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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...

2 comments:

  1. why the contribution to the TFSA? why not just put it directly on your loans?

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  2. Thank you for this useful post!

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