For the Tax-Free Savings Account, the ceiling is $5,000 a year, and it is cumulative! Because the plan started last year, that means this year you could contribute up to $10,000 if you didn't contribute last year. Also the plan limits are inflation adjusted, so eventually the cap will be higher than $5,000 (they will be rounded to the nearest $500).
As with RRSPs, always good to pay attention to whatever return you are getting too. You can diversify the portfolio of a TSA.
So after the credit cards, the car & the house is paid for, how about you? Set aside money for your retirement! God, I DO NOT want to work till I am 70! Budget fun money for your self. When we both had jobs we got $100 a month each (Mine went to library book fines, usually less that $1 a month-LOL- so I had a lot of money saved up!) We use the envelope system. Each "bill" gets an envelope & when that money is gone, it's gone until next month. Save up about 6 months worth of expenses & then start throwing money into your future. In the US- Roth IRA's (up to $5k a year & tax free) & use your company IRA up to the amount they match. Once you can put a realistic picture in your head to match your goals, it will be SO easy to save, save, save! Once we are both re-employed we will start saving again for about 100 acres in TN. We found photos of properties that we would want & that keeps us motivated to work hard & save hard. Good luck girl! -Michelle in FL
If you live in Canada I would suggest investing in the new Tax Free Savings Account. You can contribute as low or as high as you choose every month. You have the option to use the money if it is necessary without penalty. You can hold back a payment if it is necessary. You are not charged taxes on the interest and you are not charged taxes on withdrawl. Don't quote me on withdrawl but I'm sure that is what the banker told me. You can save up to $10K.
Another option is investing in mutual funds and set it up as a retirement fund. You can set up mutual funds as a monthly deposit.
What I'd suggest is talking with your credit counsellor (if you have one, I have one with my debt consolidation repayment plan) about options that are avaiable to you. If you don't have a counsellor, set up a meeting with your bank and discuss options. That way you can see what options you have before the repayment is complete and be set up once you are debt free.
Congrats on the hard work to being debt free. I have 1.5yrs left on my plan. Like you it has been tight living but very much worth it.
If you have direct deposit for your paycheck, open up a savings account if you don't already have one, and put money in that way. That is what I do and my savings is there if I need it, which is most of the time lately. I try to look at it is that the money "is not there" so I don't spend it if I don't have to.
Hello & Welcome! Congratulations on digging yourself out of the debt hole! I hope someone comes in with some good advice for you on a savings plan for you after you are debt free. I have no experience in savings and struggle just to make ends meet. But, if I did have the extra income, I think I would have a set amount be automatically deducted from my paycheck to go straight to an IRA or similar account. You are young enough that a tidy sum would be available for you when you were ready to retire. I would also set up an emergency fund and contribute to it each month as you never know when it might be needed. Good Luck & glad you are on the team with us!
Move on from the past. Don't fret about the future. Enjoy today! Linda-Missouri (CST)
current weight: 165.0
Fitness Minutes: (6,304) Posts: 306 5/31/10 5:48 P
I am 30 years old, no kids and I got divorced about 5 years ago. In the divorce I got the house and the car that was not paid off along with all the utility bills and about $20,000 in credit card debt. I have a good job but at the time I was seriously struggling so I had to contact a debt consolidation agency. The past 5 years have been the hardest of my life, there were times I was so poor that other people had to feed me. However, I am down to my last $4,000 and should be debt free within 6-7 months and that is super exciting. I really wouldn't change my experience for anything, I have learned to live within my means and I have no need for credit cards. I am concerned that once out of debt I will start to spend all my free money instead of saving because I have gone without for so long. I'm working on trying to stop my bad habits of using spending and eating to make myself feel better. Any suggestions or advice is appreciated! I'm so glad to have found this team!
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