Recap: Spending and saving in March 2015

It's the end of March, so you know what that means? It's time to revisit my progress in the game called "I'm poor and in debt and I want to get out of it right now."

Well... I want it to be right now but really, it's a one step at a time thing that I'm doing. Which is the reality of fighting your way out of a negative net worth. The fact of the matter is, debt usually is a long battle and only very rarely does things change over night. Because money doesn't grow on trees and I'm not exactly making a ton of money in which to make all my money problems disappear. 

Hence the budgeting, saving and all the other fancy magic stuff that happens month-over-month for me.

Anyway, onward to the money stuff!

DEBT REPAYMENT: So earlier this month, I had a wild and ongoing debate (with myself) about my current debts and how I can go about paying it off. What it resulted in was that I had changed my mind about ignoring my student loan debt outside of the minimum payments in order to focus on paying off my lower interest credit card debt. Because based on the dollars and cents alone, it didn't makes sense for me to pay off the lower interest loan right away.

What ended up happening was that I did way more than I anticipated to both my debts this month. 

My student loan debt ended up getting gifted an extra $75 more than the minimum (the original sum I was planning to contribute for the month) thanks to some "found money" of mine around the time my automated payment went through. And $75 is still $25 more than the $50 I generally plan to overpay my student loans every month anyway.

My 0.99% APR credit card debt saw way more action however in the form of $350, $150 more than the minimum I arbitrarily set every month to pay this debt down. However, $100 of it was already planned overpayment from off a paycheque I received from freelancing,

The other $50 was more or less unplanned, but mostly due to "bad planning." See... I uh... forgot about the fact that my credit card required me to pay a minimum balance before the 10th of every month. And since I wasn't confident that I'll have the money I planned to use to pay that amount down in time, I thought it would be better for me to just toss $50 on it right now and save myself possibly getting dinged badly for missing the date.

INCOME: I got a cost of living raise at work this month. Yay for raises!

Although after deductions and taxes, it only meant that I was making some $15 more a paycheque net or $30 more a month. Don't get me wrong, $30 is a pretty big deal for me anyhow, especially given that it does cover the rises in costs for rent, the internet, etc. I've been dealing with since the beginning of the year. And that's $30 more that I didn't have before that I can use to act as a buffer on my spending or savings so I'm excited to plan towards making that extra cash work for me one way or another going forward.

I also got one fat paycheque from my freelancing gig and a smaller surprise one from another task at around the same time, and most of those were used towards my debts and my savings plans. Because it's just as much fun to see your savings numbers go up as it is to watch your debt amount shrink in my mind. More so, although that's entirely dependent on my mood of the day.

Oh, and there was one other small event that happened this month: I got my first dividend payout from my stocks! It was only about $3.75 total, but it was exciting for me because the moment I got it was the moment I realized that I had already made more in dividend investing than I have earned off of bank interest both in my high and low savings accounts since August! Shocking!

I will hopefully keep earning around $3 a month now off dividends, give or take the quarter and the month, which is an encouraging thought as I move towards making more of my money do actual work for me as opposed to my bank. There are a lot of little schemes going on right now in any case.

SAVINGS: This month saw a lot of funny business happen to my savings as I moved around funds in order to accommodate my impatience and my crackpot plans.

So at the beginning of the month, I raided my emergency fund to the tune of around $500 dollars. To do what you ask? Well, to fund my Direct Investing TFSA account and to buy some shares that ultimately gave me around $3.75 of dividends this month.  However, it did neuter my emergency fund a bit, which I had tried so hard not to do since my little shopping trip in December that also saw me raid that section. 

Granted, unlike December, it just moved turned the funds from a low-interest but liquid asset into a higher-return but non-liquid asset. It remained savings and didn't become a form of rampant consumption. Still, the point of an e-fund is that the money can be drawn upon easily. It isn't anymore. 

