Just Another Money Monday

Not a whole lot going on around here. Yesterday was a lovely sunny day with temps hovering at -24c when I got up.....BRRRRRRR!! I took the opportunity to clean another 8" of snow off of Dougie the Dodge and shuffled him around the parking lot once the snowplow finally showed up. Today, in Ontario, it's Family Day and unfortunately the sunshine was short lived and it is gently snowing once again.

So...what is my family doing today? Well...let's see...Luna is sleeping, Lily is sleeping, and Kazi is sleeping!! Hopefully things will get a little livelier a little later! For now I'll enjoy the peace of sleeping cats and daughter. I have my new to me $3 radio set to CBC so that is keeping me company.

We're already halfway through February!! How is the money/budget stacking up so far?

• after a week of NO Spend days (the one advantage of having 2 feet of snow drop over the past few days!!) my misc budget stands unchanged at $177. It should be about $290 but I used a chunk to pay for flight/medical insurance for my trip to Ireland. I did it as a challenge to myself to spend as little as possible this month - gee, thanks Mother Nature - it's hard to spend when you can't get out your front door! I have a few upcoming plans for spending in the next week or two (going out for dinner next Saturday, plus $10/weekly for yoga and $2/weekly for volleyball) so I'm keeping my fingers crossed that $177 will be enough to get me to March! That's a bit of a stretch but I'm going to try! (I'll have to stay out of Michael's!! and stop buying yarn!!)
• I did buy some Valentine's goodies for Kazi but used cash - I think I still have about $30 in my wallet. (I'll try to save that for dining out)
• My mini-money fund (a container I throw my loonies and toonies in) stands at $130. Once I reach $150 I'm going to go exchange for some euros.
• I saved a bit on my utilities this month; set aside $75 for Union Gas and it was only $53, set aside $75 for London Hydro and it was $69. That helped pay for Turbo Tax and my wee Goodwill spree. 
• My misc $$ has been spent on: new album by Lucinda Williams on iTunes, $25 spent at Michaels on yarn & a Christmas gift, $11 at Walmart (batteries & light bulbs), $5 to go see "Brooklyn", $21 at Goodwill, and flight/medical insurance.
• Gas budget stands at $120 remaining out of a budget of $160, and the food budget stands at $156 remaining out a budget of $280. I have about a half a tank of gas and will go grocery shopping tomorrow. I will probably end up with a bit left in both of those budget lines and if so that will go to savings.
• I used money saved since Christmas to pay for my flight($709) and one of our BandB's($342 for 3 nights in Galway) so have no debt so far for my trip. 
• Thankfully this is the time of year when interest earned on RRSPs starts to appear so that will help out with upcoming trip expenses. AND it's the 15th so I can Netfile my tax return today - the $200 refund will go toward purchasing more euros. 
• I have purchased February's Christmas present - a crystal making kit from Michaels for my great-nephew but I have NOT made my charitable donation of $25 yet. I really am squeezing my misc budget this month!! I can do it, I know I can!
• Oh, I just remembered I'm going to see my favourite band next Sunday - Blue Rodeo - but I paid for the ticket in November so there will be no expense for that, except maybe parking.
• My other bills remain pretty much the same: Bell Mobility is $79 monthly, internet is $84 monthly, my insurance has renewed and is the same amount - $270 monthly and Kazi pays $175 of that for her car, hot water tank rental is $34, property taxes went up $6 monthly but the city budget isn't finalized yet so that may change, my condo fees went up by $7 and Netflix remains the same at $8 monthly. The two small increases were covered by my pension raise of $30. 
• I increased my monthly savings automatic transfer from $350 to $400. That will increase again once I start receiving CPP (Canada Pension Plan) hopefully to $900 a month. That'll pay for a few trips!! 
• RSPPs: I have two coming due this month and they are going into my RSP Savings Account. From there I can withdraw $5000 to go into my TFSA (Tax Free Savings Account). Of course the gov't takes 10% right off the top so I'll only receive $4500.  The RRSP interest I receive more than makes up for that otherwise it wouldn't be much of a tax shelter would it? Way back when I was contributing to my RRSPs the adage was "pay now or pay later" so I always contributed the maximum. Now I'm in the "pay later" phase though I am very thankful for all those wonderful refunds (of my own money!!) I received over the years. 

Well, wasn't that an exciting post! I wish you sunshine wherever you are and hope your Monday is a happy one. 

