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Discussion Starter · #1 ·
I'm trying really hard to get back on my feet and stop struggling. I used Dave's plan before but starting off was far more simple at that time.

Now, I've narrowly averted bankruptcy, lost a house and broke the lease on my car and I'm starting from scratch. Again. At 41. Sigh.

I'm doing a consumer proposal of $400 a month for the next 5 years. There is no interest on this, therefore, not that much benefit in paying it off early.

I have an 11 year old car that I owe 900 dollars on, again, no interest. As well, I owe my mother $600. I will be paying that off with my tax return next month.

Should my next step be paying off the proposal early or funding my baby EF? Any advice, even if it's harsh, is welcome.
 

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I am just starting the DR plan myself and probably shouldn't be giving advice just yet, but according to the plan and what you have described, you should work on your baby EF first. Then start the snowball.
Best of luck and keep us posted on your progress!
 

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baby EF of 1000 before anything else
 

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I'm doing a consumer proposal of $400 a month for the next 5 years. There is no interest on this, therefore, not that much benefit in paying it off early.
Really? Think again.
Do not only think about the numbers, but also take risk, the $400 a month hammer hanging over your head etc. into account.

If you manage to get yourself out of those payments, say, within 3 years, you have achieved a couple of things that I would consider a benefit. You have put blood, sweat and tears into proving to yourself that you can budget well, pay off that amount 2 years early, and when the time arrives, use roughly the same amount a month towards better goals.
Much better than simply "settling" for doing the bare minimum.
 

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I think there's a reason why DR puts everything into steps. To make it less overwhelming (JMHO).
Step 1 - Baby EF. Start there. Then start Step 2. Don't think about step 2 until you are getting close to starting it.

Remember 4 walls first. Then everything else comes next.

Good luck, we're cheering for you.
 

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If you aren't actually behind on anything right now, and aren't racking up late fees, then you do the baby emergency fund first.
 

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I think that 400 dollars a month is going to be a monthly reminder of something that's been horribly traumatizing for you. The financial element aside, maybe you should take another look at how important it will be to pay it off.
 

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I think that 400 dollars a month is going to be a monthly reminder of something that's been horribly traumatizing for you. The financial element aside, maybe you should take another look at how important it will be to pay it off.
What Nishu said and also....My vote would be split it. Have something put aside but getting rid of the 400 asap...don't know about canada but here if you can't pay it back in the repayment the bankruptcy stops ( which I realize you didn't file ) and the bill collectors can hound you again.
I would split it..just me
 

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I vote for establishing an emergency fund - you never know when you might need it. I had to use some of mine today and was glad to have it!
 

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Yep! What they all said!

$1000 EF First.

Pay off all debt asap. Regardless of interest.

Good Luck!! You can DO it!! It doesn't matter if you're 41 or 81.
 

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Discussion Starter · #13 ·
You make a lot of very good points. I will get the baby EF established and put aside the money for the DD's activities, then add an extra $100 a month to the payments, with more when I can.

(The activities are: tuition for a foreign exchange program for DD15 and competitive cheerleading for DD10 - I will be able to pay for the year in full with my tax return, and I am making separate savings accounts for each.)

I'm also looking at my living situation - I believe I can reduce my costs by $200-300 a month by moving to a less expensive place.

Niko - you are right - if you miss 3 months of payments the whole nightmare can start all over again and the proposal is void. Probably good to get that off my back as quickly as possible - I simply cannot go through this again.

Thank you again for the excellent advice.
 
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(The activities are: tuition for a foreign exchange program for DD15 and competitive cheerleading for DD10 - I will be able to pay for the year in full with my tax return, and I am making separate savings accounts for each.)

I'm also looking at my living situation - I believe I can reduce my costs by $200-300 a month by moving to a less expensive place.
you said: "Any advice, even if it's harsh, is welcome. "

ok, i am confused by the fact that you had to borrow money for rent this month from your mom, but someone is going to travel abroad? i cannot wrap my mind around this. what?

dear one, i am slamming you with a friendly smile on my face. but when i read that my jaw dropped.

also, i would tell daughter number 2 that we cannot afford cheerleading. you cannot put food on the table. you are in a consumer proposal.

i think you have to make some adjustments to your lifestyle. :)
 
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Discussion Starter · #15 ·
ok, i am confused by the fact that you had to borrow money for rent this month from your mom, but someone is going to travel abroad? i cannot wrap my mind around this. what?

dear one, i am slamming you with a friendly smile on my face. but when i read that my jaw dropped.

also, i would tell daughter number 2 that we cannot afford cheerleading. you cannot put food on the table. you are in a consumer proposal.

i think you have to make some adjustments to your lifestyle. :)
I'm not offended at all and appreciate the advice. :)

Cheer had already been paid for the remainder of this school year. The money I am putting aside is for next year. If it turns out that is no longer possible I will discuss it with her at that time.

