What if THIS is it?

I have a ‘runners world’ daily calendar on my desk, given to me as a gift. Every day I’m in the office, I’ll rip off the previous day(s) page and read the next.

Every now and then one of the pages will have a quote or thought that sticks with me. These pages end up tacked up on my office wall with the intent to review the thought later.

One of the first to get the honour was this:

“Ask any athlete, we all hurt at times”Jackie Joyner-Kersee

I identified  at the time because I was diving deep into some long-distance training during some pretty crappy weather. Sometimes it’s good to know that even the elites are suffering the same fate.

I have just 3 others on my wall, two are haunting me:

“Lord, make me so uncomfortable that I will do the very thing I fear”Ruby Dee

and

“A sobering thought: what if, at this very moment, I am living up to my full potential?”- Jane Wagner

Now that I write them, they must be related. I KNOW that I am not living up to my full potential, and that’s uncomfortable. At what point will my lack of comfort push me to do what I fear?

I work hard, and do more than what is asked or expected of me. But this better not be it. I need to feel that my footprint is going to be deeper, that my impact will last just a little longer than I will on this earth.

A mid-life crisis? Maybe.

Or maybe I’m just living life with a little more thought.

So, today I woke up and thought ‘I can do a little more’. More is making time for a webinar tonight. More is pushing myself just a little harder on today’s run. More is taking time to listen to others, rather than preparing my answer while they’re talking. More is sticking to the budget so that the long term financial plan gives me the time I’m dreaming of to do…well, more.

What drives you towards your goals? What makes you get up and do it again…and again…and again?

 

 

Tax Free Savings Accounts-an introduction

If you’re not up for some Monday education, look away now. I’m working to be able to simply explain our retirement options up here in the great white north, for my benefit and maybe yours 🙂

Let’s start with TFSA’s. I like ’em, and think you should to.

TFSA – Tax Free Savings Accounts – are a device?…tool?…product, maybe? Devised by the CRA in 2009 (Canada Revenue Agency – my simple mind does not like their name because I’ve never received any revenue from them.)

The TFSA program began in 2009. I wasn’t in Canada at that time, so it was alien to me when I got back. Basically, it’s a way to set money aside tax-free throughout your lifetime. You don’t need any income to put cash away, and as a result contributions to a TFSA are not deductible for income tax purposes like they are with an RRSP (Registered Retirement Savings Plan). Any amount contributed as well as any income earned in the account (for example, investment income and capital gains) is generally tax-free, even when it is withdrawn – yep! Withdraw the funds at ANY time and don’t pay any tax.

Did I stutter?! No tax on principal, no tax on the interest, and not tax on the withdrawal! It’s a beautiful thing! For a more in depth look on withdrawing, check out 2 cents’ article here

Here’s the catch -you can’t put ALL your money into a TFSA. The amount you can put into the account has an annual maximum,  and that maximum has changed over time. You can, however, accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA.

This is good news for me, since I haven’t used this tool….yet 😉

The annual TFSA dollar limit for the years 2009, 2010, 2011 and 2012 was $5,000.

The annual TFSA dollar limit for the years 2013 and 2014 was $5,500.

The annual TFSA dollar limit for 2015 is $10,000

We may have a good lookin’ prime minister these days, but his appeal is a little duller when you learn that the 2016 TFSA dollar limit has been reduced to $5500 again.

Since I wasn’t resident in Canada for any of 2009, I don’t get to count that year against my contribution room. But, even though I only arrived back into Canada half-way through 2010 I DO get to count all of that. Awesome.

So:

$5K x 2010, 2011, 2012= $15k

PLUS

$5.5K x 2013, 2014 and 2016 = $16.5k

PLUS
$10K x 2015 = $10k

Total – $41,500 worth of TFSA contribution room! Looks like I have a place to put my (eventual) investment cash 🙂

My next task? Decide on the structure of the TFSA since a TFSA can be structured as a simple savings account or as an investment account. A TFSA is generally permitted to hold the same investments allowed in an RRSP—including cash, term investments, mutual funds and individual securities such as stocks and bonds.

Did you learn something? Do you have your TFSA set up yet? No? DO IT!

Next time, we’ll take a look at where to put that cash, unless of course you have a magic land of amazing interest that you’ll share with me.

 

 

 

Reverse Retirement revisited

Since returning to Canada six years ago, I’ve often joked that I have done my retirement in reverse.

For most of my 20’s and 30’s I traveled, lived overseas, and moved whenever I got itchy feet. I have surfed in Hawaii, raced in triathlons in New Zealand, been to the Melbourne races and lazed on the bank of a river in Switzerland. It was awesome.

