Well done!

DAvid

I actually tried doing this earlier in the year. Currenlty, I am at $1000 deductable and the broker advised me that raising the deductable would make a difference of about $2 a month. I haven’t looked into any further since. Maybe when the dust settles, I can revist my insurance as I do not mind having a $1500-$2000 deductable at all (do they even have a $2000 deductable?)

@ FT:

Thanks! I marvel at we have been able to accomplish – we owe much thanks to you and the wonderful ‘team’ here at MDJ.

@ cannon_fodder:

At the beginning, we took our savings and used almost all of it to pay off the debt. Since we began our ‘debt reduction plan’ we have never missed a payment of at least $1320 every two weeks. I took extra OT shifts at work (20 to date) and still have the rest of the year to take more shifts. All of this money went to our debt reduction. My RRSP contributions were zero this time around. My RRSP is pretty paltry at this time. Something for me to think about moving forward. When we are debt free, I will be more then happy to go into more detail about our journey.

Paul and Melanie

Did you forego RRSP contributions (very popular at that time of year)?

You guys are doing great. Here is one idea you may consider. Increase your deductable on your cars. I will assume you probably have a $500 deductable. Call your insurance company and find out how much you would save if you increased it to say $2,000. You may find that on two cars this will net you about $200 to$400 per year. Taking this money to pay down more debt is like making another $300 to $600 gross or more a year! The “extra risk” you take is really another $1500 to self insure, for the savings this may be worth it.

Going one step further once you get the house take this money to insure yourself which is more valuable than the cars!

Brian

Just wanted to give you a quick update:

Debt as of July 23, 2009 => $13211

Paul and Melanie

DAvid

Just wanted to give everyone a very quick update:

Debt as of Dec 31/08 => $41971

Debt as of March 8/09 => $27431

Debt as of April 27/09 => $21104

paul and melanie

David: Thanks for the advice…we will try to keep an account of our thoughts along the way in order to share with others.

I had to head out in short order after I made my earlier post, so here’s a bit more.

Please keep track of how you accomplish your goals, what you did, which pieces of advice worked for you, and the impacts it had on your lifestyle. It would make an interesting counterpoint to the original blog to be able to come back and share your successes with the wider world. Who knows, your tale might inspire others to do likewise.

DAvid

DAvid

Just wanted to give everyone a very quick update:

Debt as of Dec 31/08 => $41971

Debt as of March 8/09 => $27431

paul and melanie

One quick observation…………………in the finanical breakdown, I don’t see all of the other expenses listed that comes with owning a house, and considering they are currently not even renting these would be all new expenses. AND SIGNIFICANT EXPENSES

For Example:

1) Municipal Water Fee
2) Annual Property Tax
3) Municipal Garbage Fee
4) Monthly Groceries
5) Monthly Gas
6) Monthly Electricty
7) Annual House Maintenance (furnace breaks, landscaping, repairs etc)
8) Cable TV/Internet

I would STRONGLY suggest renting a place for a year and monitoring bills and savings. If that works out well, start looking for a house because in one year it will be an even better buyers market.

Just wanted to throw in my 2 cents worth; your on a great path! Keep the focus & I’m positive the goal will be reached even before the anticipated date!

My wife & I decided last year to move to Ottawa (to be closer to family) and since taking that decision, took the steps to clear & pay off all c/c debts and loans.

Not only has it proven to be easier than anticipated but with the sale of 1 of our 2 homes (rental property), we now can clear all our debts with money leftover for our downpayment.

When we sell our residential home, hopefully within the next month or two we will be in a great position to start our new life in Ottawa!

Keep the focus!

Mark

One question: is Melanie’s school loan a Canada Student loan? If so, it might be better to look at the other loans first, as the interest costs on it are tax deductible, reducing your interest cost a fair bit. I’d suggest you retain your repayment plan, just alter the order of loans to atack!

DAvid

We decided to pay the following debts off first:
1) Melanie’s school ($3500 @ 6.5%)
2) RBC Loan ($21956 @ 8.3%)
3) MBNA ($11600 @ 1.99%)

Paying off the school loan will free up an extra $115 in money we can use towards our ‘focused debt payments.’

Currenlty we are both paid on a bi-weekly schedule. My income is fixed and Melanie’s income fluctuates depending on her hours worked. We decided to take $900 and $410 from our respective bi-weekly pays and put the money specifically toward debt repayment. We expect to pay off the school debt by the end of January 2009. This will bring our debt down to approximatley $33556. We also promised ourselves to be debt free by the end of 2009. We are also looking to take more shifts at work and look at creating additional income streams.

- paul and melanie

Therefore in addition to those, here are some more practical(contrarian?) suggestions that could be taken immediately:

1. Move in together now, but stay at one of your parents houses. I assume that one of the 2 parents may be willing to accommodate this situation as both P&M are currently making good money and living at home. [This will benefit P&M by a)enabling them combine and eliminate a number shared expenses, b) may give a tax/insurance break for being common-law. c) allow them to agressively save (if they are disciplined enough)]

2. Use P’s savings to pay off as much as possible on the TD Visa and BMO Mosaic CCs. Consolidate the remaining debt by obtain a line of credit at a lower interest rate for the remaining debts (BMO Mosaic, RBC loan, student loan) – Credit unions offer decent rates (6.25% now) and typically do not report to the credit bureau.

3. Reduce the credit limit of the TD Visa and BMO mosaic credit cards to ~$1000. No need for more.

4. Set up an effective budget. Pay all debt/expenses on payday and divvy up the remaining cash for variable expenses (gas, food, entertainment, etc) between the 2 of them evenly. Use cash instead of credit cards – this will make P&M aware of how much they are actually spending.

5. Get married in a cost effective way. (i.e. immediate family and friends.) This will save you some money for the house down payment.

6. (A bit contraversial…) Ask each of your parents if they are willing to help you with a house down payment. Most parents are, therefore P&M’s are likely no exception. On a side note many parents will leave their children their estate only after they pass away. As a parent, I would like to see my children enjoy a potential gift (i.e. help with a down payment), instead of just simply passing on an estate after I die. (imo)

7. Go to Chapters (or better yet the public library) and get educated about a) budgeting, b)the most basic accounting practices (to keep track of your finances and rental property investment), c)read up on RRSPs, TFSAs, investing, and basic financial planning. By educating themselves P&M can decide for themselves plan (or advice) best works for them.

Good luck P&M

DAvid

Whatever happened to the standard, obvious solution? RENT A CHEAP APARTMENT.

It’s just silly to buy a really expensive house with someone you aren’t married to, and have never lived with.