I'm Dreaming

Because the last couple days have been a little stressful, I really wanted to do something light and fluffy. Something fun and semi-useless. I say semi-useless instead of useless, because this exercise can give you real insight into where your priorities actually lie. Sometimes that's just as useful as money. So, inspired by Money Rabbit's What I Would Do With $100,000, and Krystal at Give Me Back My Five Bucks' What I Would Do If I Won $1,000,000: 4 Years Later, here is what I would do if I had $100,000:
Credit Card - $4,300 ($95,700 left)

So long sucker. Like a bad ex-boyfriend, I won't miss you when you're gone.

LOC - $11,000 ($84,700 left)

This is like the annoying kid brother to the aforementioned bad ex-boyfriend. Less directly spiteful, but I'll be happy to not have to deal with it again either.

Car - $9000 ($75,700 left)

I still plan to sell my silvery little lemon, but in the mean time I'd rather not have the monthly payments or inflated insurance on it either. Hello extra $450 a month...

Mortgage - $48,000 ($27,700 left)

My mortgage, while it is fixed, has multiple pre-payment options including one allowing me to put up to 20% of the total mortgage down on the balance every year. That chunk right there takes my mortgage out of the oh please don't let the rates get too high category into the *breathe* category. Ah the things you learn when you're young and dumb.

New Homebuyer's Repayment - $15,000 ($12,700 left)

Because when I put money into RRSPs, I want my tax money back dammit.

Emergency Fund - $5,300 ($7,400 left)

I'd plunk the money for my goal of $4000 in there, along with a little extra just for good measure. That puts my combined cash savings and investments between $9,000 and $10,000. I'd feel pretty good about that for the time being, as that gives me several months living expenses should I need it. Or a new furnace in January. You never know.

Renovations - $5,000 ($2,400 left)

I need to finish the flooring on my staircase, and the tile in the kitchen. After that, I should have enough money left to put up the other half of the fence in my back yard.

Pantry Restock - $400 ($2,000 left)

Assorted dried/canned odds and ends, as well as 1/2 a lamb from a farming friend of mine up north. Some containers to hold dried goods in an orderly fashion would be nice too.

Grandfather's Birthday Present - $250 ($1,750 left)

Because he deserves it. I don't know yet what the exact gift would be, but I can assure you it likely includes a large Tim Horton's gift card.

Grandmother's Birthday - $750 ($1,000 left)

It's my grandmother's 80th birthday this year, and the family is all getting together in BC to celebrate. That means flights and accommodation, along with a gift for my grandmother.

Wardrobe Restock - $995 ($5)

Right now the thing I'm most in need of are a pair of gum boots (rain boots, wellies, whatever you call them). The snow is melting around my place, and the water on the sidewalks gets quite deep in some places. Other than that, some good quality work clothes to kick a couple items off my list would be great.

Starbucks Chai Latte - $5 (I'm Out!)

Because, you know, I want one.

;)


*Missed a couple several others - Oops*
Paying Myself
Finance Say What
Debt Free Kid
Fabulously Frugirl
Little Miss Money Bags
Figuring Money Out
Hi That's My Bike

Dry Run

NA NA Na Na na na Na Na NA NA Na Na na na Na Na Tax Man!

Why I have that modified batman ditty stuck in my head, I don't know.

I've been wanting to do a dry run of my taxes for quite some time now, but I either a) didn't have the forms, or b) didn't have the time. I wanted to make sure I did it with enough time to spare so that I could set aside enough money to pay the taxes if it turned out I owed the government this year.

It looks like I don't :)

In fact it looks like I'll get almost $2000 back.

I'm ecstatically happy about this. That right there gets me half way to my emergency fund goal! By the time I get it I'll be sitting around 75% of my savings goal.

*happy dance*

This time last year, I wasn't even remotely close to being a happy camper. At. ALL.

I was working for a different company for my last set of taxes, and for whatever reason they didn't take enough taxes off of my pay cheque. Not even close! April rolled around and I was expecting quite a healthy refund. I had put THOUSANDS of dollars into RRSPs, I had the new homebuyer tax credit, I had last year's home renovation tax credit, you name it. But, even with all of that, I still owed the government money.

