Author Topic: Case Study CND ... 43yrs old and “0% chance of” BABY on the way, :) … OMG!!!  (Read 6705 times)

SweetLife

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Income: One full time government job $66,564 Take home approx. $1,680 bi-weekly =$45,360 year take home. 

My husband currently doing some paintin jobs for friends and family as well he is a wonderful house husband and loves to take care of everything there (which I love and am being spoiled rotten) and when the baby comes the plan is that he will stay home – which will save us 1000’s on child care. Will also continue to do some furniture refurbishing for extra income.

With contract changes new salary: $70,119.70
Retro pay to be paid out within 6 months: $4,763.67 (after taxes)  --- will go to finish off paying VISA (if any left) then Mastercard (or should go to LOC??? - advice?) LOC has higher interest rate.
Severance + Bonus to be paid out within 6 months: $11,553.78
--- will go to either Mastercard or LOC

Overtime:  Have been feeling much better now that I am in my 5th month ... Update: I have worked one full shift Jan 29 and two half shifts Jan 26 & Feb 2&Feb 9 = $750 or thereabouts …

As of today I have:
$500 in my chequing account - update Feb 10 $672.42
$25.17 savings
$9.83 in a separate chequing account (where overtime pay and holiday pay goes) Update Feb 10 $5.52
$142.19 in a separate savings account Update Feb 10 $256.23 (need $2300 for month of July before maternity kicks in for bills)$1,371.89 RRSP Update Feb 10 $1428.69
All of my bills come out automatically and any extra money I have after everything comes out goes to (right now) paying off highest interest rate (VISA) credit card.
I have had no late payments on any of my outstanding bills and have an excellent credit rating. (Normally when there is a 0 balance on my credit cards I overpay my bills to ensure NEVER EVER getting late fees (gives me hives just thinking of that!). This month rather than pre-paying anything I am concentrating all excess cash on paying down that VISA card.

Current expenses:

Mortgage – weekly accelerated payments of $216.24 (they also pay land taxes on this which work out to $2700 a year) I was thinking of taking this on myself so that all of the payments I make to mortgage go to mortgage and not taxes … advice? $864.96 monthly. Had upped this payment to $233 weekly but I think I should pay off LOC first ... advice??? My mortgage is 10 years at $3.89% LOC is 5%

RRSP – Took out RRSP’s ($4200) on first time home buyer plan need to pay back in 15 years on track to have paid much faster at $50 bi-weekly (currently have $1371.89) -- Update: as of Feb 10 have $1,428.69 looking to put payments down to $50 a month and put rest towards bills for now as I have 15years to pay

Home/car insurance    $215.76 monthly … have tried to get reduced with no luck!!!Still looking into this!!!

Life insurance for hubby      $71.73 mine covered through work, but will need to pay 8$ a month for $50,000 more.

Home Gas bill $81 month (I pre-paid when we moved in and we have a running credit) central heating/AC (AC barely gets turned on in the summer however being pregnant and frozen this winter the heat has been higher than normal <- working on this ) Have started wearing more clothes but still can't get temperature lower than 21degrees :(

Electricity and Water (UGH) $193.11 month (includes Electric $134.85, Water $30.19, Waste water $41.55, Credit adjustment of $13.48) – water tank is 16 years old and needs to be replaced … have been putting this off however now that we need to get the pipes done in the basement this will need to be addressed as well…

Virgin Cell phone $80 per month ($40 bi-weekly) total for 2 phones Update have not been using any data so my bill is getting lower :) should be able to switch to cheaper plan by next month!!!

Internet $70 month (cheapest we could get excellent service)

Gas $140 month or less (my husband rarely goes out and when he does he does multiple jobs at once gym/groceries/pick up wife one trip)

Food $200 month or less (we garden in the summer my hubby and I can tomatoes, pickles, beans, variety of jams and anything else) he is an excellent cook so we do not go out but eat at home and I bring my lunch to work every day.

