Im new here..... SLAP ME IN THE FACE ! ( Canadian )

[tyhatts]

Hey all.... I guess I will start by introducing myself/Family
I'm 27 yrs old... my Wife(common-law) is 25. We have a son who will be 1 in March.

We live in a small home in Ontario. I work in Sales for a John Deere Dealer and She works as a PSW at the "city" retirement home.

2013 is the year to start planning for the future. I know we are getting a late start. BUT with the addition of our son, it really kicked our asses into gear.

Our plans for the future are :

Long term
- Retirement Savings
- Education savings for the kids.

Mid Term
- New home in 3 yrs
- One more child
- A nice "nest egg" for emergencies, kids, etc.
- Our FIRST vacation ALONE ! We have never EVER gone on a trip by our self in the 11 yrs together. This actually might fall under mid term..

Short Term
- debt pay off
- emergency Fund
- Savings
- Fix up certain areas of the Current home Siding, Bathroom ( Very small bathroom) MAYBE kitchen. This is all being done to ad value @ selling time.

Our situation is a little unique because Wifey works "part time/call-ins" ... she is basically guaranteed 3 shifts a week. So her paycheck will ALWAYS vary from week to week. I work on Salary/Commission.... SO my weekly pay check is X amount.... but my monthly commissions could be any amount of $$.... or ZERO ( These months suck lol)

Our month fixed expenses, for both of us, are pushing the $2000 mark .... this doesn't included the variable spending. 
Variable spending is approx. $3000/month on average. INSANE ..... trust me I know :(

Last year I made approx. $90K and the wife was on Sick/Maternity Leave the whole year.... Her income was approx $30000 ( unemployment, baby bonus, etc. )

SO i guess the Finances break down like this.... roughly

Debt
- Mortgage = $74596 @ 3.75%
- Tahoe = $5500 @ 7.0%.... Matures April 2015
- Boat = $8868 @ 4.95%..... 10 yr loan... Amortized over 5. Started May 2012. ( I have paid $2500 of this loan on top of reg. payments )
- Line of Credit = $9986 @ 4.5%.... This HAS GOT to go.... it was a consolidation a couple years back. 
- Visa = $1480 @ Prime plus 1.75%
- Over draft = $1200 @ 19% ??? 
- John Deere Financial = $480 @ 18% interest.

Assets
- House = $95000... this is UNDER market value to keep it conservative.
- Tahoe = $4500
- Grand AM = $1500
- Boat = $10500
- My RRSP = $650
-Wife RRSP = $1750
- Checking account = $1300
- Wifes Checking account = ????
- Liquid Savings = $0
- Wifes Liquid Savings = ????


OK..... SO.... I know I'm fucking STUPID with my money. I made $90,000 last year.... more then I EVER have in my life... and I have next to ZERO in savings. BIG PROBLEM !

Now the saving grace is the fact I'm getting such a big tax Return.... As it sits right now I will be getting approx $3800 back.  ALso.. between now and March 1st. Any money I put in my RRSP, I will receive 45% BACK on my return.  BONUS !!!!!!!!

PLUS Wifey just ended her vacation MAT leave ( he he he ) and we will see a normal pay check from her again.

Im going to stop here and let a little of this sink in.... PLEASE PLEASE PLEASE comment or review and tell me what your first step would be. TRUST ME I already know what your going to say... I just want to start a discussion. Thanks

PS.... if this is suited for another spot in the forum, please move it accordingly.

[Jack]

• At 4.5%, the line of credit isn't so bad... it's the overdraft, John Deere Financial, Tahoe and boat loans that HAVE GOT to go (in that order)!
• IMO, the boat itself has got to go too, unless you commute to an island. You can buy it back after you've extinguished your flaming hair.
• We can't give you advice about how to reduce your variable spending until you post a budget breakdown for us.

[SunshineGirl]

Welcome!

I am wondering how well you understand interest, because you seem more concerned about the 4.5% debt than the 18-19% ones. ???

Once your wife's paychecks are regular again, I would immediately pay off the two loans with the highest interest rates. Just get them gone.

Regarding your short-term goals:
 -- I would move "fix up certain areas of home" to a mid-term (i.e. not this year) goal, because your other two goals are good ones and the ones you should focus on in the next 12 months.

It would help if you can list your definite monthly income and your definite AND variable monthly expenses. From there, you can probably get good advice. A no-brainer plan would be to put all income after your definite income toward debt reduction and savings.

Also, the fact that you don't know what's in some of your wife's accounts leads me to ask - how do you or don't you combine your finances? Who is responsible for paying off the debts?

Again, welcome! You will be able to make some great progress this year if you focus.

[NumberCruncher]

I second what other people have said.

Also - is the new home to get more space for children? If so, you might want to reconsider your space requirements. It seems like many people "need" more space, when they really just need less stuff.

[tyhatts]

Great advice so far.

I had planned on doing a budget break down but just didn't have the time during the original post.

I used " Back in Black" software on my Iphone over 2012 . Problem is, I used it VERY loosely. I didnt take into account credit card spending or track other account. I didn't track my cash spending either. So I consider the Data mostly inaccurate.

I took September as my example because it was the most "accurate" month. The months after had some BIG expenses with a wedding ( not mine, I was the best man ) and Christmas.

Its embarrassing to say the least... but here she is.

March
 


April



May



June



July



August



September



Now I understand alot of those numbers are in red. BUT the "budget" isn't accurate at all. I basically used it for an expense tracker.

Here is the start of 2013

[mensa]

Welcome! It's good that you're here and ready to do something to save yourself from the tyranny of consumer debt.

Looking at your numbers above, you've spent triple the amount on fishing than you have on groceries. I'm assuming (hoping) that number ($6345 in 2012) is including debt repayment. You mentioned that you have prepaid 2500 on the boat loan. If you hadn't, you would be underwater on the boat (that can't be good), as well as the Tahoe.

As mentioned by Jack, the boat has got to go. Sorry, my friend. It's an indulgence that you can't afford, especially since you had to take a TEN YEAR LOAN to afford the monthly payments. (Slap, slap slap!) That's about $3,000 in interest payments on a 10-11 thousand dollar depreciating asset. (Slap, slap, slap!)

Your net worth, per your numbers is $11, 700. For a family making upward of 100 large per year, that pretty much blows.

1) As previously mentioned, the boat has to go. Likely the number of hours on the motor are low, so you shouldn't be seeing much of a loss, if any.
2) Also as mentioned, you should focus on getting the high interest debt paid off asap.
3) I note that your line of credit is a consolidation loan. (Here comes more slapping) So you had enough consumer debt that you needed to consolidate, then you turned around and bought a Tahoe, a boat, a ?J.D. lawn tractor?, and racked up your visa and your overdraft? (Slap, slap, slap!)
4) Make yourself a realistic budget and stick to it. You need to put the brakes on the spending and ramp up the savings.

