Last week I was tagged by Mr. Cheap who started a meme with this question: One of my most shocking money moments as a child occurred because I didn't understand exchange rates and that one dollar in Canada is not the same as one dollar in other countries. This lesson happened when my family was preparing for a trip to Seattle. My parents gave my brother and I each $10 which we were allowed to spend on whatever we wanted on the trip. They gave us the money as $10 Canadian bills and took us to the bank to exchange the money into US funds. At the time the exchange rate was probably around $0.92, so I was outraged when the banker did not hand me back $10.00 US for $10.00 Cdn, but only $9.20. I thought the person had made a mistake! My mom had to explain it all right then and there. She had probably explained it in advance, but I think I must not have truly understood until I saw how much money I "lost" in the exchange. The rules of the meme are to tag at least 3 people, and link back to: http://www.four-pillars.ca/2007/11/01/childish-misunderstandings-about-money/ I am going to tag Nancy, Mariam, and Vixen. Groceries purchased this month ($500 budget): $137 Meal Planning Money Saved: $21
Of course, a few weeks later, exchanging the marks for francs, I was upset again. Somehow, I'd gotten it in my head that it was only US dollars that came out differently. :)
ps--Noticed on Ms. M&P's site that you mentioned hubby is lactose intolerant. I'll be posting some vegan recipes on my site soon, if you want to try them. Check back end of the week and they should be up.
Thankfully he isn't a bloody relative (or I'd need some serious generic engineering before I'd even THINK of reproducing).
Great post, thanks for carrying on the Meme! Any kids in your situation today will be happy (they'll get MORE then $10 in exchange)
We have $20,390 in credit card debt! This isn't because of frivilous spending. It is because we have had to use it to supplement our income while my husband has been in school. Not to mention the huge student loan debts we will have to start paying on after he graduates. We rent, so we don't have a mortgage payment. We try to be very frugal and stick to an incredibly tight budget, but after the bills are paid we often don't have enough for gas and groceries! I feel like we are drowning and just sinking further and further into debt. Please give me advice on what to do!
Thank you,
Jessica
Perhaps you could post where your $3,100 after tax goes each month. I live on about $1300 / month as a single guy, s even if you're running a car, you guys *should* be able to live off of $3,100 and be paying down the credit card debt.
Look at luxury spending (how much are you spending on TV, alcohol, cigarettes, tim horton's coffee, cell phone bills, travel), look at rent (maybe move somewhere cheaper if its over $1000 / month), etc.
Spend the next month writing down EVERY time you spend money, and I'd be amazed if you weren't able to find a few places to cut back.
One perspective is, you *MIGHT* be ok living in debt for the next year if you're CERTAIN that your husband will be able to quickly get a high paying job instantly after he graduates (if this is the case, you might be ok). What is it he's studying?
I'd also recommend looking into getting an unsecured line of credit (assuming you live in Canada). They're a lot like credit cards but with far more reasonable rates (a percent or two above prime).
Rent: 500
Car Payments (for 2 cars): 405
Car Insurance: 170
Credit Card Payments: 675 (that's just paying the minimum payments)
Electricity: 120
Propane Heat:150 (during the winter)
Water: 25
Groceries: 300
Fuel for cars: 750- This is so high because he commutes north one hour both ways for school and work and i commute south one hour each way for work. Which is why we have to have 2 cars.
Cell Phones: 80
DSL: 50 ( I would like to cut this expense but he has to have it for some of his classes)
Satellite TV: 50- I know this is unecessary, but we can't afford to go out for entertainment so we have to do something, right??
Savings: $80 - We have to save this money for paying taxes on the money we earn cleaning.
So this adds up to $3,305.00, about $200 more than we make. AHHHH!!
Any time you're spending more money then you're earning, its very dangerous territory. That being said, you and your husband are just "under water" by $200 / month, which seems like it gives you quite a few options.
1) Get extra cleaning jobs for $200 / month (this would be like 1 extra job / week I assume). Ask for overtime or a raise to cover some / all of this shortfall.
2) Get rid of the satellite and DSL (let hubby use internet at school). Make up the $100 shortfall as in 1). Borrow books and DVDs from the library or friends. Cut back on cell phone usage (I've used a "pay as you go" phone for under $20 / month, so $80 / month seems excessive - people lived without cell phones not too long ago).
3) Move to within walking distance of your husband's school. Get rid of one or both cars and find a new jobs also within walking distance. Your cars are costing you $1,325 each month (which is 42% of your income! You're working to "feed" your cars). Keep one car if you can use it to increase your income by WELL OVER $700 / month (e.g. through cleaning jobs or a better income).
There are a couple other "edgy ideas" (like the line of credit, negotiating with your credit card companies or a 0% balance transfer card, or getting a student loan) that I think might be dangerous for you to use (it *MIGHT* end up increasing your debt rather than helping you, maybe it'd be better to live within your means first, then try more aggressive solutions later).
The flip side to all this is, even if you're covering your living expenses, how are you going to handle emergencies? Are you planning to give anyone gifts at Christmas? How are you going to pay for them? Are you certain neither of you will get sick? Are you positive your husband will graduate on time and that you're job is 100% secure.
If you got a job near your husband's work and you moved closer to it, and got rid of both cars, and you were earning anywhere CLOSE to the income you are now you would have a significant "cushion" in case of trouble. In a year, once the husband gets a good job out of school, you can always get a car again.
Living JUST within your means is pretty dangerous (although living outside of them is VERY dangerous).
Good luck! I'd love to hear how things work out for you and what you decide to do (cheapcanuck@gmail.com)!
That being said, if it is not possible right at the moment could you work from home one or two days a week? To start all you need is an extra $200 a month. Reducing your commute for a few days, and picking up extra income somewhere might get you close to this amount (an switching to a cheaper- yet still fast- internet).
Work hard at your budget and take a good close look at it, and try and squeeze every penny out. Go to a cheaper cell phone plan, cheaper satellite plan... etc. you get the point, until the #'s add up.
Have you ever seen the show Til Debt Do Us Part? You can watch online at: http://www.slice.ca/Watch/Default.aspx?dpid=POGnFcLXpcLOUtBfXQXqv0ij1RtOxVk_
This show really inspired us to get our butts in gear and I watch whenever I need any reminding of what we need to do!
Good luck with everything, let us know if you find some extra $$ to help you along.