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Monday, April 24, 2017

There Goes The Wagon I Fell Off – Request For Help Please

Posted by Sheryl on September 19, 2012

This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.

I’ve always freely admitted I’m just starting this journey to FI (I’m too old for RE, unless I do it ERE style, lol). Over the past 18 months, I’ve really felt like I’ve made progress. I track all my finances, cut out the extras, clipped coupons, and found comfort in my frugality. I’ve also admitted I have some debt other than my mortgage, and have been directing any unspent money to reducing it.

The last few months, for all my efforts in changing cell plans, cutting cable, and limiting entertainment severely, I’ve started to go backwards again. Some of it has been my own doing, stress and extra hours at work (with no extra pay), coupled with still grieving for my father (I just don’t feel like I’ve had the time to) has resulted in more convenience and restaurant foods as well as some impulse purchases. But other things like my car insurance going up substantially, car repairs, appliance repairs, I don’t feel like I’ve had any control over. I paid for these things with my credit cards or line of credit, now I have to pay off these debts.

I had contemplated stopping writing, thinking that who wants to read what I have say about the journey to FI, when my road seems so long and blocked up? Then I realized this blog is about the journey. And where mine seems to be different from most who hang out here, it’s still a journey.

To try to get myself back on track, I’m re-reading YMOYL, as well as reading ERE and Tim’s book, Free at 45 for the first time. I know part of my problem is the added stress at work, I’ve been trying to keep up doing the work of 2 positions for the last 3 months (had staff problems at work that now seem to be fixed).

I’d like to ask the readers for their opinions on what I can do better. To protect some of my privacy, I’m not disclosing my mortgage and property tax amounts or net income, but I am saying how much my other bills are, and how much is left over for food and other living expenses. All amounts are monthly. I live in the Toronto area, to give you an idea of cost of living for food etc.

Condo Fees – $685
Car & Condo Ins – $480
Private Loan Payment – $520
Cell Phone – $ 35
Land Line – $ 33  ( I mainly have this for the lobby buzz up in the building, I’m considering getting rid of it as I rarely use it, but would then need to pay for a dry loop)
Internet -$60
Netflix – $8
Gaming Account – $15

Line of Credit Interest $ 50

I have $ 300 per month to pay for food, gas, savings, credit card payments etc.  Sometimes I make it, sometimes I have to put it on my debt.  The private loan amount decreases every month, but the credit card or line of credit sometimes increases.  Most months, my overall debt reduces (except for the last few months, string of unfortunate events).

I’m willing to do something to earn extra money, but it can’t conflict with my full time job  (I work from 8am to 5pm, Mon – Fri),  but I am  stuck as to what I can do.  I don’t want to work for minimum wage if I can avoid it, but don’t know what kind of salable skills I have.

Any advice any of you are willing to share is appreciated, and I thank you in advance for your considerations.

Comments

30 Responses to “There Goes The Wagon I Fell Off – Request For Help Please”
  1. Tim Stobbs says:

    Can I ask an additional question? What is included in the condo fees? They seem high to me, but maybe I don’t understand the context of them.

    Tim

  2. bk says:

    having 300 at the end for food/gas/savings/etc isn’t much.

    i think (and i’m no expert) it’ll have to be a combination of increasing your income along with reducing expenses.

    income: i apologize i haven’t read other posts if they mention your education/job, but have you considered switching positions/part-time education etc. to improve your employment prospects?

    expenses: wow, condo fees approaching $700? i doubt there is much flexibility here. but thats ridonk.
    Car insurance/home insurance, the usual, spend half a day to shop around.
    you can eliminate your land line im sure. i know people who have their condo buzzers forwarded to their cell phone in some buildings in mississauga.

    biggest one possibly: if you live in toronto, depending on where you work, just stop driving the car. i agree that having a car is a nice convinience, but without the extra costs of gas/insurance/maintenance, you could come out ahead and make up for the last few months.

  3. Sheryl says:

    Welcome to Toronto!!
    My condo fees include my utilities except for phone, internet and television.
    More precisely, hydro, water, heating, air conditioning, property tax on the common areas, security, snow clearing, grounds & building maintenance.

