I guess as I typed above I see the obvious. My spending is nuts, but I didn't see it. I was overpaying into savings when I took a $20k pay cut due to a job change.
No. You were not overpaying into savings. You were overpaying on everything else. Your listed transportation costs alone are almost as much as you were previously saving -- and that doesn't even include any kind of car insurance or maintenance. (I understand that the car used to be paid for -- the point is the mental shift, that it was the *spending* that put you in the hole, not the *savings*).
What is the tax situation? I get @$2850/mo listed expenses + savings (w/o debt repayment) on a $70K income; do taxes really account for the rest of it, or is there other spending sneaking in there? I suspect that your spending has exceeded even your prior income for a while (or else where did the line of credit come from?). Given how tight things are, I think you need to do a little more detailed comparison of net monthly income vs. cash flow. I suspect when you do that, you will see that your job change didn't cause the problem as much as reveal it, and that the car is just the start of the changes you need to make.
I always find Laura33's posts in the case studies to be so wise. The thing that stood out for me is the bolded part above.
newb999, I've also been at the point that she highlighted, the point where you suddenly realize that your problem doesn't lie where you thought it did - or at least not completely. Being Canadian also, did you ever watch the show "Til Debt Do Us Part?" The host, Gail Vaz-Oxlade, would take several months of financial records, and analyze them, then review with the family. Sometimes, what would be revealed is a pattern of frivolous spending - "Look how you went to the bank machine this day and this day and this day and three times this one day!" And the look on their faces. Sometimes, she'd add up how much was being spent on clothing, electronics, books, and at department stores in general (hard to categorize, but basically - "stuff!") And the other shoe would drop. Bank fees, and NSF fees for some families. Or the amount of interest they were paying just to service their debt <--- that's the one that really got me. I felt like I was working hard to pay off my debt, paying hundreds of dollars a month toward it. But when I realized how much was going to interest, I suddenly realized why I wasn't really making any headway. Well, that and my absurdly expensive pets, but that realization came more gradually.
Anyway, the point is that I think you do still need to figure out the rest of your spending, at the same time as you start to cut back in the obvious areas. Where is your insurance (car, home/contents, etc)? Gifts, vacation, clothing? Car repairs and oil changes? Any other utilities you need to pay (water, heat, electricity?) Do you have cable or Netflix or anything like that? Dental deductibles or prescription co-pays? Charitable contributions? Occasional but large purchases like furniture? (If you buy a couch one year for $600, and a dining room table the next year for $600, then you do need to add $50 to your monthly average spending, even though they may feel like "one-off" purchases.)
I guess as I typed above I see the obvious. My spending is nuts, but I didn't see it. I was overpaying into savings when I took a $20k pay cut due to a job change.
I guess my question is, should I sell my car and just absorb that debt? We do use it, but could survive without. Things are messy up there and unfortunately I've tied up my cash in RRSPs and got snowed under with my line of credit.
So, obviously you've woken up to realizing that there's a bigger problem than just your car, but I agree with others that the savings wasn't the problem. Around here, we're going to support you for trying to save money! Though you may need to temporarily suspend saving to get the debt paid off, depending on interest rates.
You and others have identified the car. And the entertainment budget is way high too. You'll get the most bang for your buck addressing those areas. I also have to ask about rent and transit - $400 a month in transit is a lot. I assume that means taking the GO train into the city, maybe even having to use TTC as well? But your rent is low, so it may be a reasonable trade-off. But is there any reason why you couldn't look for something closer to work, even if just inside the city limits, so you're only paying for one transit system? Shared accommodation, basement apartments (some, like the one bedroom I sublet to a young couple for $900 a month, are very nice!) and so on, may be similar in price to what you're paying now but save you a lot on the transit side.
There are other smaller categories you can look at as well. Groceries is more than twice as much as I spend as a single person. I'm vegetarian, and do get a fair amount of food at work, but household needs are also included in my grocery budget. Your mileage may vary, but check out the grocery threads in the Gauntlet section, and you'll see that others also spend a lot less than you on food. Also, there's no way that I spend $50 monthly on household stuff, so you'll want to examine what you're buying in that category (fancy brands, lots of different types of cleaners to do different jobs), and how you use it as well. A small dab of shampoo will do you, most people in office jobs don't need to use the full amount of laundry detergent, etc. I would start with challenging yourself to get all that stuff within your grocery budget, and you've already freed up $50 a month.
Finally, think about joining us for future Toronto area meet-ups! Check out the Meet-Ups section of the forum. We just had one recently, but have already set a date for the next (late April, if I remember right). Love to have you join us!