Clearly, you are having an issue with looking beyond the monthly payments. I can appreciate that as a commissioned salesman, you spend all day telling people "Look, the monthly payment is only "x", surely you can afford that". The problem is, you've swallowed your own lure.

The good news is that you're young, and you make a good income. Your debt is not insurmountable, by any means. What I've found helpful is to lower your fixed expenses to the very lowest point you can, then save a set amount, then spend what's left over. It sounds like your housing expenses are low, which is a great start. Don't be too quick to "move up" in terms of housing. Stay where you are as long as you can so that you can get your debts paid and start saving.

Monster post. I'll shut up now. Good luck and keep us appraised of your progress.

[tyhatts]

Welcome! It's good that you're here and ready to do something to save yourself from the tyranny of consumer debt.

Looking at your numbers above, you've spent triple the amount on fishing than you have on groceries. I'm assuming (hoping) that number ($6345 in 2012) is including debt repayment. You mentioned that you have prepaid 2500 on the boat loan. If you hadn't, you would be underwater on the boat (that can't be good), as well as the Tahoe.
I included boat payments/down payment in the "fishing" section because its a tool for fishing. So the overall figure for 2012 does include debt repayment AND the down payment for the loan.
As mentioned by Jack, the boat has got to go. Sorry, my friend. It's an indulgence that you can't afford, especially since you had to take a TEN YEAR LOAN to afford the monthly payments. (Slap, slap slap!) That's about $3,000 in interest payments on a 10-11 thousand dollar depreciating asset. (Slap, slap, slap!)
I completely agree that under SEVERE/debating bankrupcy conditions, selling the boat would be a MUST. I wont make excuses for the loan/owning the boat. All I can say is IT WILL NOT BE SOLD.

Your net worth, per your numbers is $11, 700. For a family making upward of 100 large per year, that pretty much blows.

I can't agree more. BUT the house was purchased in 2011 then gutted and renovated. ($$$) So I have only been paying off the house for the last two years. (Not alot of equity built ) The Tahoe was bought this year. and the boat was bought this year. So the Tahoe is upside down since I only have paid on the loan since Easter. I have listed the Tahoe forsale once already but decided to drive it for the winter as I had to make a $400 repair. I have no issue selling the truck but it doesnt leave us with much of a vehicle for the family.
The $100,000/yr income is a little misleading. I made $90,000 last year. IT WAS A STELLAR year though.... I would imagine our combined income for this year will be closer to the $80,000 range.

1) As previously mentioned, the boat has to go. Likely the number of hours on the motor are low, so you shouldn't be seeing much of a loss, if any.
2) Also as mentioned, you should focus on getting the high interest debt paid off asap.
3) I note that your line of credit is a consolidation loan. (Here comes more slapping) So you had enough consumer debt that you needed to consolidate, then you turned around and bought a Tahoe, a boat, a ?J.D. lawn tractor?, and racked up your visa and your overdraft? (Slap, slap, slap!)
4) Make yourself a realistic budget and stick to it. You need to put the brakes on the spending and ramp up the savings.

1- I know I will be chastised, but the boat IS NOT being sold, it's out of the question. Its something we use as a family and it gets us out of the house.
2- High Interest loans are priority. I think I should have listed them in priority in the original post I guess. ALSO the $500 J.D.F account is usually paid off every month. Christmas just went by obviously and most of those dollars were spent on "perks" for customers as Christmas gifts.
3- The line of Credit was an UNEDUCATED mistake. I've had it for approx 3.5 yrs now. I fucking HATE looking at it. I need to transfer it to a LOAN and just start making payments. I don't have the self control ( obviously) to NOT spend the $$ when its sitting there.
4- How does one stick to a budget ??? lol I have tried 100 times and this is where it got me. 

Clearly, you are having an issue with looking beyond the monthly payments. I can appreciate that as a commissioned salesman, you spend all day telling people "Look, the monthly payment is only "x", surely you can afford that". The problem is, you've swallowed your own lure.
Your right.... monthly payments Kill me. Oddly enough, I know my weakness and I don't push monthly payments on my customers. I try for Cash as much as possible haha but cash also makes it easier for me !

The good news is that you're young, and you make a good income. Your debt is not insurmountable, by any means. What I've found helpful is to lower your fixed expenses to the very lowest point you can, then save a set amount, then spend what's left over. It sounds like your housing expenses are low, which is a great start. Don't be too quick to "move up" in terms of housing. Stay where you are as long as you can so that you can get your debts paid and start saving.
One of the things that has helped me when reading these journals and posts on here is I realize, while still BIG, my debt isnt OUT OF CONTROL so to speak. If i just listened to what the voices in my head tell me, I could have it paid off pretty quick. As far as a house is concerned ... Im not wanting to move QUICK. We are only looking to upgrade for the sake of another child joining the family. Even at that point I dont want to move into anything huge. $150,000 is the top side of the scale for us. It will buy you roughly 12-1400 sq/ft in our town. PLENTY big enough for my family.
Monster post. I'll shut up now. Good luck and keep us appraised of your progress.

Thank you very much for the input. Its nice there is a place to come to and vent/get a dose of reality. Maybe daily follow ups here will keep me on track

[Jack]

I completely agree that under SEVERE/debating bankrupcy conditions, selling the boat would be a MUST. I wont make excuses for the loan/owning the boat. All I can say is IT WILL NOT BE SOLD.

You're welcome to run your life however you want... but if you want to think that way, are you sure this is the right website for you?

I understand that fishing/boating is important to the point of being non-negotiable... but that doesn't mean you can't try to accomplish the same level of fun with less expense. Can trading in the boat for one that's cheaper (either older, less fancy, or both) be an option, at least?

I can't agree more. BUT the house was purchased in 2011 then gutted and renovated. ($$$) So I have only been paying off the house for the last two years. (Not alot of equity built ) The Tahoe was bought this year. and the boat was bought this year. So the Tahoe is upside down since I only have paid on the loan since Easter. I have listed the Tahoe forsale once already but decided to drive it for the winter as I had to make a $400 repair. I have no issue selling the truck but it doesnt leave us with much of a vehicle for the family.

Sunk costs are irrelevant; sell the Tahoe and replace it with a car that's not only cheaper, but cheaper to operate.

Having recently purchased things is not an excuse for having low net worth; it indicates that you either financed too much of the purchase price or got a poor deal. (For example, if you had renovated smartly then the increase in value of the house should exceed the decrease in cash on hand, resulting in an overall increase in net worth. If you claim your net worth decreased because of the renovations, then you spent too much on them.)

(By the way: if it makes you feel any better, I financed too much of my house too.)

