Goals for 2010 and 2011

Happy New Year!  I'm here, let's see if I can keep it up.  I wanted to take a look at my goals for 2010 and see how I did with them, as well as set out some more goals for 2011.

Here were my goals for 2010, along with how I did:

 

Financial Goals

 

Pay down $1,300 directly in credit card debt. Pay down $1,500 in other debt. Pay down $1,080 in regular credit card payments. Total: $3,880. Round up to $3,900. Even with paying down as much and as often as possible, I'm basically $3,000 deeper in credit card debt.  I paid down $1,375 in other debt.  I made almost all the regular credit card payments.
Open a TFSA and put $1,300 into it. I opened an account and put $1,200 into it.
Put a minimum of $520 into the Emergency Fund. I pretty much cleaned out my Emergency Fund when I went to the US for a wedding but there's $1,236.72 in it at the moment.
Put a minimum of $520 into my RRSP. I put $350 into my RRSP.
Keep putting money into my set aside accounts, rural credit union account, etc. I was inconsistent with this, though better than in any recent years.
Keep current on all my bills. Not always.
Come up with $3,000 for Dear Child’s dental surgery. Well, we paid for it although a good chunk of that is the increase on the credit card.
Pay off both Home Depot payment plans on time. Done!

 

Rural House Goals

 

Plan out and create a garden in the front of the house (south west side of driveway area). Nope.
Plant lavender border. Nope.
Go to house 2x per month in summer. Nope.

Finish new floor in master bedroom. Nope.

 

Physical Goals

 

Get weight down to 120. Nope, still sitting at 132, but some of that is now muscle.  Not all though....
Walk for at least a half hour per day (or use elliptical for same length of time). No way!

So, I won some and I lost some.  What are my goals for 2011?

Financial Goals

1. Pay off all our outstanding debt.  Not as insane as it sounds, as we are expecting a small inheritance shortly.
2. Put $1,300 into the TFSA this year.
3. Increase the Emergency Fund by at least $520.
4. Put a minimum of $520 into my RRSP.
5. Put the set-aside money into my accounts regularly.
6. Get current and stay current on all my bills.

Rural House Goals

1. Go to the house a minimum of once per month when the weather is decent.
2. Build the bedframes that have been there for a year now!
3. Step up the search for land once we have the money for a down payment.

Physical Goals

1. Go out to exercise at least once a week.
2. Exercise at home every day that I don't exercise elsewhere.

 Let's see how I do with these goals.  I think I learned some valuable lessons last year and have developed at least somewhat better habits.  I'm also taking better care of myself, which is really just as important as getting my financial life in order.

 

 

 

Signs of Life

Yes, I am still here.  I'm just very, very busy.  And tired.  And bored or frustrated with certain aspects of my life.

I got through all the Jewish Holidays.  I went off to the US to the wedding I talked about before and had a fabulous time.  And I've been exercising pretty well twice a week.

On the other hand, our car was totalled recently.  We weren't in it; a family member was cut off on the freeway.  The family member is okay but we've spent the past while arguing with ICBC over the value of the car.  They did come up from their initial, offensive, offer but we're probably still out about $2,000 over what we'd have to spend to replace the car.

And more things have gone wrong with the house.  If anybody tells you old houses are money pits, believe them!  A leak in the main bathroom upstairs led to a gigantic hole in our kitchen ceiling and another, smaller one.  Our upper cabinets are mostly down (with the contents in boxes) and the bakers rack I keep a lot of our other kitchen stuff on is sitting in the living room.  Basically, the living room is unusable.  We pass through it to the kitchen, bath and our daughter's room.

The floor in the bathroom and through most of the kitchen is laid and part of it is grouted.  We should get our new toilet put in within anywhere from a day to a week, depending on how busy our son-in-law is and how fast he gets around to both it and to putting the vanity back in the bathroom (with the new top on it).  The thought that we might finally have a fully functioning bathroom is exciting but seems slightly unreal.  It will be wonderful not to have to go upstairs to use the facilities there in the middle of the night, however.  I'm really looking forward to that!