When I arrived back in Canada, I had this overwhelming feeling of needing to ‘catch-up’. My old high school friends were married, had homes, jobs and kids. I had exactly none of those things.

In essence, I felt like I had to pay for all the fun I had been having. Financially I was all too aware that I needed to build some wealth and equity fast if I was ever going to retire and have fun again.

So I bought a house in  a great neighbourhood…that was steeped in cigarette smoke and smelled like cat pee. Yes,  I got a great deal.

It took 3 months to get rid of all the cat pee, smoke and kitchen grease. I moved in with a bed sheet as a bathroom door and make-shift plywood kitchen countertops.

When I moved out late last year, the final coat of paint in the basement was almost dry. 5 years of tears, sweat and a lot of hard work later my ‘home’ was ready to be a rental. I Obviously, flipping properties is not my game. I’m ok with that.

On the surface, I’m doing all the right things to satisfy the 2010 Liz – the one who badly needed to feel like she had some roots and could build a life that would allow her to retire in time for some undetermined future date. I got the job, house, car, pension payments etc.

2016 Liz is a little feisty and wants more, faster. She does not want to work another 25 years at 50+ hours per week commuting 15 hours per week. Nope. She wants to be outside, walking the dog, running in races, playing in the lake and generally loving the people she loves.

The two are at odds. Or ARE they? Can we have both?

Can I pay off debt AND build a financial future ahead of the curve?

Can I create an income AND have more time for family?

Others have done it, I think. And if they can do it, so can I. Right?

(Can it be done post 40? I hope so, I need to find those people!).

I feel a little stuck on building the an for the next 6 months – how did you build yours?

Pay Day!(ep 4)

Alrighty, let’s get on to this stupid line of credit:

Total applied to LOC:        $750

Current LOC Balance:       $12,926.43 (Down under $13k!! Woot WOOT!)

Progress on LOC to date:  $1506

Car Loan:                                $16,424.01 -no change, and I haven’t checked the balance again. I’m thinking I will at the end of June for a mid-year check up.

I’m preparing myself for what may feel like some slow progress over the next few months – there’s no ‘small’ debt obliterate or credit card to cut up. Progress might feel slow, but as long as it’s steady the goal will be met.

I can do that. I WILL do that.

Back in February, I set myself quarterly goals. When I was doing my taxes last week (oh, the excitement of adulting!), I had a look at my Q1 goals:

1.Pay off $3000 of Visa debt and leave balance at $0  DONE

2.Move automated payments from credit card to debit card ALSO DONE

3.$1000 in emergency fund THREE FOR THREE BABY! DONE!

Goal setting, it’s what gets this girl moving.

When the Quarter 2 goals were set, I still had the Mastercard debt and hadn’t consolidate it to the LOC yet:

1. Pay off $5803 in master card debt – let’s just consider that amount the LOC reduction goal

2. Get my house rented out – DONE!

3. Figure out how much my overseas pension has it it (more than I thought!) and how much I need to put into it to stay up to date.

Some progress already, what’s not to love about that?

Do you set goals? How often? And how do you keep yourself accountable?

 

Net worth

I’ll be honest, I’ve been putting off calculating my net worth for some time. I kept seeing others doing it, took a look at this amazing list of net worth’s [UPDATE – I’m now on the list!], but worried that because of my debt, my age (I’m no millennial!), and financial re-start in 2010 that my net worth was going to be depressing. I don’t need depressing in my life.

I did know, logically, that I had to get to grips with my numbers. Moving around the world has meant that I’ve left a sprinkle of investments and accounts that, individually, really don’t amount to much. Tracking all of that is a pain-in-the-butt, but I have kept all the mail I receive about each one.

I had all the excuses for not looking at the balances: ‘it’s not going to be enough”, “I’m stupid for not paying more attention”, “I’m embarrassed about where I am in life”. In my head, the nagging voice of adulthood kept telling me to look, understand, and just start.

“You don’t have to be great to start, but you do have to start to be great”

So, I did it. I looked up the numbers, did the exchange rate, pulled the last assessment done on my rental property, looked up my car value, dug out my work pension statement and added it all up.

Hey, that number didn’t look too bad.

And, of course, I had my debt numbers to hand. In fact, I can recall those better than my best friends phone number.

I used the most basic of assumptions: What I own-What I owe = Net Worth. There are arguments about what you should and should not include – should include bank balances, should not include personal residence – but I’m putting those asides and doing it this way for simplicity.

So, how did it look?

Net worth = $94,788.60.