2- High Interest loans are priority. I think I should have listed them in priority in the original post I guess. ALSO the $500 J.D.F account is usually paid off every month. Christmas just went by obviously and most of those dollars were spent on "perks" for customers as Christmas gifts.
3- The line of Credit was an UNEDUCATED mistake. I've had it for approx 3.5 yrs now. I fucking HATE looking at it. I need to transfer it to a LOAN and just start making payments. I don't have the self control ( obviously) to NOT spend the $$ when its sitting there.

The assumption that you didn't understand interest rates came from your statement that paying off the line of credit was a priority (despite that the line of credit was at a low interest rate). If the issue with the line of credit is temptation, not interest rate, then that makes much more sense.

It's too bad; if you had the self-control, I would have suggested maxing out the line of credit and using it to pay everything else off... but based on what you've said so far, you'd fall off the wagon and make your situation worse instead.

One of the things that has helped me when reading these journals and posts on here is I realize, while still BIG, my debt isnt OUT OF CONTROL so to speak. If i just listened to what the voices in my head tell me, I could have it paid off pretty quick. As far as a house is concerned ... Im not wanting to move QUICK. We are only looking to upgrade for the sake of another child joining the family. Even at that point I dont want to move into anything huge. $150,000 is the top side of the scale for us. It will buy you roughly 12-1400 sq/ft in our town. PLENTY big enough for my family.

How big is your current house?

By the way, if I'm reading it right you're planning to only own your current house for 5 years. Keep in mind that transaction costs for real estate are really high (6% realtor fees, plus appraisals, loan origination fees, inspections, closing costs, etc.), so try to stay in your current place as long as you can (or keep it as a rental when you do move, if the numbers work).

[Another Reader]

It never ceases to amaze me what a priority luxury items are to folks that say they want to turn things around and get their financial houses in order.  You have an infant, soon to be a toddler, and you are planning a second child.  Do you take your infants and toddlers fishing?  You want an emergency fund and a nest egg.  You have to feed, clothe, house, and educate your little ones.  To me, having the financial security to do those things is far more important than a few hours fishing with the family.  Is your wife as adamant as you are about keeping the boat?

If you sold the boat and the Tahoe, you could pay off all your other consumer debt.  That would put you in the position of beginning to save for your kids' education and your retirement, as well as having a nest egg.  In your shoes, that's what I would do, after discussing it with the wife and coming to an agreement to do it.

[matt_g]

You have a debt emergency.

1. Sell the boat
2. Put your credit card in a paper shredder and don't ever sign up for another one
3. Pay off John Deere
4. Pay off Overdraft
5. Pay off Visa Card
6. Pay off Tahoe
7. Pay off Line of credit
8. Go on vacation for a week and pay cash.
9. Save up a few months worth of expenses in cash.
10. Max out retirement accounts,  while paying off the mortgage
11. Retire early.

[nofool]

It never ceases to amaze me what a priority luxury items are to folks that say they want to turn things around and get their financial houses in order.  You have an infant, soon to be a toddler, and you are planning a second child.  Do you take your infants and toddlers fishing?  You want an emergency fund and a nest egg.  You have to feed, clothe, house, and educate your little ones.  To me, having the financial security to do those things is far more important than a few hours fishing with the family.  Is your wife as adamant as you are about keeping the boat?

If you sold the boat and the Tahoe, you could pay off all your other consumer debt.  That would put you in the position of beginning to save for your kids' education and your retirement, as well as having a nest egg.  In your shoes, that's what I would do, after discussing it with the wife and coming to an agreement to do it.

You asked for a slap in the face, and you got it, OP. But your reaction to the face slap is...apathy. Wake up! Do what you need to do to get out of debt. Stop making excuses. You do not deserve luxuries. A boat is a dream, not an entitlement. You can live on so much less than you think you can right now. Get mad and get motivated. You haven't even tried to cut back and scale down your lifestyle! Try it first, then get back to us on it (the boat and the Tahoe) being a non-negotiable necessity.

[amyable]

If you sold the boat and the Tahoe, you could pay off all your other consumer debt.

I agree.  A lot of people (myself included) would kill to have a Tahoe and boat they could sell to assist in the repayment of their debts. 

[tyhatts]

ok ok..... SLAP in face has been noted.... well noted. Thank you for all the responses. They are great.

I will focus on "matt_g" post

1. Sell the boat
2. Put your credit card in a paper shredder and don't ever sign up for another one
3. Pay off John Deere
4. Pay off Overdraft
5. Pay off Visa Card
6. Pay off Tahoe
7. Pay off Line of credit
8. Go on vacation for a week and pay cash.
9. Save up a few months worth of expenses in cash.
10. Max out retirement accounts,  while paying off the mortgage
11. Retire early.

I understand the reasoning behind selling the boat. As part of this plan... keeping the boat is a priority. I just need to make it work. Thats something I have accepted as a financial responsibility. I fish a lot and its much cheaper as "entertainment" then a night out. I spent 4 years before it in a $1000 beat up aluminum boat that I couldn't take a mile of shore. The boat is essentially maintenance free for the first 5 yrs.(5 yr warranty on motor) Its a simple aluminum hull boat. no steering or big outboard motor.  Other then fuel, oil, and battery maintenence... there are no costs associated with operating the boat. 

Selling the Tahoe is something I'm very willing to do. I will make it a goal to have it sold by the end of January.
Paying off John Deere/Credit Card/Over draft is all priority and will be paid off with in the next couple months. I say " the next couple of months" because I plan on using a good portion of my tax return to do this. 

This brings me to the next part of the story. I have had my accountant give me a rough idea of what I can expect for a refund. So far she has me for $3800 return. :) !!!
NOW..... she hasn't considered any RRSP contributions so far.  SO.... I have to put money into a RRSP between now and March 1st. Currently for every $1000 in RRSP contribution I will get $450 added to my return... or so Im told.
My commision check for January was pretty good. I will take $1000 from that to put towards RRSP and also my February Check is also going to be pretty big so I planned on at least $1000 from that.

For conservative sake..... I should have roughly $4500 tax return. $3800 + 900(RRSP returns) = $4700

I have the credit card with TD and the overdrafted account. The current total on that is approx. $2700.

That leaves me with approx. $2000 to put towards the LOC.

1. Sell the boat
2. Put your credit card in a paper shredder and don't ever sign up for another one.... Check
3. Pay off John Deere..... ASAP... interest is compounded daily or monthly. TRUST me I know its a bad one to have, usually it carrys a $0 balance but I just havent gotten to pay it off since Christmas. Will be done by the end of the Month. 
4. Pay off Overdraft.... Paid by April/May
5. Pay off Visa Card.... Paid by April/May
6. Pay off Tahoe.... Goal is to sell by the end of the month. Pretty optimistic.


7. Pay off Line of credit..... talk to banker about turning this into a fixed payment loan ? That way its being paid off and the fund are no longer available.
8. Go on vacation for a week and pay cash..... Not important at the moment but Im thinking we can save " extra cash " from the Wifey Scentsy business and from my selling a few "things" i have around the house.
9. Save up a few months worth of expenses in cash...... High on my list RIGHT NOW.
10. Max out retirement accounts,  while paying off the mortgage.... Also high on the list AFTER debt paid off .
11. Retire early....... sounds fabulous !