I also withdrew $400 from my High interest TFSA account and deposited it back into my Direct Investing TFSA account, and I also ended up spending around $230 out of my short-term savings/planned spending account to fund my sister's birthday as well as a brand new trench coat that I have been waiting and waiting on to buy and finally found the perfect one to buy! (Which will be told in full detail later)

Despite all of this funny business and spending out of the account, I had a pretty good month as far as savings goes. Just under half of all my freelance paycheques went towards savings, either the fund up my TFSA account or else to fund up my depleted e-fund and short term savings accounts to the tune of nearly $452 dollars. 

In some ways, me raiding my savings in certain areas prevented me from using that money heedlessly as if I had a larger disposable income.

Well... mostly. I did end up going a little crazy in the spending category.

SPENDING: Well, as per usual it seems, I went a little too nuts in the food category, in that I spent more than $80 more than I had originally intended to spend a month on food, mostly due to the eating out category. That is to say, I had zero discipline this month when it came to eating out and little by little, blew my planned budget to bits. 

Part of it was due to laziness and part of it was due to an unnecessary craving, but for next month, it is something that I will have to focus on reigning in. I've already made a start on attempting to reign in the spending however. 

Then I also ended up spending around $50 that I never intended to spend on a new indoor jacket from H&M (it was cute and on sale and cute) and due to stupidity on my part as far as the costs of my taxes go, really blew out my miscellaneous fund for the month on getting my taxes done.

Thank goodness for that fat refund next month.

All in all, while this month wasn't nearly as expensive or expansive as December or January, it felt as if it got pretty goddamn close. While one of the big expenses was one that was more or less beyond my control (taxes), the other two could be better managed as far as temptation is concerned. In any case, I will need to figure out a viable plan in which to manage my need for new clothing once in awhile... maybe allow a purchase once a month if possible. But we shall see.

CURRENT NET WORTH: -$28,680.62 (+4.17%)

Allow for this thought to sink in for a moment here. In a month where I only got two paycheques and a marginal raise plus my freelance salary, I almost equaled the savings I made in a month where I had three paycheques and my freelance salary.

What does this tell me? That February did have an effect on me and my priorities and kept me grounded towards putting more of my spare money towards it. 

I also thank God that I rethought how I would account for my savings in my net worth and focused on only my emergency fund in my savings account and did not include my "planned spending" accounts like my short term savings and my other accounts, because then like in December you would have likely seen my net worth take a bit of a hit in that category thanks to spending in March out of those categories.

It's somewhat hard to believe looking at this number that I may soon be seeing a net worth around -$25,000... and this from a net worth of -$33,000 in October of 2014.

It just goes to show that even when I feel I had gone crazy with my spending (which seems to happen every single month) or that I am stretching my money too thin, the very fact that I am watching where my money goes and making an attempt to reign in said spending here and there is leading to a very positive net increase every month. Regardless of if I manage to totally reign in my impulses, I am nonetheless reigning them in just by watching them.

Anyway, next month should be interesting to see what happens given a fat return with likely make a giant impact in all my finances. Where and how, we shall have to see however.

An early update on the TTC test, because the results are in!

Earlier this month, I mentioned that I bought something around $125 dollars of tokens in an attempt to gauge my actual usage and whether or not it's worth it for me to buy either a VIP or even a regular priced metropass, which goes for a little under $20 dollars more every single month, or if the expense is actually a luxury.

Well on Saturday March 28th, with at least two more round trips to contend with for the month and I've used two more tokens than the $125 worth of tokens I purchased.

Yowzah! That's a lot of bus rides!

Yes, that's right. Even while being mindful of the fact that my travel options are not unlimited for the month and therefore being reasonably more conservative than I'd otherwise be in a given month (translation: less lazy-ish) I'm on pace to have used more than $141 dollars, or a full priced metropass' cost, of travel on public transit this month.

And that even doesn't take into consideration that I can claim my metropass costs on my taxes, which gives me money back for having one once a year. I can't do that for money spent on tokens.

So, does this result with the tokens surprise me?

Actually it does.

While I'm cognizant of the fact that I often have six day work weeks (regular job plus freelance) plus other errands that adds to the daily back and forth of my life, in my head, I didn't expect to use 44 tokens in only 26 1/2 days. I had thought I would make it to the end of the month easily with those tokens and a few left over besides.

