Debt Management

What Rich Means to Me – Debt Relief

I was reading Neville’s post on ‘Being Rich’ and it made me think about my definition of being rich.

Neville joked that:

“The American Dream is a German Car an Italian wardrobe and a Swiss bank account.”

To me, the Canadian Dream is your car paid for, your home paid for, and enough money in the bank that you can retire at a decent age while enjoying life until then And can pay your insurance.

Currently I have none of these. What I have instead is no savings and sizable student loan and consumer debt as the result of an overpriced post-secondary education. That’s the bad news. The good news is that overpriced education got me a fairly well paying job, allowing me to meet my commitments and start putting some money away.

Over the past year or so I have managed to retire over $5000 of consumer debt and I have a plan to deal with the rest, which I will share in a future post. I have started on an emergency fund, and will be starting on more long-term investments once the emergency fund is built.

I consider these my values in the financial sphere:

  1. Money is not everything. I would rather have enough money for my needs and more time for family, friends, and hobbies.
  2. I do not want money to control me, I want to control money. I want interest to work for my benefit and not work to pay interest off.
  3. I want to be prepared for retirement, but I also want to enjoy life along the way. I don’t have a goal of retirement by 35, just when I run out of work to do.

To that end, here are some of my goals:

  1. I will pay off my consumer debt within the next 6 years (Achieve Debt Relief).
  2. I will pay off my student loan debt within the next 8 years (Student Debt Relief).
  3. I will have an emergency fund that represents three months of income.
  4. I will have 10% of monthly income going to savings and investments and 10% accelerating my debt repayment.
  5. I will develop multiple streams of steady income.
  6. I will own my own home, which will be large enough for my family but not larger than is reasonable.

In the long run I would like to be self-employed, but for now I very much enjoy my job.

Considering my current financial situation, you can expect more posts about debt management to get Achieve Debt Relief and savings from me than on investing, but hopefully we can learn along the way.

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