Edited to add: In November the Canadian government has increased the 2019 TFSA contribution amount to $6,000. https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html
I don’t make New Year’s resolutions. I’m kind of lazy that way. I’m a procrastinator and I’d be breaking them two days into the New Year.
I’m more about creating goals for myself, sometimes financial goals, and other times something that I might want to purchase. If you read my post about 6 steps to save for big ticket purchases, I put them into action for smaller purchases and ongoing annual expenses.
My first big financial goal of the year is contributing to my TFSA – that’s a registered financial product in Canada called a Tax Free Savings Account that was introduced in 2009. There are strict guidelines about how much money a person can put into this account each year, usually around $5000, except for one year it was $10,000. The benefits to the TFSA are that you can withdraw money as needed without being taxed on it. An RRSP will cost you 10% to 20% in taxes depending on how much you withdraw in a year. If a person has withdrawn money from the TFSA, they can also top it up again to the maximum allowed amount.
As of 2017 an individual can have a total of $52,000 they’ve contributed to their TFSA. In 2018 the maximum contribution amount is $5500. The great thing about the TFSA is that people can purchase stocks, mutual funds, term deposits and other financial products and increase their value.
I’m happy to report that my first financial goal of 2018 has been met. I already had that money set aside waiting in a savings account. I transferred it to my TFSA held with my online broker and bought shares in CN Rail, a high paying dividend that’s a good choice for people closing in on retirement or who are already retired.
Check that one off my list.
Now I have to start thinking about my TFSA contribution in 2019 and start saving. Let’s just say it’s going to be $5500 again because it’s been that amount every year since 2013, except in 2015 when the maximum TFSA contribution was $10,000.
I work best in round numbers so I’m bumping the amount to $6,000. After all, you never know when the government might bump up the amount a bit. Divided by 12 months I know I have to put in $500 a month into my savings account that I call “save for next year’s TFSA”. That’s a lot of money, so I’m putting in a percentage of each paycheque plus about half my monthly dividends from investments. I’m putting my dividends to work towards next year’s TFSA contribution.
An easily executable savings plan.
However, I also have to think ahead and see that some months I might have more than $500 in the TFSA savings account. My plan at month end is to transfer any money over the contribution amount into another savings account for my vacation fund.
As for the rest of 2018 I’ll be working on goal setting that includes having fun. Did you read my post on going to Hawaii if my shares in Aphria reach $35?
If that doesn’t happen in 2018, my back up plan is a road trip with my dogs either to Oregon or perhaps South Dakota. I haven’t seen Mount Rushmore since I was a teenager.
2018 is all about keeping an eye on my retirement planning and having more fun experiences.
I’ll have more posts coming soon on putting together a financial plan.
I’m working on meeting my monthly target for my 2019 TFSA contribution, an easily manageable goal, while putting the excess into my vacation fund. Next step is getting more serious about creating a financial plan.
Do you have any financial goals for 2018?