Well, clearly I guessed wrong. And not only did I guess wrong, I completely underestimated my need for transportation when it came from coming from home to work and then some. I'm well aware that I am very dependent on public transit to get myself places, and not just because I don't have a car. Frankly, many of the places I travel to in this city as a result of work or play is better accessed using public transit than having to find and pay for parking downtown.

So what does this mean for me going forward as a transit user?

It means that me owning a metropass is not only worth it, it can save me a buttload of money when it is a VIP pass. And that was the real lesson for me in the month of March.

I hate my checking account. Unfortunately not enough to switch.

I own a chequing account with TD Bank.

It started as a savings account when I was 16 and first opened the account and it has since became a chequing account over time (although it still maintains some unusual accounting quirks due to its origins). This account has seen me through everything since then, from school to part-time jobs to my current full-time job. It's been my constant in life.

Of course, that constant presence has lately cost me to the tune of $10.95 a month. 

Yes, so that TD can hold my money and maintain my business, I pay them $11 of my hard earned money every month. 

Absolutely seeing those bank fees disappear from my account every month is increasingly becoming an issue with me as they should really. When you budget the dollars and doughnuts out of your monthly expenses, especially in my case, $11 seems like more and more money every single time. That $11 a month could shave a significant amount of time off my student loan debt every month. Or pay for some great meals. What have you really.

But I'm struggling with the idea of how to get rid of it.

It's not that there are 'no options' available to me to get rid of bank fees. In fact, TD, the very bank I'm gripping about does provide "free" chequing accounts to everyone.

Well, except that those free TD accounts comes with a catch that is partially the reason why I'm gripping still.

Free TD accounts require a minimum balance in order to have your fees waived. And before you think "Oh that's not so complicated" let me add, as far as minimum balances goes, these are not small insignificant minimums. Even TD's minimum chequing account (which comes with a $3.95 charge) requires a $2,000 minimum. And it's an account that I don't downgrade to despite the smaller price because I happen to use my account just enough a month with bills and whatever is that it is still cheaper to use the account I currently have than the one a pay grade down.

The account I'm currently using? I need $3,000 to get the $10.95 charge waived. Money that could be put to work elsewhere.

To be honest, you only have to look around at other major banking institutions in Canada to realize that most of them follow the same model of a minimum balance needed to avoid fees without any actual no-fee, no minimum banking options. 

While the amount needed varies meaning that some accounts are still better than others, it really isn't enough for me to justify making any switches in banking. The model also begs the question, is there any actual no-fee banking options for Canadians that doesn't require us to be students, seniors or have lots of money sitting in a bank account?

Yes.

The more famous of the two I know of is the one offered by Tangerine, who not only doesn't charge fees but also pays interest on money held in your chequing account, something that my chequing account with TD doesn't provide at all for any amount.

However, while doing some quick and cursory research for this entry, I also found the President's Choice Financial no fee banking account... and found myself feeling it to be a better no fee account if only because it matches Tangerine and then exceeds it in services provided... except one.

Their interest provided is tiny compared to Tangerine, who provides 0.25% for the first $5000 while PC Financial doesn't provided a 0.25% interest until you have twice that ($10,000) in the bank.

While the pull to switch is strong, the inconvenience of switching after owning this account for as long as I have and having a large number of accounts associated with it is enough to deter me... but only for now. I'm still determined to eliminate my bank fees and that may mean having to eventually go elsewhere to do my banking. But for now as it were, I am looking towards getting the minimum balance to get it waived.

And the sooner the better.

I have jumped the shark on investing

So, a couple of months ago, as I have previously mentioned, I had included a Direct Investing account within my TFSA with an eye on eventually allowing my money to make money for me, rather than me do all the work.

And then I sat on it for a month or two.

Part of the wait was me educating myself by reading what material I could on strategies and how best to capitalize on my investments while I also was watching the market and finding stocks and prices that agrees with me and my investment plans while also getting a better gauge of how things are moving.

Although I may as well be cloud watching for all the good me watching the market did. What people say is true; trying to predict the stock market is like trying to predict the weather: you can make all the necessary precautions against the bad, only to not encounter it.