    Comparatively, when I owned a house that was about the same size as my condo (plus a basement), my costs for these things were about $100 less per month, (and I rarely used the a/c, kept the heat colder than you say you keep yours, used rain barrels for my gardening, a clothesline instead of my dryer etc.) So I consider that the extra $100 I pay now isn’t too bad, all things considered.

  4. Astin says:

    Internet at $60?

    Take a look at TekSavvy or other providers. 6MB/s DSL with 300GB cap for $35/mo, or 7MB/s cable unlimited for $40/mo.

    They have cheaper options too ($25/mo), but they’re either slower or have lower caps. Since you’re using Netflix instead of cable, and have a gaming account, I’ll guess you’d appreciate higher caps.

    The reality is that the 12-25 MB/s Internet offerings from the big guys is largely useless unless you’re downloading massive amounts of data (ie.- pirating movies, so why pay up for them?

    At $35/month, you’d be saving $300/year.

  5. Sheryl says:

    @bk My car insurance is high (I have shopped) mainly due to my address, and that my daughter had an accident in 2008 that will affect my premiums for the next few years. Other than insurance, my car costs me next to nothing. Most of my gas is covered by my employer, and most maintenance and repairs can be done by me or a friend of mine, and I get the parts at a discount. I’m concerned that if I stop driving, my insurance will be even more when I start again as my name wouldn’t have been on a policy for a while.

    Also, public transportation, I live on the edge of 2 transit areas, one area (where I work) is $120 for a monthly pass, I don’t go in the other area often enough for a pass, but that would end up costing about $35 a month. Part of my reluctance to drop the car is time. I’ve taken the bus to the areas I usually go to, and what takes 10 minutes in a car, took 1 1/2 hours with 1 or 2 transfers. And with my mum being on her own now and me and my daughter being the only family living close to her, I don’t want to put all the responsibility of being the go-to person for my mum on my daughter.

    Please let my know if it sounds like I’m just making excuses, sometimes when a person is in the middle of something, they can’t see it clearly.

  6. Sheryl says:

    @astin – I’m shopping for new telecommunications right now, I was in a contract that expired 2 weeks ago. I’ll check out Tek Savvy

  7. bk says:

    ok i hate how i can’t reply to comments.

    anyways @sheryl…

    i get what you mean now about living between two transit areas and all. car isn’t a bad option if your gas is paid for.

    see if you can group discounts for insurance from work/school/professional association. i’d seriously recommend spending half a day insurance shopping.

    but yeah, if all else is well. i’d consider having a look at the income side of things (employment prospects/education)

  8. bk says:

    btw you said the $300 left goes to gas amongst other things……. if gas is covered, then you should have some left over out of that $300

  9. Andrew says:

    It depends what company you have your cell phone with, but if you can also get DSL internet from that company, you might benefit from a bundle discount. I’m with Bell (in Ottawa), and (though I feel I’m overpaying and am ready to renegotiate with them) my cellphone, dry loop, and internet are bundled at $90.

  10. Sheryl says:

    a fixed dollar amount for gas is covered, but if I have to do a bit more driving than usual, then I have to pay out of my own pocket, $20 – $50 per month, depending.

    I can usually stay within the $300 (and pay down my line of credit with any left over), but sometimes too many things happen at once and I have to dip into my line of credit.

    I know sometimes when I look at a problem or situation to much, I don’t see the obvious anymore, and wanted to make sure I wasn’t overlooking something here.

    I’m used to living on next to nothing, and my plan is to not upgrade my lifestyle once that debt is paid, but to direct those funds to my mortgage and investing.

  11. Aaron says:

    I’ll preface this by saying that I haven’t read all your posts and I don’t know your entire situation. I don’t mean to sound harsh, but they’re my honest opinions.

    Nearly $700 for condo fees is pretty ridiculous. Only times I’ve seen them approach that high is when there’s expensive amenities like a pool in the building or it’s an older building and you have a fairly large place. If you’re only able to save $300/month, I think you need to re-evaluate your living situation.

    If you sold your place and rented, would you be able to take the capital gains you’ve made and pay off most or all of your debt (after all selling fees)? Paying off your debt would free up a ton of cash flow.

    I can almost guarantee you could rent a similar sized condo in a similar location and pay hundreds less in rent than what you’re paying now for condo fees + property taxes + your mortgage payment. If you’re determined to be an owner, can you sell and buy something smaller or in a cheaper neighborhood that’s more affordable (or even something with far more reasonable condo fees)? Does your daughter live with you and pay rent?

