Sticking to goals can be hard. Especially when it comes to your money. For me, between going to work, paying the bills, making rent and having a social life, months can fly by without taking a good hard look at my financial strategy.
But, it’s the beginning of the year and the time when everyone and their grandmas are making New Year’s resolutions to lose weight, hit the gym, learn new skills and become better versions of themselves. A lot of people my age roll their eyes at the notion but I think that when you’re not buried in snow and the post-vacation blues, January can be an empowering time to reevaluate your life. Er, I mean, investments.
Even though I work at MoneySense, I’m far from being a money expert, let me tell ya. Though I have learned a lot just from writing this column, I’m smart enough to realize there’s plenty I can improve upon when it comes to my bank account. So without further ado, jump into my personal financial details, why dontcha? Here’s what I resolve to do in 2018:
Open up another TFSA
It was a surprise to me when I first found out that you could have more than one TFSA. Because there’s a contribution limit and the fact that, well, I already had the one, I hadn’t considered the possibility of opening up a second one. But in 2018, that’s just what I hope to do. Here’s why: I have a TFSA with a big bank and own balanced, growth and income funds all with Management Expense Ratios (MERs) of more than 2%. I know that’s too high, my colleagues know it’s too high (pssst, here’s why that’s too high!) and I’m ready to do something about it. I’m thinking about opening up that second TFSA with Tangerine because they offer low-fee funds. Right now, I’d say I don’t want to jump into DIY investing and buy stocks and the Tangerine funds are vetted by people much smarter than me AND they all only have MERs of 1.07%, around half of what I’m paying in my bank TFSA.
The tricky thing about having a second TFSA is making sure you don’t over-contribute. But I don’t think that’s too huge a factor for me. I have more than $25,000 in room for 2018 and tuck away around $200 bi-weekly. A second TFSA would mean motivation to ramp up my savings and catch up on room.
(The next step after that is to explore if I want to go back to just having one TFSA, the new one. If I go that route, I already know I would need to have the original bank handle a direct transfer from one institution to the other in order to avoid messing with my contribution room. One thing at a time…)
Open an RRSP
I know, I know. You’d think I’d have one open by now. But I promise, this is the year. I want that tax refund! And also want to start taking advantage of the Home Buyer’s Plan to start saving up for a down payment on a home. I’m looking to get a tax refund of around $1,400 which will be a nice boost.
Get smarter about investing
As I said earlier, I still feel like a financial dummy. Well, I mean, I’ve learned so much about investing in the past year since starting this column but I’ve a long way to go (as do you, probably…or should I just speak for myself?) That’s why I pledge to get reading and have some personal finance books under my belt in 2018. First up is The Only Investment Guide You’ll Ever Need by Andrew Tobias. That’s a pretty bold claim, Andrew. The book was recommended to me by Julie Cazzin, my trusted MoneySense colleague. It’s American but it seems the lessons it imparts will be relevant to a broad audience. Second on the list is Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam. Seriously? Everything about that title speaks to a) my yearning to spurn adulthood and be a student again and b) my annoyance that I didn’t learn all this good personal finance stuff in school in the first place! Rule eight in the book is “Avoid Seduction.” I’m intrigued.
MORE ABOUT TFSA:
- How to make a spousal RRSP work for you
- How to build a $5,200 TFSA in a year
- Bring back the $10,000 TFSA
- How to shuffle a DIY portfolio to last to age 90
- Opening a TFSA at your bank
- Using your TFSA as a learning tool
- When ‘in-kind’ TFSA transfers don’t trigger a ‘deemed disposition’
- Building a TFSA doesn’t have to be complicated