Disclaimer first:  we’re not broke!  Not even worried.  But with Helen’s health problems we’ve gotten pretty far in debt and this year we’ve decided we really need to tighten our belts and make our way back to financial health just as we’re slowly making our way back to physical health.  So when our church offered a class called “Reaching Your Financial Goals”, presented by the Credit Counseling Services of Alberta, we sunk money into the class and a babysitter decided to go.

Trouble is, all the good tips this guy had, we’re already doing them!  We need a class called “Reaching Your Financial Goals When You’re Already Doing Everything Right”. 

Well I’m exaggerating a bit.  We did pick up a few good pointers.  And if nothing else we got some affirmation that what we’re doing is the right idea.  Here are a few pointers we particularly liked (in no particular order):

  • Put aside some “his and hers” money that each of you can spend on whatever you want without being held accountable, without having to feel guilty.  We’ve been doing this every time I get a bonus at work, giving each of us a part of the bonus.  Also any cash gifts we get (like Christmas/birthday gifts) we resist the temptation to put in the line of credit, and instead put them in our own accounts.
  • Get rid of “dirty debt” as he called it.  Credit cards, car loans, that kind of stuff.  We never carry that kind of debt to begin with.  If we can’t cover our full credit card balance we’ll borrow from the LOC.  5% instead of 18.5 baby!
  • Start a budget in small pieces.  We were great budgeters for years, and then kids came along and it all fell apart.  It takes too much time!  So it was suggested we don’t try to budget everything, just start with one area, like groceries or transportation (the two areas most people have most control over).  Take a few months to track spending in that area, find ways to cut back (eat out less often, etc), and then add another budget area.
  • Don’t try to be perfect.  Give yourself money in the budget to eat out once a week, or to get that double-double at Tim’s one morning a week, or whatever your weakness is.  If you tell yourself you can never eat out you’ll feel like a failure that first time you do, and abandon the whole budget.
  • Check your credit report.  This was new to me–and I think is new period because I researched this several years ago when someone applied for a credit card in my name.  Apparently now in Canada both credit bureaus (Equifax and TransUnion) must send you a copy of your credit report by mail for free.  You can also get it online for around $15 if you don’t want to wait.  Their (extremely poorly designed) websites explain how, and also show how to make corrections.  (The U.S. has an additional credit bureau, Experian.)
  • Set short-term goals you can accomplish in less than a year (e.g., $25 from each paycheque will go into a separate account for car repairs).
  • Set medium-term goals you can accomplish in one to three years (e.g., pay off our line of credit in two years by putting 80% of each bonus toward it plus $400 each month).
  • Set long-term goals you can accomplish in four to 24 years (e.g., put $50 a month in RRSPs plus 25% of any raises I get).
  • Keep paying a loan after it’s gone.  If you’re used to paying $200 a month toward your loan, then when the loan is gone keep taking that $200 out of your account every month, putting it in a savings account.  You’ve gotten used to living without it.
  • When you get a raise, have most of it automatically transferred to your savings account.  Like the loan, you’ve been living without it, so get rid of it before you get used to it!

I’m generally quite solidly annoyed with CitiBank and put their myriad offers of pre-approved credit directly in the shredder, but I happened to read one of their pamphlets recently and liked this quote:

Money is not worth loving.  Unless you’re talking about those little chocolate coins.

Go and owe no more!