House repairs $60 month (just had pipe burst in basement due to faulty ex-owners contractor work … put water pipe on the outside of insulation between insulation barrier and the concrete porch duh … it wasn’t something we could see and therefore a big surprise … not much damage thankfully but still 

We have an upcoming bill for plumbing issues in the basement now that this happened … luckily I believe my brother said he would do it (thankfully) need to replace all the outdated metal pipes with copper and get rid of the “dog’s breakfast” that the previous owner left … so no bill for labor but still need to buy the materials … this is a “must-do” rather than a cosmetic issue.

Now the punch in the face comes ….
Gym $30.52 month (I know … but it is my outdoor activity for winter as I hate hate hate the cold … especially this year being pregnant I am frozen)  but I realize a luxury I should cancel  Update cancelling this - luxury can't afford

Line of Credit $52,988.33  bunch of stuff I should not have bought… I pay $300 a month to it, the interest rate is 5%  Update paying $280/month - currently at $52,388.33

VISA: $4,098 (paying $300 a month) interest rate a whopping 19.99% this card was a zero normally but crept up with a recent flight purchase (death in husband’s family in Portugal), car maintenance – tires –could not put off any longer ($1000) alignment and some tie rod they had to replace… Any extra money coming in will go to this immediately – Jan 30 should be paid for my xmas holidays - $600. The only reason I keep this card is that it gives me rewards for every dollar I spend … we book our flights on this and it gives hundreds of dollars off even if I keep no balance. As a gold card also gives me excellent trip medical insurance/rental cars (we rarely rent) etc… I do not like having a balance on this  Update Feb 10 Visa at $3289.14 throwing any extra cash that comes in on it

Master card: $9,603.84 (paying $180 month) interest rate 4.5% Update at $9487.32

$225 a month to Madeira, Portugal (we have a house there and a car) Husband has made enough to pay this for next 5 months money sent already :) 

GRAND TOTAL OF $ 3057.08 EXPENSES OUT PER MONTH
GRAND TOTAL OF INCOME: $3360.00

Expected ER expenses:  Travel to/from Portugal once a year or once every 2 years.

Assets: House built in 1923 (gorgeous all hardwood love love love it) close to work allows me to bike in summer – since pregnant no biking but still very close to drive. Paid $120,000 – Taxes are about $2200 but rolled into our mortgage.
Jeep Liberty 2002, 4x4 sport limited edition, bought in 2008 (during divorce), put it as well as half of my ex-husband’s debts on a Line of credit ( I know, I know, I know punch in face coming) but at the time  – I didn’t know a mustashian from a bad toupee .  I have since learned the error of my ways … at least in buying vehicles … it currently has over 200 000 kms on it and
I am worried it will conk out on us . Still keeping fingers crossed as do not want to purchase anything right now (and have no cash reserve for this).

Liabilities:  lots of debt above 

Specific Question(s):
Our first baby is on the way … after being told 0% chance of conceiving two years ago … we are excited and terrified at 43 and 44… especially being so high risk (not bed rest as yet but light work and lots of rest)…
How do we get out of this mess the fastest and with the least stress?
At this point I can’t imagine retiring early – my work offers excellent retirement package but you need either 30 years or 65 yrs old or some 85 factor that I do not understand otherwise every year I leave before 65 I lose 2%
We already eat at home (we love it … and are both good in the kitchen)
We don’t watch TV (ever) occasional movie (but even that has been curbed since the pipe burst our TV went).
I have cut out manicures/pedicures/even getting my hair done!
Just not sure where to go from here … ANY advice (even punches in the face) is appreciated… my husband is a prime mustashian even though he doesn’t know anything about it … he rarely spends money and when he does it is on food. His clothes are mostly from Europe and are incredibly well made and last forever… plus he takes meticulous care of them! So he doesn’t buy clothes… we switched to a free cell app “TANGO” to call/video overseas to his family (slashing a previous $60 a month bill for calling cards).
Permanently moving to Portugal at this time is not an option I don't want to lose my job ... the income is excellent and there is nothing comparable there. BONUS though while there and while I am still earning salary my HUSBAND will be working !!! At least earning enough to pay the bills there and some of our food/baby needs while there. Yes we could stay with family but for 6-8 months I think I would rather ... well let's just say we like our privacy sometimes lol... ;)
Sorry for the book … but now that I have made the decision to get at this I tried to give as much of our picture as possible.
« Last Edit: February 10, 2014, 10:13:47 AM by imsharper »

Paulie

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I didn't read it through totally yet, but I just wanted to congratulate you with your pregnancy! That's really exciting news!

