Overall my Debt Snowball worked quite well for May. I paid the minimums on all of them except for the credit card at the top of the list, and I was able to put an extra $78.83 towards it, so I’m pleased. I also just felt like it was a more productive month financially simply because I had a bit of a buffer in my chequing account. Of course I wasn’t spending the money there, but just seeing it in my account was nice. In fact, that buffer was already spoken for in my budget, but wasn’t going to be spent until the end of the month, so it sat there in my account until this weekend. Sometimes it’s just nice to see the extra numbers when I logged into my account, you know?

I’ve also started writing a note to myself with each pay day, so that I know what the money is going towards. A friend of mine does that with her pay stub, writing the bills she’ll be paying with it on the papers, however I absolutely despise pay stubs because nobody ever does anything with them anymore. I find them to be such a waste of paper it’s ridiculous. So I clip a note to the calendar that just above my computer, and I find it more useful. At any rate it doesn’t really matter, does it? As long as I’m aware of what things I’m paying with each paycheque, that’s the main thing.

This is an official post from Adventures in Debt.

In one of the episodes, Gail Vaz-Oxlade advised her clients to declare bankruptcy. It was the first time she’s ever done that, as typically she’s able to help the couples out of their situation and get them on the road to financial recovery. But this time there was no way around it. She crunched the numbers every which way and just couldn’t find a solution. So she advised them to declare bankruptcy.

This is something that a lot of people around the world are starting to do in increasing numbers. In the UK the numbers have increased quarter over quarter (up 8.8% between the 2nd and 3rd quarters of 2008). In Canada, the number of bankruptcies has increased 2.8% in one month (from Dec. 2008 to Jan. 2009), which is up 20% from the year before. That’s a lot of people who have just had to give up  on their financial situation.

I admit that the thought has crossed my mind every now and again, as I wonder if it would just be easier to declare bankruptcy and start over fresh. But then I remember that I think about doing it simply because I’m impatient. I want to be done paying off my debt NOW.

The funny thing is, there’s no real need for me to pull the bankruptcy trigger. And why is that? Because even though I’m currently unemployed (that is, not earning full-time money), I can still cover my debt payments. And do you know why? Because I’ve been budgeting for quite a while and had cut down on my variable spending to the point that the fact I’m not working full-time means that I’m not chewing through my emergency fund at a fast clip. I’m able to stretch out my money because I already know exactly how much I spend in my variable & fixed expenses every month. I was saving money in my emergency savings plan with that in mind. I knew that if I needed to use my emergency savings, that it would be able to sustain me properly, including my dept repayments. Add to it  my recent income tax refund, and I’m able to survive. I’m not “living large”, but then again, I wasn’t even when I was working full-time. I was being responsible with my money. I might not be paying more than the minimum payments on my debts, but I’m not defaulting entirely on those monthly payments. I’m buying myself time until I can earn enough money to start making more than the monthly payments again.

So that’s why I’m not giving up just yet and declaring personal bankruptcy. But your situation might be different, you might be forced to do that because you’re far beyond your emergency savings, because you had to deal with unforseen expenses (a health emergency, or unexpected housing breakdown.) For whatever reason you might have to just do it. And that’s okay. Just make sure you make the decision with all the facts. Make sure you understand the ramifications of your decision, but once you do, and it makes sense for you, then do it, take the plunge. It might be the best decision you ever make.

Reminder: I am not a financial expert, nor an expert in bankruptcy filing. If you’re thinking of declaring bankruptcy, please consult an expert.

This is an official post from Adventures in Debt.

Cutting the Food Bill

In DecemberI blogged about how I was going to be super-frugal in my food spending to make a bit more of a dent in my debt repayment (again, because I’m impatient.) I called it Plan B, and it worked well, as I was able to add about $100-150 more to my debt repayment in January. But I was one unhappy camper. I realized that cutting back to the uber-cheap meals was not something I’m able to do. I wasn’t even going the Ramen noodle or KD route, but was doing some cheap and tasty pasta meals, but I must say that I was bored pretty quickly with that. So I definitely can’t do that on a regular basis, but it’s something I try to do once or twice a year.