And then when you least expect it... BAM! Snowmageddon!

The educational material was a little more helpful when they didn't spend too much time speculating the future.

Really the wait was mostly for me to find some courage to step into the uncertainty that is the stock market and having to wrap my head around the fact that I am exposing myself to possibly gambling away my hard earned cash.

I have played stock market games before with the use of fake cash with some success. That success is rooted in the fact that I am at my best when I spend it and forget it, sometimes for months at a time. This allows time to make my earnings grow to a value that I feel comfortable in selling it which allows me to take the value of some stocks that are on the downside in stride as well.

And while not really being in any mood or position (given my student loan debt) to being terribly risky with my money, as I really can't afford to lose all my money on any particular stock, in the same breath, I'm actually pretty comfortable with a moderate amount of risk provided that the portfolio is strongly diversified so as to ride out any potential downturns in particular markets for instance.

That said, I'm not much of a gambler either, so stability is something I value when it comes to me picking stocks.

Knowing all this from my own experiences over several years, I'm attempting to replicate this as closely as possible. That is to say, I want something that is both low maintenance and something I can handle long term that I can reasonably be able to find gains in.

In short, I am looking at splitting my investments between ETFs and a diversified selection of dividend stocks. The ETFs because they are low maintenance, lower costs than mutual funds and they act as a ballast that automatically diversifies a portfolio. The dividends are so that I'm not entirely dependent on the current market returns in order to have accumulated an actual profit from investing in said stocks.

After all, more money is the reason I'm doing this, isn't it?

However, this is going to be a life-long project that I am taking on. To get a portfolio I'm happy with will take an extremely long time. For one, I accumulate real cash at a much much lower rate than I do fake cash. Not only is fake cash easy to earn, I also currently have a debt that I am prioritizing more or less to servicing and being rid of above and beyond any investing I intend to do, because unlike the market, my debt repayment returns are guaranteed.

Also keep in mind that because I pay a $9.99 commission for every bundle of stocks I purchase. Ergo, I don't exactly go about buying stocks one at a time because... well it's a dumb idea and it adds $10 dollars to the actual cost of said single stock. I won't do it. But because that means I need to make those purchases in bulk, at a minimum of 10 stocks a purchase (though realistically I want at least 15-20 stocks purchased per buy), it means I have to save up said money in order to afford my preferred stock of the moment.

There's also the matter of trying not to panic over drops in the market and what have you.

Wish me luck and hope I don't bugger this.

Home ownership in Toronto is looking more like a financial nightmare waiting to happen

Let me be perfectly clear: I grew up in the city of Toronto, and despite the traffic and higher probability in which you will need to deal with stupid people, I actually really love living and working here. And it's not just because of the availability of major sporting events that I can partake in either. I just love the vibrancy of culture, the availability of entertainment, the comparative ease of public transportation and oddly enough, it's size.

But the older I get and the longer I live here, the more I realize that home ownership in Toronto is pretty close to impossible. 

Such is the life of living in Canada's second-most expensive city.

How expensive you wonder? Earlier this month, various news outlets reported that the average price of a detached home in Toronto proper is over $1 million dollars. And we're not talking mansions in the Bridle Path either or even the decent sized homes near good schools. We're talking about modest two-storey homes that needs some renovation work in so-so neighbourhoods with okay schools.

One million dollars.

If you can't quite wrap your head around the million dollar price tag, think of it in terms of the down payment you'll need for the house, which generally recommends that you have 20% down so you can avoid paying the additional cost of insuring your mortgage against default with the bank.

In that case, how long would it take you to save $200,000 in actual dollars in order to buy a million dollar home? Because that's how much you'll need in order to buy one.

If your answer to that is "oh, that's easy," either you make a heck of a lot of money, are a wicked saver or completely detached from reality. Speaking for myself however, as a person with an entry-level salary and a whack of student loan debt to contend with, my answer that amount is "gulp!"

Seriously, I'm looking at $10,000 saved for my future as a huge feat. But $200,000? For a house with a mortgage in Toronto? Yikes. In some parts in the States (note the point some parts, meaning not to include California and New York generally speaking), you could get a pretty decent deal for that amount of money without any mortgage!

