i have a lot to work on

Yesterday I was running around town doing some errands - I'm now onto the stage of moving where you change all your addresses, update car insurance, that sort of thing. I'm also in the slightly awkward phase of trying to find some local spots to get everyday things done. In this case, I needed a tailor - at 5'4", I basically have to hem every pair of pants I buy.

After some googling and driving around the area, I decided to make the 15 minute drive to one of the local malls for a tailor. I reasoned that it's closer to work, so it will be easy for me to pick up and the hours are longer at the mall than at a small business. But on the way there, I got a phone call from J that was threatening to become a full blown fight. After hanging up before it got bad, I continued on, trying to stay positive. But outside the mall entrance, he called back - and it did erupt into a fight.

Now I'm emotional and frustrated. I drop off the pants at the tailor, and I was going to leave but thought better of it - I stopped in at the MAC store to update my info with them (I have a Pro card). Well, it turns out the best way to do that is online or over the phone. But instead of just leaving, I spent $40. I was upset, and browsing makeup with some girls was making me feel better.

I'm spending my emotions...literally. This is frighteningly similar to last weekend. I need to learn how to control this.

the stress of managing

So, we're finally back online and moved into the new place. And almost right away, an unplanned expense arose, I got stressed and lost my willpower, and now I don't even want to begin to organize my paperwork and budget. Here's what happened...

For the last five days or so, there was a lot of eating out going on. I wasn't home to cook, and neither "home" was set up for it. Half our dishes were in one place, half our pantry was in the other. So I did a lot of eating in the car on my way from one place to another, and ultimately spent a fair amount (in other words, I don't know how much) on takeout.

The move went well - the moving truck cost us about $80 each, but we were friendly to the cashier and she went above and beyond by waiving the young driver fee (there's a $25 fee if you're under 25, and since the truck was going on my credit card, we had to pay it - even though I wasn't driving) and the second driver fee. So we saved $35, just for being nice to her after some really rude customers were in line ahead of us.

Once we got all moved in, there were the incidentals that always come up and that I really should have planned for. Like a step stool, because I can't reach half the cupboards. Or some drawer organizers, because they're a lot deeper and longer than I expected. And the list goes on!

So after about $50 at Wal-Mart for that stuff, I thought we were done. But then - the big one. There was a last minute family trip to the interior for a funeral. No way out of it, of course, and no time to plan. The travel and hotel expenses were paid for, but of course food was not, and we were there for three days. We took advantage of things like the continental breakfast, and renting the hotel BBQ to have a family cookout and save on the restaurant fare (couldn't do that yet again), but it wasn't enough. There were still a couple dinners out, a lot of Starbucks to keep us going, and things like evening ice cream in the park. It was a good time, but expensive!

And then it gets worse. I lost my will power. BIG time. I was stressed, tired, emotional, and mentally exhausted. It was hot and bright - that really intense interior BC sun - and I wanted sunglasses. I tried on a few cheap ones at a mall kiosk, but J (ever the devil on my shoulder) didn't like any of them. I shouldn't have let myself, but I tried on a few designer pairs and found myself putting $170 on my credit card (actually, J was the one who saw me hesitating and said to the cashier "ring them up!" and then I felt like I couldn't go back).

Still gets worse. I am (well, was) in desperate need of some appropriate summer work clothes. I need to look very professional, but the clothes need to be comfortable and sturdy enough to handle some serious outdoor work. Good quality dark wash jeans and nicely tailored golf shirts are usually what I look for. And I found them in a big big way at a Tommy Hilfiger outlet. They were having a huge sale, 40-50% off everything, and I just went nuts. Four or five shirts, a sweater, and two pairs of jeans. On one hand, this is good. That's almost an entire summer wardrobe of good quality clothes (jeans and sweater were originally $118 each, the shirts $56). And I got all of that for only $160. Not bad, right? It was a pretty amazing deal - but I just didn't have the cash. And I bought it anyway on credit. Then, continuing my streak of spending, I bought a $60 necklace. Granted, it's a gold cross that I have been looking for for about a month and finally found one I loved - but again, did I have the cash?

