How David Paid Off $36,000 of Debt to Regain Financial Freedom
David showed up at Money Mentors with a staggering $36,000 of debt weighing down on him every day. He heard about Money Mentors from a colleague and made an appointment to see his new credit counsellor the very next day.
David spent a few minutes talking about his experience with Money Mentors, and the fear people may have around swallowing their pride and asking for help with their finances.
“There was no judgment. My counsellor was great. He never once said you must do this, this, or this.”
After his free consultation, it was decided the best course of action for David was to start on the Orderly Payment of Debts (OPD) program. He was grateful for this option because it gave him the chance to catch his breath and finally tackle the one thing that had been controlling his mind for far too long.
“Night and day” was the way David described the feeling of ridding himself of debt through Money Mentors’ OPD program.
The OPD program allows individuals to consolidate all their debts into one easy to manage monthly payment with a fixed interest rate of just 5%. As a federally legislated program, administered by Money Mentors on behalf of the Government of Alberta, the OPD program combines debt consolidation with unbiased financial assistance from our accredited counsellors.
Dealing with Debt in a Relationship
David started to go into debt when he loaned money to his former partner, and without legal documentation, it was impossible for David to re-claim.
“It’s fine to help someone out that you care for, like $50 here or $100 there – if you have the money in your budget that’s fine. But it becomes dangerous when you’re borrowing thousands of dollars.”
Managing money in a relationship is a notoriously difficult thing to do. A suggestion to people who may be in a similar situation is to surround yourself with people who have a similar financial lifestyle to yours or spend responsibly. David now has open conversations with his partner and friends regarding their financial situations and says their honesty has helped him be that much more confident in his saving habits.
Forming a New Relationship With Money
After two and a half years, David can proudly say he is 100% debt free thanks to Money Mentors and its OPD program. “I still live on a cash-only diet; I budget daily, weekly, monthly and yearly,” said David.
Although it was extremely hard for David to live using a cash-only budget for two and a half years, he learned to manage his money and leverage the cash that he did have.
“If people at work say, Hey David let’s go for a coffee, I’ll say sorry but that’s not in my budget today.”
“I’ve had to give up many things that I used to love to do like travelling, vacations, and buying nice clothes. But I also became an expert on how to find things within my budget. I learned how to do coupon shopping, I learned how to get discounts and I learned to be patient with market sales.”
The Importance of Financial Literacy
David hopes that one day we will be able to talk more openly about debt and money. He praised the Money Mentors vision to empower youth in Alberta by providing free financial education for students and youth in the community.
Basic fundamentals for budgeting don’t always exist. David explains that he wasn’t taught these ideas in school. “It’s funny, because my parents were great with budgeting, but somehow there was a disconnect,” says David.
If David could give his old self one rule to live by, it would be the 10% rule. By saving 10% of each paycheck, anyone can have a valuable emergency savings fund.
Money Mentors would like to congratulate David on being debt free and having the courage to share his story with us.