This kind of home in Toronto? ONE MILLION DOLLARS!

Which brings us back to Toronto and the headache that is the traffic in this city, which is to say, the price of homes in Toronto is both caused by the traffic as well as the cause of traffic. A decent chunk of the people in cars in this city clogging the expressways in the area are people who live outside of Toronto, not by choice, but due to the fact that most of them finds that it's more affordable and manageable for them to buy a home outside of the city limits and commute in for work for however long the commute they chose takes north, west or east of the city.

But for some, is it? Is the stress of driving and the time wasted stuck in traffic and the early hours and late days to travel to work worth it? For some, it isn't and is the impetus for them wanting to move into the city limits. And there's enough of them to make these homes astronomically expensive.

Hey listen, I can understand the appeal and the draw that is home ownership. And frankly, it would be a huge dream to have my own home. But not at that price, frankly, which is a price that makes my eyes water.

As far as the "decision" to rent or to buy is concerned, I'm more than willing to rent for the rest of my life. I mean, sometimes renting can be the difference between your kid going to a great public school or not, especially in this city, and as a result is not nearly as bad as some people seem to like to make it out to be. There's plenty of pros and cons for both, so it comes down to your values. And what you're willing to sacrifice throughout life.

What should I do with this money???

Help! I just got a $150 cheque and I don't know what to do with this unexpected sum of money!

Okay to clarify here, the money wasn't "unexpected" in that it fell out of the sky or was somehow gifted to me by some unknown force. I did actually earn the money through my own hard work by freelancing my time.

What I meant by this being unexpected was that I wasn't expecting this money for at least another month.

No, no it isn't a bad thing really that I received the money that I earned early. And yes, I should be happy that my hard earned money is going towards my expenses sooner rather than later. But it is an bit inconvenient in that it somewhat skews my current monetary plans.

Right now, every dollar that comes in from my regular job more or less has a set task for it to see through, whether it is towards my rent, debt or what have you. The money I earn freelancing, of which I can make a healthy guess as to when that amount is made available to me, also has some kind of job attached to each of its dollars, mostly towards my debt and my savings.

I even already spent my tax return in my head for chrissakes. (A tale that I will regale once that task gets put to bed for good later this month)

So what's the big deal? Put the money where you were planning to put it in April and be done with it.

Except I haven't yet set my April budgetary planning into motion yet, and frankly because of the tax refund, I couldn't plan yet. As far as my vague monetary plans were for that money in April, it was to fill any holes that my tax return couldn't cover in either my savings or in my debt repayment plan. Not something that can be done before the return.

Nonetheless, there are various options available to me right now that I can do with that money anyway that doesn't include spending it. It's just a matter of figuring out what I want to do really.

1. Dump the full sum into my debts.

Note that I used the plural form here. Yes, even though I have paid over my monthly $200 minimum on my Mastercard for March, since the future is still an uncertain and scary thing, I would rather abide by my aforementioned plan of splitting any excess cash between it and my student loans.

Nevertheless, it still gives each a $75 boost off the principle of each debt in the end and long term will save me in crucial interest costs down the road which can be looked at as an immediate return on the investment. Importantly, it also makes a full and immediate impact on my net worth.

As far as most people will tell you, this is the smart option, the right option and when you have debt, it shouldn't even be up for discussion. Debt repayment is priority number one above and beyond any other concerns out there.

Except that this kind of money is like a drop of water in an ocean of trouble when it comes to my debt. And I'm of a mind of having something that provides a little more instant gratification for this money.

Which is wrong and is bad and won't help me as long term as paying down debt. I know that. But after foisting nearly $800 to debt this month, I really would like to see some of my other projects get a little more consideration.

2. Put the full sum towards my travel savings.

It really just occurred to me today while playing around with my budgets, but I'm very, very behind on my travel savings. And we're not even talking by a small amount either. We're looking at about $500 behind on my travel savings. And unlike with my debt repayments, it will make a big dent in allowing me to catch up on the costs.

However, because my travel savings are considered short term, I don't include it into my net worth adjustment, meaning that this money won't impact it at all, a thing that makes me a little unhappy if for no other reason than I am obsessed with raising my net worth as much as possible right now.