All told I did about $400 worth of shopping. Mostly because I was mentally down for the count and shouldn't have been anywhere near a mall.

So now I have to face the consequences and figure out a way to pay this off ASAP so I can get back to my original debt. Probably within two paycheques...maybe one if I'm really strict. And this is about the time that I start to get really wary. I saved all my receipts so I can input it into my budget spreadsheet, but I haven't done it yet. Bills will be coming next week and I need to be ready. I need to move half my rent into the joint account this week so I'm prepared for next month. I need to get some cash from J to put towards his debt with me (he's got three running right now - vacation on credit card 1, rent/security deposit on line of credit, and $230 of incidentals like the moving truck, groceries, house stuff etc).

And I hate to think about all this. I hate to actually deal with it. The dread sits on my shoulders for days, until I actually sit down and sort through everything, and then I feel better. All of a sudden I just feel a sense of control and security.

But even when I know that, I always stall and drag my feet, because I'm worried that one day I'll go to organize and pay everything, and I won't have enough to get by another month.

how it all started

When I opened a chequing account at a new bank a few years ago, they also handed me a line of credit worth $15,000 without me even asking. Then I opened a credit card through them as well, and they gave me a limit of $6,000. All of a sudden I had a lot of money available to me. I wasn't used to this, I only had a student credit card with a $1,000 limit. So I didn't know what to do with all the new money. In fact, it intimidated me. So I left it alone. I never touched the LOC. I put aside my student credit card (with it's exorbitantly high interest rate) and started using the new credit card (low introductory rate, of course). I never carried much of a balance. If I did, I was disciplined enough to pay it off within two or three months. And the line of credit just sat there. When I logged into my bank account, every day I saw it there - $15,000.

Last January, my good old car began looking for a place to die. It was clearly time for a new one. But I had no savings (no savings account, even). And when a family member offered to sell me a great car at a huge discount, I had to take it. But how would I pay for it? Well, I walked into the bank and asked for $3000 from my line of credit. In seconds I had an envelope stuffed with $100 bills. And later that day, I had no envelope but I had a fantastic car.

But then things got sticky. Something from my past came up to bite me shortly after I got the car. See, back in '07 I made a really big mistake. I bought a new computer on impulse. I spent $1,700 on it. Bad, right? It gets worse. I opened a store credit card to do it, so I had a year of no payments, no interest on that $1,700. I made a token effort in the beginning to pay it off before the year was up, and got it down to $1,500. But then I had other bills to deal with, and I just sort of left that card alone.

Unfortunately, shortly after I bought my car, that one-year anniversary on the store card was coming up fast. And if I didn't pay off that $1,500, I was going to face an interest rate of 28% (retroactive too!). And again I thought to myself, what am I going to do? So I paid off the card in one fell swoop, using the trusty line of credit. I did this before I made a single payment towards my car.

All of a sudden that intimidating money wasn't so scary anymore. I could use it, and I could manage it! Right? No. Life happens. Shit happens. And I got myself in trouble. Just when I would start hacking that thing down and getting close to the original $3,000 balance, something would come up. Another purchase of some kind. Car repairs. Emergency surgery for my cat (that alone was $1,000 - and that's just my half). I impulse bought another computer (a Mac this time, at least) last year again - as if I hadn't learned my lesson the first time! And any good work I had done was wiped out yet again as I again paid my credit card with the line of credit to avoid the bigger interest.

At it's worst, I had just over $6,000 on the LOC. And at one time I was paying over $500 a month in a desperate attempt to get it under control. But something would always come up, and since I bought my car, I've never gotten the account down to that original $3,000. I've gotten close though - the lowest I've had it was $3,900.

Anyway, this year I have been making pretty good progress. I was cutting it down, cutting it down. I was approaching $4,000 at a pretty good pace and was almost there. But life happens, yet again. All of a sudden my job transfers me, and we have to move. Of course, a new place requires a security deposit - half a month's rent. And because we have cats, there's a pet damage deposit of another half month's rent. For our new condo, that totals $1,500. And then we have to pay June 1st's rent on top of that. So now we are writing a cheque for $3,000 and we never saw it coming.

