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Monday, August 16, 2010

New Baby and New Yearly Goal

frugala and I are pregnant! We formally announced it at our six month wedding anniversary on Saturday so I can talk about it on the blogosphere. With a baby on the way, for the next school year I am going to shift my plans from saving to paying off debt.

I got a new job at the Homework Help centre, which will pay me about $130 per week, and along with tutoring on the side, I should have more disposable cash this year. The plan will be to get my student loans paid off before the baby is born (or at least close to that time).

Right now I save $200 per paycheque and put $500 towards my mortgage and $400 towards my student loans (monthly). Out of my money from the Homework Help, all will go towards my student loans. I should get two raises this year, one from seniority and one from moving up to the highest category. I estimate this will be about $200, so I will take $100 from that. My mortgage will go up to $525 and my savings will go to $275. The shift will be that $75 will go to my RRSP and $200 going to my TFSA. Then every time my TFSA gets to $1100, $1000 will be removed to pay towards a student loan. In this way, lots will be paid off my loans. As well $200 x 26 pays per year is $5200 so I shouldn't get into trouble with the government over the $5000 cap on the TFSA (considering that I have undercontributed for the first two years).

In this way I am still making my regular payments, and the extras are coming out of my TFSA. I will comment on the effectiveness in the upcoming weeks (once it happens in September), as well as the price of having a baby and how the extra work on the side is going. It is a plan anyway...

Monday, August 2, 2010

Net Worth Update - August 1st, 2010

frugala's and my numbers are finally linked, and despite doing two weeks of painting and installing laminate flooring (which costs money), we still ended up okay for our first update.

Every time I get paid (every two weeks), I update my net worth. The idea behind this is that my goals are that my liabilities drop every two weeks, and by tracking them in this way, I am able to get a nice picture of where I stand financially. Its not a perfect balance sheet that I have (because of student loans I have a negative net worth), but the progress is what I am looking for.

- down $15,682.92 from July 17th, 2010

frugala donated some of her assets to remove one of my loans, which is why this number looks really bad. The theory is that I will be taking on all of the bills myself in exchange instead of splitting them down the middle which has happened in the past.

- better $15,775.32 from July 17th, 2010

Once again, with a loan paid off, this looks very nice. Next week will have more realistic numbers.

- better $92.40 from July 17th, 2010

With my loan being charged a much higher interest rate than what frugala was earning on her GIC, this will naturally improve more. A nice start though!

The last thing I am going to track is the value of the TSX. I have some asset allocation goals that are dependent on the value of the TSX.

TSX Graph
Current Value: 11,713.43
Highest Value in Last 2 Years: 13771.25 (August 29th, 2008)

We are exactly two years from the high within the two years. The market hasn't been over 12,000 consistently since September, 2008. For these purposes, the stock market was about 13000 in mid September 2008, so I will either rebalance when the TSX hits 13000 or 12500 after September (once I get my raise).