Saturday, July 20, 2019

30.000 In Debt

Confused? Us too but it's an idea....
I've been considering my finances recently and with the help of three of my financial heroines - Elaine Colliar, Darci Isabella, and Gail Vaz-Oxlade, I've made the decision to go into debt to the tune of 30,000 shekels (about £7500). In addition, I want to cut my teaching hours next year to free up an extra stay-at-home day. At first glance this all seems totally counter-intuitive, but read on. All will be revealed.

I used to follow Elaine Colliar on her blog Mortgage Free In Three (which seems to be down atm but here's her most recent update vlog). After having the rug pulled out from under her by the bank, Elaine, a single mother of two young boys, found herself at rock bottom and in debt. She lived extremely frugally and intelligently in order to pay off her debt in record time. She then used the lessons learned from this to extend her lifestyle in order to pay off her mortgage in three years. Once free of that albatross the aim was to soar without any financial burdens holding her back.

Elaine is an accomplished seamstress, she's handy and artistic, very tech savvy, she has a garden in which to grow vegetables and she's a great cook. (my favourite post ever was The Rubber Chicken about how one chicken provided the protein base for seven meals for the three of them.) One of her top pieces of advice is that you have to be willing to learn new skills towards being more self sufficient. It makes sense. You're not going to save as much money if you have to buy services all the time.

I am not at all handy so I can't do half the things Elaine accomplished, albeit with the occasional help of her handy Dad (covering her sofa, building partition walls to create an extra bedroom, making all her Christmas presents and selling homemade items online). However the biggest difference between Elaine and I was the time factor. I once asked Elaine why she didn't just take a part time job to help with the pennies. She explained that the loss of benefits and all the costs involved with working (travel, childcare, work clothes, socializing with colleagues and collections) made it better for her to stay at home and use the time to live frugally and build up side hustles.

I also had no debt apart from my mortgage, I also took in paying guests for a while, and I was also the single mother of a young child. DD was in childcare because I had to go out to work. But you can only work very restricted hours when you have a young child and no back up (no partner and no family nearby). And here's the thing about teaching (I'm not complaining, just explaining) - you only get paid for the hours you are in the classroom but half the work has to be done before or after hours (planning, preparing, marking, paperwork, co-ordinating with colleagues, meetings, and speaking to parents/students about individual matters).

So I followed Elaine's advice the best I could. I built up a store cupboard to keep food costs low, cooked from scratch as much as possible, meal planned, cleaned my own apartment (still do - in theory), tried to grow some vegetables on my balcony - not very successfully, rented out my spare room to paying guests, took on no-spend challenges for months at a time, saved every spare penny, and looked for side hustles to bring in a little extra income. The effort nearly killed me but we survived those early childhood years which are the hardest. (Luckily kids that age are so cute that you'd do anything for them.)

The years passed and both our very young children grew a bit and became more independent. There were more free hours to work with. I built up my work load and Elaine was able to take a job locally that suited her. We both elevated our families from the bread line towards the cakes and biscuits. And then Elaine stopped writing her blog. I understood that as well as the time constraints, it's hard to live so frugally every day when you don't actually have to anymore. We also enjoyed more convenience foods, evenings out and material treats. It's true what they say about needs must. And it seems that the opposite is also true. Don't need, why kill yourself over it?

With my mortgage nearing its end and the emergency fund in place, it's not a matter of getting out of debt. Otoh, only 10 years away from retirement is not the time to take a gap year and live off savings. Otoh, I'd spend less money if I had more time to shop at the cheaper but further supermarket and cook from scratch. And I'd have more time to take on better paid work at home.

I now follow a lifestyle blog by Ameican, Darci Isabella, who recently decided to become debt-free. By making small changes for herself and her large family, she shifted thousands of dollars of debt in eight months. Here's how she did it. I was inspired but (unfortunately?) I'm not in debt.

I've been binge watching Gail Vaz-Oxlade's Money Moron  and Till Debt Us Do Part programmes on You Tube. She's another of my financial heroines. At times I almost wished I was in debt so that I could take on her advice about getting out of it. Then it dawned on me that I could be in [imaginary] debt if I waned to be. The great thing about imaginary debt is that you can owe as much as you like - and no interest.

Imaginary debt is just saving up with a goal sum. Calling it a debt makes it more urgent. And in a way, it is a debt in the sense of a deficit of funds needed for future use. So I'm henceforth in debt to the tune of 30,000 shekels. I aim to be debt free in 20 months, with no borrowing from currant savings - it all has to be earned and saved starting from now.

When I've paid it off, the money will be used for (or towards as I've no idea how much these things cost) DD's Bat Mitzvah in 18 months.


8 comments:

  1. I made a really fun bat mitzvah for my daughter with about 100 guests for around 20K. Holy bagel catering at a local shul's hall.

    Feel free to ask if you have questions.

    ReplyDelete
    Replies
    1. Thank you, I might. I saw your photos on fb and it looked really lovely.

      Delete
  2. I used to read Elaine's blog - loved it and was very disappointed when she kind of disappeared. Gail lives just outside Toronto and I followed her programs and blog for years as well. Wish I'd followed them more closely as I do have debt but I'm working on it
    I'm going to check out the other blog you mentioned. You might want to check out The Prudent Homemaker blog - it's not just her but the community of people who comment every week. She posts on a Monday and people comment back and forth all week - lots of interesting people from all sorts of backgrounds and lots of great ideas.
    Can't believe DD is almost 13! Good luck.

    ReplyDelete
    Replies
    1. I think we first met via Elaine's blog, didn't we? I'm definitely going to check out The Prudent Homemaker. Thanks for that tip. Btw, the boys have their Bar Mitzvah at 13. Bat Mitzvah is at 12 because girls reach puberty earlier.

      Delete
  3. Ha! Genius! I think I might well go into debt myself now you got me thinking - I am rubbish at saving up actual money in an actual savings account without any urgency attached to it. Debt might well be the answer... ;-)

    ReplyDelete
    Replies
    1. Debt is the equivalent of the procrastinator's Panic Monster. I'm adding some more ideas on this today.

      Delete
  4. It sounds like a great plan, I'm sure you'll get out of debt. What I want to knwo if how has DD practically got to the age to have a Bat Mitzvah, where has time gone? Mich x

    ReplyDelete
    Replies
    1. We're still 18 months away but yes, I often wonder about this myself.

      Delete