Hi Personal Finance friends,
I swear I am not as financially illiterate as I act but I have been overspending for the last... ~5 years and I can just hear Gail Vaz-Oxlade's voice in my head, "you're a money moron". I am a lone parent- daughter is 9 years old. I put myself through University with student loans (graduated 2016) and I have a decent job with the government (been here 1 year). Due to childcare restraints finding a second job is not an option, so cutting expenses is my number one priority. My biggest issues are that I have about $60k in student loans and a $32k brand new car loan. The other place where I find myself over spending is on gifts. I'm at that point in my life where my friends are getting married, having babies, and birthdays. I love giving gifts, even if it means overspending.
I'll also say I'm located in Canada. I have a good credit score - 743
I'll start with my income:
Employment - $1422.05 biweekly (some months I get paid 3 times, May is one of them)
Child support - $285 twice a month
Child tax benefit - $431.61 a month
Total monthly income - $3845.71
Savings:
I have a savings account I tried to contribute to, I use it for emergencies - $590
TFSA at main bank - $2,030
RRSP from last job - $3,590 (don't think I can touch this)
RRSP personal - $5,155
TFSA at diff bank - $5,870
Total savings - $16,650
I also have a pension that I contribute to through my work that is matched by my employer. I have no idea what's in it and I wouldn't be able to touch it anyway.
Here's one of my biggest problems - I have a $4,000 overdraft that I got when I was with my ex-fiance to help pay for wedding expenses.. We never ended up getting married and I didn't use this overdraft until I finished uni. I find myself creeping deeper into it every month... Right now the balance is in the red $2255. Every time I get paid it goes against this balance. Also, the reason I haven't used my savings to pay down my debts is because without a plan I know I will just continue to overspend and pull from those savings and eventually have no savings and more debt.
Debts:
Overdraft - $2255
Credit card - $2655
Student Loan (through provincial govt) - $22,299
Student Loan (through bank) - $25,506
Student Loan (through federal govt) - $12,620
Car loan - $32,608
Edit to add: I have looked into selling the car, it would be at a loss (at least $10,000). Yes, buying it was a mistake, I have had it for a year and maintained it, at this point I'm just planning on driving it forever. Also, I was in a car accident last year and I will eventually receive a settlement - I have no idea how much this will be I'm thinking between $5,000-15,000 that I would use towards this debt.
I honestly forgot what a disaster this payment is to me, because up until about 2 months ago I was paying on 2 car loans... Last year I bought a (not brand new) car, put $2,000 down on it, and I was rear ended and it was totaled after owning it for 1 week. I need a vehicle for work so I was stressing out and ended up buying that brand new car, as we all know was a giant mistake... I just recently paid off that other car loan with my tax return. So I felt like I was doing alright with that one payment.
Monthly Expenses:
Rent - $1249 a month - going up to $1285 in July
Child care - $50 a month during school, will go up in July & August
Tenant & Car insurance - $198.99 (is going up June 26 to $235, I have been calling around getting quotes, I can get discounted insurance through my union that look like they will keep my payments the same)
Govt student loan - $112.57
Govt student loan - $199.95
Bank student loan - $299.46
Car loan - $496.24 a month + $20.12 insurance for the loan (disability & life insurance)
Dance class for daughter - $65 a month
Life insurance - $61 a month
Heating - ~$60 a month
Phone bill - $110 a month
Cable and internet - $130 a month (in July I will be cancelling my cable reducing this bill to about $80 a month but currently have been in a contract for the last 2 years)
Singing lessons for daughter- $60 a month
Total - $3112.33
Not including Gas and Food, after I pay all of my loans and bills I have $733.38 left over
I added up all of the money I spent on food (groceries, snacks, coffees, eating out)
| Food (total) | Food breakdown (fast food/restaurant) | Food breakdown (coffee/snacks) | Gas | Total | |
|---|---|---|---|---|---|
| March | 1,069.86 | 166.08 | 106.33 | 168.71 | 1238.57 |
| April | 740.38 | 88.59 | 66.78 | 197.02 | 937.40 |
| May 1-13 | 243.76 | 29.18 | 22.08 | 143.19 | 386.95 |
March gifts - $286.63
April gifts - $103.75
May gifts - $116.97
Ok, so now that I've done the math I see that gifts aren't my biggest problem but eating out and buying coffees and snacks and groceries is.
My rough plans going forward include not buying coffee (I brought k-cups to work to make my own), not going to restaurants (In March I had a bday dinner and also took my mom out to dinner), and not buying snacks.
I have celiac disease so meal prep is a priority for me but I still have some extra restaurant costs that I can go without. Buying gasoline is unavoidable - my commute to work is 22km one way. I am also in a long distance relationship and visit my partner (900km roundtrip) at least once a month.
My priorities are:
- stop using my overdraft and feel safe enough to close it
- pay off credit card debt
- create a budget that includes a portion for gifts and stick to it for 6 months
- get to a point where I can add to my savings again
Personal finance, if you have made it this far THANK You!
What can I do immediately to stop relying on my credit to get by? Should I use savings to pay off debt?
How do I create and stick to a budget? Should I start doing cash only?
Submitted May 13, 2019 at 12:45PM by helpmeimpoor780 http://bit.ly/2E7VZEz