No payments have been made on the foreign exchange program yet either. DD15 has earned an art scholarship to pay for half of it, as well as her application fee, and her dad and I are to pay the other half. The travel expenses are included in the cost of the program. She is required to save her own spending money. With her fellowship the cost to us is just under $2000 - if I can make it happen at all I will - it's a great educational opportunity for her to study art in Europe.

The rent issue was unusual last month, as I was still paying huge bills on the house that is now off my plate. When I went over my budget with the trustee she agreed that these things were doable once I was no longer paying an additional $100 a month in utilities and insuring an empty house for $300 a month. Also, my CTB check got lost in the mail because of our recent move, which accounts for $500 of the $600 I borrowed. Things will be brighter now for us.

Please keep in mind, I won't be saving for these items until my baby EF is in place and my proposal is established.

Thank you. :) Your input is appreciated.
 

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You make a lot of very good points. I will get the baby EF established and put aside the money for the DD's activities, then add an extra $100 a month to the payments, with more when I can.

(The activities are: tuition for a foreign exchange program for DD15 and competitive cheerleading for DD10 - I will be able to pay for the year in full with my tax return, and I am making separate savings accounts for each.)

I'm also looking at my living situation - I believe I can reduce my costs by $200-300 a month by moving to a less expensive place.

Niko - you are right - if you miss 3 months of payments the whole nightmare can start all over again and the proposal is void. Probably good to get that off my back as quickly as possible - I simply cannot go through this again.

Thank you again for the excellent advice.
ohhhh Daisy - I agree with Kemma.

I know how expensive competitive cheerleading is - some things just have to wait.

My 10 yr old niece had to take a break (due to finances) and joined her school cheer squad instead. It's not perfect, but it just has to do for now.

As for the foreign exchange program tuition; that's what FUNDRAISERS are for - She can raise that money for herself!!

YOUR tax refund should pay off debt, not pay for activities.

While I get that your priorities are your kids, you aren't prioritizing the FUTURE with your kids.
JMHO.

I say this all with love. Not to hurt your feelings. :hug:
 
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I would say Baby Emergency Fund first.
Mom, next because of emotional he!!
Then one extra month of proposal payment in a savings account.
(so you are not likely to get kicked out of program)
Debt with interest.
Then a savings account for PP until you can pay it off in one fell swoop.

If you say that there is no interest on the debt then there is no reason to cut to the bone and risk an emergency to pay it off early. Since things can be a little umm....eventful...I would rather you be able to take care of any event until you have enough to to pay off PP amount. Of course this requires SERIOUS discipline.
 

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Discussion Starter · #19 ·
Debt with interest.
Then a savings account for PP until you can pay it off in one fell swoop.

If you say that there is no interest on the debt then there is no reason to cut to the bone and risk an emergency to pay it off early. Since things can be a little umm....eventful...I would rather you be able to take care of any event until you have enough to to pay off PP amount. Of course this requires SERIOUS discipline.
Kita ~ There is no debt with interest - it is all in the proposal.

During the first year of the consumer proposal you aren't allowed to make additional payments for the exact reason you expressed - the event of an emergency. After the first year you have to show an emergency fund of one month of living expenses before they will allow additional payments.

I do appreciate all of the advice, even when is different than the way I have planned things. Please understand - cheerleading is paid for, including competitions, until the end of the school year. There is no way I will pull DD10 out of something that has already been paid for.

As for the exchange program, I greatly hope that DD15 will be able to supply/earn a great portion of the remainder. I feel that the educational value of this trip outweighs the sacrifices to save the money to send her. I can live without cable, new clothes and little luxuries to provide this for her. If it puts us in a position of using up the emergency fund, she won't go. If it can't be saved in it's own separate account, she won't go.

I'm working hard to pare down my living expenses so my kids can have a few priveleges, as long as they work hard to help out, earn money when they can, and keep their grades high.

I probably sound defensive, and I don't mean to. I know the advice is well-meant, and I appreciate it. :)
 
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