Saturday, 5 May 2012

Finance Friday

I got my RRSP funds on Wednesday ($10K) and immediately transferred the entire amount to an account I can only access online. I then transferred $7K of that to my ING school account. It's about twice what I need for tuition, but I thought it would make a good cushion in case I need extra supplies, or want to pursue another stream when I've finished the program next May, which is a real possibility.

This leaves $3K in my account. I really don't want to touch it, but am trying to decide whether I should just slap it onto my debt and take a big bite out of it. I'm hesitating simply because that's not the intended purpose of that money and to use it that way feels...wrong. It's "free" money in the sense that I'm not paying taxes on the withdrawal, and by paying down some debt with it, I'm saving on higher interest costs. Plus I have to pay it back anyway.  Part of me says I'd be silly not to, but the more practical side says "don't do it!" Then there's the part of me that wants to buy a few nice things to pamper myself with: soaps, some new duds, a nice bar of chocolate...

LOC = $4000.
VISA = $2400
MC = $700 (?)
Total debt: $7100

There's no rush one way or the other. I've made payments on my cards and LOC, and the money can sit while I think, but the longer I leave it, the more tempting it is, too.

I got a paycheque from my second job today! Hurrah! Just shy of $300, which is great and more than I anticipated. I hope the fact they mailed it doesn't mean I won't be going back... :P This will be going into my chequing account so I can do some grocery shopping tomorrow. I also have to take Joey to the vet again. I took him on Wednesday morning as he had a sore toe and it was starting to look ugly. The vet said it was a puncture, between his toes, and she cleaned it out and wrapped it up. She wasn't confident that he wouldn't get it off, but he hasn't touched it. He shakes his foot a lot trying to get it off, but otherwise it's fine. I have to give him antibiotics to fight the infection (pills, for all you cat people out there...), so I have no idea what it will look like when it comes off on Saturday. Much better I hope! I imagine they'll clean the wound again and rewrap it. He looks like a real gimp with his shaved body and bandaged leg, but seems to be doing fine otherwise. A bit sulky, but that's pretty typical anyway.

I had a busy day today and feel very productive! I rode over to the Ministry of Education this morning and picked up some forms for financial aid, then rode most of the way around the Millenium Trail. The total distance of that is 5km, and I probably did 3. After that I headed to the gym for 45 minutes, which was great! There were two other people besides me there, which is just how I like it. Mind you, it was 11:00 in the morning, so I shouldn't be surprised, but it is nice to have the space to move around and figure out what you're doing. Once I know my routines and the machines better, it won't be such a big deal, but as I'm just starting out, the fewer distractions the better. I went to visit with a friend for a couple of hours and I have a potluck tonight! YUM! I'm bringing apple pie and vanilla coconut ice cream. I'd like to claim the honours for the pie, but it's actually a frozen one I've had for some time (one of those M&M Meats promotions; buy this or that and get a free pie!). This is the perfect opportunity to use it up.


Reyna said...

Some thoughts that may or may not be helpful or even make sense.

* If you use the money to pay off debt, you will be less likely to "slowly" use it until it is suddenly "all gone" with not a lot to show for (and a surprised look on your face). You will ALSO save on interest.

On the other hand you have to know your own habits because sometimes we pay off a debt and then accumulate "new" debt on a credit card "because it has all this available credit!" And end up in a spiral financial situation-right where we started from.

* I believe financial dieting is similar to food dieting in that if you cut all the good stuff out you feel deprived. (My own theory.)And then overcompensate by going on a spending spree.

So I don't know how much new duds & such costs but I would leave a small cushion to treat yourself.

* This is what I would probably do if this were my situation (I am FULLY aware that you did not ask-just ignore and delete as you feel the need!)

* Pay off the 2400.00
* Pay off 500.00 of the 700.00
(This can be reversed depending which has the highest interest: 2200.00 + 700.00)
* Use the leftover 100.00 to treat yourself.
* Then use the payment amount that you would regularly make to the 2400.00 (ex. 51.00 PLUS the regular amount you usually pay to the 700.00 (ex. 28.00 for a total of 79.00 - even it out to 80.00) to pay off the 200.00 remaining.
That should only take approximately 3-4 payments.
* Then use those 2 combined payments to pay towards the 4000.00 of course ALSO paying that regular payment. (80.00 + 111.00= 191.00).
* It is surprising how much quicker a loan diminishes when we do this. It encourages us to stay diligent because we can see evident results.
* If you ARE diligent then I would allot an allowance per pay period or per month maybe just 25-50.00. Just a small one but something that rewards your discipline.

Good luck in whatever you decide to do!

Just the fact that you are aware and contemplating what's best puts you way ahead of many others.

Keep up the good work!

Karen E said...

Personally, I just hate owing money so I'd probably use it to (mostly) pay off the the two smaller debts as Reyna already suggested. Not having those extra payments when you go to school would be an added bonus. As long as you would still have a cushion. It about killed me leaving cash sitting in the bank knowing I could pay off my Jeep, but spring is an iffy time for me for work and I wasn't completely comfortable using up so much of my savings. I did finally pay it off and since then work has picked up - good karma? lol Anyway, you really have to do what's best for your situation and only you really can decide that.

You have my sympathy on the kitty pilling if he's anything like mine! I have one guy who gets liquid antibiotics a week every month for a chronic respiratory infection. Thankfully he doesn't hold a grudge long. :-)

Dannie said...

Sounds like you have been given some sound advice on the debts there and i would agree with paying off those smaller debts and getting rid of it. However you know your own spending habits and if it would be important to have that safety net.:-)