Debt Much?

A couple of days ago, I mentioned we had gotten ourselves into some debt in 2019.  From renovations, to dog surgery, to vehicle breakdowns etc. etc. This post is about how we're going to get out of it.

After some brainstorming with Jordan and then bouncing the ideas off of my mom - we've decided to suspend all of our current savings (RRSPs, RESPs, TSFA, future spending) and direct all of it to the debt.  This will essentially have the debt paid off in 2020 rather than 2021 - so that's big.  To my husband's point - why are we saving if we're drowning....and we're not, drowning that is, but debt is a slippery slope.  Once you have it it, it's easy to keep sliding.

Our income/expenses are also going to change several times throughout the year so my other strategy is going to budget based on the constant and then as our situation evolves make additional lump sum payments, rather than continuously updating the budget.

Here's a snapshot of the budget.

Right away you might notice that I'm not budgeting here for annual insurance premiums etc.  I usually save for advance for those, but those savings are also being directed to the Line of Credit until we've got it paid off.

The next thing you might see is the monthly spending of $2,600.

This also has Jordan's income - but he's not back to work until February.

One of the mistakes we've made (several times) in the past, is not being realistic when we budget on what we spend on life.  So this number represents what we actually spend - not what we hope to spend.  Intention here is so that we don't go further into debt while trying to get out of it.

The numbers are coming from yesterday's post on our 2019 spending summary.

Of course we will try to keep this as a maximum, and even less - but also - let's be realistic here.
On to what will be changing over the course of the year.

• In April we'll see a tax refund of some kind
• In February I think we'll be eligible for the BC Affordable Child Care Benefit for the 2019 year.  This may (or may  not) decrease our child care expense by around $450.
• In July our CCB Benefit will be re-assessed and I expect this to go up based on 2019 reduced income.  I think it will be around $450
• In September little man will go to Kindergarten, so Daycare will be reduced by $850/month and then we'll have after-school care for a couple hours.  I don't know what that will cost yet.
• In a few months we'll be apply for Life Insurance for Jordan
• When Jordan goes back to work we won't have the RRSP premiums line item
• In June our mortgage is up for renewal.  We're going to see about reducing our weekly payment ($500/week) to manage cash-flow.  The goal is down to $400/week.
• In the spring, we'll be installing three new exterior doors - we're expecting that bill to be around $8,000.

So, that's it. 

That's the plan.