How did I manage it this time? I drained my vacation savings account of it's measly $200. I just about drained my chequing account with a $500 withdrawl. And then I looked to my line of credit for the final $800. What about J's half? Well - he bled his chequing account dry ($300) and my line of credit had to fund the remaining $1,200.

He's promised to pay that $1,200 back over two paycheques. And he will - I've loaned him large sums of money many, many times and he's always paid it back very quickly. The question is, how quickly can I pay myself back?

Here's my current picture:

• My balance on my LOC (minus J's balance) is $5,400.
• My balance on my credit card is $820 (J has $515 on there as well - we used my card to pay for our vacation this summer, and he's paying it off a lot faster than I am).
• I have just $300 to speak of in my new RRSP account. $50 goes in there every two weeks automatically.
• I have a pension that just started through work and is worth about $600 or so.
• I have a mutual fund that tanked like everybody else's - my $1500 is worth about $600 right now.
• I have stock options that I could exercise and get about $9,000 - but not long ago, they were worth $13,000!

All told I have $6,200 of debt to pay off. I've opened a standard savings account and I absolutely must get an emergency fund in there and keep it at a respectable balance (ideally I'd like three months of living expenses, but that will take me awhile). And lastly, I've opened a high-interest, tax-free savings account that I'd like to use to save up a down payment for a house.

I've also come up with a budget that we will be using as of June 1st (will put that up in another post). That includes a plan of debt repayment at $300 per month, $100 into the RRSP, $100 into the emergency fund, and $0 into the TFSA. If I have money leftover at the end of the month, half of it will go towards debt repayment and the other half into the TFSA. I'm not counting on having any spare pennies, though.

So now you see how I got myself into this position. I know I'm not nearly as bad off as some people, but for me, this situation seems just barely manageable right now. Some days I don't think I'll ever be able to make it out and be okay. But starting now, I'm going to really and truly try.

the move begins!

Today the packing starts! I actually don't mind packing, since it gives me a chance to itemize everything we have. When we move, we're going to adjust our contents insurance. We've bought a lot of stuff since we first got our policy, so I don't think our coverage amount is adequate anymore. We're sitting at $20,000 right now and I'm thinking of boosting it to $30,000. Better to be a little on the high side! I've also gathered model & serial numbers for our electronics (we have a lot - two flat screen TV's, Wii, PS3, HD-PVR, digital box, surround sound, Macbook, desktop PC, laptop PC, two cell phones) so once I just organize the rest of our stuff a bit, I'll know for sure what we have and draw up a final list. That way if anything happens, we'll know exactly what we need to get our lives back together and be organized for insurance purposes.

Packing puts everything into perspective for me. We have a lot of stuff. We have spent a lot of money. Most of the electronics listed above were things that J bought on his own, but I definitely threw some money down too. At least we know where it all went, but at some point, you've got to step back and be happy with what you've got. And now's the time to do it! It's going to be hard for J though, I think. He's used to having a lot of disposable cash and those electronics speak for it. Today he called me wanting to buy a new mouse for his laptop, even though there's nothing wrong with his current one. He put it back, which is good...but I know it will be hard for him to get in the habit.

As for other things going on today, we picked up our first moving expense. We spent $48 on a bunch of boxes and tape from Budget. Last time we moved, we didn't buy a single thing and just collected boxes from the grocery store or wherever. This time, we opted to buy nice, sturdy, standard size boxes because we're actually going to hang onto them and put them to use. We currently rent a storage locker for things we don't have space for but need/want to keep (childhood keepsakes, winter coats, summer stuff, etc). The locker is an absolute DISASTER. The boxes are all old, falling apart, they don't match and stack well, some stuff isn't in boxes...ugh I just can't even think about it. So, after the move is done, we're going to take the boxes to storage and pack up everything properly. Our new condo comes with a storage space, so we want to make good use of it and not turn it into a pigsty!

I didn't buy too many boxes so we can reuse them all instead of waste our money by recycling them when we're done. It means we don't have enough for everything though, so we're definitely going to have to make a few trips on the move. I'm just hoping it goes smoothly and we get it over with ASAP!