Once they finish the work in the bathroom upstairs comes the messy part.  The new drywall will have to be taped, mudded and sanded until a thick layer of white powder covers pretty much everything in the house (including, no doubt, my lungs).  After that the new upper cupboards and new range hood can go up.  If that happens before Pesach I'll be thrillled.

And then there's money.  I'm so messed up there.  My credit card is maxed.  Actually, it was over limit until a few days ago.  Now it's exactly at the limit and I have to make another payment before they add the interest or that will put me over again.  I skipped a couple of transfers to my TFSA, although I still have over $1,000 in there.  And I have a huge cell bill from my trip to the US.  I tried to use it as little as possible but still incurred over $80 in long distance or roaming charges.  A bunch of those calls were incoming ones from my hubby or daughter, so I couldn't exactly refuse to pick up!

What next?  Well, I'm pretty well broke until Wednesday and I'll probably be broke again almost immediately afterwards, once I pay the various bills that absolutely, positively have to be paid.  But we'll technically have money sometime this week, because we'll get the cheque from ICBC.  We still have to decide what we're going to do about a new car.  We have to decide new, near new or very used.  We're still debating over what kind of car to get (since we have to replace it, the only sensible thing to do is to buy one this time that will fit all four kids in their car or booster seats, plus at least 2 adults).  And we have to decide if we're going to do it now or wait until my hubby receives money from his late mother's estate (probably a few months away).

School's Out...For Summer!

Yesterday was the last day of school.  This summer I'm lucky, in that my Eldest Daughter is home on maternity leave.  That means Dear Child will hang out with her.  (Not sure that Eldest Daughter considers herself lucky, since that leaves her with 4 kids every day, and 5 if my Number One Son's daughter comes too, as she did some of the time last summer.)

Next year will be a much bigger financial burden for all of us, as she'll be back at work and all the girls will have to go to day camp right through the summer.  As it is, we are putting them in a couple of sessions of swimming lessons (necessitating me leaving work to pick up and drive everybody to and fro).  The lessons are 4 days per week for 2 weeks (but only 1/2 an hour per day) and we hope that the sustained amount of pool time will enable everybody to move up at least one level.  Last session (which was 8 classes once a week) nobody passed, although they all made progress.

DC will go to day camp for 2 weeks this year too, as my granddaughters' other grandparents are taking them out of town for 2 weeks.  That will give my daughter the relative quiet of only having her nursing baby at home.

Yesterday was payday. I paid some stuff then and some more this morning.  Right now I'm pleased to say that I'm current on all my bills (paid the water today) and that I have $651.14 in my TFSA, right on track for the year.  Property taxes for the rural house are due next week.  I have to check, but I think I have enough in the rural credit union to pay them.  Yay, me!

I went away to the house last weekend and spent some money, money on myself (gasp!) as well as gas.  But I just have the $50 odd dollars I charged for gas on the way back to pay back still.  And I made the regular $90 payment on the credit card anyway.

So, I have to pay for swimming lessons and I'm going to start some exercise stuff of my own that I'll also have to pay for.  And I only have about $150 left in my chequing account for food, etc. for the next 2 weeks.  But all in all, I'm not doing too badly.  And my hubby should be transferring some money over to me at month end.

Shevy, Reappearing

Interesting, no?  One minute I'm here, if a little busy with Life.  The next, nothing.  Two months plus of nothing.

And the answer is: I had a little crisis.  I don't quite know how to describe it.  Of confidence.  Of identity.  Of how I see myself.  Of how others see me.

What brought this on?  The silliest thing, something totally innocent.  Praise.

I've known pretty much forever that I'm not great with criticism.  Who knew a casual line of praise could totally undo me?  Well, certainly not my blogging friend who emailed me a short note that included the following line:

"you are so good at staying committed to your goals".

