Income Tax Refund & Car Payment Plan

We were able to cover a lot of ground this week because of income tax refunds. We were lucky enough to get all our required T4’s and other forms super early this year – so when we finally had my T4 (the last one we were waiting for) in our hands we went for it. This was our first year doing our own taxes and honestly I don’t know why we haven’t done this ourselves before. We don’t have complicated tax returns so we ended up using Simpletax.ca because it seemed the most user-friendly program. We just plugged in the numbers – had to reference the CRA website a few times but all the information was there and easy to understand.

Thursday we had $5448.26 directly deposited in our account and this is how it went:

-       $2000 deposited into my TFSA 

-       $2700 paid off the LOC

-       The rest to our MC to pay for a Costco trip G took a few weeks ago (paid off completely)

So it was definitely good timing to get that refund. It’s nice to finally have the vacation spending  on LOC paid off completely & it gave a nice bump to my retirement portfolio (I’m $1000 away from $10,000).

            Friday when I got home from work G was asking about what the plan was now that we have absolutely no consumer debt, full emergency fund, more income coming in and regular savings to both our long-term and short-term savings. He already knew the answer was paying off our car but I think he just wanted to say all those things that we have accomplished ;) lol.

We called Scotia Bank and talked to one of the loan specialists to make sure there were no penalties, how to set up pre-payments, etc. After getting off the phone with them, G & I talked for a bit and agreed to pay off the loan completely with our LOC, that way we can easily pay it from our online banking and also have a constant reminder that it is there. There is a 1% difference for the car loan which I needed some convincing about but to see G so motivated to pay this off really made me feel better. So we called Scotia back and set up the payment! Yes, I know now that this debt is 'callable' but even if that did happen we can withdraw from my TFSA & the EF and have it covered - that makes me feel a lot better just incase.

            Now that we don’t have to contribute to our EF or make car payments that money that we have gotten used to not using will be going straight to our ‘new’ car payment that is the LOC: that’s about $830 a month. So to have the car paid off in a year we only have to snowflake $621 a month. That’s doable and we are both confident we can pay of the car within a year. I’m making it a personal goal to try to have it paid off by the end of 2015. That would be an awesome accomplishment that's for sure!

- M