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Reducing the Financial Burden

Money, money, money,

must be funny,

in a rich man’s world.

I’m convinced that anyone who says “money can’t buy happiness” has either grown up with wealth and therefore has no understanding of living paycheque to paycheque, or is an idealist happy-go-lucky who would be content no matter their financial state.  But I think if a person tends to be miserable no matter what the situation, nothing will change that, least of all more money.

I believe that money = freedom.  There’s no doubt in my mind that more money would allow me and my husband certain freedoms that would lead to a better life, and a better life = happiness.  Just think of less debt, less job-dependence, more vacations…

We all have money issues.  Except for famous people, and who the heck cares about them?!  For us regular Joes, freedom comes when we take control of our financial situation, so in choosing my 31 Goals I wanted to make one specifically to enrich our lives by getting rid of some money-related stress.  My goal, really our goal, is to “Pay off both lines of credit” this year.

Let’s put things in perspective.  My husband and I both went to college/university.  Neither of our parents provided finances towards post-secondary education, so it was entirely up to us.  (That’s not to say they didn’t help us in other ways, nor are we ungrateful – I’m just setting the scene here.)  My husband moved out right at 18 because his parents live outside of the city and, being without a car, he needed easy access to campus.  Since he had mostly only done part-time fast-food employment previously, he didn’t have much saved up to pay for school, so he applied for student loans.  He went on to do a total of 9 years of post-secondary education, augmenting the total of the loan he took each year with high-paying jobs during the summer months.

I, on the other hand, lived with my mom until I was 24; I moved out just prior to my last year in college.  I also took a year after high school to continue working in my administrative job.  With a whole year saving money, combined with saving rent by living at home and continuing to work while in school, I was able to pay for my first two years of college myself.  That didn’t exempt me from drawing from the student loan pool though; after my first two years, I switched disciplines and went on to do 3 more years of schooling, all with student loans.

Also during those years, we both took out student lines of credit with our parents as co-signers.  Combine all that with 4 credit cards since we both had two when we married, and we’ve got ourselves a big pile of debt.

Now, we’re not dumb people.  And our parents are not dumb people; they certainly raised us with important information that they hoped would help to inform our financial decisions.  But we spent a number of years, on our own and together, living in blissful ignorance about our financial situation.  It wasn’t until after we were just married and had consolidated our bank accounts that we really developed an understanding of our situation.  Frankly, our situation ended up the way it is because we just didn’t take the time to understand what was happening; we let our debt happen to us, and now we have to deal with it.

The best example for this is student loans; student loans seem to be heralded as God’s gift to the student, a generous investment from the government, a reprieve from the daily grind.  When my husband and I went to post-secondary, we both viewed student loans as the way we’d have to go to make it through school; everyone was doing it and it was a necessary evil.  Heck, even when I decided to take a year after high school to save money I was bombarded with people telling me that I better not because then I’d never go to school and why don’t I just take out a student loan?  The reality is that student loans are just like any other loan, even if they may be lower in interest and provide small tax benefits.  They are the government’s way of fooling students, particularly the impressionable 18 to 21-year-olds, into a long-term loan that’s really the equivalent of a mortgage (since they take just as long to pay off).  We let our student loan situation happen to us because we believed that’s what we needed to do.  I wish we’d known better.

Once we realized what we’d done, we took control and we’ve worked hard to pay off 3 of our 4 credit cards now (cue the applause)!  We’re pretty proud of ourselves, and the only reason we still have the 4th card to pay off is because we took an amazing trip to Cuba with 8 of our closest friends in honour of all of us turning 30 this year, so we definitely don’t regret that!!

Deciding to make a goal to pay off more of our debt was a no-brainer.  The reason we chose our lines of credit specifically is because we both signed for these lines of credit with our parents (because we were both quite young at the time and had no collateral); being that we both turn 30 this year, it seems like about time we finally cut that financial cord and set them free from any obligations.

Don’t get me wrong though, we both realize just how difficult this will be.  My husband just started apprenticing as an automotive mechanic last year, so he’s been working for starter wages and now he’ll be in school for 2 months to finish his first year – which means two months of living off of only one salary.  It’s going to be tough, but we’ve survived before and we can do it again.

Our plan is to wait until he’s back at work in June, and then seeing as we’ll have just lived off of only one salary for two months, we’ll just continue to do so; we’ll be putting all of his salary towards these lines of credit, and we should get them paid off by March of next year.  It’s ambitious, but it’s time we stepped up our debt repayment strategy.  The faster we can get out of debt, the happier we’ll be.  So who says money can’t buy happiness?

Did you fall for the student loan trap?  What’s your debt repayment strategy?

S

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