Paulie

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Wow, just read through your whole post, you're in serious debt! 19.99% interest is insane! Are you paying the minimum payments on the other debts? Otherwise it seems best to put everything you have on the one with the highest interest. Cancel your gym membership immediately! I'm not sure whether your electricity/water bill is high according to Canadian standards, but besides the second home and car (can't you stay with his family when you are there) and your vacation trips (I'm guessing that the flight tickets don't come very cheap), you don't seem to waste a lot of money. I think your husband should start earning some more money; when the baby arrives he could work weekends/evenings. You should also have 300 left per month, please put that to your 19.99% interest loan!

SweetLife

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Thanks for the congrats on the baby everyone :) It is a wonderful thing! After two years of IVF etc (that didn't work) ... we had decided that we would just remain childless and retire/move to Portugal earlier.  We are both really happy though that this is (so far) working out.  :) As for moving to Portugal now ... my job is with the government and I definitely don't want to lose it ... the income is very good and has something that (in Canada) is very hard to find - Job security!

As for the hubby we are definitely going to find something for him (and he is such a hard worker that anyone would be lucky to have him working) ... the language thing is holding him back at the moment.

As for the VISA 19.99% is horrendous ... I have only held this balance for 2 months and am hoping to get it paid off in the next two months ... with my holiday pay checks coming in, in the next few weeks it should be at least down under $1000.

Ok ... I will quit the gym. I know it is a big expense this deep in debt.

frugaldrummer

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Congrats on the baby!

Definitely I would recommend you see if you can rent your Canadian house out while you are in Portugal.  (I love Portugal!  The nicest people on the planet - and the best food!).

I would take the 200-300 dollars you have leftover at the end of the month and build up your emergency fund first.  THEN I would tackle that high-interest debt first - any chance of transferring that to a 0% interest credit card or some such?

Obviously things would be much easier if your husband was able to bring in an income - could he tutor people online in Portuguese?  Or find work as a painter working for someone else (who could do all the negotiating, talking parts while your H just paints?). 

If you own half of a property with your brother that is worth $60,000, why would you sell him your half for just $10,000?  You really need the money, only seems fair that he either buy you out for 25-20k, or you both sell it and split the profit.  If it has extreme sentimental value and he really wants it, you could arrange for him to make payments to you I suppose.  But you're too broke to pass up a $30,000 windfall.

Also - is there anything you could do during that year of maternity leave, to bring in extra money?  Something online perhaps?  Any extra side gigs you could do now?  Even just babysitting in the evenings and weekends to bring in an extra 100-200 a month would make a difference.

After you have the baby, when you go back to Portugal, have a glass of Ginja for me ;)

SweetLife

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frugaldrummer
I have been thinking about things I could also do to bring in more $$ ... Since I am now past the dreaded 1st trimester and feeling a little better I am going to start taking a few overtime shifts ... I work 4 days on 4 off 12 hour shifts and our overtime is only 7.5 hours so I don't think even my specialist would object to one extra shift or two a month and it would bring in much needed cash.
As for the land... nothing can be done until the estate gets settled which may take another year (hopefully not more).

Will gladly have some Ginja for you!!! :) Madeira is a wonderful island ... and year round warmer than here lol...

ghatko

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Just be careful about earning money while on maternity/parental leave. You have to report any extra income, and it will reduce your benefits. I don't remember all the details since I also work for the government and get the fantastic top-up, but you don't want to jeopardize those benefits. Best of luck!

The Taminator

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Do you absolutely need a car right now? If you live in an area with decent public transit I would suggest selling the car. It would save the $140 a month in gas plus whatever portion of the $215.76 goes to car insurance. A savings of probably $200 a month total. Not to mention any repairs that could come up in the short term. You guys are definitely in hair on fire debt emergency.

