Personal vs Financial

In many cases including mine debt is a symptom - not the problem.

There is an interesting article written by Financial Mentor. He writes that our real problems are within us. With a few exceptions (ie: a medical emergency), our financial issues are due to our habits or attitudes.

Out of the eight characteristics that he listed, I chose three that defifinitely apply to me.

Misplaced Priorities:- choosing consumption and current lifestyle over investments and freedom

No Plan:- there is no budget, no plan for growing assets, no tracking of spending, no discipline

So... How do I get out of debt?

"Live on less than what you make"
My Debt will not be paid off if I spend more than I make.  The Financial Mentor states that in truth we need far less than we think we do.

"Track your spending"
I will write down where my money is being spent to raise awareness.  Is it spent on unplanned purchases or is it on fees or interest due to debt?

"Tell the ones closest to you about your debt free goal"
Actually this really works.  I have told two of my closest friends and my mother. They rally around me, ask for feedback, and pump me up when they hear of my progress.  "Accountability is a powerful force for shaping human behaviour."

"Have a good attitude"
I am not thinking of the sacrifices being made. While I am in debt currently, I treat some parts of my journey as a success.  For example, we have never missed a mortgage payment and I got my interest rate decreased on my credit card.  I can't help but to feel positive of the financial security headed our way.

So which of the common characteristics are getting in the way of financial goals? 

Nail Polish Challenge Colour Las Vegas Perle $16.00

51 Bottles Continues on.  Today's colour:  L'oreal - Las Vegas Perle.

This one is $6 because all I had was three toonies for my jar.  I have now saved a total of $16 for a plane ticket to somewhere!

Nail Polish Challenge Colour Warm Black $10.00

51 Bottles Continues on.  Today's colour is Avon # N228 - Warm Black.

It is a great colour for the holiday season, and I now have $10 towards a vacation to anywhere.



Canadians and Debt

It was on the news tonight that Canadians have set a new record for household debt. 

If an expensive emergency were to occur, many households would experience major financial hardships.  A study has shown that Canadians are paying out more than 40% of their income towards debt.  It is at this point that it becomes difficult to keep up with their payments.

Our household has incurred some additional debt this year.  I have already decided though that we must get our financial house in order.  Our mortgage is up for renewal in 2 years. The goal is to pay off 90% of our debt before the renewal. 

It is easy to say that we will pay off our debt, but not so easy to maintain that pledge.  One can achieve this feat if goals as well as a plan are put into place. I am still formulating a plan for the Hubby and I, but I already have some important points to ignite the plan:

Make a Budget
Every month I ceate a budget listing all of our fixed expenses.  Recently, I have thrown in savings as well.  We have our separate accounts, but share a joint account  for expenses and one with ING for our savings as well.  All we have to do is deposit the dollars for the expenses and savings listed, and I make sure the bills are paid.  I then transfer savings into our joint ING accout.

Do Not Shop With a Credit Card
Enough said!  The only extracurricular thing I do with my card is apply payments to it.  It is my first time using a spread sheet to track my spending.  I hope to have money left over to apply to my credit card debt.  I do make payments to my VISA bi-weekly, but the only way I will make a dent in the balance is if I delibrately strive to throw extra money towards it.

For Goodness Sake! Save Something
Something will always come up.  That is is reason one to have money put away for a rainy day.  For once, I would like to be somewhat prepared for an emergency.  I hate having to use my credit card toget out of a jam.  Or how about going on a vacation, paying for it in cash, and not paying it off with interest?

Include a Reward
There is nothing wrong with rewarding your self for displaying good financial management.  I am doing this with my Nail Polish Challenge.

What are the few financial steps you used to kick start your way to a debt free life?

Nail Polish Challenge Colour Seductive $5.00

As you remember in my post 51 Bottles, I mentioned that I was going to place $5.00 a jar every time I painted my nails.  I found a jar.  Well actually a small flower pot and placed my first bill into it.  It is in an inconspicuous place, where no one will find it.

The colour tonight is Sally Hansen #40 - Seductive. You can get your mind out of the gutter.  There will be no seducing this evening.  Hubby's got the flu. 

But I digress.  I have $5 towards my vacation!