I read it and a voice from deep inside said, "You don't deserve that praise."  And I quietly fell apart.  Couldn't post.  Couldn't hide that truth.  Couldn't speak it aloud.  And, as time went by, things just got worse and worse.

I originally felt unworthy of praise because I'd just come through the whole financial devastation that is Passover.  I'd charged a lot of food, matzo, wine, you name it on the credit card for Passover.  I'd had to pay for Dog to go on his annual Pesach vacation.  And I was starting to fall a little behind on certain things, while trying to pay off Dear Child's dental surgery.  It seemed ludicrous to say that, because I was diverting $50 a pay period into my Tax Free Savings Account or $10 per week into my Baby Emergency Fund, I was staying committed to my goals.  There were so many places where I was bleeding money.

In the interim, things have just gotten worse and worse (as I said).  I bought the laminate flooring for Dear Child's room (and my Son-in-Law installed it!).  More money, but money well spent.  DC's room is finished except for baseboards.  I also bought four new upper cupboards, IKEA ones, about the week before Passover (because I wanted pantry shelves on which to put my food).  I spent about $500.  If they were in and being used, I probably would also consider it money well spent.  They're sitting in their boxes in my foyer.  Apparently, if (at some point) I put them together my Son-in-Law will demo the existing (mostly broken and unusable) cupboards and hang the new ones.

I started having terrible tooth pain and ended up with a major root canal that now needs to be finished off with a crown.  And my husband has just had pretty much the same thing.  Net result, big increase in the credit card balance.

Sigh.

Despite paying off as much as possible pretty much every payday we owe way more than we did in March or April.  I have a spreadsheet that tracks all the additional charges we've made to the card and when I've made each payment (in addition to the $90 per pay period that is our normal payment).

And I have continued to put money into both the Emergency Fund and the TFSA, as well as restarted deposits to my RRSP.  It just seems like such a drop in the bucket compared to the other.

So, that's my story.  I'm going to try to get back to writing here though, because (for all the embarrassment of having to admit all this) I find it valuable.

Thinking About TFSAs

I just wrote about my TFSA last week here on my blog and then I got into talking about them over on Trent's blog too.  In fact, I had to deal with a commenter who both twisted what I said and told everybody I was wrong!  Uh, no.  Actually I wasn't.

In case you don't want to go over there and poke around the comments, here's the story.  Trent responded to someone who asked him about opening a Roth IRA and using it as an Emergency Fund.  He was against it, because the Roth has a $5,000/yr limit that expires at the end of each year (instead of being carried forward like a TFSA).  Trent's point was that if you deposit $5k and then use it for an emergency you can't put it back.  You've lost that year's contribution and that $5k is gone from your retirement account forever.

Several others pointed out that you might not have an emergency, and then you'd be ahead whereas if you had the emergency you wouldn't be any worse off than if you hadn't opened a Roth and had just put the money in an Emergency Fund.  I chimed in to talk about how a Roth and a TFSA are similar but different, and how you can take money out and put it back into a TFSA.

I used the example of someone with a $5,000 contribution limit depositing $2,500 then withdrawing $2,000 for an emergency.  I said this person could replace the $2k this year.

Kevin then jumped in to say:

In the interest of avoiding any confusion, I just wanted to correct Shevy’s inaccurate information regarding the Canadian TFSA accounts. Some of his information is completely wrong.


The TFSA does indeed have a $5,000/year contribution limit, and any gains in the account are tax-free, like a Roth IRA. Contributions are not tax-deductible. Shevy is correct that you can take money out, without penalty. Where his information goes off the rails, however, is his suggestion that you have to put the money back in that same year. In fact, it’s exactly the opposite. You CAN’T re-contribute the money that same year. You can put it back, but you have to wait until the next year to do so. Money you withdraw is added to next year’s contribution limit. Unused contribution room rolls forward.

