What are your plans for your tax refund?

I have a novel idea for you

First answer this question.

What do you plan to do with your tax refund?

Answer: Pay off my Credit Card

Splurge. It’s found money,

Naturally that has always been the recommended thing to do with your forced savings for the entire 2016.

This is how you generate a tax refund

Your employer took taxes based on the T1 you signed when you were first employed. You decided to put money into your RRSP.   You had not informed your employer so he sent the required amount of taxes base on your T1. This creates a refund. Since the money you contributed to your RRSP is tax sheltered. There are other methods of decreasing your taxes, but the RRSP is the most advantageous for the regular person.

Group No. 1 – Pay off my credit card

These groups are the ones who do the same thing every year with their refund and expect a different outcome throughout the remainder of the year.

That group uses their tax refund and pay off their credit card year after year. Then they wonder why they cannot create a savings plan. They will tell you if you ask them in October what did you do with your tax refund. Paid off my credit cards and boy that felt so good. To that you answer great, so you are free of debt that must feel truly wonderful. Then with a sad look on their faces they reply. Well you remember when Joan got married that cost me a mint, then my car broke down, then I went on vacation that was a hefty cost. Now I am just waiting for my refund this year to pay off my card. You are left dumbfounded.

Group No. 2 – Splurge its found money.

These groups are people who wait to see what comes up to spend it on. They play the wait and see game. They wait and see gamers have no plan for the refund. You know for sure that, if you have no plan, things just go wherever the wind takes it. The same applies to your money, if it has no purpose it will certainly disappear. Then in a month if you ask the wait and see gamers what they did with their refund. The answer will surprise you. It might go something like that…you know I have no idea, oh wait, I bought me a lovely pair of boots they were on sale 50% off then I just spent the rest. This is the money story of a wait and see gamer.

Now its time to tell you about my novel idea

What I recommend you do with your tax refund no matter if its $50.00 or more is to stash it away. Save it. If its more than $50.00 divided into two of your savings accounts with a purpose. Some in Tax Free and the rest in a vacation account. You are now paying yourself first and have just sown the seed of investing in your future.

You were paying the credit card every month well continue paying it. Stop using it. Do not carry it with you. If you do this you are changing what you have done since you filed you very first Income Tax.

What I am asking you to do goes against the conventional thinking. Which is, why would I save money and have debt to pay. Well that method has not netted you a positive financial statement.

What do you have to loose. Try this for say one year and then let me know. I am sure six months into this new plan you will feel emotionally better and amazing in a year.

Hope this help.

If you have questions or if this has helped you let me know at:

tessamarieshillingford46@gmail.com

 

 

 

 

 

 

Being a Mom on Tessa- Marie’s Plan

I am the $27.00 bra girl sharing some money saving tips on the first year of being a mom

After one year of Mommyhood, Tessa-Marie asked me to write my top tips for year 1 of this new adventure I am on!

While the path through pregnancy and parenthood varies greatly, the focus is always the same; we want the best for our babies.

Here’s what I have learned:

Say Yes! Say yes to baby equipment that is being offered to you, either on loan or for keeps. I have a Mom-Friend who had two babies before me and so generously offered me an arsenal of gear; baby bath, swing, chair, jolly jumper, play mat and playpen.  Retail value of my gear was over $1100.  My daughter enjoyed only the playmat and the bath.  Not all babies like the same types of movement or positions and you won’t know until your baby arrives. As much as I wanted that cute ‘baby sleeping in a cute swing’ picture, every time I tried it and she cried.  I was grateful I didn’t spend $200 on it.

Diapers: While I was pregnant, I searched the Internet for cheap but reliable cloth diapers, because I considered the one time investment compared to disposables and it seemed to make sense.  I bought a week’s worth of cloth diapers on a Black Friday sale while I was pregnant. Once my baby arrived, and the reality of new Mommy life set in, the last thing I wanted to do was to stuff liners in cloth diapers.  I discovered store brand disposables.  They retail for half the cost of brand name diapers, and work (for my active baby) just as well.  They rarely go on sale, but their regular cost is significantly cheaper than the sale cost of big brands.

