Hey everyone,
I'm looking for some advice advice on my situation. Currently 24 y/o, living in Toronto and racked up a large amount on my credit cards. See below for an analysis of:
1.Current Debt Position (Aug 4, 2018)
Assets
Liabilities
Available Credit:
$1K in chequing account
$12.9K RBC CC (1% interest rate until Feb 2019)
$15K Scotiabank CC (with available balance transfer @1% interest rate until March 2019 and 2% balance transfer fee)
$1K in personal goods
$9.4K AMEX CC (1% interest rate until Feb 2019)
$10K Scotiabank LoC unsecured (prime +3.45%)
$5.8K PC Mastercard CC (due September 2019 @19.99% interest rate)
$10k RBC LoC unsecured (prime + 5.49%)
Total = $2K Total = $28K Total = $35K
2.Annual Pre-tax Salary (CY + projections) - for some background, I work in professional services, with a planned exit in 2020 assuming $71K (if I settle on a lower Senior FA position, or $80K if I jump into Equity Research).
2018: $53K
2019: $62K
2020: $71K - $80K
3.Monthly Budgeting:
Takehome pay = $3,300
Expenses: $2,225 per below
Surplus income: ~$1,100
Amount to save for debt payments = $1,000
Amount to keep in chequing account = $100
- Move in with girlfriend in 2020 debt-free (27 y/o)
- Get married in 2022 - which will require me to save about $25K (29 y/o)
- First kid in 2023 (30 y/o)
5. Edit: Current Position - 8.28.2018
So after creating this post, I took two weeks to clear my head and re-evaluate my options. I opted out of going through with a consumer proposal (which was my initial plan), as I would not be able to carry unsecured debt for a while, which would hinder my opportunity to create wealth by investing into stocks (and eventually, trade options on the market).
I decided to put my money where my mouth is and jump into trading shares. I have a total gain of $5K, as of August 28, 2018, on a $20K investment (from my 2x LoC).
Here are some notes:
- Current debt level: $28K + 20K LoC = $48K
- Market value of portfolio = $25K
- Available cash = $3K
Thanks for everyone's advice. I will be keeping this post updated on a weekly basis to keep track of my progress.
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Options:
I am looking to start saving and sharing my savings details with my girlfriend in about two years, at which point I plan on being debt-free, but also have a sufficient amount of savings so that she doesn't believe that I am a total degenerate.
- Pay off PC Mastercard with LoC at Sep 1, 2018
- Draw down remaining LoC ($15k) to pay CC debt at Feb 1, 2019
Debt Payoff At Jan 2019:
Income
CC Debt
Surplus income: $1,000 x 5 months (up to Jan 31, 2018) = $5,000
Total outstanding CC debt at Jan 2019 = $22.3K x 1.01% = $22.6K (RBC + AMEX) less $500 x 5 months payments = ~$20K
LoC = $15,000
~~~~Total income to be applied against expiring promotional 1% rate CC debt = ~~~~~$20K
Overall Position at Jan 31, 2019:
Assets
Liabilities
$100 saved/month x 5 months = $500
Liabilities =
$20K total LoC (average interest rate ~7.5%)
Payoff period = ~20K/$1.5K payment per month = 13.33 months before calculating interest payments = approximately March 2020
2. Go for a consolidation loan (are interest rates lower than my LoC)?
3. Consumer proposal
- Take a credit hit with zero chance of obtaining a [updated - lower than normal rate] for a large loan (i.e. for a home) for 10 years -> until I'm 34. I do not want this to affect chances of us buying a home around that time (32/yo). Is this even possible given my current situation with a payback period of 1.75 years (Sep 1 2018 - April/May 2020)?
4. File for bankruptcy
- Can I recover from this? Will my girlfriend/ future wife know about this when we apply for a loan together for a home?
Yup, shot myself in the foot. Please help.
I'm looking for some advice advice on my situation. Currently 24 y/o, living in Toronto and racked up a large amount on my credit cards. See below for an analysis of:
- Current Debt Position
- Annual Pre-tax Salary (CY + projections)
- Monthly Budgeting
- Life Timeline
- Current position at 8.28.2018
1.Current Debt Position (Aug 4, 2018)
Assets
Liabilities
Available Credit:
$1K in chequing account
$12.9K RBC CC (1% interest rate until Feb 2019)
$15K Scotiabank CC (with available balance transfer @1% interest rate until March 2019 and 2% balance transfer fee)
$1K in personal goods
$9.4K AMEX CC (1% interest rate until Feb 2019)
$10K Scotiabank LoC unsecured (prime +3.45%)
$5.8K PC Mastercard CC (due September 2019 @19.99% interest rate)
$10k RBC LoC unsecured (prime + 5.49%)
Total = $2K Total = $28K Total = $35K
2.Annual Pre-tax Salary (CY + projections) - for some background, I work in professional services, with a planned exit in 2020 assuming $71K (if I settle on a lower Senior FA position, or $80K if I jump into Equity Research).
2018: $53K
2019: $62K
2020: $71K - $80K
3.Monthly Budgeting:
Takehome pay = $3,300
Expenses: $2,225 per below
Surplus income: ~$1,100
Amount to save for debt payments = $1,000
Amount to keep in chequing account = $100
- Rent = $1,000
- Insurance = $45
- Groceries = $200
- TTC = $130
- Internet = $35
- Phone = $65
- Eating out = $150
- Haircut = $40
- Entertainment = $40
- Household goods = $20
- 2% minimum CC Payments (2% x 22.3K) = $500
- Move in with girlfriend in 2020 debt-free (27 y/o)
- Get married in 2022 - which will require me to save about $25K (29 y/o)
- First kid in 2023 (30 y/o)
5. Edit: Current Position - 8.28.2018
So after creating this post, I took two weeks to clear my head and re-evaluate my options. I opted out of going through with a consumer proposal (which was my initial plan), as I would not be able to carry unsecured debt for a while, which would hinder my opportunity to create wealth by investing into stocks (and eventually, trade options on the market).
I decided to put my money where my mouth is and jump into trading shares. I have a total gain of $5K, as of August 28, 2018, on a $20K investment (from my 2x LoC).
Here are some notes:
- Current debt level: $28K + 20K LoC = $48K
- Market value of portfolio = $25K
- Available cash = $3K
Thanks for everyone's advice. I will be keeping this post updated on a weekly basis to keep track of my progress.
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Save, invest and pay off debts:
~~~~Total income to be applied against expiring promotional 1% rate CC debt = ~~~~~