It is with mixed feelings that I’m writing this net worth report. I say mixed feelings because on one side, I’ve managed to drop my debt this month. I was able to pay off $1,284 in debts in a month which it pretty good! It’s very good considering everything that’s happened over the past 30 months (I’ll get to that in a second). But the problem is that I was expecting a huge income tax refund this year (roughly 6K) that was meant to pay for my pool (for which I will owe $5,500 on it starting in June). Unfortunately, my tax return wasn’t that big…
The Complexity of Taxes in Quebec
There are lot things I like about living in the Belle Province (I mean besides our big student babies who boycott University for 2 months). Unfortunately, taxes are far from being one! Last year, I received a tax refund of 2K. This year, I put 10K in my RRSP (as compared to the usual 3.5K-4K I’m allowed). This is why I was expecting a much bigger tax refund. But what I didn’t consider (since I’m not doing my own taxes) was the other tax credit that I was eligible for last year and that I’m not this year. Guess what; the tax credit totals roughly 3K! So I’ll let you do the math…. My refund check is slightly under 2K instead of being slightly over 5K! So I’ll have to keep my pool loan until next January so I can pay it off with my year-end bonus… Man, I just can’t wait to have this darn bonus to spend to enjoy myself instead of paying off debts each year!
Having said that, I should have definitely called my accountant prior to making my purchase! At least, I’m not going anywhere on vacation this year so my “vacation budget” can be allocated to pay a part of the pool!
Tons of Expenses in April!
Along with my regular budget, I ran into extra expenses once again. But this time, it was quite brutal! It all started with $450 going towards municipal taxes. I was completely aware of this one but it always takes a hit on my monthly budget since I using my employer’s stock (once or twice a year) to pay for my taxes. Since I already paid $900 in taxes and haven’t cashed a single stock yet, this expense should have shown on my line of credit. But the next expense was unexpected and hurt a lot… cars!
In a single week, I had to pay for $2K in car repairs. When I wrote last month that my car was going to be worth less than a Caramilk, I didn’t think it was going to happen so fast! Well this is what happens when you drive 50,000Km in a single year because you are working at 85km from home! It’s a blessing that I’m now working 4km from home! This should not happen again.
So my total “extra expenses” for this month is $2,467. Considering that I just deposited my income tax refund of $1,945 and my current debt level is $1,284 less than the previous month, I’m pretty happy about April. This means that my monthly spending has dropped enough so I could “technically” (without any bad luck!) decrease my debts by $1,806 per month ($1,284+$2,467-$1,945). This is perfect since my main personal finance goal for 2012 is to drop my total debts below the $300,000 level.
My Secret Debt Killer Weapon
As my plan starts to take place and that I seem to be able to pay for 16K of debts by the end of the year, I’m also counting on 2 secret debt killer weapons. The first one is my employer’s stocks which I cash in annually to pay off some of my debts. I currently invest $500 per month and my employer is giving me a “free” 25% contribution. This why my employer stock goes up so fast. It’s because I have $625 per month of new money coming in. I’m trying to not touch this account for the first time this year and trying to accumulate them. However, if I really need extra money to pay off my debts, I should have around $9,500 in this account by the end of the year. 75% of this amount is redeemable once a year (in order to continue the program). So it makes $7,125 available for me to pay additional debts.
My second secret debt killer weapon is not so secret as you know about it already; it’s my year-end bonus. By switching job, I explained that I should not be making a crazy bonus this year. However, now that I’ve started my new job and that I’m already bringing in results, I might be able to get a decent bonus! I didn’t think that it was possible because I’m starting a whole new book of clients, but apparently, everything is possible! So I might be able to count on a few extra thousand to put towards my debts as well.
Looking Forward to May!
I’m definitely looking forward to May right now as I hope that I’ll have a “normal” month. It has been a shaky start to the year with our newborn, a drop in income due to my parental leave and over 3,5K in car repairs (next time, I’m going to sell my RX-8 and buy a skateboard!). I hope that I’ll be able to post a 1,8K decrease in debts for the first time on this blog! Wish me luck!
CHECKING ACCOUNT $1,000 $1,000 0.0%
$3,574 $3,898 9.1%
RRSP ACCOUNT $29,167 $28,628 -1.8%
PENSION PLAN $20,218 $20,218 0.0%
HOME $345,640 $345,640 0.0%
COMPANY SHARES $98,000 $98,000 0.0%
MAZDA TRIBUTE $16,926 $16,492 -2.6%
MAZDA RX-8 $4,800 $4,400 -8.3%
TOTAL $519,325 $518,276 -0.2%
CREDIT CARD $6,371 $6,152 -3.4%
LINE OF CREDIT $19,945 $19,922 -0.1%
HELOC $263,400 $263,000 -0.2%
CAR LOAN $16,926 $16,492 -2.6%
Personal Loan $10,416 $10,208 -2.0%
TOTAL $317,058 $315,774 -0.4%
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