Thursday, March 19, 2009

Tax Refund Heaven

That's me doing a happy dance. I've been checking daily to see if my refund had been deposited yet and today was my lucky day. Woot woot!! Isn't it great that we are so brainwashed that getting some of our own money back warrants such jubilation!

Jonathan Chevreau, author of the Wealthy Boomer blog at the National Post, wrote about tax refunds on March 11th: "most Canadians will use it to pay down debt, says a survey released today by Dr. Tax Software Inc., makers of U File".

Oh we Canadians are a cautious bunch aren't we? I took $2700 of my refund and paid down my line of credit so it now sits at a nice round figure of $30,000. (I do take such personal satisfaction in nice round numbers, don't you?) With the interest rate on my LOC sitting at an all-time low of 2.5% I can afford to pay more on the principal. Most folks I have spoken to say they are putting all they can into debt repayments also - why the hell not?

Although our government has chosen to spend its way out of this recession I (and many others) am choosing to keep the lid on spending and have revamped my budget to make the most of my income. I've ramped up my debt repayment from $500 to $1000 monthly and increased my savings from $690 a month to $830 a month. If I can stick to this budget (a big if) then my challenging Five Year Plan for retirement will stay on track. My concern is that I don't have a lot of wiggle room. I hope by maintaining this blog I'll be more committed to the PLAN. Either that or I'll just plain be committed!

Suggestions and savings hints are welcome!

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