Cutting the Fuel Bill

This one’s an easy one right now, since I’m now a work-at-home freelance writer! But when I was still commuting, I made sure to buy gas when it was cheap, I drove slower on the highway, made sure to use my cruise control whenever possible, and kept my tires properly inflated. This definitely helped me cut down on the fuel costs, as did the lowering cost of the price of gas. If it was still up at the $1.30/L mark it was at in November 2008, then I would have had to change my job situation much sooner than I did. But after Christmas it went back down below $1, and then it hovered around 75 cents (+/- 10 cents), which is a much more manageable situation. But now that I’m working from home full-time, that cost is reduced dramatically.

Stop Buying Clothes

An easy place to cut out the extra expenses is on clothing. I realize that I’ve got a ton of clothes that I don’t wear on a regular basis, so it’s easy for me to cut out the extra expense here. Sure I have bought a few things here and there when I needed to replace something, like new socks, but I have been quite good at passing on the “ooh, that’s a good deal on a coat/shirt/pants/whatever” situations. I might walk around the store holding the item for a bit, but then I just put it back on the rack and walk out. Makes me feel good. Last year I even did a Clothing Experiment where I tried to see how long I could go without doing laundry. Click here to read the final results. It was a fun thing to do, and I highly recommend it to all of you who think you don’t have anything to wear.

Cutting the Cable Bill

The last place I can really cut down on variable spending is with my cable bill. I’ve got digital cable, which means I have a few extra packages on my bill for those great specialty channels like the Game Show Network or the Biography Network. Depending on how frugal I’m feeling, I modify my cable package pretty much once a quarter, so I’m definitely aware of where I could cut back there. In fact, I might just take a look at my packages this afternoon and see where else I can cut back. I’m one of those that couldn’t get rid of the tv entirely, but I can definitely cut back on some of the channels. I watch far too much tv anyways, so getting rid of the channels might have the added bonus of causing me to do more freelance writing and earn more money! So I guess in the end it’s a win-win situation for me.

How have your efforts to cut back been going? Has it been tough for you and your family? What lessons did you learn from your experience? Share your stories in the comments, I’d love to hear them!

This is an official post from Adventures in Debt.

Turns out I was wrong! I am a big city girl now. Phew, okay, I said that out loud. I feel better now.

Plus I’m just tired of “working for the man” and having to go into the office, so 2009 is the year of the freelancer…me! I spruced up my freelance website, and have started networking and applying for freelance jobs. I’m quite excited about this on a number of fronts, but the main one is simply that I could possibly bring in a few extra dollars here and there. That is the number 1 goal for doing it. But if I can get the monthly income and client list up to a decent level, I am most definitely going to chuck the full time job.

But wait, what about the current state of the economy? Aren’t you worried?

Surprisingly no, I’m not worried. Technical writing is a small enough market that if you’re good at it, you’ll always have a job. And it’s one of those types of jobs that lend themselves to contracting because it’s a great way for companies to save money. They get you in to work on the project they really need done, they pay you a fair wage, and they don’t have to pay you any benefits or retirement savings matches. One other cost-saving measure for them is that I am able to work online, from home, so they don’t even need to set me up at a desk in their offices. Technical writing covers such a gamut of topics that I’m not worried at all. Tech writers work for software companies, hardware companies, banks, insurance companies, the government, the military, your local transit commission…I could go  on here. So I’m not even limited to just tech companies.

This is why I am excited about starting on this adventure. While I haven’t landed any freelance contracts just yet, I know that with my current efforts, I should land some soon. Wish me luck!

This is an official post from Adventures in Debt.

Some cards give you a cheque once a year with your cash back amount, others ask you what you’d like to do with it (get a cheque or apply it to your balance), and others simply apply it to your current balance. My card applies it to my balance once a month, in January. So this year I earned $112.43, which is great! It gets applied to my card, which means that it pays for almost all of my cable bill, or insurance bill, or, well, you get the idea. It decreases the amount I have to spend on my monthly bills this month, PLUS, I can then take that $112.43 and put it down on one of my other debts.

How’s that for a snowflake?

This is an official post from Adventures in Debt.