RRIFS or TFSAs

I am at the point now when I can no longer contribute to my RRSPs. For the first time since I was about 12 I have NO EARNED INCOME!! What a lazy a-- I've become eh? 

The last few days I've been going over my RRSP options. There are many different lines of thought and most have to do with whether to let my RRSPs sit and earn interest until I'm 71 at which time the RRSPs would convert to an RRIF and there would be a minimum amount withdrawn and added to my annual income....OR....withdraw so much a year NOW and add to my Tax Free Savings Account or Tax Free GICs. 

The crux of the matter is which option saves me the most in tax dollars? I'm leaning towards starting RRSP withdrawals NOW while my income is at its lowest. Right now I'm just living on my school pension with additional bump ups to my income coming when I start to receive Canada Pension and then Old Age Supplement. If I wait til I'm 71 to start taking money out of a RRIF then I will be pushed up into a higher tax bracket. For the rest of my LIFE!!

On the other hand if I can get my money out of my RRSPs over the next few years and tucked safely away into a TFSA my tax bracket will remain lower, thus paying less in taxes.  We Canadians are currently allowed to put $5,500 per year into a TFSA where it is tax-sheltered forever. I'd like to start removing $5,000 per year from my RRSPs and place it into my TFSA. Of course there is withholding tax when I remove $$ from my RSP which increases based on the amount withdrawn. The tax rate for $5,000 is 10%. So I would receive $4,500. However, at tax time I might see some of that withholding tax come back to me. 

I feel that this is the right way to go. The consensus is that it's best to withdraw RRSPs when your income is at its lowest. Which is now. 

Decisions, decisions...

The Perfect Moment...

Once a week or so the perfect moment occurs....the laundry is done (but not put away yet...shhhhh...don't tell anyone), I've had my hike and fresh air, the cats are asleep, supper doesn't need to be thought about yet, the housework is as done as it's ever going to be, music is playing from my iPod in the background,  and with coffee in hand I can relax to do whatever I want...sweet!

Yes, we were walking into the past today...

this area is within city limits...and in my part of the city!...

not a lot of colour this time of year but beautiful just the same

in an austere sort of way.

So, what to do, what to do...

Well, if you're a numbers geek like I am (and I know that you are!!) then you'll search for an online RRIF calculator and figure how much you'll have to start withdrawing from your RRSPs at age 71. Yup, that's what I did too! Isn't it fun??

It's strange to realize that right now I'm living on far less than what I'll be living on when I turn 71. But let me back up a little...in a year and a half, when I turn 60, I'll start to draw on my Canada Pension Plan (CPP); then at age 65 I'll lose some (around 13% I think) of my CPP but will start getting the OAS (Old Age Supplement) and then at age 71 my RRSPs will convert to an RRIF and that will increase my yearly/monthly income. Isn't it nice to know I still have a few "raises" to look forward to!?! I just better darn well live long enough to reap the benefits of my labours or I'll be some MAD!! It would make more sense if I could access all of my money NOW and then have it gradually reduce until I'm in my 90s. Let me use it while I'm still young enough to enjoy it!! But no...as we all know the government doesn't use common sense...

For 25 years (or more) I've done everything in my power (and made a lot of sacrifices) to max out my RRSP room come tax time. I think only once I had to borrow in order to make my contribution. Eventually I got smart (and started earning enough) and made automatic monthly transfers into my RRSP finally getting ahead of the game. 

I've thought about taking money out of my RRSPs and putting what's left after the taxman takes his share into my TFSA but I read an article that said if you have a choice in paying taxes NOW or in the FUTURE then do it in the future. That makes a lot of sense to me. I'll be in a much better position to pay the taxman at age 71 than I am now. So I'll let the money sit and earn interest for another 13 years and then enjoy the bump in income when I hit 71. I have enough in my TFSA for any emergencies that might arise in the meantime and in only 1.5 years my CPP will kick in. 

If these are my lean years I can't wait until my "fat" years!! 

March Challenge: Take 3!

Thank you Carla for setting up this challenge. The March Take 3 challenge involves deciding on a personal goal (in the area of health/fitness), a decluttering goal and a financial goal. To learn more about this challenge go HERE!