Listen, I’m not going to lie. I should be WAY farther ahead given my age and income earned in the last 20 years. If I was bendy enough, I’d kick my own ass for only getting to the detail now.  I should have double and more to my name.

Did I spend a few minutes wallowing in my disappointment? Yep, sure did.

Then it dawned on me:

I’m in the BLACK!

I knew I would be, but I suspected that it was just tipping over into the black. I am surprised, elated, and over the moon that I’m this close to $100k!

AND here’s the deal – just a few more months of debt repayment and I’ll be moving to $100k-ville.

I’m not promising that I’ll share my net worth regularly, but I’m pretty sure I’ll be celebrating (frugally, of course) when I get to $100k.

 

Productivity and Planning

I keep reading posts about slowing down, being more purposeful, living with meaning while working incrementally towards your life goals. The A-type personality I possess immediately launches into anxiety mode because I’m not slow enough, in most moments feel I have little purpose, am trying to multi-task several life goals, and am taking baby steps towards multiple goals.

However, my personality also lends well to looking for solutions and implementing them. I thought I’d share a few I’m working on , and ask you to do the same.

Getting up at 5:45am – Ok there’s not fancy link to a fancy program for this one. I once read some where (it might have been on www.blondeonabudget.com) that getting up and doing one thing you love before you start your day will help you feel and be successful. My love is running, and so I’ve pushed myself to be on the treadmill 4/5 mornings by 6:00am (ish). While this has certainly helped in my actual running (evidence in actual PB – personal bests- during races), I can’t tell you how much calmer and focused I am at work because of it. I’m not worried about whether my run will get side-tracked because of a work emergency; I can comfortably take time to have a conversation with a colleague without looking at my watch all the time, trying to readjust my daily schedule; I can cook meals at home in the evening. Which brings us to…

Meal Planning – I’m new to having more than just me to worry about for meals, have moved into a home where red meat and potatoes are king and queen, and have control issues. I took to planning the meals, but found that we were still eating out 2-3 times as week. Apart from the cost (hundreds!!) it wasn’t helping my running and digestion. 2 weeks ago I made a goal of going a week without restaurants, posted a menu for review (Kids and pasta – what’s the obsession?!)  and grocery shopped accordingly. 7 days, no complaints, no restaurant bill, and more balanced meals. The meal plan is posted on a white board in the kitchen , which leads to impromptu ‘changes’ according to the kids,….and now neighbours who think we have ice cream for dinner. We’re going for week 3 🙂

The Self Journal  – I’ve been using this daily planner for about 8 weeks. It’s undated and set for 13 weeks of planning, allowing for a shorter time frame on specific goals I do love the daily scheduling it pushes you to do in advance – nightly 5 minute planning sessions is all it takes to identify how my day is going to flow, what top 3 things I need to get done in order to move forward on my goals, and a daily reminder of the overall goal I’ve identified for myself. Along with morning and evening prompts to identify what you are grateful for (coffee shows up an awful lot on mine!).

I’m slow to the ‘wins and lessons’ section, and know that I’m not using the planner to its fullest yet, so I suspect I’ll be buying another one and will be able to use it to greater effectiveness the second time around.

Mint – I’ve connected all of my bank accounts, credit cards and loans to Mint. Mint allows you to set monthly budgets for yourself and then tracks your spending according to those budgets. While that’s been helpful, I’ve found it more useful in two key areas:

  1. Tracking unexpected bank fees, including credit card interest charged. This one feature alone led to the move of my PC Master Card amount to my line of credit, saving a whopping $XXXX per month in interest payments
  2. Provides reports on spending trends and habits. Coffee is the downfall, and when I first connected all of my accounts threw a $345 expense over 3 months at Tim Horton’s in my face. That ended my auto-reload account with Tim’s.

Mint allows me to stop logging into each account (although there are just two, really) and doing a detailed search and analysis for items I need to correct and adjust. The app takes just a few seconds to update all my accounts, and then it takes me no more than 2 minutes to check if I’m on target or if there is something I need to fix.

I moved my phone from the bedroom– My phone has so much capability and functionality, the least of which is the alarm function. I was using it as my bedside alarm, but this led to late night Facebookery, Twitter watching and email gazing. Doesn’t take much to agree that this is not the desired sleeping environment, and let’s not go into other bedroom activities. So, I dug out the old-fashioned bed side alarm from the basement, dusted it off, and moved the phone downstairs at night. I’m sleeping better and feel less anxiety and urge to read emails first thing in the morning. It’s been a good move!

 

I’m always looking for more ways to get my time back – efficiency and productivity allow me to relax where I should, take in the sunshine now that spring has finally arrived, and enjoy the time I have with family and friends.