As far as a realistic budget. What would be some appropriate allocations , % wise, based on income ?
I need to come up with a realistic budget FORSURE. Wife and I realize we are going to be basically living under a rock for the next year. But we also want to be able to have a "life"

Also, I have asked my current insurance company to email my policies to me. I will forward those to some other companies to see if I can reduce my insurance costs for the year.

Thank you again everyone

[Jack]

I understand the reasoning behind selling the boat. As part of this plan... keeping the boat is a priority. I just need to make it work. Thats something I have accepted as a financial responsibility. I fish a lot and its much cheaper as "entertainment" then a night out. I spent 4 years before it in a $1000 beat up aluminum boat that I couldn't take a mile of shore. The boat is essentially maintenance free for the first 5 yrs.(5 yr warranty on motor) Its a simple aluminum hull boat. no steering or big outboard motor.  Other then fuel, oil, and battery maintenence... there are no costs associated with operating the boat. 

So you replaced a $1000 aluminum boat with a $12000 aluminum boat... are you sure there's no way you could manage, at least until you've paid off your other debts, with something in between, like a $3000 aluminum boat?

($12000 seems to me like a lot for something as simple as you describe, by the way... I haven't looked at boats in years, but I suspect I could get a used 17-foot fiberglass runabout -- with steering and a motor powerful enough to ski behind -- for that price.)

This brings me to the next part of the story. I have had my accountant give me a rough idea of what I can expect for a refund. So far she has me for $3800 return. :) !!!
NOW..... she hasn't considered any RRSP contributions so far.  SO.... I have to put money into a RRSP between now and March 1st. Currently for every $1000 in RRSP contribution I will get $450 added to my return... or so Im told.
My commision check for January was pretty good. I will take $1000 from that to put towards RRSP and also my February Check is also going to be pretty big so I planned on at least $1000 from that.

I've got $7000 in IRA contributions to catch up on before April 15th, on a household income similar to (slightly lower than) yours. If I can do it, you can do it too.

By the way, if Canadian tax returns work anything like USian ones, having a large refund isn't a good thing because it means you had too much withheld and gave the government an interest-free loan. You might want to look into adjusting that.

Edit: fixed quotes

[tyhatts]

I understand the reasoning behind selling the boat. As part of this plan... keeping the boat is a priority. I just need to make it work. Thats something I have accepted as a financial responsibility. I fish a lot and its much cheaper as "entertainment" then a night out. I spent 4 years before it in a $1000 beat up aluminum boat that I couldn't take a mile of shore. The boat is essentially maintenance free for the first 5 yrs.(5 yr warranty on motor) Its a simple aluminum hull boat. no steering or big outboard motor.  Other then fuel, oil, and battery maintenence... there are no costs associated with operating the boat. 

So you replaced a $1000 aluminum boat with a $12000 aluminum boat... are you sure there's no way you could manage, at least until you've paid off your other debts, with something in between, like a $3000 aluminum boat?

($12000 seems to me like a lot for something as simple as you describe, by the way... I haven't looked at boats in years, but I suspect I could get a used 17-foot fiberglass runabout -- with steering and a motor powerful enough to ski behind -- for that price.)

This brings me to the next part of the story. I have had my accountant give me a rough idea of what I can expect for a refund. So far she has me for $3800 return. :) !!!
NOW..... she hasn't considered any RRSP contributions so far.  SO.... I have to put money into a RRSP between now and March 1st. Currently for every $1000 in RRSP contribution I will get $450 added to my return... or so Im told.
My commision check for January was pretty good. I will take $1000 from that to put towards RRSP and also my February Check is also going to be pretty big so I planned on at least $1000 from that.

I've got $7000 in IRA contributions to catch up on before April 15th, on a household income similar to (slightly lower than) yours. If I can do it, you can do it too.

By the way, if Canadian tax returns work anything like USian ones, having a large refund isn't a good thing because it means you had too much withheld and gave the government an interest-free loan. You might want to look into adjusting that.

Yes I know its a step up, But I want worry free boating for the next 5 yrs. The costs of operating a fiberglass with a bigger motor and steering controls and what not is there is more to go wrong and (used) no warranty to cover it. Plus maintaining and insurance costs are higher. We don't do "water sports" and if ever the need or feel to do them, I have friends with bigger boats. For what I need on the water around here ( Chatham-Kent) ... its a perfect size boat. Also, the wifes family has a cottage up north on the lake that we go to in the summer and its a great size for up there aswell. Boating/fishing is a family pass time, not just a hobby we got into.

As far as the return goes. I always seem to have a return because they way the pay structure works. If I get a big commission check ( $14-15-16,000) I get taxed out the ASSSSSSSS !!!! So it doesn't balance out at the end of the year no matter how they try to work it out. At least that's what they tell me at work. This years return is much bigger then usual because I had three or four big checks that were taxed improperly.

[happy]

You've had the face punches, and FWIW I agree with them.  If you are determined to keep the boat, so be it, I think you can still make substantial progress on all other fronts. Its your choice how fast you do this, keeping the boat will slow things down, but thats your choice.

You asked about setting and sticking to a budget:

1. Firstly you need to start tracking your expenses more accurately. Once you have it all written down you can see where the problems are.
2. Secondly every time you are about to let $$$ leave your custody, ask whether you really need to spend the money AND if the answer is yes, is there a cheaper way to do it? EVERY time. Do NOT make any elective purchases without waiting out a cooling off period e.g. a few days or a week and re-examining whether you really need that thing.
3. Try some games like a "no-spend" week or month... this really shows you what you are spending that you don't really need, as well as saving money
4. Learn to be frugal...its a learnable skill, although some people are naturals. It takes time and practice to learn and its fun!
5. Mustachianism is a mindset... not a money diet. The easiest way is for you and your wife to commit your self to the mindset, so you don't feel deprived.
6. You might like to kick-start with some big wins.. go for the easiest e.g. sell the Tahoe, pay off those high interest loans/debts.
7. Your living expenses should be subject to continuous improvement: i.e. if you spend $400/ month on groceries, challenge yourself to do $350. When you can comfortably do $350, go for $300. Eventually you will baseline, where you just cannot cut anymore...this might take some time.

Once you have practised 1. and 2., you should have a sense of how much you have left over for your savings rate. If you are trying to compare your self to others here...well MMM lives on <30k a year......and read some threads...case studies and journals will give you some ideas. But I doubt you will be just able to decide to live on <30k this year and pull it off, when you are used to spending more than you earn. Prove me wrong, I dare you!  Seriously though, some of us can change faster than others..depends a bit on your personality. Push yourselves but not so hard you decide its hopeless, or are too miserable and give up.