So...let's

Finance Goal:

• Get my taxes done and hopefully get my refund before the end of March. This money has to work hard for me. I am taking Living Rich on the Cheap's advice and buying a nice area rug for my living room that I can take with me to PEI. Sooner or later I will be putting my condo up for sale and a gorgeous area rug in the living room that will set off and protect the new dark bamboo floors will fit the bill. I also have my eye on a tabletop candelabra for the patio area to replace the one HE WHO SHALL NOT BE NAMED took with him when he moved out. I saw one on Amazon that should do the trick. 
• Save $3500+ (rsp interest, part of my tax refund? and payday savings transfers from my paycheques). That will put me within $17,000 of reaching my savings goal by the end of August. I am very determined.

Personal Goal:

• I road my bike 3 times last week. I'm happy with 3 x weekly until such time as I can start riding to work everyday. Right now that seems impossible but I'm sure the snow will all melt by April...May? So I will continue to ride my stationary bike a minimum of 3 x weekly, more if possible.
• This Friday March break begins. I've only been juicing for breakfast due to working so over March break I am going to juice 2-3 x daily since I'll be at home. To help with this I'm going to pick a few new juice recipes and get the shopping done for that by Friday. I want to be in great shape for RETIREMENT!

Decluttering:

• I'm already on top of this one BUT I have a big job for March which is removing the laminate flooring in the basement. I will have to hire a junk removal service to haul it all away. Good riddance!! 
• Remove the wallpaper borders that still remain in 4 rooms during March break so that painting can begin!! 
• Believe it or not I have totally decluttered ALL rooms in my house! BUT when my sister told me how much it was going to cost to move her stuff to PEI I've decided to get rid of whatever I can't fit into my truck - maybe I'll pull a trailer too, haven't decided yet. Or maybe whoever buys my house (could be students since I'm close to both the college and the university) will want/need some furniture. So I'll be selling or giving away what's left and I'll buy new/used/antique once I'm in PEI. As it is I've been living in PEI for 2 months a year and have managed just fine with what I have there. The idea is to live a more simple life and the thought of reducing what I have doesn't bother me in the least.

So that sums up my March goals - we'll see how it goes. I may try to exceed what I've laid out here as an extra challenge to myself since these goals are what I planned to do anyways, challenge or not. 

Thanks Carla for inspiring me to think through my goals!

Scrub a Dub Dub!

Good morning!  It's alternating between sunshine and dark clouds today, pretty breezy too. But all of that is AOK because the temperature must be around 10c!!!! Yeehaw!! Spring has sprung at last! Maybe.....

Ok, we won't dwell on the possibility that Mother Nature is rubbing her hands with glee at the thought of dumping a pile of snow on us again but I CAN DREAM CAN'T I???

Oh dear Lord, please let it be SPRING!

On to business.....

I just found $1,000.00!! Yes, it's true! No I'm not losing my marbles though I know some would argue with that. Here's how - because I'm nice that way - I want to share my wealth-building strategies with you because that's what it's all about right?

OK, here goes.
Step One:  Buy a truck for $5,000.00
Step Two: Take money out of your Line of Credit to pay for it.
Step Three: Think that you are taking out $5,000.00 but really only take out $4,000.00 and use savings to cover the other $1,000.00.
Step Four: Forget Steps 1 through 3.
Step Five: Make a payment of $1250.00 on your Line of Credit and check your balance remaining.
Step Six: Do a HAPPY DANCE when you realize you only have $2750.00 left to pay back instead of $3750.00!!

Easy peasy!  You're welcome!

In other financial news I have purchased the lovely pair of appliances shown below for our PEI home. I'm feeling pretty darn happy that I was able to cross off TWO MUST HAVE items for our retirement abode - Dougie the Dodge  and now a washer and dryer!!!!! They are scheduled to arrive on July 5th!  I am paying for them with my tax refund which should be rolling in by the end of this week.  Dougie the Dodge will be paid off by the end of April and all of my savings in May and June will go into my EMERGENCY FUND (which is currently empty!!) - around $5,000.00.  Then all that I can save between July and December of this year will go towards long term savings - my TFSA and RRSPs.

Aren't they pretty?  

This is how we did laundry for the last two summers. (And of course we will continue to use our clothesline as much as possible to keep our electricity bill down).

Unfortunately I only have pictures of Michael hanging the clean clothing on the line. I don't have pictures of how he cleaned our clothes. Can you guess? YES, IN THE BATHTUB!!! I don't know how I let that photo op go by uncaptured! A half naked Michael, very damp, muscles pumping as he scrubbed and scrubbed....leaning over the tub....

Do you think I can still cancel my appliance order??