Thus, to correct Shevy’s example, say you contributed $2,500 to your TFSA in year 1, then had an emergency that required you to take out $2,000. Assuming you don’t do anything else in year 1, then next year, your limit will be $9,500 ($2,500 unused contribution room from year 1, plus the $2,000 you took out in year 1, plus your new, $5,000 limit for year 2).

So, of course, I went back to correct all of his errors, starting with where he mistook me for a guy!

First of all, there's a world of difference between being able to do something and being required to do it.  I never said the person had to replace the money that same year but they could if they wanted to.  Why?  Because the person still had enough contribution room to be able to do it.  In my example the person would have used $4,500 out of his or her $5,000 contribution room (and would have had $2,500 in the account at the end of the year).  There are lots of good reasons for wanting to put the money back as soon as possible, interest being only one.  Perhaps the person had to pay for something and then got reimbursed by insurance.  So it really should go back in and, if it doesn't, maybe it will end up getting spent on something else.  It's a way of focusing on savings and making them a priority.

Kevin is only right that you can't repay the money in the case where you've already used up all your contribution room.  For example, if you put $400/mo into your TFSA and then have an emergency in October that costs $2,000 you won't be able to repay it until next year.  Why?  In October you have $4,000 in the account and you have another $800 that is scheduled to go in over the next 2 months.  If you put the $2,000 in you would be over the limit for the year by $1,000 right away and by $1,800 by the end of the year.  CRA charges 1% tax per month on the overlimit amount so that's a very bad idea.

You could put $200 back (bringing you right up to the $5,000 limit) and put the other $1,800 back at the beginning of the next calendar year or you could just wait until January to redeposit the whole $2,000.  In January there's another $5,000 limit, plus anything you didn't use from a previous year, plus the amount of any withdrawal you made.  So, every year the amount people can have in their TFSAs grows by $5,000 and in 10 years time everybody will be entitled to have $50,000 in their account (regardless of how much they actually deposited or withdrew during that decade).

The thing is, how many people are really fully funding their TFSAs?  In fact, how many people even opened one in 2009 when they first became available?  As I mentioned last week, I'm certainly not fully funding mine with $50 per pay period, especially when you consider that I'm one of the ones who didn't open the account until 2010 (so my contribution limit for this year is $10,000).  I think a lot of people who are struggling aren't able to fully fund anything, whether it's 18% to their RRSP or $5,000 to a TFSA or whatever the current maximum to receive the full government match is in an RESP, or even the 1/3/6 or more months we're all encouraged to have in an Emergency Fund.

So what's an average Joe or Jane to do in this circumstance?  I think the first thing is to start paying down debt.  Then open a TFSA and put whatever you can in there.  It could be $10 per week or $416.66 per month or anywhere in between.  If you have a baby, open an RESP right away and start putting something into it.  I pay $50/month into an RESP.  If you've fully funded your TFSA for the year and you have contribution room left over from a previous year, I'd keep going with that.  Otherwise you should start a separate Emergency Fund.  Once there's $1,000 in the Emergency Fund (and your TFSA is still fully funded) you can split the deposits that were going into the EF in half.  Half still goes into the EF, the rest can go into an RRSP.  As you finish paying off each debt, snowball it into the remaining debt.  When you have no debt other than mortgage you can split the debt repayment money between paying down principal and adding to your RRSP (up to your contribution limit, of course).

Sounds so easy, doesn't it?  But I'm still in the very early stages.  I'm paying down debt.  I have a small TFSA and a smaller Emergency Fund.  I have an RESP for my daughter.  I have RRSPs but I'm not putting anything into them at this point in time.  The money in them is still earning interest though.  I prefer the TFSA to the RRSP because of the flexibility inherent in it but I think each has a place in my retirement plans.

February Goal Review and March Goals

Yes, it is a new month and yesterday was payday.  Sounds like a good time to see how I did with my February goals and maybe set some new ones for March.