That said, most of us here would agree that your high interest debt is an emergency and you should pull out all stops until it is cancelledhttp://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/. Re-read MMMs post at least daily until you get it .....

[Jack]

Yes I know its a step up, But I want worry free boating for the next 5 yrs.

First you tell us that this $12000 boat is "simple," then you tell us that you need a warranty in case something goes wrong. Do you see the contradiction there?

Do you realize that you could have sent your old boat to the bottom of the damn lake and bought an equivalent one 11 times over and still have broken even compared to what you spent on the new one?

Just how big of a wuss are you, anyway? You're so fucking scared of paying a mechanic a little bit of money that you'd rather pay a salesperson a whole metric fuckton of money?

Is "worry free boating" -- not boating in general, but specifically the "worry free" kind -- really worth sacrificing your family's financial well-being for?

For fuck's sake! Man up, trade in your expensive boat for a cheap* one, get a goddamn paddle if you're so incredibly worried about the motor dying (regarding leaks, I assume you have PFDs even with your $12000 Unsinkable Titanic), and grow a sense of perspective!

(*It doesn't even have to be as cheap as your old one, for crying out loud! It just needs to be a decent improvement from TWELVE-FUCKING-THOUSAND!!!)

[Another Reader]

I think we all understand how important fishing is to you.  If we were just talking about you, well, what you do to yourself financially does not really matter.  That would be your choice and only you would have to deal with the consequences. 

However, you chose to marry and have a family and now you want to grow that family.  You have many of the goals someone with a family usually has, but you are not taking the steps necessary to achieve these goals.  While you can haul this boat to family gatherings and be the popular guy, you are hurting the other people for whom you are responsible by doing so.

From my experience, there comes a time where you have to decide what sacrifices you will make personally for the good of your family.  In your shoes, given what I could achieve for my family by selling the boat and the Tahoe, I would choose to sell those things and eliminate the other consumer debt.  I would spend the time I would otherwise spend fishing with my son and my wife.  That's a win-win in my book.

[GoStumpy]

I have a $600 12' Aluminum fishing boat... it's a fucking Cadillac compared to the $100 POS boat I was using last year!

A well-equipped $600 Boat can be just as comfortable & useful as a $5000 boat...


OP, if you need help budgeting I have a solution for you :)  PM'd!

[marty998]

#1 Listen to Jack. Jack is harsh, but right.

My commision check for January was pretty good. I will take $1000 from that to put towards RRSP and also my February Check is also going to be pretty big so I planned on at least $1000 from that.

#2 Every mega cheque that comes in you use it pay off debt. Not a $1000 from this and blow the rest. All of it goes to paying debt.

Then you will start getting in better shape financially.

[SwordGuy]

Well, you asked for a face slap... :)

Unless your wife gets horny as all get out in a boat, sell the damn boat and replace it with a less expensive one.  I saw a bunch of boats for sale at iboats.com for much, much less than $12,000.    Surely a $5000 boat and a $2000 repair bill over 5 years is better than a $12000 boat plus interest and no repair bill?

And if she does get horny as all get out in a boat, why the hell have you been wasting good money on all those non-boat items?   :}

Seriously, check out iboat.com, craigslist, etc. and see if you can replace the boat with a nicer one that you had for half the price.

A really good starter budget, if you're not ready for mustachian standards yet, is the 50-30-20 budget.

50% is for "needs", things that you are contractually obligated to spend or which you must spend in order to live, go to work, etc.  That includes inexpensive meals, not steak and lobster every day.   Required work clothes, not designer shoes, etc.

20% is for savings or EXTRA debt repayment.  If you have to make a $300 car payment every month, that $300 goes under the 50% "needs" category.  If you pay an extra $200 on top of that, that $200 counts as savings. 

You use your income to cover the 50% needs and the 20% savings FIRST.

The remaining 30% is for "wants".  Spend it how you like.

If you are thinking of buying something on credit using this budget, you don't do it if it would take your "needs" category over 50% of your income.  Since you work on commission and don't know your income ahead of time, you have to assume you won't make as much money each year as you did last year.  Be conservative so you don't get surprised.

This budget WILL NOT make you financially independent at a young age.   It will give you a solid retirement at "regular" retirement age and you won't find yourself sweating to pay your bills once your numbers are in this range. 

What it will do is help you transition to a more sustainable lifestyle and avoid big, stupid mistakes.

You might want to check out Dave Ramsey's website, too.  He's pretty good at finding ways to help folks change their financial behavior.  The good news is you don't have an income or debt problem, you have a behavior problem.  You have the money to pay off your debts in a reasonable number of years if you get your financial behavior under control.  You have the money to invest and get rich if you get your financial behavior under control.

This is a much better place to be in than having no income and lots more debt!

You will be better off financially if you follow Mr. Money Mustache's advice.  But if you can't, or your wife isn't on board yet, this is an approach that might get her on board for now.

Best of luck!

[matt_g]

Ah.... the tax accountant.  Ask yourself, "Would I take out a loan to put money into my retirement?"   Of course not, but that's what you are doing.  Keep in mind that you'll have to pay all those taxes back once you take the money out of the retirement account plus any returns.  It's a good deal, but not something you should be borrowing money to take advantage of.

If you want to keep the boat... so be it.  But don't re-consolidate this crap so that you can't pay it off early.  Your goal should be to pay off all of those loans in 12 months, except the mortgage, then you can save up some cash and relax.  Then pay off the mortgage. 

[Milkman666]

An expensive boat in Ontario, eh?

You going out fishing in your boat today? Have you been out in the past 8 weeks? What about the next 8 weeks?

A boat is nice. So is a motorcycle. But making payments on either one in Ontario is madness because most of the year the machine just sits there because it's too fucking cold to use it!

Disclosure: I have a bike, but I can easily afford it and paid cash for it. I still get screwed in Ontario of course, because I have to insure the GD thing year round, even though it sits in my garage for at least 1/2 the time.

[JanMN]

Tyhatts - I commend you for tackling your situation - that's great!  But, man, you are putting a boat ahead of your family's financial security?  That makes no sense. 

I live in boating mecca (northern Minnesota) and I see plenty of happy families fishing away in old Lunds, canoes (gasp) and other random floating objects. 

Take another hard look -

[Togoshiman]

I suppose the face punches hurt and they should, re the boat.  But you seem to be taking the message to heart on every other category and point, so hats off to you really.  I think there is an important point here, which is the different between needs and wants, and what one is willing to do (i.e. work longer) just for wants.  The fact that you have steadfastly identified the boat and fishing as worth it to you says you have actually found out something valuable - your limit on what you're willing to sacrifice, which I think is ultimately a good thing.

So, I'll go against the grain a bit and say that on a six figure house hold income, a $10k boat is not that big a deal if you attack everything else with gusto.  If you said you need to keep the Tahoe and need three credit cards, etc. then you'd deserve ridicule.  But you're been flexible on all these points.  If you do everything else, you'll be out of the red save your mortgage in a year and then well on your way to ER.