    $480/month for insurance for 1 car and your condo is also extremely expensive. Please make sure you do your due diligence and shop around and find the best deal. I’m in the dreaded male 18-25 category and I pay about 1/4 of what you do per month for car + condo insurance. If you’re part of any kind of professional organization, see if you can get a discount with them. I am saving about $200/year through a professional organization discount.

    If you can, get the buzzer set up for your cell phone or see if the phone jacks are hardwired to the buzzer system. This is how it is in my current place so I just bought a 20 dollar cordless phone and plugged it into the wall.

    You’re doing well as far as frugality goes. Dropping cable and going with Netflix will save you a lot of money, and you might enjoy Netflix more anyways. $35/month for a cell phone is also great. As mentioned above, shop around a bit for internet as you could probably save a bit of money there.

    In the end, I really think that evaluating your living situation should be your main concern. Saving $20/month on internet is nice, but it’s peanuts compared to what you could be saving in your living situation. Try and see if you can find a place that would bring your housing costs (mortgage + taxes + condo fees) around the 25-30% of gross income range and determine if you’re willing to downsize/move to free up extra cash flow.

    Just my opinion. I hope you find my perspective helpful.

  12. Pat says:

    Almost $6000 per year for Condo and car insurance?? Wow I thought that was a typo until I read about your daughters driving issues to drive up your car insurance so sky high. Sell your car now! Public transport takes too long OK then get a bike, walk – your spending $100 a week on just car insurance does not include any other cost. You are wasted 25% of your take home pay on a car insurance plan you cannot afford you need to take action – sell the car – non- negotiable. If you are as you say 1.5 hours by public transport to work, sell your condo and move closer to work or obtain employment closer to home but you must choose one of those options.
    I know you don’t want to hear it but it something you have to do it you are serious about getting out from under your debt – good luck!

  13. greg says:

    for a point a-la MMM, I personally find that my lifestyle took an insane turn for the better after moving within a 10-minute walk of work and renting out a very cheap, small apartment. If you noticed, 2 of the 3 major complaints you have are related to transportation:

    “other things like my car insurance going up substantially, car repairs”

    Then there’s “my road seems so long and blocked up”. I am personally set up for FI by 30 (I save > 70% of my income), but I didn’t have as much motivation before landing a much higher-paying job because things felt insurmountable. And I currently sympathize. Ironically, the longer it takes you to achieve FI due to income and situation, the harder it is to actually take drastic action. Like exercising and losing weight (any long-distance runner can drop 5 pounds in a day – just run 20 miles and don’t eat much, but it takes a long time to get to that point).

    I’m also a BIG fan of the ERE book, although it is definitely rather extreme. I also remember recalling that there were quite a few areas that were specifically written by and for typical “left-brain”, logic/mathematical thinkers (ie. the whole “degree of freedom” life philosophy section).

    “Cell Phone – $ 35″ – better than almost everybody, but mine is $14.60 USD /mo including the cost of the dumbphone over a year with a pay-as-you-go plan (and I’m way under the number of minutes/texts I bought on a day-by-day basis).

    “Land Line – $ 33 ( I mainly have this for the lobby buzz up in the building” – I send mine to my cell phone … then you can let others in remotely (or yourself if you forget your keys!). I’ve also replaced this with Skype unlimited calling (for use with my old, now-dataless smartphone on wifi, too) for $60/yr or $5/mo.

    “Internet -$60″ – you probably don’t need more than 3 Mbps down, so see if there’s anything cheaper. You can also threaten to cancel, and probably get a better deal (at least that’s how it works in the US).

    “Netflix – $8″ – if you already have Amazon Prime, you already have a lot of free streaming video. Perhaps see if it is sufficient?

    “string of unfortunate events” – my entire major goal right now is avoiding having to worry about these. Believe, me, sacrificing now is worth it later!

    Honestly, I think getting completely rid of your car is probably the most effective way to free up money. You will also be much more well-off in terms of cash-flow if you can bring yourself to find a cheaper place close to work. I went from a “luxury” apartment to a place that was “the place to be” in the 1940s and with much poorer neighbors, but I can tell you that hundreds of dollars every month to be invested well for 40 years sends me to bed smiling every night!