First of all, what were my goals for February?
1. Pay for Dear Child's birthday party.
2. Pay at least $229.75 to MasterCard
3. Stay current with all the other bills.
4. Get the treatment plan for DC's dental surgery and figure out how to pay for that.
5. Make arrangements for Dog's Passover vacation and pay at least $100 towards that.

Those sounded pretty reasonable.  How did I do?

1. Dear Child's party was held at the community centre with an hour in the gym and then food upstairs.  Given that my Eldest Daughter's baby was overdue at that point and we were doing renovations both upstairs and down at home, it was the only logical choice.  She didn't have a party the previous year and had been promised a nice one this year.  I charged the party on my MasterCard and paid for part of it in February.  I finished paying for it today.
2. I made a number of payments to MasterCard in February, as well as at the beginning of March.  I paid both the $229.75 and $90 (my regular payment) on 17 Feb, then paid $62.50 towards the cost of the party on  the 22nd or 23rd.  I paid another $90 yesterday and $400 today.
3. I am current on all the usual bills like internet, water, credit card, cell, set-asides into my credit union account, ING emergency fund, etc.  It feels good.
4. Dear Child had her surgery and I charged the first of 3 monthly payments for it to my MasterCard at the beginning of the week when the surgery took place.  The total bill was a little under $1,800 and each payment is between $500 and $600.  $200 of the $400 I paid today was towards the dental charge.  I'll have more to put towards it when my hubby gets paid again.  I want to pay each dental charge off before I charge the next one.
5. I wrote to reserve Dog's place today and will send a cheque for $100 once I hear back.

All in all, I did very well!  Now, what do I want to choose as goals for March (bearing in mind that Passover falls at the end of March this year and is both hectic and expensive).  Let's keep it very simple.

1. Stay current on my bills this month.
2. Pay at least half of the cost of Dog's vacation ahead of time.
3. Pay down the cost of the first dental charge before the end of March.

I could add more, but I know just how much of a challenge those will be.

In addition, I'm on track with my TFSA.  I've been putting in $50 each payday and it's currently sitting at $250.18.  I've also got an automatic transfer of $10/week to my ING Emergency Fund.  There's $251.56 in there as of today, close to half the $520 I listed as a goal for the year.  Yes, I realize it's not enough but the money in the TFSA can also be taken out for any reason at any time, so it can also function as a sort of emergency fund too.  I'll be happier when I have at least $1,000 put away between the two funds but right now I'm just trying to find some kind of balance and form regular habits.

Review Day & February Goals

It was Wednesday.  It was payday.  And my Hubby had transferred money to my account.  Guess what I did this morning before breakfast?  I paid bills, of course!

That made me think about my goals for the year.  How am I doing with those?  What should I work on this month?

Overall, I'm doing well with the money.  Both the Home Depot payment plans are history.  That's just over $1,500 worth of debt we've paid off between about November and now.  I have post-dated cheques for another debt we're chewing away at and I'm on track with that.  I've opened a TFSA and there's already $150 in it.  I have $10/week going into my ING Emergency Fund.  No, that's not a lot but it's going in there nice and regular.  The IKEA account is all paid off and can no longer be used because they changed companies that provide the credit card services.  As of today, I think I'm current on all my bills.  The one thing I still need to do for this pay period is to go to the credit union, take out $45 in cash and then deposit it into my other credit union via the ATM.  That's the set-aside money each payday for my electric bill, garbage, property taxes and fuel oil at our rural home.  Next winter, when it's time for a fuel oil delivery, I'll have the money all saved up.

On the other hand, I've been charging stuff for the city house on my MasterCard.  In fact, Capital One put a fraud hold on my card after the third time I used it in 2 days!  What did I buy?  I spent $20.11 at IKEA on 4 D cell batteries, 10 votive candle holders and a pair of sheer drapes (2 panels).  I bought $129.37 worth of DriCore (including a levelling kit) at one Home Depot and, the next day at a different Home Depot, I spent $229.75 on tiles for the foyer and 3rd bedroom, as well as concealing film for the bedroom windows, a closet pole that will fit Dear Child's closet at the rural house (it's an odd size) and a grouting sponge.  Bad?  Not really.  I had to buy the reno supplies before the end of January to be able to cash in on the home renovation tax credit.  And I needed the supplies to finish important projects that will make our part of the house a lot better looking.  Plus, I've paid down $149.48 of that already today.

