So I have been thinking about this for a while (well past couple of weeks at least).
I want to have a variable budget with regards to LIFE expenses. However with semi-fixed expenses/savings this is what I want to try to have each month:
$100 for Transportation
$600 to my Family Loan
$200 to TFSA
$50 for Gifts
$50 to E-fund
Transportation would cover gas and hopefully small repairs.
Family Loan is the loan my family gave after I graduated to help reduce interest costs. Contributing at this amount would take me to about June to get it paid off. Anything left over would also go here.
TFSA was started this month and would be "planned spending" but for something at a much later date (i.e. wedding, car)
Gifts is for birthdays and Christmas throughout the year
E-fund is low right now because I live at home and have relatively little expenses so an emergency is not very likely to occur but I still want to get one started to help for when I do move out.
You may be thinking that I should be contributing to an RRSP as well. I have thought about this, and I think for me it's more important to pay off my debt before contributing to retirement. Especially since I have a low income. I will start contributing to an RRSP once I get the family loan paid off. I have a budget for this as well. After loan is paid off I was thinking: $400 to TFSA, $250 to RRSP, $50 to gifts and $100 to E-fund.
*Also I should mention this is for typical paycheque months, some months I will not even make this amount and I will try to cut personal expenses as much as I can to make these payments but may not always happen. Other months I will try to go above these goals as well when I have better paycheque months :)
Any advice is welcome!! What do you think?
Your plan sounds great.
ReplyDeleteKnowing you are a teacher, I wouldn't worry too much about the RRSP at this point. We pay a high percentage of our paycheques into the pension plan and it really leaves very little room for RRSP contributions. When you have more money in a few years, it wouldn't hurt to start a small one, but really, you are already paying 10-12% of your income towards retirement!
A fellow Ontario teacher...
If you are supply teaching and driving hither and yon to get to those schools, will your transportation budget be enough?
ReplyDeleteI personally would increase your transportation amount. If anything throws my budget out the window its car repairs! We've been lucky enough to have a pretty good vehicle for the past 2 years until most recently when it cost us $1500 in 1 month for repairs we did not see coming. I myself budget $100/mth for transportation and we do not pay for gas (my hubby works for a gas company) and have also contemplated increasing this category for repair costs alone. If we paid for gas too it would be a lot higher.
ReplyDeleteOn another note - love your blog! (I'm a new visitor)
Actually, I agree to grow your EF and to pay off your debt first as RRSP contribution room can be moved forward to the next year.
ReplyDeleteSounds like some good thinking on your part. I also find the transportation category a little troublesome especially when preventative work is being done on my car so I have less of a chance to have a major repair.
ReplyDeleteYour Pension will definitely be great once you get on full-time so waiting on your RRSP's is a good idea. I would agree with everyone above about your Emergency fund though. This would be used for those repairs that cost you more than your transportation budget would allow. I had a rule when I needed a car - no matter what I would have a car fund set at $2000 (double my deductible) for those repairs that you'll need the fund for. You should look at your deductible on your insurance and at least make sure you've got double what it is designated just for car things.
Other then that - great thoughts for the coming year!
It's good that you're at least considering fiscal responsibility. It's too bad you live in a country where the government doesn't do the same thing :-( I suspect inflation will be eating away at any money you put towards a pension so I'd be trying to improve my present quality of life before putting money away to dwindle in value. Seriously!
ReplyDeleteBB
Thanks for all the advice!
ReplyDeleteI planned on contributing to an RRSP for two reasons. One, for retirement (good to have some even if I will get a pension, there is talk of it not being as great for future retired teachers as it is now), and secondly I wanted to start an RRSP as sort of a house fund. They have a program that helps first time home owners, you are allowed to take out all of your contributions (up to $25,000) to help pay for your house. The catch is that you need to repay it within a certain amount of time. I will look into this more still to see if its a worthwhile option.
Right now I spend about $60-80 a month on gas. Sometimes less. I think it would be good to put a bit more toward that, and the emergency fund could cover any major repairs. Hopefully nothing comes up though!! Just oil changes!
I envy your gas bill. My gas is about $40 a week and that's in a small town where it is only 5 KM to work. It's the children, and their activities, that add on the miles and burn liters.
ReplyDeleteIt does add up when you need to run around a lot! I have a small car so I can get pretty far on a tank of gas.
ReplyDelete