So happy upside because it means I will catch up to something. But downside because it means it doesn't make an impact on my net worth. Boo.

3. Put the sum into my emergency fund.

This would actually make a difference for me because boy does my emergency fund ever need this infusion of cash after the crackpot scheme I pulled a few weeks ago involving using some of the money in my emergency fund and investing it in my TFSA, which basically negated that money's ability to do its job as an actual emergency fund.

And while granted, it made zero actual impact on my net worth, still, all told I'm short around $400 from where I was just a month ago with my emergency fund plans. And all because I got impatient with my savings pace in my TFSA.

And so, here I am almost completely starting over and $150 would actually do quite a bit here towards rebuilding (again, for the second time in four months) my intended emergency fund limit of $3000 while paying down my student loans.


So there it is. All the ideas and possibilities that I personally have strong consideration in doing with this unexpected sum. I mean, there are other options for sure, including putting the cash into my TFSA Investing account with the intent of investing or even spending it, but none that I would call a priority currently. Chances are I may end up hedging my bets and splitting it one way or another between choices.

But even then, what would you do in my place? Would you be smart and straight and pay down the debt, or will you go for the instant gratification of seeing your savings go up a pretty significant number? (to you anyway)

I won't be letting my kids make my post-secondary mistake

Another month, and another $479 gets sucked away from my bank accounts by federal student loans in order to service my still massive debt.

And for what? What did I get from it?

Well, for me, I got was about eight years of post-secondary studies, summed down to 22 credits earned towards an Honours Bachelor of Arts at the University of Toronto as well as a post-graduate certificate at Centennial College, the latter of which helped me get the job I currently work today.

But the above equation only shows what I managed to achieve with that money. What it doesn't show however was the credits I paid for and didn't earn amounting to about a full year's worth of credits; all told, around five or six total between the half credits and the full ones of classes I failed.

Hence the eight years of post-secondary schooling.

Listen, I'm not about to make any excuses over the fact that I failed a lot of classes while in university. It happened, it was really stupid on my younger self's part and there really isn't much that I can do to rectify the issues after the fact. Needless to say, it's a heck of a mistake to have made and I'm certainly still paying for it well after the fact some three to four years later.

It was a huge learning experience for me as well in terms of what I did wrong and what I'll need to watch out for when it comes time for my kids to decide on post-secondary education. Heck, any kid really if they for some reason are compelled to ask me about it.

For starters, I absolutely wasn't ready to go to university. And it wasn't even a matter of my maturity or intelligence, but my mental state towards school at the time. I was absolutely disillusioned by the concept of it and in a state of serious denial as far as what university entailed for those in it. This was  further complicated by the fact that I at the time hadn't a clue what I wanted to do or be in life. I spent zero time in high school really figuring out my strengths and weaknesses, my interests and my passions and how all of the above could be utilized to actually create a career for me to focus towards or build on.

Instead, as a matter of convenience, but also with some extremely heavy influence of my parents, was shoved in the direction of Life Sciences, a topic that became more and more difficult for me to wrap my head around the more advanced the topic became. And something that I quickly found myself hating to the point that I dreaded even going to class.

It was a horrifically bad fit. Still is to this day. But it wasn't something I was able to confront for years. In fact, it took my parents, the same ones that shoved me into the subject in the first place with big hopes and starry eyes, telling me to look elsewhere for me to realize how bad a fit it was for me.

The sad part is, all of this could have been so easily avoidable if I had only stopped to think even a second about how I was feeling and why. If I had only spoken to a counsellor about my concerns surrounding school and even my life.

It would have likely saved me two years of misery.

Hindsight is 20/20 and ultimately, I'm thrilled to be where I am now working a job I absolutely adore and love, even if the path really was a terrible one to have to take in order to get there. But in the end, for everything that I gained, I don't regret it.

With that said, I don't intend my potential kids to repeat my mistakes either. I want them to know what they want from their life and career before they head to any post-secondary program, which I will admit will be a tall order for some at 18. But in that case, they can take a year off and work, go for a victory lap or perhaps even take a few general education courses to see what piques their interest.

