Friday, April 22, 2011

It's all about the Benjamins

Or the Bordens, seeing how I'm Canadian and all.

I had my taxes done over the weekend and I'm getting a nice little refund, which I'll be putting directly back into my RRSPs.

Or will I?  I know the proper thing to do is to put the refund into my RRSP because the main reason I'm getting a refund is because of my RRSP contributions.  And by investing my refund, I'm helping to cover the tax I'll have to pay once I start drawing from my RRSP.  So this would be the sensible way to do things.

But I've also got some student loans that need paying off - and the sooner the better.  So do I take my refund and put it towards this debt?  It's a conundrum.

As well, as of April 29, I will have paid off all my consumer debt.  This is pretty huge for me, as a year ago, I had about $5,000 owing on a line of credit and about $2,500 owing on credit cards.  AND IT'S ALMOST GONE!  Paying off $7,500 in a year is both exciting (no more debt!) and depressing (all that money that didn't go to me!) but I'm proud that it's almost behind me.

So about those loans.  I have four different loans to pay off: two (Canada and Ontario) negotiated through CIBC and two (Canada and Canada-Ontario) negotiated through the National Student Loan Service Centre.  The reason for four?  My first year of university, student loans were negotiated through a financial institution; after that, they changed to being negotiated through the NSLSC.  So I make four different monthly payments, which is so much fun.

Anyways, now that the consumer debt is done I can start paying more than the minimum on my loans.  Here's where I stand:

Canada loan:  $4,136.44
Ontario loan:  $1,912.78
GRAND TOTAL: $6,049.22

Knowing I paid off $7,500 in this past year, I'm confident I can take down this entire chunk of my loan between now and next spring.  But - of course - there's more:

Canada loan:  $2,743.62
Canada/Ontario loan:  $6,435.35
GRAND TOTAL:  $9,178.97

So my overall total owing is $15,228.19.  That's a pretty big number.

But I took some time yesterday afternoon to put together a repayment spreadsheet and I've come up with a very ambitious repayment schedule.  If I can stick to it, I will have all my debt paid off by the end of June 2012.  Seriously - 14 months.  And I've set up my budget in such a way that I still have a little slush fund every month, for those times that I blow my weekly budget or need a little extra for things (like cottage weekends or birthdays or a pretty pair of shoes).  Because as much as I want to pay off my debt, I don't want it to be at the expense of my life. 

So starting next month, more money will be going towards my loans.  I'll be starting with the lowest balance first ($1,912.78) and doing the snowball method: as I pay off each amount, I'll roll what I was paying on that balance into the payment on the next-lowest balance until all are paid off.  And so begins me seriously buckling down and focusing on my financial health this year.

Here's to June 2012!

No comments: