2016 goals / 2016 progress updates / financial health check / Personal Finance

Desperately trying to stop the bleeding

It is with a heavy heart that I announce that we have had to borrow an additional $462.71 from our Home Equity Line of Credit to make this week’s mortgage payment of $1061.44. Even though I had worked hard to get us back into a position of Financial Stability last year, we find ourselves back in the Financial Instability stage (i.e. the point at which our income is not enough to cover our expenses and we must incur debt to cover living expenses.)

 

5 Stages of Personal Financial Independence

I knew this would happen. Without me working, our expenses far exceed our income. And yet, I had desperately been trying to delay it by posting everything sitting unused in our house on Kijiji. Last week, I made $140 selling two old laptops. I currently have 22 active ads on Kijiji but now it’s a waiting game.

Income statement (Mr.)

* Electricity is paid only every other month, but is variable.
** Our Visa bill is variable, and should be significantly lower now that we are on a cash diet. However, we have chosen to continue putting our insurance, gas and phone/internet bills on our credit card as those are fixed monthly expenses and will continue to allow us to keep our good credit score while still earning some rewards points.
*** Our Pet Self Insurance is something I discussed in an earlier post, Is Pet Insurance worth it? Since our premiums had skyrocketed, we had decided to “self-insure” by transferring $40 into a TFSA every 2 weeks.

Earlier this evening, I got the call that all my reference checks had gone through and that although they had originally told me that my target start date was Monday, February 15, they were happy to welcome me back next week – Monday, February 8! I can’t tell you how excited I am to be going back to work!!!

Before I had left for Asia, I had been employed through a third party, so I got paid every week, which I loved, since it gave me more frequent opportunities to pay down our debt. This time, I’ll be employed directly through the company (although still on contract), so I’m not sure what the pay schedule will be like. Assuming the pay is the same, I’ve included my income on our income statement below.

Income statement (both)

As you can tell, we’re still only up $202.38/month … which is really not very much if we’re hoping to pay off our debt by the end of the year! However, last month’s Visa statement did include a lot of our Asia expenses and some spending before we started our cash diet.

I’m estimating that going forward, our Visa bills should be no more than $650 per month (which would include internet, cell phone bills, car and home insurance, the monthly payment of our Dyson Stick Vac and gas bills). That should leave us with an additional $1,036 per month, which we can use to pay down our HELOC.

We’re still on Week 2 of our Crash Cash Diet and I have to admit – it’s working a lot better than I thought it would. We take out $140 per week (totaling $560/month), and including our Visa bill, it should be no more than $1,210 per month.

I suppose we could tighten up a tad, like trying to spend less than $60/week on groceries, or $40/week on our household budget, but just like a food diet, since we’re just starting, I figure it’s better to ease ourselves into it and feel empowered from the successes instead of starting with nearly impossible goals, get discouraged by our failure and blow it completely.

I’ve updated my 2016 Goals to include getting us back into a position of Financial Stability by March 31. By my calculations, we should be good by the second week of March, but of course, that’s not taking any unforeseen circumstances into account.

HELOC Feb 2

HELOC balance as of today: $14,558.90

balance sheet - Feb 2

I can’t wait until Friday, February 19 (when I assume my first pay day will be)!!!

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4 thoughts on “Desperately trying to stop the bleeding

  1. I feel your pain! It’s so scary watching the numbers get more and more red, I know from experience. Here’s hoping that adding your income back in, combined with the cash diet, will help you inch that red line lower & the green line higher!

    Liked by 1 person

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