I added up the LOC, Visa and MC and you've got a combined debtload of $66,690.17. Plus your mortgage. Sell the car if you can.

oldtoyota

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due end of June and need cushion of cash for JULY before maternity and work top up kicks in (Very fortunate that I will be receiving 92% of salary for the year I am off... time to pay down bills!!)


Whenever I am on a forum and a Canadian is talking about the entire YEAR they get off with their baby, I am reminded I do not live in a civilized country. Sigh.

Letj

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due end of June and need cushion of cash for JULY before maternity and work top up kicks in (Very fortunate that I will be receiving 92% of salary for the year I am off... time to pay down bills!!)


Whenever I am on a forum and a Canadian is talking about the entire YEAR they get off with their baby, I am reminded I do not live in a civilized country. Sigh.

No we do not!!  It's not just Canada that offers those benefits, it's every other developed country.  Americans have no idea what we are missing.

Daleth

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due end of June and need cushion of cash for JULY before maternity and work top up kicks in (Very fortunate that I will be receiving 92% of salary for the year I am off... time to pay down bills!!)


Whenever I am on a forum and a Canadian is talking about the entire YEAR they get off with their baby, I am reminded I do not live in a civilized country. Sigh.

No we do not!!  It's not just Canada that offers those benefits, it's every other developed country.  Americans have no idea what we are missing.

Some of us do. Grr.

livraison

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I'd say focus on the Visa debt - 20% interest seems terrifying. If your LOC limit is above what you have on it, you already effectively have an emergency fund, so I wouldn't worry about that. Can you use the LOC to pay off the Visa?

As for your husband's income prospects, if he's a reliable handyman who works to high standards, and if you're located in Ottawa/Gatineau, it's a hot-bed of single women with solid jobs/incomes who own houses and are desperate to find a decent handyman. They're willing to pay well  for someone who will do the job properly and not jerk them around. Use your work connections to start finding them -- you just need to find one, and if your husband is as good as you say, word of mouth will do the rest. Language might not be much of an issue, if you were available to do a bit of translating to set up appointments. Also, most federal government employees should have at least basic French, which isn't so far from Portuguese, after all. Or he could communicate via e-mail and use Google Translate. It's the work that people will care about. 

Not of immediate relevance, but if you're confused on your pension prospects, go to www.compensation.gc.ca. There's a bit of fooling around to set up your account, but once there, it's linked to all your HR info and you can start playing around with different retirement dates and can see what your pension would be based on your current data. Pension indexing seems to start as soon as you leave the PS, so if you want to retire early but only start collecting the pension when you're 65, it should be indexed to inflation over the intervening years. (I'm pretty sure about this last point, but I haven't quadruple-checked it yet.)

Congratulations on the baby, and enjoy yourself!



SweetLife

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I officially LOVE mustashians :) THANK you all for the wonderful advice and taking the time to think it through. I know you are bombarded with (sometimes punch in face required... like me) requests for advice... much appreciated :)

Responses ... unfortunately selling the car at this point is not viable - we do live in the city but public transit is not very useful (in Windsor).  However I am going to look into getting some better rates ... there has to be some out there ...

We are in Windsor and not Ottawa - though I do absolutely agree about the Ottawa area - I lived there for 10 years and was always looking for someone to help around the house ... now I am trying out my hand at getting things done myself and with hubby of course!

The year off in Canada is an incredible opportunity ... and yes I just read somewhere that I can't work during that time otherwise it will affect my EI ... so I am going to concentrate on working overtime as much as possible before I go off (today I am in 7.5 hours) and hopefully that will work out. 

My husband has just started painting for my Aunt and has earned enough to pay the mortgage on our house in Portugal for 3 months (woop woop) ... and since he is so good she is going to spread the word to her contacts in case anyone else needs painting done ... so that is awesome.

My girlfriend came over yesterday and bought some photography lighting off of me $75 going in the bank :) and also told me about a website for rentals for visiting professors for the university ... since we are likely going to be in Portugal between August and May (ish) (and I discussed with my husband who would be ok with renting the house out) maybe this would work out for us... so I am going to get on the bandwagon there and put out an advertisement with photos.

