I was thinking yesterday, is it a smart move to pay off my debts as fast as I can? Should I be saving more aggressively for my condo down payment?
Every pay cheque, after taxes, I make around $1,500. Currently $1,000 goes towards my debt, $50 goes towards my RRSP, and whatever is left goes towards my condo down payment fund after I’ve paid off all my bills and expenses. My plan is to put at least that $2000/month into my condo fund as soon as I finish paying off my debts. But, it occurred to me yesterday – is this the smartest idea? Since I want to buy in about a year (and I need to be out of my current place by this time next year), should I be saving up as much as possible now? If I stick to my plan, by this time next year, I will have saved $20,000. That’ s a lot to save in just one year!
The biggest reason why I’ve been paying off my debt as aggressively as I have been, is because I hate paying interest. HATE it. And I hate the fact that I’m in debt, and my net worth in Quicken is still in the red. But maybe it’s better to pay a little interest, and stay in debt a little longer in order to secure my short-term goal of buying a condo.
My friend who’s a mortgage broker told me to get rid of all my debts as fast as I can, and then build up a down payment. He said it’s easier to get approved for a mortgage with a smaller down payment and no debt, than with a larger down payment and a little debt. Is that true? Because if it isn’t, then I’ve been doing this whole debt reduction thing backwards from the beginning. Over the past 8 months, I’ve put $12,000 towards my debt. If I just paid a little over the minimum payments to my student loans, I could have saved up $10,000 of that money by now. And if that’s what I should have been doing all along, then I think I’m going to have to go throw up a little.
Apart from my full-time and part-time jobs, I also run my own graphic design business on the side. I have spent the last 6 months building my online portfolio, networking with potential clients, and creating an “image” for myself. I’m not a high end designer, and I never want to make it my full-time career, but I did get professionally trained in it, and it’s a good way to make some extra money.
Websites aren’t exactly my strongest skill, because there is so much technical knowledge that I just don’t have. I’m much stronger in the design and layout aspect of graphic design. I want to specialize in brochures, pamphlets, advertisements, logos, etc.
That being said, I’ve been talking with a real estate agent for the past month about building her a website. After she went and got quotes from the big graphic design companies in town, she decided to go with me. Mostly because I’m cheaper than everyone else, but also because I came highly recommended by a friend who graduated in the same year as me.
This is all very exciting for me! I quoted her $2,000 for the base website (I know, I could have charged way more … but I’m just starting out, and she knows I’m not as advanced as some of the big design companies). I think when it’s all said and done, it’ll cost her around $3,000. I will also be maintaining the site after it is complete for $60/hr. (1/2 hr. minimum time blocks) … and if she needs any photographs taken of the properties, I’ll also be charging $60/hr.
If I could just get two contracts like this a year, that’s an extra $6,000 of income I can bring in! :)
Well I spent $65 on my sister’s birthday present, $15 over budget, but that’s okay. I got her an awesome zip-up jacket at 50% off, so I only paid $45 for it. Then I bought her a photo storage box, and filled it with little odds and ends I know she’ll enjoy. Even though I spent a little more on her, I don’t feel bad about it. She’s the only sister I have, afterall! :)
I don’t think the BF wants anything fancy for his birthday. He wants to go with me to MEC and pick out a bell for his bicycle, and maybe a pair of cheap cargo shorts, because he likes to wear them over top of his bicycling spandex. I kinda went overboard on his Christmas present anyway, so I think I’ll be able to stay within my $50 budget for him.