Microgoals Revisited

I put up a sidebar with my microgoals some time ago in an attempt to keep myself on track. So, how am I doing?

In some categories I'm getting some things done. In others, I'm seeing things sit there for an embarrassingly long period of time. (Notice that I haven't caught up on the classwork I missed the first couple of weeks of class? Or, how about the bill I still haven't paid?) But that's the point. I'm supposed to be embarrassed by things like that so I get off my tushy and actually do them! (My excuse is that there have been a lot of holiday days this past month or so, where we can't write or handle money, but that excuse won't fly any more.)

Other things aren't really moving forward, but that's because I have some kind of decision to make. I haven't opened the ING sub-account for the wine course because I'm looking at the new Tax Free Savings Account that is coming in at the beginning of January and wondering about the value of rolling all my subaccounts over into that.

Basically, the TFSA is an account that you can put $5,000 into per year and the interest is tax-free. The nifty thing about it is that you can withdraw the money at any time and for apparently any purpose without incurring a penalty! And, any money you take out this year gets added to your $5,000 contribution room for next year. For example, if you have the maximum in your TFSA for 2009 and you withdraw $2,000 of that in November 2009 you can turn around and put $7,000 in during 2010! You can also roll over any unused contribution room to a later year. So, if you put in $5,000 in 2009 and then had a bad year in 2010, where you couldn't contribute at all, you could put in up to $10,000 in 2011.

I need to get a little more information about how it works if you deposit monthly (instead of putting the maximum in at the beginning of the year) and take out money some months later. Can you continue with your monthly deposits this year or not? I think you can, so long as the money you deposit doesn't exceed $5,000 (including the initial deposit of the money that was later withdrawn) in that calendar year. But I still want to confirm that.

A lot of people have been talking about the TFSA as an additional type of retirement plan, but I don't see why I can't toss my emergency fund, my vacation pay and my other set-aside money into a TFSA and then just pull out the money as I need it. The only drawback would seem to be that I'd then have to keep track of just how much of the money belonged to which category. Right now, with sub-accounts, I just log on and can see how much I have in my emergency fund at a glance. I don't have to do math.

As I say, I'm still deciding.