My husband and I decided to start "using out pantry/freezer food" rather than buying more groceries (other than fresh fruit and veggies and some meat) so that should free up some more cash. As an added bonus we won't have to leave all that food in the house if we rent out ...

We are also looking at the "stuff" I have accumulated over the years and as much as possible will be going on Kijiji or a Buy and Sell website to see what we can make (as well as generally de-cluttering). 

Thank you again everyone! Sherry

MorningCoffee

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RRSP – Took out RRSP’s ($4200) on first time home buyer plan need to pay back in 15 years on track to have paid much faster at $50 bi-weekly (currently have $1371.89)

The RRSPs you took out with the home buyers plan - this is an interest free loan to yourself. You would be better to only pay back the minimum every year and funnel the extra payments to your credit card debt. You need to focus on getting rid of debt right now.

Your spending problem seems to come from several "unexpected" expenses. New tires or home maintenance shouldn't be a surprise. Something unexpected always comes up - and more will come in the future up with a new baby. Once your high interest debt is gone, you need to build an emergency fund. You're using your credit cards as an emergency fund, which is costing you a fortune. And you need to set a budget for these types of expenses. You spent a lot of time in your post justifying/rationalizing why you had to spent money you didn't have. That has to stop. If you don't have the money, you don't get to do ______________ (fill in the blank).

Paulie

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Great progress, keep it up! It would be really nice if you're able to rent your Canadian house while you're in Portugal!

Thegoblinchief

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Quote
We have an upcoming bill for plumbing issues in the basement now that this happened … luckily I believe my brother said he would do it (thankfully) need to replace all the outdated metal pipes with copper and get rid of the “dog’s breakfast” that the previous owner left … so no bill for labor but still need to buy the materials … this is a “must-do” rather than a cosmetic issue.

Unless for some reason you have to use copper, don't. PEX is a much cheaper way to do supply plumbing.

Your day to day expenses seem very reasonable but it's a little shocking to see all of that debt and almost nothing saved for retirement at all.

You mention have "accelerated" mortgage payments and a faster RRSP loan payback. You need to be killing off your credit card debt first, then the LOC, then the mortgage.

What is your monthly cashflow? Keep in mind once the baby comes, expenses WILL go up. They don't have to go up much, but you'll definitely spend more.

Congrats, though. And good luck with the pregnancy. Hopefully any bed rest will come as late as possible!

Melody

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What an exciting chapter in your lives!

Not sure how this stuff works in the Canada, but here Jeeps hold their value quite well (even with high KMs) - it would be possible to sell Jeep and buy a lower KM small car at a net zero price. This way you get better reliability and lower fuel consumption without outlaying extra money. Lots of tips on this site about buying used cars off craigslist.

Can you enroll hubby in classes ASAP - here we have free classes for migrants maybe Canada has something similar. As a painter he probably doesn't need to be fluent, just able to talk with his boss. Alternatively when you have the baby could you guys put an add up on Craigslist offering your husbands services in painting/home repair. You could take to calls and accompany him to the quotes, dealing with the homeowners, your hubby can then come back and do the work. I think the main thing is for him to have confidence to try and use his English even if it's not perfect. (I learned a serviceable level of Spanish - enough for basic jobs such as kitchenhand or cleaner - by doing a 8 week crash immersion class as a 21 year old, having never previously learned any language other than English. I think the secret was not being scared to make a fool of myself... 5 hours a day of tuition didn't hurt either! It can be done.)

Good luck!

SweetLife

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** Moved this post over to journals** Thanks all for your input so far ... progressing on debt  :)

Spudd

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For internet, check whether start.ca or teksavvy.com have service in your area. $70/mo is high - I pay $45 with Start including tax. I'm very happy with the start.ca service.

I also agree you should focus on paying your credit cards down as #1 priority. Don't pay extra on your RRSPs until you have gotten rid of the credit card debt. In fact, you could even stop contributions altogether. The only thing that would happen is you would have to pay income tax on the 1/15 of the total withdrawal that you did not pay back, which would be very minimal compared to the interest you're paying on your cards.

Best of luck with everything!