    Finally, after moving, getting rid of the car and smartphone and grocery delivery, simply saying “no” to expensive things to do with friends was one of the most effective things I did to lower expenses. It’s easier for me than most because I’m reasonably introverted, but it has led to enormous gains like $2.50 a week for hours of education with a subscription to The Economist (I forced myself at first, and ended up LOVING it)!

  14. Ramona says:

    Totally agree with Aaron and Pat. You need to make some life choices and move closer to work, rent an apartment, sell the car. Your current condo and car cost way too much money. Selling the condo would free up your equity to pay off the line of credit and private loan. I’m thinking you might be stuck in “house rich, cash poor” land. Seriously, think about what advice you might offer someone in your position. Try to see your situation without the emotion.

  15. Tim Stobbs says:

    Ok, I’m going to suggest something extreme that may not work depending on the numbers: sell the condo and go rent closer to work. Pardon? Yes, you heard me right.

    I’m suggesting this for several reasons.

    1) Your housing market is unstable and prices are likely to fall in the condo sub-market. Cash out the chips now!

    2) Your condo fees are sucking the life out of your budget and you have no reward on reducing many of your bills like hydro, heating and cooling. If your frugal you should get the reward for it.

    3)The left over equity can hopefully kill off all your private loan which then leaves you a lot of free cash flow.

    4)Save your new cash flow to buy back into the market in a few years after some sanity has kicked back in. Heck depending where things are at you might get a better place in the end.

    Extreme yes, but it may have some huge payoffs to your lifestyle in the long run.

    Tim

  16. Rob says:

    I was going to make a comment, but the last entry from Tim stole it from me. So I’ll say the one thing that Tim didn’t say, even though he alluded to it. “You cannot afford your current lifestyle”!!! Really, its the same with most of us, but it is seriously hampering your goals.

    BTW, if you are planning on living in TO for the next 5 – 10 years, there is no benefit to paying car insurance now, especially at those rates. I pay $49.00 per month for my truck, and my son totaled my Hyundai 3 years ago.

  17. ping says:

    Rent a room or take on a roommate. Yes, sleep in the living room if you have too. Lost of
    privacy, is small sacrifice or follow the other readers comments.

  18. Sheryl says:

    Looks like I have quite a bit of research to do, and a lot to think about.

    I’ll run the numbers on a few things and let you know in my next post what I do, plan to do, and why.

    Thank you to everyone who has given me their opinions and suggestions.

  19. Julia says:

    I just wanted to commend you for your (non-defensive) response to the comments above. It can certainly be hard to motivate yourself to move and to go car-free. By moving in with roommates, and not owning a car I was able to free myself from a very similar barely-making-it paycheck-to-paycheck type situation. While those large moves can seem difficult (and moving is never fun) the freedom that comes with minimizing those large expenses feels amazing. It also derails you a lot less when “life” happens. While it might take a few weeks to adjust after moving, and going car-free, it’s an adjustment that also alleviates the monetary pressures, making it absolutely worth it.

  20. Paul N says:

    So many comments…

    A few things from me :

    Tough choices, Sell the Condo, move into a nice basement apt. for a while. The GF has one it’s really nice situated in a decent area very close to a subway in the GTA. (North York) Some home owners for the sake of keeping a good well paying trouble free tenant will cut you a lot of breaks to stay. Look around, network with friends and relatives to find such a place.

    Your insurance… If it is not a necessity that your daughter drives, some insurance compaines will accept a contract with you that the other licenced driver (which drives your insurance up) will never touch your car. Then your insurance will drop significantly. But if you cheat after this and she drives in a bad decision moment…. look out!

    I think you are over extended.

    Does your daughter work maybe part time and contribute?

    If your mortgage is more then twice your gross income, IMO you should not have purchased a property. If it’s more that’s most likely a contributor to your troubles.

    That’s my points for now….

  21. CF says:

    I would definitely get a part time job for the short term, even if it is “only” minimum wage. I worked in retail for a while to pay off my LOC, and it’s worth it. We’re approaching the seasonal Christmas hiring season – you could easily get a retail job for 3-4 months, with no commitment beyond that. As a bonus, if you are able to get a job at a store you shop at regularly, you can take advantage of the employee discount.