Tell me, what are you doing to make the most of your day? What’s the best tip you have for productivity and efficiency?

Divorced but not broke(n)

I can’t hide it anymore, I’m coming clean.

I’m divorced.

Yep, the big D. I went through it, survived it, and continue to thrive.

There’s no getting around the ugly of divorce, and sadly money is a big part of that. If you spend any period of time in a marriage it takes time, energy and emotional work to untangle the finances at the end of the day.

When we split, I was on the other side of the world with no family in the country. I had just been made redundant from my job, our house was up for sale (it went for auction…on valentines day. yep, that happened) and I had a looming tax bill as a result of being a contractor.

I knew that I wasn’t going to stay in New Zealand, but I also knew I had to stay to tie things up in order to start all over again back  home.

It sucked, I didn’t want to be where I was, and there is only one person who could get me out of that situation.

During the following 6 months, I hustled hard. I picked up small contracts through contacts I made through my previous job, starting working at a local recruitment office on a temporary basis and even signed up for acting work through a local agency . Dig hard enough, you’ll find my photo on a now-ancient banking flyer. True story!

If there’s one thing I have taken pride over during my lifetime, it’s been my ability to stand on my own two feet regardless where I am in the world and where I am in my career. I’ve never been above taking an hourly call-centre job as a temporary worker in order to make ends meet, regardless of the fact that my previous role was as General Manager and my next role was Senior Consultant. Those are titles that came with salary that allowed me to do more, but the hourly jobs kept a roof over my head and food on my plate and as a result, I would argue, are more indicative of my character.

My retirement has always been a  focus of my personal plan, no matter which country I’ve been living in and who I’ve been living with. I’ve always made sure to keep putting something aside for my later days. Sometimes it’s a government pension, sometimes it’s been private, sometimes it’s both (finally, I’m there! Although, I’m only counting on my contribution. The government has  a dodgy history of money handling).

I recently watched someone turn to their EX partner for financial advice. As in, the person they had decided no longer to be with, did not want in their life, preferred to be single etc. etc. Why on earth would you do that?!

Struggling to understand your taxes? Find a local tax guy person! Google the answer! Ask a friend! Do NOT ask your ex!

Don’t know how to budget? Ask your mom how she did it! Get a book from the library! Ask a colleague! Do NOT ask your ex!

If you can’t stand on  your own two feet, solve your own problems, what kind of success are you feeling? What kind of picture are you painting for the next generation watching you?

I went through a summer a few years ago asking all of my girlfriends two questions:

  1. What are you doing to prepare  retirement?
  2. Are you saving for your kids college? If so, how?

What was alarming was the response to question one was so…so…unclear. Very few, if any, had any clear plan to their personal retirement. They could speak to what their husbands or partners were contributing to at work, or what they thought was being done, or identified that they should probably ask. But they didn’t KNOW.

Kids education? All over it! For the most part, they knew how much was in their plan already, how often they put money into the  plan, and how much would be available for their kids when (and a big IF in some cases) their kids were ready for school.

Ugh! Why do women do this?! If you don’t know how you’re going to retire, figure it out now! I don’t wish you ill, but if you end up on your own (hello! been there, done that!) you need you own plan. Can it be connected with your partners? Sure! But KNOW the DETAIL.

You can’t complain when either a) there’s not enough money in the pot to retire when you want to or b) there’s no money in YOUR pot if you end up alone.

My own strategy has 4 components, 2 of which are in action, 1 will be shortly, and the final still needs some research:

  1. Company Pension – the biggest part of the plan so far, if only because they match my 6% (of gross salary) contribution
  2. Rental Property Investment – I got a great buy 6 years ago, and with some sweat equity made some serious $ equity. Couple that with a positive cash flow (tiny, but growing), and this one feels good.
  3. TFSA (Tax Free Savings Account)- once the debt is paid off, I’ll max this to the $5500 limit annual
  4. RRSP (Registered Retirement Savings Plan)- maybe? I don’t know yet. Income from this is taxable when you get to that point, although you get a tax rebate during your working years and are paying in. If my retirement income is higher than my working income (hey, it could happen!), then I’ll get dinged at the high rate.

Take control, understand the plan (or make one!), and let compound interest carry you into a world where weekdays and weekends blend together (so say my parents).

What I’m saying here is that no matter where you start, you have to START to make anything happen. The only person who is in control of that is YOU, not your partner, not your employer, not the government.

My journey is far from over, but after 6 years I can say that I’m amazed and proud of how far I have come. I’ve asked and received help from family and friends who have poured their love and support my way. I didn’t get here on my own, but I am solely responsible for the path I’ve chosen.