The fraud thing was actually pretty funny.  I've barely used the card over the past year or more, so 3 transactions in 2 days was obviously suspicious!  I got that all straightened out with a quick phone call.

What are my goals for February?
1. Pay for Dear Child's birthday party.
2. Pay at least $229.75 to MasterCard
3. Stay current with all the other bills.
4. Get the treatment plan for DC's dental surgery and figure out how to pay for that.
5. Make arrangements for Dog's Passover vacation and pay at least $100 towards that.

Got any goals for February that you'd like to share?

Steps Forward and Back

I had some ambitious goals for 2010.  My first payday for the year was yesterday.  How am I doing?

First of all, I took one fairly big step backwards at the end of December when we were going away to our rural house.  I bought discontinued bedframes at IKEA for $170.98 and charged it on my MasterCard.  Yes, the card I've barely used in over a year, the same card that just increased my credit limit by $3,000.  I'm really glad I bought them though.  We've been sleeping on mattresses on the floor at the house and it's not that comfy.  Having the bedframes will really help.  We got them to the house in our car by putting down half the back seat and running them up between the front seats.  There wasn't time while we were there to put them together but I hope to do them on the next trip.

Then we were at the house for the weekend and I charged groceries and birthday presents for Dear Child to the tune of $159.14.  I did have money left in my chequing account but I thought that a cheque I'd written for $162 hadn't cleared yet.  I didn't want to end up bouncing a cheque, so I charged it all.  Turns out, luckily, that the cheque had cleared and I just hadn't noticed.

So, the net result was that my card balance went up from $5,868.52 to (gulp) $6,198.64, almost $200 over my old limit and $330.12 higher in total.  And it will be worse in a couple of days when the interest hits my account.

However, there is also good news on the horizon.  First of all, I got a raise!  Okay, it's not huge, just 2% but there were no raises last year so this is good.  I've paid the $159.14, plus paid the water and made a payment to Home Depot. Oh! Oh, oh, oh!!!! I almost forgot!  I paid off the first Home Depot payment plan on December 31st!  That's one of my goals for the year (because it was due January 1st).

I also took a big step toward another one of my goals today.  I had to go in to the credit union to activate my new, permanent debit card (the temporary card they gave me when my card was skimmed was only good for 30 days) so I opened my Tax Free Savings Account at the same time and put $50 into it.  My goal this year is to get it up to $1,300 by the end of the year.  Yes, I know that you can put in $5,000 per year (and that my eligible amount for this year is $10,000 because unused amounts carry forward from year to year) but let's be realistic.  It'll be a stretch to make my goal.  There's no way I'd ever be able to put $416.66 away each month, unless I did it at the expense of paying down debt.  How dumb would that be?  Ooh, I'll earn maybe 2% on $5,000 of savings while paying 17% on $6,000 worth of debt.  Don't think so.  On the other hand, having an extra grand or so in an account that can be accessed if I need it is a good add-on to the ever-underfunded Emergency Fund.

While I was at the credit union I deposited cash to my rural credit union account (via the ATM).  Why cash?  Well, I pay to order cheques and they take a minimum of 5 business days to clear from the one credit union to the other.  Cash should clear once the amount of the deposit is verified the next business day.  The cash was for all the rural set-asides I've created.  That includes the electric bill, property tax, garbage pickup and fuel oil.  When next December rolls around and I need another tank of fuel oil the money will all be there.  How grown up and responsible is that?

So, all in all, I'm doing fairly well in the financial area.  And I've been walking for half an hour 5 days out of the past 7 (yet another goal).

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.