    To save some money, I would consider dropping your internet and then having someone else in your household sign up for it as a “new customer”. You’ll be able to take advantage of new customer sales (at least for the term of the promo period). I often do this by visiting those kiosks that they set up at malls. As a result, I only pay $25 for cable AND internet.

    As well, if you’re allowed to do without a buzzer, why not scrap the land line and just have your guests call your cell phone when they arrive? Sure you’ll have to go get them, but at least you’re not paying a bill for the sole purpose of maintaining a buzzer.

  22. L Uytterlinde says:

    Re: ditching the car option, some things to think about: Sometimes the biggest problem is thinking outside the box. Do you have Autoshare or one of their competitors in your neighbourhood? We ditched our car 7 years ago in favour of a combination of Autoshare/rental when going out of town for a weekend/Metropass & BIXI and haven’t looked back. Autoshare’s great for those ‘weekend visits to mom.’ Depending on where you live, a motorscooter or bike can get you to the subway and cut down commute times to much more manageable levels. You’d be surprised how many months of the year this is practical too providing you give a bit of thought to dressing for the weather. And if your concerned about ditching the car because of your insurance, Autoshare works here too. Even on their occassional driver plan, you’re covered under Autoshare’s group insurance policy. Therefore you ‘maintain’ insurance coverage history.

  23. L Uytterlinde says:

    Also should mention, depending on where you live in Toronto area, you might want to look into becoming a homestay host if you’ve got an extra room. We’ve done this for the past 5 years (the extra income goes straight on the mortgage/reno bill), and for the most part it’s been a good experience. Works best if you’re home most nights for supper (you provide room & board for students), and most students will also need access to the internet though you as well.

  24. Jacq says:

    I have some friends in TO. It always amazes me how much less they make than they would in AB and how much more they have to spend (taxes and all).

    Have you considered moving your family somewhere where you all can earn considerably more money and keep a lot more of it? Granted, I’m one of those people that was willing to work up north (in the middle of nowhere) at one point to earn more money, but you really can’t out-frugal a lower income. Or you can… but it can be really painful.

    If you’re not willing to do that, I’m with Tim on the real estate bubble. These major timing decisions like when to buy or sell houses are often not considered. But if you look at a house as an investment, you could be renovating and flipping them and making money at it without a minimum wage part time job. I’d seriously consider something like that since you sound like you’re pretty handy.

  25. Hanah says:

    Oh, Toronto! So hard to get ahead if you don’t make a lot of money.

    People have covered a lot of the bases, so here are my very minor 2cents:
    Do you really need a cell phone plan? When I was in TO I got a prepaid “plan” for emergencies/coordination. Costs $10/month. You don’t get a lot of minutes, but then you should be using skypeout for chatting anyway. Ditto on the land line – that’s a lot of money to be buzzing people in.

    Also, kudos for being so upfront and honest. That takes guts!

  26. GPS says:

    I am so so glad that you posted this. This is something different than the average bloggers who are making six digits and who think they are heros for being frugal. And then when real people comment, their concerns are thrown to the side saying they just need to make leaner cuts.

    The biggest reason why I come to Canadian Dream at 45 is to read Sheryl’s posts. Kudos for being brave and honest! It looks like you’ve got some tough decisions ahead of you.

    I hope you don’t stop blogging!

  27. Sheryl says:

    Thank you to everyone for sharing your thoughts and opinions, I appreciate it.

    I am rearranging some things, looking at ALL my numbers with a friend who is VERY smart in this area, and will share the end result in my next post.

  28. Doug says:

    Most of the expenses have been covered with various solutions. However you kept your mortgage private. This is one area where you may be able to make significant savings. Posting the details with respect to the amount, % you are paying, when you last renewed it and when is the term up will allow one to determine if you could or should renegotiate it and what, if any, savings you might see.

  29. Sheryl says:

    5 year fixed taken out in Feb 2011. 3.59%, Balance is $188,000. When I called the bank, they said it would cost me approx $8,000 in IRD to get out of it now. I’ve been watching the condo market in my area. They were built in mid 1980’s. Unit like mine either sell for $200-210 as is, or $230 if the kitchens, bathrooms and floors have been updated. My unit has never been upgraded.

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