And let them know that life doesn't necessarily revolve around a degree.

Why I got myself a line of credit... even though I don't "need" it

So in January of this year, while discussing opening a Direct Investing account inside my TFSA, I asked and allowed the consultant I was with to do a soft inquiry on my credit score.

About a year and a half ago, I had attempted to open a line of credit at my bank on the recommendation of a financially savvy friend, though at the time it was sold to me as a means to transfer the balance on my credit cards to this other form a credit that has a much lower interest rate than the 18.99% I was getting dinged with at the time.

Lines of credit (or LOCs) are like a hybrid of a bank loan and a credit card. They're like loans in that you have to apply and qualify through your bank for a lump sum of money, but unlike standard loans, you don't receive the full sum of money that you qualified for right away. Rather, it is flexible like a credit card in that you can draw on the money as needed. But unlike credit cards, that involve a system of borrowing money within a borrowing limit and than paying it back, the money in an LOC is a pool of money earmarked for your uses at your convenience by the bank and therefore "yours."

Although let's be honest, using money from a line of credit is still basically borrowing. It is still debt when you use it, though borrowing at a reasonably lower cost than you would on a credit card purchase you don't pay off within the first statement. As a result, like loans, banks do reserve the right to recall the full amount borrowed when they deem it necessary, often at the worst possible time for you.

Back then, I didn't qualify for an LOC.

The reason I didn't qualify basically came down to the fact that the bank looks at LOCs like it's a loan, so it's not something they give out as freely as credit. And given my uncertain-looking income (I had just been promoted to a full time position at work, but as of the moment there was no history of stable employment with my employer) combined with a whackload of debt between my credit card and student loans (close to $45,000), I certainly wasn't the model candidate to them.

Essentially, I came down as too much of a risk to provide an LOC to.

But the idea to get one remained with me. And as I became more or less financially aware of things, I further learned that besides the lower interest rate, the LOC can help diversify my credit report and score without actually taking out an actual loan.

Yes it's more potential for debt, but as debt doesn't really tempt me and I'm none too keen on going into it any more than I already have, I also felt it was something I could manage. Not to mention, it's a heck of a safety net in extreme events and sure beats having to resort to a credit card, even if you really shouldn't rely on any kind of debt as a safety net frankly.

In January, a year after paying off my credit cards and around $10,000 of my student loan debt, guess what? I qualified.

It made me happy, because it meant that my credit and my debt was actually becoming manageable. Basically I took it as a good sign that my finances were actually becoming healthy for the first time since I became an adult.

And after a few weeks to consider further, I took it and the hard inquiry. Because I'm big on having as many blankets of security as I can get for an added peace of mind.

Here's hoping I don't come to regret it.

Snowballs and avalanches: And why I decided to do both

Given the horrific cold snap that had buried southern Ontario for most of the month of February, I'm about done with talking about snow, let alone snowballs.

Seriously, even Olaf makes me cringe right now. Just... no more winter please!!!

Yet, here I am bringing up the less than desired shadows of winter on this blog in talking about snowballs and avalanches. Although neither really does relate to the winter season itself and actually has to do with two competing methods of how one should go about paying off debt.

And I found myself in a bit of a quandary as far as it relates to my debt and paying it back.

So last month, as I've related a few times, I did a credit swap between my Mastercard on a promotional 0.99% AIR and my ~5% interest rated student loans. But since I didn't actually manage to wipe out my student loans with the credit swap, while I more or less decreased the overall interest I  would pay on my debt, it also meant that I went from servicing one creditor to two again.

What also doesn't help matters is that my promotional AIR one the Mastercard is actually a ticking time bomb, set to go off on April 2016, meaning that if I fail to pay off the full balance by then... I don't know for sure actually. Worst case scenario is I get smacked with my regular 18.99% interest rate on the full balance of the transfer and not just what`s left of it. Either way I have about zero intentions of finding out what happens then.

So what's the problem? Pay off the Mastercard and let that be the end of that. In fact, the snowball method dictates that that's exactly what I'm supposed to do. Wipe out my smallest debt first, celebrate and gloat in my brilliance and success, then tackle the next.