For me, it's the car.  I live pretty Mustachian by every metric save for my nice used sporty car which gets terrible gas mileage.  But I drive it <8000kms a year and maintain it like crazy.  For me, I found the limit in one category I'm not willing to compromise on.

Anyway, don't let the face punches get you down.  Chin up, keep us posted and welcome.

[StarswirlTheMustached]

Seriously, OP, you need to man up.
Lemmie tell you a story. My grandfather is a pilot; he learned to fly, well, as young as he legally could, and he loves being in the air more than anything on this earth. Anything. That man took to flying like a fish to water. So the first thing he did, when he had a job of his own, was buy himself an airplane; a war surplus trainer. ( I think it was a T-6 Texan, but I cannot now recall) He loved that plane, by god. When I was younger sometimes he'd choke up, taking about that plane. Do you know what happened to that plane?

He sold it.

He sold it for the sake of his family, and didn't get another one for FORTY YEARS-- not until the kids were done school and college was paid off; not until the mortgage was gone; not until there was no debt. And because he couldn't afford another Texan, or anything of the class, he spent a decade learning to fiberglass and put together an ultralight (in the US, it would be in the "experimental" class-- our ultralights aren't that light).

If my grandfather can go forty goddamned years without an aeroplane, you can get a cheaper goddamned boat.

[tyhatts]

I don't have the time for an in depth reply at the moment ( sitting at work )

All very good info/advice .... please keep it coming. I am taking it all in. TRUST ME

PS.... One thing I will say... again.... The boat is going no where. Wifey and I both agree the Boat is staying where it is. EVERYTHING can/will change, except that. Type till your blue in the face regarding the boat. Sorry.... its not being sold. OR down graded. PERIOD !!!!!!!!!!!!!!!!!!!!

[DebtDerp]

You say now that the boat is not going anywhere and that very well may be true but I think you need to keep an open mind in the long term. Check out NoMoreHarvardDebt.com. Joe had a mountain of debt and made pretty good money. He also said that he would NEVER get rid of his motorcycle and second car. Period. Within a few months he had sold off the motorcycle and second card and used the money to pay off his debt! He was entirely debt free (except for mortgage) in seven months. He realized those things were holding him back and he had to look at what his real priority was.

http://nomoreharvarddebt.com/2011/11/17/in-tears/
http://nomoreharvarddebt.com/2011/11/20/the-murano-is-gone-i-am-officially-on-track/

[twinge]

You say now that the boat is not going anywhere and that very well may be true but I think you need to keep an open mind in the long term.

+1.  A good exercise is to think about what would happen in your situation that would motivate you to get rid of your boat.  Because clearly it's not genuinely true that you would NEVER consider it.  If you wife needed a life-saving operation, your children were starving, and you had no other means etc. you would sell it.  So especially since your financial situation is erratic, you might want to set a limit on what would be a trigger to sell the boat.  Like, if I haven't increased my retirement savings by x in 2 years, or if I'm still carrying a credit card balance in 18 months.  Hold yourself to it.

[galaxie]

Tyhatts, it may not seem like it, but you're lucky.  Usually we tell people to sell their HOUSE and get a smaller one.  At least it's just the boat. 

The trick is to reexamine everything in your life, and see if somewhere you've paid too much for a decision you could have thought about differently.  We're looking for big wins -- reducing your grocery bill is all well and good, but the amount you save by moving to a smaller house, being closer to work, or selling a boat dwarfs that in comparison.

If the boat is off limits, can you move to a smaller house closer to work, and rent yours out?  Think about that for a minute and then come back to the boat idea.

[kdms]

Anyway, don't let the face punches get you down.  Chin up, keep us posted and welcome.

+1

Some of these comments have been pretty harsh (although true) and the fact that you haven't bailed on the thread like many others have when faced with the blunt trauma of the open-handed slap is good to see.

I'm going to go against the grain as well here...if the boat is your family entertainment (that's how I grew up too, although it was a sailboat, AND my parents took me out as an infant, so I get it) then good on you for recognizing the long-term benefit of private family time, even if the short-term financial implications aren't ideal.  As long as you can build the annual maintenance for the trailer (I assume, unless you're renting a slip somewhere) and the fuel to run it into your budget, and you can get everything else done that you've identified as a priority for repayment and savings, then you'll be in good shape before you know it.  Keep us posted!  :)

Btw....2006 Ducati for sale in Ottawa, if anyone's interested. ;)

[SunshineGirl]

You know, your housing cost is admirably low, and if it had been listed as $12,000 higher, no one would have told you to downsize your house like they're insisting you sell the boat. So I'm not as bothered by that expense as others. If a year from now, you had all other debt paid off (besides the house and the boat), that would be a real accomplishment.

NO MORE DEBT.

[Jack]

You know, your housing cost is admirably low, and if it had been listed as $12,000 higher, no one would have told you to downsize your house like they're insisting you sell the boat.

The difference is, houses don't tend to depreciate quite as much as boats do. Besides, if it were possible to chop a chunk off a house and sell it separately, we probably would be advising people to do that!

[tyhatts]

Im not ignoring.... this is all awesome advice.... Once I settle in @ home later tonight. I will respond fully

[happy]

I see no point in belaboring the boat, since OPs made it clear he's not willing to consider this right now, or indeed maybe ever. The most important thing is that he and wife commit to the mindset and take some action:  the  boat may be relinquished at a later point, or he may decide to make extra effort in other areas to offset the boat.

A really good starter budget, if you're not ready for mustachian standards yet, is the 50-30-20 budget.

I think 30% on "wants" is way too high even for a beginner Mustachian, when there is some high interest debt there. While there is debt I think it should be more like spend on "needs" and the rest on debt/taxsheltered savings. On 90K, 50/50 should be possible with a fair bit of effort for a newbie. Of course what should happen is that some of the things OP thinks are "needs" when he starts out, will start to change to "wants" as he and his wife get the hang of it, and can be eliminated.

OP if you want to keep the boat, you will need to push hard in other areas ....ultimately thats what  this is all about, what am I willing to sacrifice, to get what I want, and in what time frame.

[GoStumpy]

As a fisherman, I can see where OP is coming from with the boat...

We can easily sit here and tell him to 'sell the boat, obv', but do we know what he does in his spare time?

I'd be willing to bet he would literally go insane if he had to just sit around his house twiddling his thumbs when he would normally be out boating... I'd bet boating is his stress relief, relaxing, and family enjoyment time..

Obviously the boat is going nowhere, so perhaps we should move on from that point... I owe a lot of $$$ but there's no way I'm going to sell my camping gear to pay off debt... camping is what I look forward to all year, I'll bet the same is said for his boat...

