The first three years I lived in Whistler I always spent slightly more money than I brought in, despite the fact I had two jobs for most of that time and was paying just $300 in rent to live in a front room that was all of 48 square feet.
It was difficult to think of myself as poor because I had food and beer in the fridge, money was always coming in, and I could afford to make the minimum payments on my student loan and credit cards.
But I never really planned ahead for the big expenses, like trips home to visit family and new gear purchases. These expenses always wound up on my credit card, bumping me ever closer to my credit limit (which the bank unhelpfully kept extending). And I never really added up the small expenses, so I didn’t think too much about buying lunches, going out for dinners, and coming home with the groceries I wanted rather than the groceries I needed. I didn’t think anything of going into the village to party once or twice a week, or apres ski celebrations. To me these expenses were just the cost of living and I wanted to live… for today, anyway.
Then one day I decided to take stock of all my debts and to start keeping track of where my money was going. It was a staggering revelation. I didn’t have enough money to make much more than the minimum payment on my debts, which means I was throwing most of my money away on interest. Despite my best efforts to reign in expenses, I couldn’t save any money or make a dent in my debts.
Then I got lucky and lost my debit card in Toronto. I went into a bank to get a new card, and the agent I talked to let me know I actually had good credit because I never missed a payment. I had qualified for a low interest line of credit, as well as that banks’ lowest interest credit card. I do most of my banking electronically, and this was the first bank agent I spoke to in years.
For me it was a new lease on life. I paid off my credit card with the line of credit and cut it up after cashing in the points. I kept the low interest credit card — 12.5 per cent is considered low — for big purchases, and resolved to pay the balance every month.
Suddenly I was paying two-thirds less interest on my debts, and was able to pay off the principle a lot faster.