Dollars and Sense
So, I've had a problem for a while now. I've mentioned it before and basically, I'm leaking money. Part of it is my own spending habits; some of which are bad but the major portion of it has gone to service debt.Debt is one of those funny things. It just seems to sneak up on you, when you're not looking at your bank account. You think to yourself, oh well, I'll just catch up next pay by not going out so much. That becomes, Thank Goodness for a little bit of overdraft. Next, we get into, I'll just pay for it on my credit card and pay that off with the line of credit.
Hmm... no room left on the line of credit. Houston, we have a problem.
Naturally, it weighs on your mind and chews away and chews away and chews away. This has probably been on of the biggest sources of frustration for me over the past couple of years, and I've lost a little sleep over it. Debt really is paralysing, especially when you seem to end up just floating on the surface. You're riding that edge where money in is slightly less than money out, and you just can't make headway. Rather depressing, really.
Yes, I'm very fortunate. I've got a good job which supports me in the means to which I am accustomed. I really don't want for anything, but there are things down the road that I will want, and in order to get them, I need to be able to afford them.
So, I do what anybody would do to cover their debts; I take out a loan.
Basically, I consolidated my loans from a line of credit and credit card to an unsecured loan for the balances. I paid off the line of credit, and closed it out as well as dropping the limit on my credit card. Now, I have one loan to pay off and I can't just dip into this.
For me, this is the path I need to a solution. With the line of credit gone, I can't rob Peter to pay Paul (and Peter keeps getting robbed).
If I had to do the loan process over again, I'd move over my company RRSP's to my usual bank, and convert them to GIC's. In principal (pun not intended), this would have allowed me to secure the loan and get a lower interest rate. Also, I'd have paid more attention to the way interest rates are moving, and possibly gambled on a variable rate instead of a fixed rate.
So, as of today my $8200 line of credit (10.3% interest) and $4000 (19.5%) credit card balance have been converted to a 4 year, fixed term loan of 12,200 (13.75%) with bi-weekly, rapid repayments. What that means is, on Sept 2, 2011, I'll be debt free.
Keep that date open. I'm throwing a party, and I'm starting to save for it now. =)
posted by Serdic at 00:38
5 Comments:
Good for you for making the decision to pay off your debt. I know that Maw and I went through the same thing quite a few years ago and it wasn't easy. Of course with the move and the new baby, we need to start again, make the commitment and get ours paid back off. Good luck!
Oh, how I hear this. I was in something tooooo similar when I met Jeff. I too had to pull myself together and it wasn't fun, but the sleepless nights went away. Good for you in getting a handle on it ... it's not an easy thing to do. We are doing what Maw and Lythrum are right now, between the move(s), the trip to China and a new (to us) baby we also are tightening our belts, and our budgets.
Thinking about you guys!
/hugs,
Kiy
yes money has a way of getting out of hand, there is many ways of robbing peter to pay paul an yes milagro and i have been there many times though we have learned our lesson and try to keep ourselves under control... easier said than done though...just keep telling yourself you like to sleep and you will feel sooooo much better when its all gone! /hugs p.s. still waiting for snickerdoodles : )
/poke poke poke .... you still alive?
Thinking about you!
Kiy
Good idea consolidating, but those interest rates make me shudder.
Keep making the payments and try to throw a little extra in the way of principle only payments whenever possible.
Good luck :)
Post a Comment
<< Home