cibs

All this talk about living at home etc... i'm wondering how everyone saves money and how much... maybe it's monthly or you do lump sum savings?

Does anyone have any goals of how much they want to save or strategies how to save?

right now i'm putting 400/month into RRSPs and 200/month into my ING Direct savings acct.

my RRSPs are in aggressive mutual funds, because i can handle the risk now while i'm young seeing as retirement is a long way away for me, and my fund has been averaging 16%/yr over the last 5 yrs... so hopefully that will continue.

the ING direct acct is 3.35% interest which is HUGE compared to the 0.05% you get at the bank... so that's where i'm saving up for vacations, going back to school...etc...

Starting in sept i plan on ramping it up to 600/month into RRSPs and 500/month into ING direct... wanna save up for school and a real vacation ASAP lol (i've never been on an all inclusive vacation yet...) The rest would be spending money for drinking, partying, modding the car, etc.....

goal is to buy a house in 3 yrs and go back for my MBA without taking a loan out for school... if i decide to do law school then i'd use the money for the house and use that to help pay for my tuition at law school and then worry about a house later down the road.


Does anyone else have any sort of plan/strategy/goals etc?

The Prophet

im putting 400/month away for a house into a high int savings acct... thats about it.... but i have been doing it for a year now....

hope to be able to work on getting a house within 2 years from now....

imported_Bruce Fee

i'm putting money into bars for short term joy

Gallagher

I drink and smoke all my money away....oh, and I buy cars.....pay for rent, school, books, insurance, gas, golf, etc......then again, technically im still 19

imported_Cablerat

I have begun my process of purchasing residential homes and renting them out for profit. The majority of my salary is banked, unless I have crappy tenants and need to evict people, renovate, etc.. Generally the homes pay for themselves and provide a little extra benefit for me.

I'm hoping to sell my east end rental property and look into purchasing up to 3-4 phase I or II condos in the downtown area or perhaps the missisuaga tech/commercial district.

The beauty of investing is it generally grows exponentially.. You start small and it grows like a motherFL:KJDFIOW:..

imported_TuttiGirl

Were (Marty and I) are putting away roughly $1000/month for our wedding in July

Gallagher

but I haven't got my invitation yet !

Cynikal.Mindset

australia...sh*t is gonna cost me like 4grand

The Prophet

im still trying to get them to agree to have me as the minister, lol

t_dot_porkchop

dont go too crazy into rrsp's unless you are already in a high tax braket. save that allocation room for when you make more money.

if you want to buy a house, you can use the home buyers plan to put up to 15 grand toward a house....although, i think its a stupid move as a good fund will return a much greater % than any house. besides $15 grand isnt even a decent down payment anymore.

if you want to upgrade your education, you can also use your rrsp's as part of the life long learning plan. same deal as the home buyers plan, although i think this is smart. investing in yourself is good as it means more money.

you have a lot of goals for the short term (vacation, party, cars, school, house, rrsp).......so you might want to re-evaluate and decide what is feasible.

imported_Torrey

^^^^ Very true!!

I'm gaining roughly the same, 16%/yr on my investments as well, which is very good when compared to the 'norm".

I'm also still in school, have 2 cars + a beater.... so thats not too bad.

cibs

well not cars... vacation is what like 1grand... that's not that huge a deal IMO... modding my car is going to be very minimal... if i have money in that acct and i see something that i really want then maybe i'll get it...

the other goals were house or school.... that's to be determined... and i was putting money into the RRSPs with the understanding that i can take that 15k out to use as a downpayment and it will free up that room again for me to use in the future..? am i mistaken? I'm not in what i consider a high tax bracket but i'd love to get a few thousand back from the gov't come tax time... i give them like 1g a month... i want some of that money back cuz it hurts coming off the paycheck...

by party i mean go out clubbing once every two weeks or so... by no means do i go out every night.

t_dot_porkchop

sure....its a grand here, a couple hundred there....before you know it, you are running right through your savings (and sometimes even debt!). just make attainable goals and you should get there.

if you take money out of the RRSP for HBP or LLP, you have to pay that back gradually. you do not get that allocation again to claim tax credits. i dont like these plans because:

1. a good RRSP will earn, tax-exempt, a better return that anything out there. if that money is out of the plan, its not earning.

2. when you take money out, you must pay it back with after-tax money. then, you go to pull the money out later on in life, you pay tax again. the government loves this because you are essentially paying tax on the same money twice.

imported_gatherer

I spend 1000 a month on paying back debt.

on top of that 12% of my pay cheque gets used to buy BCE stocks (Employee savings plan)

on top of that 4% of my pay goes to my extra contribution to my pension.

that is my "savings" I shoudl have my credit card pay off this year and my line of credit sometime in Q2 of next year. then I'll start working on my student loans ... by the end of next year I should be debt free and have a bit of land purchased to build a house on (with no Mortgage on it)

then I'll start saving money. the goal will be to get 56,000 in cash to survive one year without pay .. then I'll quit bell and find something else to do

cibs

so t_dot what would you say is the better option when when saving for a house... putting that money in RRSPs or high interest savings like ING Direct for example... even if i have to pay it back with after tax dollars, i figured it's not hard for a mutual fund to make more than 3.35 percent... and in the meanwhile i'll get cash back from the gov't when tax time rolls around... if i have to pay it back later then so be it, atleast i've taken that money out and put it into a house or something...

i'm not worried about over spending, i've become a relative penny pincher as of late, and have been sticking to my budget way better than i ever thought i could... it's amazing how easy it is to stick to a budget once you sit down and actually look at all the numbers... that makes you wanna spend less lol.

imported_JoonyaSI

i keep as little in the bank as possible ... lol shoebox tings i deal with havent started investing anything really .. im very "anti" system so ive never really looked into all that .. heck i dont even know what determines my tax return

imported_SW20 MR2

My wife and I take possession of our house next year, and all of our savings go into a savings account for now. Anything else is too risky for such a short term. I'm currently saving about half my after-tax paycheque. I contribute 6% before-tax to my RRSP, 3% to company stocks, and 3% to company pension. These amounts max out my employer's matching contribution amount.

BTW, PC Financial has gives you 4% on the savings account if you maintain a balance of $1k+.

t_dot_porkchop

im a penny picher too.....sacrifice now, laugh later. nothing worse than a 60 year old having to suck coq in the workplace in order to pay bills.

anyway, it really depends on your timeline. if your goal is to buy a house within 1-2 years, then you can use the HBP to your advatage. its basically a tax-credit, interest free loan for $15K. a $15K RRSP contibution at 40% tax bracket is a rebate of $6000. so its like you are getting $21K for $15K.

you can put the contribution in a mutual fund, but I would be hesitant about a mutual fund, since it can go down in the short term (who knows what the gov is going to do to interest rates). high interest RSP savings account or short term GIC is best bet.

cibs

^^ that sounds good, so maybe instead of upping my mutual funds in sept i'll open a high interst RSP savings acct... keep the funds i have now and save more seperately... diversifying does reduce the amount of risk i have...

that's exactly the reason i was thinking of using the HBP to my advantage... 21K for 15K ain't all bad... also would I have to repay it on a set schedule? or does that just stay as 'used' room in my RRSP limit and i won't get any tax credits until i pass that 15K again?

t_dot_porkchop

here you go:

http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-e.html

BTW: its now $20K.....no longer $15K.