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I've never been here before. What to do? What to do?

December 28th, 2013 at 10:30 am

What an interesting situation to be in. Debt free. And extra income coming in. I'm all set for January in that all of my extra cash is going to Christmas debt on my Amex. That will be paid off by February 1st. Off the top of my head I think the first action will be to put some funds into my RRSP (Canadian retirement savings plan) to I can avoid tax on my extra income from 2013. I have until the end of February. Then I need to max out my EF. I just need a bit of time to get my head around having extra money. I have a family wedding coming up. And I'm thinking of changing jobs. I have a short term venture that will bring in a lot of money but will only work for a few years. Lots to think about. Any suggestions are welcome.

3 Responses to “I've never been here before. What to do? What to do?”

  1. MonkeyMama Says:

    I would just continue to save the money you were throwing at debt (plus the extra). Reminds me the advice that you should make no "big money decisions" immediately when you come into a windfall. The general advice is to wait 6 months before any big decisions.

    I am sad to watch so many bloggers get back into debt the second they get out. It just seems like a general vicious cycle. The best way to beat the cycle is to be aware of it. I think why the advice above came first to my mind. Don't do anything rash, and take some time to think it through. Time makes things clearer.

    Many Congrats! You will eventually get more used to it, and you don't need to have all the answers today.

  2. snafu Says:

    How lovely to start a New Year debt free. Good on you!

    I suggest noting daily spends for the month of January. It's really helpful to point out unrecognized/unacknowledged spending. Do you give yourself an 'allowance' for personal care? When the sum is spent the spending stops until the next pay cycle.

    Working back from date of family wedding, what can you anticipate as costs like shower gifts/wedding gift, your apparel, will DSs attend, host visitors if local/travel & accommodation if necessary.

    How much do you have open for RRSP noted on your 2012 Notice of Assessment. Many of us fund our RRSP contribution by working out how much we save in tax as a result of the contribution as a starting point. We've just divided our 'allowable' by pay cycles and make contributions like it was a regular bill no different than electric.

    Have you considered a TFSA [Tax Free Savings Account] for parking money 'meanwhile.'

    Long term...if you expect to be an empty nester in 2014, is it your long term plan to remain in the family home or downsize? This takes a lot of thinking, planning and an incredible amount of work. Perhaps join us on the De-clutter thread if you are looking after stuff you no longer use, need, love or serves you. You might consider selling, re-gifting, donating items in good condition and trashing those damaged, no longer working, too out of style, unknown etc.

    ...just some unedited thoughts

  3. wowitsawonderfullife Says:

    Very thoughtful responses. Thank you both. Monkey Mamma, I have several places I can put extra cash (EF and retirement) but in addition we did come into a windfall and so your advise is particularly timely. We've known about it for about 4 months and we've changed our minds about where it's going several times. We're settling on two ideas. Thanks for the reminder.
    Snafu, I created a time line today as a result of your response, particularly as it relates to the wedding. And I did a 5 month penny by penny assessment in early 2013 so I feel my budgeting is sound. Having been under employed for 5 years I have a whack of room to contribute to my RRSP - not remotely close to doing my TFSA top up. And finally, yes! I am decluttering. I started on the 26th of December. My home is 40% crap. Another 20% belongs to the boys. I'm not looking to downsizing for another 7 years. In the mean time I just need to get rid of this stuff. I'm reading the Happiness Project and she did a great clutter summary. I think I'm going to have to donate rather than freecycle or sell. Just way to much stuff!

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