[tomsang]

Seems like the boat should be turned into an income earning asset if it isn't going to be sold.  How about charting fishing trips?  The cost isn't the gas, maintenance, and other boat expense it is $12k x the highest interest rate debt you have + all of those items.  Your spending is out of control and selling the boat would send a message to you, your family, friends, and acquaintances that you are taking your finances seriously.  This is something to be proud of vs. embarrased that you have to get rid of your trophy.

You also mention selling some items.  You should try to liquidate $12k of items around the house if you are going to keep the boat.  Pull the flat screen off the wall, dump the video game consoles, etc.  You are saying the boat is the most imporant asset in your house.  So prove it by getting rid of all the clutter in your house.  Good luck on your journey.  Make it fun, be proud that you are downsizing your consumerism.  Make a statement! 

[GoStumpy]

Selling the boat won't 'fix' all his problems, will it?

So he'll be without a boat & still have problems to deal with?

I think that's a mindset right there... I'm not going to give up the one thing I have that's fun and be left with ONLY problems.......  Just sayin!

[tyhatts]

Alright..... Just finished the "webinar" regarding budgeting from the YNAB website. :)

Im not going to reply to specific posts because there are so many and they all cover basically the same ideas/theory/etc.
Everyone has given great advice that is for sure and it has been an eye opener. I came home at lunch today after reading the posts that were left over night. Jack's especially lol !!!! ( you got your point across ) Anyhow, I came home at lunch and brought the laptop to the wife and said " here, read this" and I opened this thread for her.
She called me as soon as she had finished reading the whole thread and agreed..... We NEEEEEED to change things.

Our problem is team work.... and budgeting is all fine and dandy ... when it works. Or I should say, when WE work as a team. 
We have tried this once already and it resulted in arguing over who spent what and why things were left un accounted for , etc.
That is when the whole thing falls apart. Now we are older, more mature, and realize this needs to be done in order to live happily/stress free. Also it has to happen in order to reach or goals.

I AM THE PROBLEM IN THE RELATIONSHIP !!!!!! Wifey is very frugal with spending, KIND OF. Part of that is because we use my debit/credit to pay for everything. SO she has the luxury of being frugal. She just sits back and enjoys the ride.She does how ever spend more often on smaller things. Trips to the thrift store shopping, getting her hair done, the endless amounts of make-up,etc. My purchases are generally more spread out but larger in $$.
 She has just started back to work , off of maternity leave. She is on part time/call in..... they are guaranteed three shifts a week plus call ins. @ $28/hour she usually brings home a $1000 every two weeks.

So back to the problem.

Currently I have $1000 for debt repayment .... this money was going to the RRSP fund. but as its been said, I can't loan myself money to invest. ( This way I have the return + $1000.... as opposed to the return + $451... But I would have $1000 saved in RRSP this route)

So I have paid off the John Deere account.($475)  Which leaves me with approx $525.

That I will put towards the over draft.
Over draft $1221 - $525 = $696.
Also, I'm going to call TD tomorrow and ask them to cancel the overdraft on the account. As I pay it down, it will become unavailable.

My goal for the weekend.... get new pictures of the Tahoe and get it listed on Kijiji Again. I owe Exactly $5506. I also have a set of summer rims for the truck I can sell. I would value them @ about $1000. If I got $900 I would be happy.

Trucks forsale @ $5000.... Rims will be $1000. If all goes as planned.... I would be left with $500 for debt. BUT as everyone knows.... no one gets asking price. So if I break even on the deal. All is well.

If I sell the truck.... that will free up approx. $240+$180...$420/month plus any fuel/maintenance associated with the truck. That would be a very nice chunk of change towards the boat.

So between today and Monday

1. Sell the boat
2. Put your credit card in a paper shredder and don't ever sign up for another one... CHECK !!!!!!!
3. Pay off John Deere.....DONE !!!! Free up approx. $50/month
4. Pay off Overdraft......Prev. Balance $1221..... Current Bal. $696
5. Pay off Visa Card
6. Pay off Tahoe... Listing on Kijiji this weekend. Value $6000 w/ rims. Frees up approx $420/month
7. Pay off Line of credit
8. Go on vacation for a week and pay cash.
9. Save up a few months worth of expenses in cash.
10. Max out retirement accounts,  while paying off the mortgage
11. Retire early.



One particular detail I want to share is I have a truck for work. I have NO COSTS associated with my daily driving to and from work. There was a comment about downsizing to a house closer to work to save on gas,etc. It wouldn't be beneficial. The problem with the work truck is it can only be used for "mild" personal use. As in, stops on the way home from work.

Im going to take a break from this for a little while and rest my eyes..... they feel like they are on fire from staring at this computer screen for the last 4 hours.   

[SunshineGirl]

How good did it feel to pay off the John Deere account?

[GoStumpy]

Congrats on paying down the first debt, it all gets easier from here on :)

I'm right there with you for the company vehicle, it's a life-saver for me when I want to be frugal with gas/insurance, my wife's car just sits 95% of the time.... we have a bit more lenience with personal use (thankfully!) so I can take it grocery shopping, etc...  As long as I fill it up in town they don't mind!

That can be a HUGE help when you don't 'need' to spend $200/mo in gas to drive to/from work!

[Self-employed-swami]

If you are looking for an online budget widget, I like Gail Vaz-Oxlade's.  You can tinker around with it online, or you can download the excel sheet, and save multiple versions.

http://www.gailvazoxlade.com/resources/interactive_budget_worksheet.html

Instructions:
http://www.gailvazoxlade.com/resources/guide_to_building_budget.html

She also has a debt one:
http://www.gailvazoxlade.com/resources/own_up_to_debt_worksheet.html

Instructions:
http://www.gailvazoxlade.com/resources/get_out_of_debt.html

Good luck (and consider downsizing the boat...)

[Another Reader]

You have made a good start.  Keep up the momentum, and maybe we will relent on the boat!

[tyhatts]

How good did it feel to pay off the John Deere account?

To be honest.... It felt "normal" .... Like I said, the balance on the card was carry over from Christmas. I use it @ the parts counter ( Im a John Deere Salesman ) for perks an odd/ends . " just put it on my account" is the common phrase. Usually it gets paid off before month end, because they charge interest I think daily. BUT it did feel good to make a decision to pay off debt as opposed to throwing it into RRSP.

It will feel good when the over draft/ Visa card. (which i have carried the balance on for almost 4 yrs off/on ... I know, I know... no need to say anything)

Congrats on paying down the first debt, it all gets easier from here on :)

I'm right there with you for the company vehicle, it's a life-saver for me when I want to be frugal with gas/insurance, my wife's car just sits 95% of the time.... we have a bit more lenience with personal use (thankfully!) so I can take it grocery shopping, etc...  As long as I fill it up in town they don't mind!

That can be a HUGE help when you don't 'need' to spend $200/mo in gas to drive to/from work!

