Give Me Back My Five Bucks

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This and that

Sorry for the lack of posts (and comments on other blogs) for the past couple of days – the BF and I decided to go camping at the very last second, and all we really had time to do was pack a few bags before we hit the road. We camped at Henry Lake, which is only accessible by driving through logging roads. For those of you familiar with where I live, it was out by the Port Alberni/Mt. Arrowsmith area. We also went exploring a bit and found Peak Lake, which is where we want to go camping next time.

The bad news is it’s only July 15th, and I’ve already blown my $30 dining out budget. Poor planning by the BF and I resulted in eating lunch in Duncan on the way up to camping, and eating lunch in Nanoose on the way back down. Plus, we hit a few dead ends while going through the logging roads, which cost us about 180 KMs, and hours of our time … and gas ain’t cheap! Especially since the BF has a gas guzzling truck.

Today, I filled out the paperwork to switch my RRSP account over to a TD e-Funds RRSP account. That way, I can start depositing my condo down payment money into my RRSP account, and into the same funds I’ve been depositing into my non-registered account for the past few months. I wish I had figured out this whole tax refund/RRSP thing from the start, because now I’m going to have to wait 90 days until I can pull my funds out of my non-reigstered account (in order to avoid the 2% fee). At least I figured it out now, when I only have a few thousand in there.

In other money news, today I transferred just over $800 from my PayPal account (a mixture of PPP and eBay sales) into my chequing account … which should take 5-7 business days to complete. I have one other eBay sale going right now (a band t-shirt that I got at a show), and there’s a small bidding war going on! So far, it’s received 10 15 bids, and is up to $22 $29.86!! Considering I paid $20 for it in 2005, that’s pretty good! :) I also sold my first book on Amazon. In the end, I pocketed about $5 for it. Every little bit counts!

Already thinking about 2007 taxes

Today I did some rough calculations, and because I’ll be working so much this year, I stand to make just shy of $68,000 in taxable income.

According to my 2006 tax return, I am eligible to contribute up to $15,213 to my RRSP in the 2007 tax year.

If I max out my RRSP with the money I’m saving for my condo down payment (and then utilize the First Time Home Buyer’s Plan when I decide to purchase), according to Morningstar.ca’s RRSP contribution calculator, I stand to get a refund back of over $4,000. That money would go straight back into my RRSP portfolio.

That’s a sizable refund!

Like I’ve said in the past, I don’t like the idea of taking money out of my RRSP for any reason. I’m just so worried of having a problem paying it back in the future. That being said, if the money wasn’t in there to begin with, and I’m putting it in there just for tax purposes, perhaps the refund I’ll be getting would be worth the time it would take to pay back. Because let’s face it, it’s highly unlikely I would be able to make $4,000+ in interest over the same amount of time it would take me to pay back the RRSPs.

At any rate, maxing my RRSP this year is definitely something to think about.

You can’t start saving for retirement too early

According to a recent article, only a third of Canadian baby boomers are saving enough to guarantee a comfortable retirement. How scary is that!?

People born in the early to mid-1960’s who are counting on only one kind of savings to fund their retirement will either have to work past the age of 65, or increase their savings to avoid financial hardship.

This article completely hits home because while my mom has a juicy pension plan, my dad doesn’t have much saved up at all. I remember glancing at his RRSP statement last year, and being completely SHOCKED at the amount I saw. It breaks my heart, because he’s almost certainly going to have to be supported by my mom when she retires … and I only hope he has enough to support himself before she reaches the age of retirement.

He only has a high school education, and has been working at the same shop for a very very long time. They don’t offer any sort of retirement plan, and he’s been with them since well before I was born. A few years ago, he had a stroke, and now he makes 30% less than he was making before … making it that much harder for him to save up money.

The article says that it takes $20 of capital to provide $1 of annual pension income, and assuming it takes $23,000 a year to pay for necessary living expenses when retirement comes, it would take almost $500,000 to provide that amount. Yikes!

P.S. I was A MILLISECOND away from snagging that $700 PPP opp this morning! I kept refreshing my screen, and then I saw it drop into my “Available Opportunities” page! I quickly clicked on it, and hit “Take This Opportunity” … but my screen froze up and I got an error message. By the time I was able to refresh the screen, the opp was taken! ARGG!! Nevermind, I actually DID get it. :)

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A beginner's guide for Canadians looking to get their financial life in order. Get great info on budgeting and saving, RRSP's and pensions, investing types, insurance, and where to go for additional resources.

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