Have you ever played Monopoly? My family banned the game from our house years ago; it seems to bring out the worst in all of us, and negotiations soon go from the usual trades to people issuing threats sugared with real -- not Monopoly -- money. I actually don’t think we ever finished a game, though my dad was a Monopoly champion in his youth. Whenever you add money to an equation, tempers rise, negotiations harden, and the fun tends to drain from each interaction.
This is why I started to laugh when my husband suggested we use Monopoly money to figure out our financial obligations years ago. Here's what that looked like:
For those of you who have had a bi-weekly paycheque, you’ll be familiar with the Three Paycheque Month. I don’t know about you, but I await this month with anticipation because it’s “extra” money for us to toss down on debt, put into savings, or (to some degree) spend frivolously.
Mint.com has given us an excellent tool with which to visualize our budget, but I’m still a hands-on, cash-based entity. Mint is limited in how much it can tell me because I work in different ways.
That’s one of the hardest parts of a budget: communication. Money is so often imbued with emotion that it’s difficult to take a logical stance and maintain that objectivity in conversations. “I want” and “I need” are hard to define and tricky to express in a way that supports continued discussion, whether you’re working through a budget with yourself, with a financial counsellor, or with a partner.
When it comes to a Three Paycheque Month getting priorities straight is important, especially when you’re tempted to stray from your regular path of responsible financing and go the route of excess and adventure.
We decided to have it all and opted for wants, needs, excess, and adventure…through Monopoly money.
Let the Game Begin!
My husband pulled out the Monopoly board we have in the house (it’s actually Monopoly City, as regular Monopoly is banned…the City version is a loophole we have yet to close). This board features money in denominations we don’t possess, with the smallest bill being “10K,” so we ignored the K and worked with our options. We counted out money equivalent to all of our paycheques for the month, both the ones we received and the ones we’re expecting (we also had Mint.com on our computer up at the same time), and put the money in a pile. From there we removed our regular bills: mortgage, debts, groceries, etc.
This left us with a much diminished pile, but thanks to Three Paycheque Month and a bit of overtime there was a significant amount left. Usually our money would all be gone at this point and the conversation would be over.
Let’s talk for a moment about excess and adventure. For a few months now we’ve been planning a trip to Disney World with family. We have a budget of $2600 for the entire trip, with all the park passes, dog sitting, hotels, transportation, etc. included. Was this a priority over repaying our suffocating debt?
In our case, yes.
Having the Monopoly money in hand and seeing how much we could pay off if we chose to spend that money on debt instead of gallivanting through Disney World made that decision more clear: the delay of debt freedom versus a family vacation. This isn’t a decision anyone could make for another person and comes down to what is more important to you—your values.
And let's face it: Disney's Always Been a Priority for Me
Values change, which is why conversations about budget is an ongoing, ever-changing dialogue. Budgets require constant check-ups, check-ins, revamps, and sometimes even Monopoly money. Whatever your system, giving yourself a means to articulate your needs is an essential, constant practice.
Right now, we value one family fun trip over debt repayment that would get us out of debt two months sooner. I honesty, I actually found a bit surprising considering my consuming obsession with paying debt and getting out from under our $45,000+ point Beast. In the long run, though, those memories are more important to us than the few months we could have shaved off our debt repayment, and having that money in hand helped crystalize that for us. Besides, we would still make our regular debt payments for the month and we would still be on track.
That's important: staying on track. We're not putting ourselves into a worse situation, which is key here.
Whatever your budgeting technique, try to have a few options for communication available to you when you discuss your finances. What follows is a list of ideas we’ve used and loved (or hated) at various times in our ongoing financial dialogue. Each of these items will be covered in more detail in future posts:
- A financial counsellor! Even the most avid budgeters and money-conscious people can learn a lot by having a professional financial planner look through their finances with a fresh pair of eyes and a new pair of ears
- List of every item you’d ever want to buy with prices
- Drawing and writing out immediate financial goals, medium-term ones, long-term ones
- Visualizing the life you want to live
- Making use of Monopoly money to have your monthly cash in hand (or using the cash itself if you can)
- Creating a visual debt beast (mine had hit points a la video game culture and is slowly dwindling with little opportunity to heal itself)
- Spreadsheets (Google free budget spreadsheet)
- Mint.com (athough it is really a bookkeeping system as it doesn’t allow you to budget for future months)
- Gold star chart for achievements (or smelly sticker chart…because who doesn’t love smelly stickers?)
- Maintain an updated list of goals with all items listed on it (both those involving money and those that are free)
- Create a budgeting group with a few of your close friends who can help keep you on track, provide support/ ideas, and celebrate your accomplishments with you
We've been staring at a blank page for months now, wondering where to start what is a rather large undertaking: to officially launch Squirrel and Nest in order to reach out to people who need help getting their financial lives collaborating with their dreams. The most important part of this process, much like the most important part of tackling one's finances, is to simply start.
So here we are. Welcome to Squirrel and Nest, a place to find both sanity and sanctuary. Here we hope to provide you with the inspiration, perspective, direction, and advice you need to take control of your money and get from where you are now to where you want to be.
Squirrel away money. Create a nest egg. We show you how.
We have done it! Our new debt total is $0, which means we have no debt total! We are free and clear of those financial woes at last!
It's hard to believe we won't be making any more debt payments. Ever. Not. Ever. Again.
Here's to 2015! And here's to a fresh start! A life without debt!!
Only $5223.23 stand between us and financial freedom.
