Zero Money to Hero Money

May was a pretty good month, 3 pay cheques, and some solid debt paying off. I also generated about $1000 of extra income this month which was great to have on top of those 3 pay cheques. My goals for May were pretty simple, stick to a budget and get the following accomplished:

Goals for June 1st 2008:

• Line of credit - under $1500 owing - Check (paid off completely $1450 used from RRSP 1st HBP)
• RRSP - add $250 - Check (added $300)
• Car Loan - under $13000 - Check (down to $12749 left)

I increased my Networth by about 30% by paying off just over $4000 in debt, wow! So I guess I need some goals for July 1st, which might be tough to attain. I’m heading to Cuba for a week, as well as a golf trip this weekend, luckily I got some extra work and am using that to fund my trip and spending money for them, so I won’t have to dip into my salary

Goals for July 1st 2008:

• House savings - Increase by $4000
• Extra Income - Make at least $1,500
• Stick to my budget
• Run at least twice a week

The first week is over, it’s Friday again and I have to say I did pretty good with my budget.  I alotted myself $140 for the week in spending money, and $50 in gas.  The $50 was all used up, but I managed to come out $21 left over from my $140, even with the long weekend.  Here’s what I spent it on:

• 3 rounds of golf - $45
• box of golf balls - $20
• Concert tickets - $20
• Coffee & breakfasts - $20
• Beers - $15

Needless to say I’m pretty happy with myself, that was for a long weekend as well.  I also got some more work to the tune of a couple hundred dollars for this weekend, plus the event I’m shooting on Sunday.  Now I just need all those cheques to roll in.

The best news of the week came on Wednesday, we had a huge meeting at work with the entire company, things have been a little bit slow lately so the meeting was slightly worrysome.  When we sat down there were 3 new faces in the meeting room, it turns out our company got purchased by another company.  The deal isn’t finalized but it should be in a couple of weeks, however both parties were very confident that it’s a done deal.  Why is this so awesome?

1. They’re paying out retention bonuses to keep staff on board
2. The company that bought us has been voted top 5 High Tech companies to work for, for the past 3 years straight
3. They’re relocating our office, the new office is less than 1km from my new condo, and about 2.5km’s from where I’m living now.

Less than 1km from my new condo!!  I couldn’t believe this, currently I’m driving 30kms each way to get to work, when we move this summer I’ll be walking for about 5 minutes.  This is enormous to me both financially but more important emotionally.  I previously had a job where I was about this close to the office and I loved it.  I felt like no time was wasted during the day, whereas now I spend about an hour in the car everyday.

This week I’ve limited myself to $120, and will try to hang on to another $20 to put into my LOC.  Next weekend I’ve got a trip coming up, and a few more weeks away I’ll be in Cuba, so I’m trying to cut back on my spending until then even more so I don’t feel as guilty.

Wow what a relief, a bit of a tight one, but I made it through the long weekend, with enough money left over for a movie tomorrow night, and probably $10 to just put in savings by Friday.  I planned it fairly well, 2 rounds of golf meant taking $28 out of my budget, plus the golf balls, another $20.  I ended up having a 2nd round and playing 36 holes today, but we somehow managed to convince the course to let us play again for free, and only charge us half price for the Cart, so our greens fees went from the regular $48 with a cart, to $15 each.  Not too shabby.. it was snowing when we arrived for our first 18 so I guess they felt kind of bad.

I ended up spending my extra money where I thought I would, and where I didn’t want to.  Coffees for all the guys in the morning before golf, breakfast at golf when we got there and it was snowing (in may??) and decided to wait it out, and a couple of beers at a concert that I went to on Saturday night with my girlfriend.  All in all, I think I made my $140 budget of fun money play out pretty well for a long weekend.   2 BBQ’s, 3 rounds of golf and a concert.

On top of my extra $600 from last week coming in this week in the form of cheque, I have that event on Sunday for roughly $400, as well as another short 3-4 hour web development contract which means an additional $260 to the bank.  Woohoo!

I’ve got my yearly golf trip that I haven’t saved for on June 2-3, and a trip to Cuba that’s already been paid for on June 14th for a week with my girlfriend.  So I plan on taking $275 from the cheque this week for the golf trip, and putting the rest into the LOC and then taking $200 from the $400 for the trip to Cuba, and banking the other $200 + $260 back into the LOC.   That means an extra $750+ into the LOC, that should really help out my May goals, not to mention my 2008 10k+ additional income goal is appearing even more attainable than ever.