You did NOT want to be in the room with me when I worked that out.

Come to think of it, my face was about the same shade of purple as the sweater I'm wearing right now. Interesting.

Either way, it looks like this year won't be as painful. I really needed that. THANK YOU accounting department.

Month End - February 2011

I had some fun at the company curling bonspiel this weekend. For those of you who don't know, curling is quite possibly the only sport in the world where house cleaning experience comes in handy. Hehehe. They call it sweeping, but it's really more of a mopping motion. I'm a little sore from sliding those chunks of granite around now.

I realized something earlier this month. I've been contributing money to my RRSPs through work, but I never actually took the money into account when I was doing my month ends. Oops. Looks like I have about $600 more in assets than I thought I had :)

Sweet.

Anyway, here's how the month panned out:

	31-Mar-10	31-Jan-11	28-Feb-11
Chequing	$116.66	$149.68	$661.78
Savings 1	$0.24	$0.26	$0.26
Savings 2	$100.00	$0.90	$0.90
Savings 3	$500.00	$0.07	$0.07
Investment	$2,189.67	$1,154.89	$1,256.02
TFSA	$0.00	$2,423.86	$2,522.19
RRSP 1	$1,525.96	$1,632.31	$1,642.74
RRSP 2	$3,868.08	$4,016.41	$4,038.05
RRSP 3	$0.00	$444.94	$667.42
ASSETS	$8,300.61	$9,823.32	$10,789.43
Car Loan	($13,138.27)	($9,397.49)	($9,034.03)
LOC	($10,000.00)	($11,000.00)	($11,000.00)
Credit Card	($5,155.65)	($4,433.32)	($4,301.76)
DEBTS	($28,293.92)	($24,830.81)	($24,335.79)
Net Worth	($19,993.31)	($15,007.49)	($13,546.36)

While I didn't backslide anywhere, I didn't exactly pay anything off by leaps and bounds. It's disappointing, but not entirely unexpected. I'll go into more detail on where the money went in tomorrow's post, because it would make for far too long of a post if I put it in today's. I'm utterly miffed by how small the change in my credit card was, but it's my own fault.

I really need to consolidate my RRSP accounts, I don't need to have 3 of them. I've been meaning to do that for about 6 months now, I just... haven't. It's right up there with writing a will and buying more life insurance. I know better. I'll probably do it when I get all of my tax slips in, that way I'll have all the information I need to switch things around. I'll set that as a goal for April. The will and life insurance will probably be goals for May and June.

How did you guys fare this past month?

I'm Confused...

IIIIIIIIIIIt's Tax Time!

Err, well, actually it's RRSP time.

I don't know about you, but usually this time of year I feel like I'm being SWARMED with financial institutions trying to shill their wares. It's front and center on most of the websites I frequent.

Put money in your RRSP! It's the smart thing to do! Do it now before it's too late!

It's 24/7 in your face advertising until March 1st.

But this year... it isn't. I don't know if I've just become oblivious to it, but it feels like the banks aren't pushing RRSPs nearly as hard as they've done in recent years. Do they know something I don't?

*suspicion*

Adding to my confusion are the articles I'm seeing relating to RRSPs right now, such as You Can Have Too Much Money In Your RRSP over at Everyday Money, and The Problem With RRSPs over at MSN Money.

Wait, what?

It seems that after years of pushing this type of investment the banks are pulling an about face: don't put money into your RRSPs, pay off your debt instead.

That's fine and dandy that you want us to pay off our debts; at a debt load of 148% for every dollar earned, I can understand you wanting us to pay off our debts as well. But after years of lamenting that the younger generation is taking so long to enter the work force, buy their first house, and generally hit the major milestones... are you sure you want to be telling us to discount or put off our retirement contributions? I agree fully that the overall debt load of Canadians is too high and NEEDS to be reduced, but do you really want to tell us to not focus on saving for retirement in order to do it? Unless we're getting the 1-2 punch of financial education and frugality to go along with it, I'm worried that not only are we going to get out of the habit of saving for retirement, but we're not going to learn the skills we need to avoid going into debt in the first place.

