did I do it?  To be honest it wasn’t that hard.  There’s really nothing to do up here in the cold Northeast during the winter so I nowhere to go and nothing to spend money on.

I could have spent the money shopping but I consciously made an effort to avoid the shopping malls and all their after holiday sales.  I ended up spending only $41 on three new pairs of pyjamas, they were already on sale plus an additional 30% off so how could I resist.

I feel like $40 is not so bad, trust me the damage could have been a lot worse.  I controlled my spending this month and it directly helped me save more.  That’s a win-win in my books.

Photo from I’dPinThat

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