That's what I did back when I started aggressively paying down my debt and that was the plan originally when I had cooked up this crackpot scheme. Minimize down on the student loan payments in order to just toss as much money as I can at the Mastercard in order to make it go away quickly and forget the charges ever existed. Oh and to celebrate when it was gone.

Except... the math doesn't entirely work here.

I've never had a problem picking between snowballing and avalanching when I had more than one debtor simply because my credit card was always the one with the highest interest on it and the least owed to it. So there was never any complications or discussions on which I'm doing. Both resulted in me doing to same thing. 

But now my credit card may have become my smallest debt once more, but this time it currently has the lowest interest rate between it and my student loans. Suddenly my process differs, because according to the avalanche method, I should be minimizing out on my credit card and popping every extra dollar to my student loans. 

To do otherwise is to pay more in interest than I should on my massive student loan debt in the meanwhile. Even $200 there would make a difference to the interest that accrues daily.

However, I don't think the avalanche method takes into consideration that this 0.99% interest rate has an expiry date and therefore cannot be overlooked as something I can just throw the minimum at while chasing my student loan interest rates down. I risk getting tossed the full sum when April 2016 rolls around, especially if I have no means of throwing down the full amount at the very end. And let's be frank, if I had that amount sitting in my bank account waiting to be deposited, then I'm an idiot because it would have been better to have just tossed it on sooner and not paid the interest in the meantime.

I had about 15 months as of this past February to come up with the $3,000 I needed to pay off the loan on my credit card. If we ignore the interest that would accrue in that time, that means I need to pay down $200 a month in order to pay off that loan on time, a sum that currently I accrue via found money whether it is done through freelancing or by being extra frugal for a month. 

That is to say, my credit card payments are not budgeted and generally difficult to plan for. And this makes me a little anxious when it comes to paying just $200 a month on that card because honestly, I can't tell you for certain that I will have that money next month. 

However with that said, after this week, I'll have paid off about $525 dollars to my credit card. I'm almost a full month ahead of schedule on that card and it's barely been a month since I made the swap and with money yet to come from these additional ventures.

But still, the uncertainty irks me.

So I decided if one or the other isn't a viable solution for my future planning, I'll just have to do both.

 Every month, I need to pay down at least $200 to my credit card, no if, ands or buts. That's my "minimum" monthly payment needed to pay off that loan in the time needed before the regular and exorbitant interest kicks in again.

After that, the extra sums that go above and beyond will end up being split between both creditors. One to service the avalanche method in order to pay the creditor with the highest interest rate and therefore save money long term on it for me, the other to service the snowball by not just accelerating payments on my smallest debt, but also to act as a safety net during months when I may not be able to pay down $200.

Some may say I'm still doing it wrong, and that's fine. But for me, it seemed like the most logical path to take in order to ease my mind on both fronts.

Metropass vs. tokens: A one-month study of TTC usage

So remember back when I took a look at the price increase for the Metropass and discovered that it has become less of a matter of savings and more a luxury expense and an item of convenience?

Well, this month a series of events resulted in me being more or less without the option to get a VIP metropass for the month, meaning I had a choice: purchase a metropass for full price or ... give tokens a try.

And so I purchased 122 dollars of tokens or roughly the equivalent of the price of a VIP metropass. That came out to roughly 44 tokens, or 22 round trips.

I want to see how often and how much I happen to make use of public transit when I go to and from work and other errands and hanging out with friends. Mostly to see how much do I actually save when I go VIP and how much do I pay for the convenience of owning a regular metropass.

And if it is worth it for me to buy a full price metropass every month after the fact.

So that's the challenge for the month as far as the transportation expenses go. However, unlike last month, nothing will really change in my life. I work around five days a week at my regular job, I go to my allergist once a week and I go out with friends and freelance every once in awhile. All in all, a fairly normal month for me.

But that's the point.

The point of this is to test my regular usage and see if I end up spending more or less by paying for a metropass. And allow me to gauge future decisions that ride on my

So that's the task for this month. We'll see where I am later this month.