My Canadian Debt Story

I came to Vancouver in 2006. I landed with a permanent resident visa, 2 pieces of luggage and $ 5 000.

Needless to say, this amount of money didn’t get me very far in this expensive city, particularly when I was starting over from scratch and by myself. Luckily, I had left additional money in France, about $4K. I had absolutely no debt at the time.

Back then, the economy was very good and I found a job within 6 weeks of arriving. Unfortunately, it was low-paying, I was overqualified, under challenged and I just hated it. This was the beginning of my professional life over the next 3 years. I just drifted from one low-paying, dead-end job to the next.

Looking back, I see how I was barely getting by. My salary and expenses didn’t allow me to set aside enough money to have a solid emergency fund, let alone plan for items like vacation, going back to school, buy a house or even have an efficient retirement-saving strategy.

This was also the beginning of a series of costly financial mistakes such as:

• Maxing-out my credit card, then applying for a second one
• Getting a line of credit I didn’t need in the first place, all in the name of “building credit history”
• Traveling back to France twice when I couldn’t afford it
• Quitting a job on a whim with nothing else lined up and virtually no savings
• Using my credit line to pay for living expenses while job searching…job search that took longer than expected
• Spending $ 400 to $ 500 a month in restaurants and take-out

Did I mention all my savings were long gone by then? I had used all the $5K plus the additional $4K I had left in my bank account in France.

I also had to weather the 2008-2009 economic meltdown…..which I couldn’t. Early 2009, I was unemployed, had no savings and had pretty much used all my available credit. I had to ask my parents for money. They lent me some and this was my lowest point ever. I vowed that I would never let myself into this situation again. Update: the latter point remains true to this day.

Obviously, something had to change and to happen…fast! It turned out I was eligible for a provincial program that offered grants to help people with my profile obtain additional credentials. I applied and was successful. I enrolled in college and obtained a Diploma in Accounting & Payroll Administration in 2010.

Unfortunately, the amount of the grant was not enough to cover for all my tuition fees and expenses, as I attended a private college. I took government student loans totaling $12K. To this day, I don’t regret this decision, even if it meant additional debt, as my life drastically improved afterwards. Update: my student loans are fully paid-off.

Upon graduating, I found a job in Accounting that paid well and offered good benefits. At the end of 2010, I had $25K in debt with little to show for it except for my Diploma. I was taking good care of my employer’s money, and it was time to take better care of my own.

I obtained a consolidation loan and closed all the credit accounts except two credit cards. I also changed jobs to earn more. It allowed me to save more, and combined with controlled spending, I was able to buy a condo in the Greater Vancouver -being able to buy in this area is no small peanut-. Update: I sold this condo and bought another one in 2016. I’m still living in it.

My “consolidated consolidation loan” is finally under 10K and repaid on a bi-weekly basis. Its highest peak was $31K.  Update: this loan has been fully paid off in April 2017. As of 2022, the only debt I have is my mortgage.

Obviously, buying my home put a huge dent in my savings, which I aim to rebuild. One of my financial goals is to have $ 5 000 in my emergency fund. I currently have $ 1 500. Update: I reached $5K in April 2015. There have been some fluctuations since, but I ‘ve always maintained at least $5K for the unplanned/unexpected.

I also realized I wanted to learn more about personal finances and share, hence this blog.

Happy reading!