Category Archives: About Me

Being Working Poor – My Story

As we continue along this week discussing the working poor I thought I would share a little more of my own history of a time when I would have been considered poor.

It all began the year I graduated university and got married. You see neither my wife or I were able to get jobs in our field right away after graduation. So we needed some income to live while we continued to look for jobs in our field.

I actually still recall the interview I had for a cook’s job I had applied for. It mainly consisted of a the usual few questions followed by just one more “You realized your way over qualified for this job. So why do you want to work here?”

I replied “I still have to eat and pay rent.” Apparently that satisfied his curiosity because he then offered me the job at a whole $6/hour (just above minimum wage at that time). My wife was working at a similar job with low pay.

Despite the fact we made around $1500 a month after taxes of which $550 when to rent and another $400 when to paying down my student loan, I experienced something very profound. I was very happy during this time of my life. Till this day I still look back at the time period with some fondness.

Why if I was flat broke near constantly was I that happy? I think it was because several different things. One was without much for extra money life was fairly simple.  You pay your bills, rent and buy food.  With the small amount left over you buy a few extras like a night at the cheap movies.  Today life seems more complicated mainly from the additional choices that more money brings: should you put in the RRSP, pay down the mortgage, have a nicer vacation this year or perhaps fund the RESP more?

Additionally during our broke period we came to use any help that was ever offered to us.  We weren’t to prideful to reject any help that came our way.   So we got rides to events around town from friends, we borrow my dad’s truck for a few months when he could spare it and I’ve fairly sure I never turned down a invite out to supper with anyone.

After about a year this period of my life came to a close.  I got my first engineering job and we moved to Edmonton. Yet being poor to me was a incredibly useful experience at that time of my life.  It taught me that money does not have any relationship to happiness beyond providing the essentials (shelter, food, love).   To this day I give credit to this period to showing me I can live off a low amount of expenses which is partly why I know I can retire with a spending budget of around $26,000/year.

So rather than pity someone with low financial resources I tend to study them and learn from them.  I ask myself how can I be so creative with so little money, how can I reduce my spending on things that don’t matter to me, how can I help support others around me to create a more sharing group of friends and family?  In the age of excess consumption, the working poor may very well be some of the best teachers of how to have a happy life on a shoestring budget and thereby show you the key on how you can become financially independent.

Behind the Blog

So it occurs to me despite everyone learning a little bit about me from my various post I really never really given you a good idea of who the hell am I and how these posts come together. So let’s pull back the curtain and show you a little bit behind the show.

This blog is usually written in the early morning. The house is quiet and I can actually finish a full cup of coffee while writing my daily post. The only sounds are the furnace cutting in, the hum of the computer and the running water from the fish tank filter in the other room. Sometimes I get inspired at work during my lunch hour or at home in the evening and start a draft of a post, but often the entire things comes right out of my head first thing in the morning.

I write this almost always on the desktop because I rather like the effect of the cabinet where the computer is kept in. It creates a little screen with it doors open so most of my field of vision is forced to look at the screen. I usually write for about an hour in the morning. Then with a short edit I hit the publish button.  Then I go get dressed for work and grab some breakfast.  Isn’t it interesting to know that I have written most of these posts while I’m in my PJ’s and a house coat?

I get my ideas for this blog from just about anything. News articles, other blogs, little events that happen to me or people I know. Sometimes the ideas are flowing so fast I have to record them in my notebook to track them all. Other times my ideas dry up for a week and I use some of my backlog for a while.

Other ideas come from books. I am typically reading up to five books at once on various topics at any given time. I like to keep at least two books going at all times. One to be a more serious read and another to be lighter entertainment reading. So depending on my mood I can pick up something a little heavier or lighter. I would estimate in total I spend at least a hour or two reading a book each day. As such my reading rate is fairly fast and I can often finish a novel in three evenings (with the exception of anything by Tad Williams who’s books always seem to number around 800+ pages, then I likely need four evenings).

Reading topics include just about everything.  My wife and I tend to read different topics, yet we both encourage the other to read some additional material that isn’t in our normal scope.  So I do read a fair amount of business/personal finance books, but they are not my main topic by any means.

I hope you enjoyed the short tour behind the blog.  Let me know if you have any questions.

My ‘Success’ Story

*** Warning – This is a VERY long post***

Over at Get Rich Slowly, JD is having a contest which is part of his group writing project which asks people to write their own success stories. Since I really haven’t gone into this topic in much detail I thought it would also provide a little history on where I was and how I got here.

It began in 2000. They shoved a engineering degree into my hand in the spring then then I added a wedding ring that fall. My wife and I were $60,000 in school debt combined and working minimum wage jobs trying to make student loan payments. I remember it well. I was basically broke all the time, but strangely enough I was happy. I had good friends and a wife who loved me. Besides, we were just out of university, so we knew how to deal with being broke and still have a good time.

