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!

10 Comments

  1. Inspiring story, thanks for sharing it! Have you kept putting away money regularly and are you still at it? Very much hope so. I started investing when I was only 14 years old, and now have great joy managing my 600k USD portfolio (currently generating 2,000 USD in passive income per month). Hope all is fine and you are doing well! Cheers from Singapore, Noah

    Like

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