Company truck is roughly $10,000 income we figure. Between fuel, insurance, maintenence, etc.
The company is pretty lenient with it I must admit..... I can use it for groceries, running to the store, using it for small job. As long as I dont abuse the fuel/milometers.... they dont blink an eye.

If you are looking for an online budget widget, I like Gail Vaz-Oxlade's.  You can tinker around with it online, or you can download the excel sheet, and save multiple versions.

Good luck (and consider downsizing the boat...)

Thanks for the tip.... I have downloaded YNAB to all my devices.... home computer, work computer, I phone and I still have to get it on the Wifes I phone

 

You have made a good start.  Keep up the momentum, and maybe we will relent on the boat!

Thanks ...... lol... can we just drop the boat already ?!?!?!?!? lol

Again... the boat isn't a " fancy " boat.... Aluminum fishing boat... Its a "polar kraft 1778WT".. 40HP tiller motor, 17 ft w/ floor, live well, storage , etc. But I don't have any major components that would cost a shit ton of money to fix. OTHER then the motor.... which is covered for the next 5 years.

So while I'm paying interest on the loan ( the bad part )... Its a " cheap " boat to operate and maintain on a yearly basis. My insurance for 2012 was $350... and im shopping that rate at the moment for a cheaper one. Im told it can be done.

It will cost $150/ month for me to NOT use it. My work truck offsets the difference, lets look at it that way !!!

[Jack]

Thanks ...... lol... can we just drop the boat already ?!?!?!?!? lol

Again... the boat isn't a " fancy " boat.... Aluminum fishing boat... Its a "polar kraft 1778WT".. 40HP tiller motor, 17 ft w/ floor, live well, storage , etc. But I don't have any major components that would cost a shit ton of money to fix. OTHER then the motor.... which is covered for the next 5 years.

So while I'm paying interest on the loan ( the bad part )... Its a " cheap " boat to operate and maintain on a yearly basis. My insurance for 2012 was $350... and im shopping that rate at the moment for a cheaper one. Im told it can be done.

It will cost $150/ month for me to NOT use it. My work truck offsets the difference, lets look at it that way !!!

No, let's not look at it that way. If you want to insist on keeping it, despite recognizing and accepting the fact that it's an expensive luxury, fine. On the other hand, making excuses and trying to rationalize it indicates that you yourself subconsciously realize you made a mistake, and that deep down you're feeling guilty about it. That sort of self-deception is face-punch-worthy all on it's own!

By the way, the bad part isn't just that you're paying interest on the boat loan... even if you had $12,000 in equity it would still be bad compared to selling the asset to pay off other debt.

What do you mean, "it'll cost $150/month for you to NOT use it?" That part doesn't even make any sense, unless I'm missing something.

And finally, I still think $11,000 for not much more than a 5-year warranty on a trolling motor is an exceptionally bad deal. I never said you couldn't have any boat at all (except initially, when I didn't yet know it was important to you); I'm just convinced that you can get almost the same amount of happiness out of a much cheaper one.

P.S. I had dropped it, until you brought it up again!

[happy]

When I post about this stuff I always become very conscious of a couple of bible verses: "let he who is without sin throw the first stone" (John 8:7) and "Why do you look at the speck in your borthers eye and pay no attention to the log in your own eye?"(MAtt 7:3)  No-one is perfect, although some of us have more logs than others. I definitely have several but I have made  a deliberate choice to keep/put up with or compromise on those ATM. Some logs may stay forever and some I  plan on removing at the right time. But I know what they are and have made deliberate choices, fully recognising how they are holding me back. If I absolutely turned my life upside down right now I could be FI and retired....but I still have some attachments to worldy goods and habits that I'm working on.

Jack is right, just about everyone here will tell you in theory the boat is over the top, I think so too.  But in practice you may choose to sacrifice some other things to keep the boat since its very important to you. You can decide to keep this luxury, its free a world, but don't go rationalising that its not a luxury (it'd cost me $150 not to use it??) and don't do any complainypantsing that you will have to compensate in some way in another area if you are serious about turning your consumer lifestyle around. So far you 've made some very good plans. Stop fretting over the boat and action them.

[tyhatts]

Good Morning everyone

Its been a long weekend but things were accomplished and plans have been set in motion.

Wifey and I sat down yesterday, we watched a couple videos on YNAB and talked about our "spending plan"

We have decided to keep things simple for the first couple of months in order not to discourage with a hardcore budget.
We are going to live off cash for our weekly things like groceries, gas, and a small allowance.
I had thought about living off of one income/totally throw the other to debt, but we cant really plan for that until wife gets a couple of regular paychecks since going back to work from Mat leave. We are thinking her paycheck will be somewhere around the $800 ballpark on an average-ish week. But are hoping for more since she has gotten a raise while on Maternity leave. Do not ask me how that works !!! haha
My pay is salaried so its very easy to allocate... plus commission once a month helps.  I'm planning on 75% of the monthly commission to go towards debt. The other 25% will go in the account.

We have broken the Catagories down like this..... please let me know how we should change them, because I know we have forgotten something.

Mandatory Monthly Bills
- Groceries
- Fuel
- Mortgage
- Property Tax
- Hydro/Water
- Natural Gas
- Cell Phone
- Internet
- Life Insurance
- Car Insurance
- Boat Insurance
- Tahoe Payment
- Boat
- Visa
- Line Of Credit.

Everyday Expenses
- Household goods
- Groceries
- Restaurants
- Entertainment
- Drug Store
- Clothing
- Pets
- Misc./Other

Cash
- Wife Allowance
- My Allowance

Future Expenses
- Car Repair/Maintenance
- Home Repair/Maintenance
- Birthdays
- Christmas
- Emergency. Vet bills.   

Savings Goals ( short term only ) 
- Emergency Fund
- ONE months living expenses
- Vacation

We are using the "YNAB" software which I think will help us a tonne.

Also... I put the Tahoe on Kijiji yesterday afternoon. I woke up this morning and had a text... someone asking to come have a look at the truck. I didn't even get to reply and he phoned asking to come see it today @ Lunch. BONUS !
I'm expecting to take a hit on the truck. I have it listed for what is owing on the loan, or AS-IS for $750 less. I'm going to stick pretty firm to my price AS-Is.... possibly negotiate the safety Price.
I still have the set of summer rims to sell also.... so that's AT LEAST $750

Well... thats it for now.... gotta get back to work ! ;)

[TomTX]

What's this "misc" and "allowance" stuff?

These are like $10/month categories, right?

[tyhatts]

What's this "misc" and "allowance" stuff?

These are like $10/month categories, right?

Nothing has been allocated to these categories yet.

[zug]

One suggestion that might smooth over money matters: Create a monthly allowance for the two of you, that each of you can spend without consulting the other. Might be $50/month, might be $200, but that should resolve some of the "why do you need ANOTHER pair of shoes!?" friction between the two of you.