Yes, you read that number correctly. Expect the Debt Beast to die.
Quick financial update of money owed to the idiocy of youth:
Canada Student Loan is at $18,759.71.
BC Student Loan is at $1830.82.
At least we can see the end of one of them.
When I miss a month update, I think you can pretty much guarantee it's because I've avoiding the obvious lack of progress on the budgeting front.
When last we met, the Debt Beast was a whopping $22,200.85.
At this moment our debt sits at $21,272.18.
This would be grand if it weren't for the fact that the total above was from 2014 January...three months ago.
We're way behind on our debt payments. In the past three months we've paid less than $1000, which is our monthly target. In order to make our debt goals, we'd now have to pay...
Actually, we still have to pay about $1100 per month to meet our goal.
The trick is we actually have to pay it.
Gabe likes to tell me we decided to pay only the minimums for a few months in order to build up a reserve in the Canada account. All I see is debt. Debt is not a logical thing. It exists...therefore we have failed.
I'm not really big on the logic. I see this.
So, we're $21,272.18 in debt. We'll see what it's like next month.
I have never been in a place or position where I could receive a year-end financial bonus. Honestly, it's one of those things you think only exists in movies. But this year, I received one. Unexpected and incredibly generous, I came into a sum of money I could not have imagined.
Anytime I have come into unexpected money, I start conducting research. The Internet and numerous financial books are full of useful and often contradictory advice about what one should do with the year-end bonus. I like the idea of the 50/25/15/10 split: 50% goes towards debt, 25% goes towards emergency fund, 15% goes towards savings, and 10% is leftover for experiences that are fun and spendy.
Unfortunately, we are not currently in a position where this is a viable option. Maybe we will have the stability to indulge in such thoughtful spending in the future, but for the immediate moment, we need that bonus to go to work for us.
This means majority of my unexpected bonus is to be put towards temporarily stabilizing our current and upcoming expenditures. This month and next we have a number of sometimes unexpected and costly items that need to be covered. This month alone we have seen unexpected veterinary bills (oh, Homer) and had to replace all of the tires on our car after one died an irreparable death.
We do have a cash cushion and an emergency fund, but we also now have a way to preserve those accounts in case we met an emergency without other financial options.
In a single moment, the bonus--what at first seemed a happy, plump, endless affair--is spent and saved in Responsible Ways.
But I can never be too Responsible. I decided to take part of the bonus and buy myself a ridiculously good and horrifically priced ticket to the upcoming Cavalia show, Odysseo. I also (and how could I not?) bought myself a book (no surprise here). I decided on a photography book I would not be able to buy myself were I not suddenly in possession of gift money.
Both my husband and I found this a satisfying end to the bonus, which was here, gone, and left us in unexpectedly better financial, literary, and cultural places.
Finite money meets infinite goals means a fair bit of creative play with the budget. And compromise. Always comprise.
The closer we get to our goal, which is also to say the longer we've been in debt, the more impatient I become to pay it off, and the more we would like to enjoy our life.
At this moment we owe $22,200.85.
We could pay this off in a year, and when I think of being completely debt-free within 12 months I couldn't be more eager to get it done and commit myself to the plan.
But then I have to agree to live less.
I'm really, really not fond of anything that keeps me from living life in exactly the way I'd like to live it, which involves a ton of travel, lots of activities, and having the flexibility to say yes to new experiences (or books)!
The original plan we set involved a five-year payment plan to get $62,000 of debt paid off by December 2015. We started and ended up annihilating debt faster than we planned, and the date of December 2014 seemed within reach.
This year we had a slower payment schedule, due in part to our dog's end-of-life care (which we worked out to be an average of $1000 a month, every part of that money well spent), other unexpected costs, but also because we decided to start living a little more. We traded the potential of debt-free months in for life, and it has delayed our repayment, but our lives are much richer for it.
If you had told me a few years ago that I'd make this choice, I'd be livid, but now, living this life we're creating, I couldn't be happier.
We could still pay our debt off by 2014 December, but neither one of us thinks it's worth the sacrifices we'd be making: Vegas, Galiano, Chicago, Colorado, sculpting classes, dance lessons, books, electronics... We'd miss out on so much.
And we don't want to miss these opportunities.
We've reset our debt repayment date to 2015 December, which puts it back to our original five-year plan instead of the four-year goal that became our pursuit for a time, and we're both really good with that.
So, here it goes:
Let's start with the mandatory debt update, because when the Beast is smaller than before, I become even happier than I usually am, so...
Last month we owed $27,607.87.
This month our numbers look like the following:
BC Student Loan: $2,863.29
National Student Loan: $20,390.63
States Student Loan: $963.19
Our new grand (that's completely the wrong word...it makes debt sound noble) total is $24,217.11.
This means we paid off $3,390.76 in debt this month, which is phenomenal! Woo hoo!!
We are still on track to be out of debt (OUT OF DEBT!!!) by 2014 December.
I have commenced the Happy Dance.
Now that we're out of refinance stasis, let's have a look at our current numbers:
Last month we owed $28,503.76.
Canada Student Loan $20,616
British Columbia Student Loan $5918.87
States Student Loan $1073
Our grand total this month is $27,607.87
We're closer to being back on track now, and next month will be even better!!
So, what else is new?
We saved up enough money and went to Disneyland!!
Squirrel and Nest offers one-on-one and small group financial counseling services that aim to give individuals the knowledge and independence they need to get their financial lives in great shape.