Last night I got paid, I’ve set up the new budget as described in my last post, and went to the bank on my way to work this morning to withdraw the money.  I skipped my usual Tim Hortons as I figure that $2.50 would be better spent elsewhere, possibly this weekend.  I took out $160 in cash for the week, which includes my $50 for gas,  the other $30 I put on my credit card (which has no balance) for the 2 rounds of golf that will be coming off of it for this weekend.  So now I’ve got $110 in my pocket to last me till next Friday, I don’t think it will be that bad.

A bonus is I have about $600-700 coming in next week from photography (sold a print this week) and web programming (did a few hours of work a couple nights this week, and last Sunday).  I also have a photography contract to shoot an event next Sunday which should bring in an additional $400.  I’m almost on schedule for hitting the $10k mark for the year from outside income sources, that would be amazing.

So my paycheque I divied up like this:

• $100 gas
• $280 spending (groceries, entertainment, golf etc)
• $250 car loan payment
• $17 gym membership (I use this 6 times a week, so it’s well worth it)
• $50 travel fund
• $50 electronics fund
• $50 car maintenance fund (I have a feeling I’m going to need new brakes sometime this summer)
• $125 RRSP
• The rest onto my Line of Credit

Can’t wait to see how I’ve done next Friday.

Over the past couple of years I’ve tried everything for budgets, limiting how much I would spend, removing money from one account to another, breaking everything down in spreadsheets etc etc.  None of it ever seems to work, I’ll write down what I buy every time I buy it, then miss a day, or a weekend, and suddenly I just give up on that.  Or I’ll examine my quicken at the end of the month and it will blow my mind that I spent $800 on dining in one month, or on drinks.

I have a few vices, namely Golf, and eating out.  Previously I had the gear itch with photography, but I have a reasonably good set up that works really well for me, and have managed to resist and not really had the urge for at least a year to purchase more gear.

So back to my new strategy, when I say that I’m terrible with budgets and money, I really mean it.  I have good intentions but they never work.  Usually when I think I’ve done well for the month, I look at my credit card bill and realise I just put everything on there instead of paying for it.

The new strategy, I’m going to leave my credit cards at home, take out my budgeted money for the next week on payday, and see if I can make it till the end of the week on what I allotted.  I get paid this Friday so I’m going to try it out.  I’ve allotted myself $50 for gas, and $20/day for groceries & entertainment (which unfortunately includes golf).  So this Friday to next Friday I have $190, if I can come out with even 10 cents left over, I’ll be really excited.

Assets:

• Partial Downpayment on house - $10,000
• Car - $16,000.00
• Retirement - $8,500
• Cash (checking & savings) - $0.00

Total Assets: $34,500

Liabilities:

• Line of Credit - $4000
• Car Loan - $13,250
• Couch - $1300
  

Total Liabilities: $18,550.00

Net Worth: $15,950.00

Goals for June 1st 2008:

• Line of credit - under $1500 owing
• RRSP - add $250
• Car Loan - under $13000

I bit the bullet, and started up this personal finance blog as an extra motivator to get me to save money, and spend less.  I already do the budgets, the spreadsheets, the automatic withdrawls etc etc, but I still go way over my monthly alloted budget without realizing it.  I’m hoping that by setting goals and monitoring them through this blog I will pay closer attention to where I’m spending the money and hopefully achieve saving more than I normally would.  Every month I hope to set financial goals to reach for the next month, and track them through this blog.

A little bit about myself:  I’m 27 years old, and almost a first home owner who lives in Canada.  I work in high tech doing software development and photography / web design as a side job.  I’ve been working full time for a couple of years now and should have a lot more money saved than I do.  I did however make the very stupid mistake in university of spending way more than I made in my part time jobs and summer jobs.  Resulting in almost 25k worth of debt on credit cards and lines of credit by the time I graduated.  It took me nearly 2 years of full time work to pay it all off, and actually I’m not fully out of debt yet.

Currently I’m sitting at 10k paid to the company I’m buying my home from as a partial downpayment, an additional 9k in RRSP and I still owe $3500 on my line of credit.   On top of that I have a car loan that still has roughly 2 years left at $250 bi-weekly for my 2005 Mazda 3.  By September 15th my goal is to have 30k total for the downpayment on my condo (just over 15% of my mortgage value).  I’ve got some work to do.