Freebies: Many are shocked when they hear exactly how many free products I received from baby companies. A quick Google search of ‘free baby samples’ will cast you into a pool so deep you could be requesting samples for days! Diapers, formula, coupons, wipes, creams, lotions all arrived in the mail just before my due date.  Receiving mystery packages filled with baby supplies was a great perk at the end of a long pregnancy.  Some products I didn’t end up using, so it’s important to me to pass this point on; local food banks will gladly accept all un-opened baby samples.

Solid Food: This tip is what made Tessa-Marie realize I was well on my way to a ‘Planned Spending Mommy hood’. I did make most of my daughter’s food from whatever fruit and veggies I had on hand, but found it much easy to have pre-prepared food while I was out and about.  In the baby food aisle, below the fancy cute squeeze pouches, is the same food in jars.  The jars are not as cute BUT they are half the price for the same amount of food!

Clothing: I love baby clothes: the matching outfits, the little shoes! I did not know what gender my baby was until she arrived, but I wanted to be prepared.  I set a challenge for my self while pregnant: a $3 limit. Any piece of gender-neutral clothing that I loved, I bought. (Important: you have to love it! There are always amazing deals but if you don’t LOVE it, it’s a waste). Now, $3 makes me sound crazy, but the amount of pieces I picked up during those months was incredible! I kept the tags on everything, so anything my daughter didn’t wear went straight into a box to use as gifts for other babies.

Enjoying my tiny baby was my priority, having to not worry about dollars at the same time because my plan was in place made it all a bit sweeter.

Thanks Kathleen for sharing.

I hope new mothers will benefit from your experience.

If you need any help, please contact me at: tessamarieshillingford46@gmail.com

 

It’s Tax Season

Not sure what documents you need in order to file your taxes? Today I’ll share some tips on what you need, and how to make tax time easier for you.

At this time of the year, all your T4s are arriving in the mail. Be careful, these documents are very flimsy and it may look like there’s nothing in the envelope. What should you do once you receive them? Place all documents together in a large envelope or a folder; keep it in a safe place. When it’s time to prepare your taxes you’ll have all supporting documents you need in one spot.

If you have changed employers and changed your home address in the past year, you should contact your previous employer and have them send your documents to your new address. Come tax time, you cannot omit a T4 from a previous employer because of an address change. That’s not a valid excuse. The government will find out and you will be fined, and forced to pay interest on that fine. Remember it’s your, money keep it.

We are allowed to file electronically and it’s a great idea to take full advantage of doing so. While we are given the privilege of doing just that, the government can pull your name in a random audit. If you are randomly chosen, you will be sent a letter that will require you to forward all supporting documents to the government. Therefore, it is imperative you keep all documents even after filing your taxes.

One of my biggest concerns during this time, is with tax preparation companies. You are promised your refund as soon as they file your taxes. Be careful – in most cases, it is advertised that it’s free to get your refund the same day. What is often left unsaid is that your refund will be significantly smaller (they take a portion of it as payment for the quick turnaround). That means, if your refund totals $500.00, you may only take home $450.00. In some cases even less. I know it’s wonderful to get your refund as soon as possible, but if you have paid the company $65.00 to prepare your taxes, why not just wait a few days and get your full refund? Again, it’s your money, keep it!

Another way to save money on doing your taxes is to share the cost of the tax-filing program. You can split it with family and friends, making that $29.95 plus taxes significantly smaller. In fact, this is what I do. I have my family; a few friends and our taxman come over to my house. I prepare a big pot of spaghetti; we take turns sitting with him, while the others enjoy the spaghetti and conversation.

It’s fun, inexpensive, and get’s our taxes done properly.

As always, let me know if you have any questions. I’m here to help.

Tessa-Marie     tessamarieshillingford46@gmail.com