Basically, I worry that the money that would have otherwise gone to savings will become part of our consumption income stream.

The younger you are, the more time is on your side. Putting in at least a little bit when you're young will pay off in spades in the future. Yes, debt interest is a nasty NASTY beast, but when the same concept of interest is used to your advantage it can be a wonderful wealth building tool as well.

Has anyone else noticed the banks taking their foot of the gas this year? Or is it just me?

Retirement Frustration

As I mentioned a while back, I've started up my retirement contributions again. They're small mind you, but they are there. When I received my last pay raise the entire raise went into retirement savings. No pain no gain? That seems to me like a gain without the pain to me. What really spurred me into action was an e-mail from my employer saying that they were re-instituting part of their contribution matching program. The program had been cut during the downturn as a cost savings measure. Better to keep more people employed with most of their benefits than keep fewer people employed with all of the benefits. For employees working at the company for 1-5 years, they would match up to 2% of your pay, providing you put at least that much into the account. My last raise was 3%, so I met that requirement. My 1 year anniversary was earlier this month, so as of this pay period I'll be receiving their contributions as well.

When I signed up for the contribution matching, they had a little section on the form where you put down which funds you wanted the money dispersed between. I selected a couple funds with low MERs (management expense ratio - the percentage of your fund that goes to them every year), and submitted the form. A couple weeks later I received a letter from the company holding the mutual funds, saying that the funds I selected were not available in my program. I'm not entirely sure if it's because I didn't have the minimum balances for the funds, or if they're not available to my company's plan? They had another form asking for different funds, which I never sent back to them. The money has been sitting in the account making whatever their interest rate for cash is (super low).

Not having the cash in an actual fund isn't going to stop me from getting my employer's contribution, so I've been just letting it sit there. A 67% straight return is better than nothing in the short term.

The reason why I didn't select one of their other funds is because they have absolutely ridiculous MERs (2.5%-3% was common, and even higher). What's really frustrating is that they don't tell you that when they send you the paperwork to fill out.  I received another form this week, with a list of mutual funds again. They list the Gross Annualized Rate of Return for the last 1, 3, 5 and 10 years, but no other information. Besides the fact that you can't predict the future returns based on the past, the Gross ARR is meaningless. If anything, I'd wan't to see the Net ARR. There would be a lot more negatives on this sheet if they did show that, that much I can promise you. It's frustrating that they don't show you the fees, they just mention in small print that you can contact them or find them online.

Grrrrr.

So, for the time being, I'm leaving my money in cash. I'll let it accumulate for a while and see if the other funds open up for me. If they don't, I'll probably just let the money build up and then periodically make a bulk transfer from it to my other institution which has cheaper fees. Better to get free employer money in a crappy account than not.

The Savings Solution!

I figured out what I’m going to do with my 3% raise! I am so stoked about this one. When I started with the company I’m working for right now, there was no contribution matching for money you put into the company RRSP accounts. They used to have it, but it was discontinued when the economy took a face first nose dive off a cliff a couple years back. The company I left had a very generous plan. They automatically gave you 4%, and matched dollar for dollar up to 6% of your own contributions. That meant that in order to put in the maximum 18% allowable savings every year, you only had to put in 8% of your own money. Losing that, plus taking a pay cut when I left there, severely hampered my savings ability.

The matching is back! It’s not fully reinstated yet, but given the fact that the economy appears to be stabilizing the company directors have reinstated part of the contribution matching program. If I put my 3% in, the company will match me with another 2%-3%. That’s an automatic 67%-100% increase in my savings! I’d love to see a savings account with that rate of return. Heck, I’d love to see a savings account with a 10^th of that rate of return.  Then come tax time it goes against what I owe (or towards what they owe me). There’s another 20-25%. So just by putting it in this account (which stands a solid chance of growing), I’ll be getting a return of 87%-125% without lifting a finger. I can’t argue with that.

Oh yeah, and the university head honchos gave me permission to take two courses at the same time which I otherwise wouldn’t be allowed to do. I wish all Wednesdays were this good J