Then about eight months later I got my first ‘real’ job. The base pay sucked, but I would be earning bonuses on each job I did after I completed the training in six months or so. My mistake here was I leased a new car and added $20,000 to my debt load. I thought I ‘deserved’ the car after getting a ‘real’ job. Perhaps the only smart thing we did is we continued to live on the base pay even after I got bonus cheques. So that way I was already living below my means and paying back our debt.

Then one day I realized I hated my job. I mean I was almost physically ill going back to work after my days off. I realized this was no way to live. So I resigned. They instead transfered me to another department giving me an extra six months to try to find another job. I didn’t get one, so I ended up getting ‘laid off’ so at least I could collect Employment Insurance (EI). I spend the next two months constantly worrying about not having a job. Despite the fact we were fine for money during this time I still worried.

Then I took an entry level position with another company. The work was alright, but the pay sucked again. But we got by. Then after while I got a promotion/transfer to northern British Columbia. Despite not having earned all that much money during all this time we managed to save enough to buy our first home. I felt so proud, yet at the same time I was now drowning in debt buy adding a $108,000 mortgage. My new job was similar to my first real job. I got a small base salary and then large bonus cheques each quarter. We continued to live on just the small base salary.

This we found out was a very good thing. Shortly after moving into our home we found out we were expecting our first child. It was like a dream come true. A home, a wonderful wife and a baby on the way. The dream came to a crashing halt 30 weeks into the pregnancy. The baby came 10 weeks early. We were tossed into a world beyond our control and I just found out our house’s main structural beam was rotted and had to be replaced. Also our buy out came due on my car lease and that was on top of the medical related expenses such as my plane ticket south to a hospital that was equipped to deal with our son. We were now beyond broke, I had a baby I didn’t know was going to live and $20,000 in unexpected expenses.

This was when I learned, when you’re at the bottom learn to swallow any pride you have left and ask for help. The helped poured in. We stayed with friends in cities where our baby was located and saved hotel costs. Gifts and prayers flowed in from family and friends. I managed to strip out ever dime of savings I had and max out my line of credit to cover $15,000 of the expenses. Then my parents came forward and offered us a loan for the remaining $5000. My work gave me an unlimited paid leave to deal with the crisis. Our baby grew and got stronger and somehow so did I.

I’ve often been asked by people how we dealt with it all. To be honest I don’t know. Somehow I woke up each day and held it together. After 64 days in various hospitals and neurosurgery we got our son home. At this time we also learned my wife would only get part of her maternity leave. She was working as a teacher’s aid at the time and had collected EI the previous summer, so she would only be able to collect six months of the normal twelve that she would have got (she didn’t have enough new work hours between claims to get the full time off).

My finances were in tatters, but my family was home. That’s all that matter. So we cut costs to the bone and I saved like never before. In nine months we had paid my parents back. We continued to pay down the line of credit, yet as my wife’s maternity leave money ran out we came to a decision. We wanted my wife to stay home to look after our son, but in doing so we would have no extra money for anything. No vacations, tiny amounts for Christmas presents and no extra spending money beyond the basics. So I offered my wife a challenge, you can stay home, but you have to find a way to make some income. I don’t care how much, but you must make something.

So the daycare opened and we continued to claw our way out of debt. After a year I had an opportunity arise. I had a job offer back in Saskatchewan. We could move back to be near both our families and share our son with those that helped us so much in the beginning. Yet there was a cost. I had to take a 27% cut in pay. At this time we had paid back all of my student debt and had less than $10,000 left owning on my wife’s student loan. So we took the chance and moved. As it turned out my house had increased in value substantially after our renovations to it. So after selling the house we had made $55,000 in profit. We took $40,000 and used as it as a payment on our new house. Then we cleared the remainder of our other debts and moved with just a mortgage.

Now about 15 months after that move my net worth is pushing $200,000. Granted $100,000 of that is gains on the new house, but still even without that gain, I went from -$80,000 net worth to $100,000 net worth in just over seven and a half years. That’s a average gain of $24,000/year to my net worth when our household income never went near $100,000/year.

To be honest, I never did the math on our average savings until this post. I’m shocked we managed to save that much money for that long. To me it was never about getting rich, but rather providing the best foundation possible for my family. To allow us the freedom to let me take a lower paid job to move closer to our family to share our son whom grew up to be perfectly normal despite being warned repeatedly of all the problems he might face from his premature birth.

Now with our second child on the way I’m still well on my way to retirement on my 45th birthday. I started this blog to share this one story. It is possible to defy the odds. You don’t have to have a huge income to enjoy the one thing that matters most about having your finances under control: freedom.

This post is now part of the 123rd Carnival of Personal Finance.