5/05/2014

Do you have a TSFA?

Posted by with 3 comments | in ,
My Money, My Choices - Level 3, Activity 9 & 10

From the blog posts, and articles that you still see regularly around the merits of TSFA's versus RRSP - it's no wonder people are still confused about what they are for, and if they should have one.

Level 3 activity 9 and 10 are to open a TSFA and automate contributions to it.  It's the easiest (only?) way in Canada to save money (up to $5,000/year) and not pay taxes on the gains earned on the money.  For a lot of people who are lower income, it makes sense to save for retirement this way; Jordan and however need to use RRSPs for retirement to capitalize on deferring the taxes payable until we're in lower tax brackets in retirement.

We use my TSFA to save for eventually a baby.  We currently have $3,300ish and the goal is $10,000 to help offset maternity/parental leave no income. We save $100 every month to the fund, to grow it slowly but surely.  I see this account as I see our retirement accounts - it cannot be touched unless it's for the very specific reasons we've laid out (I'm so much more flexible with our Emergency/Curveball accounts which is perhaps why we've never achieved a particularly high goal for the Efund).

What do you use your TSFA for?

Related Posts:

  • I Hate my Spending JournalGah! I hate the spending journal, hate it!  Gail says you can't move forward in the process until you nail this - it takes discipline... I still hate it. I hate remembering to ask for receipts, and then trying not to l… Read More
  • My Money, My Choices - Level 2, Activity 2Activity: Track Spending in a Spending Journal This is the activity that I haven't been looking forward to...but the one that I think will finally see Jordan and I getting on track with our $600/bi-weekly allotment for all d… Read More
  • My Money, My Choices - Level 2, Activity 1Activity: Align Cash Flow, with Bills The first activity in level two is to align our cash flow, with our bills.  I went to one of Gail's older blog posts on the subject to frame the activity a bit.  Here's what … Read More
  • My Money, My Choices - Level 1, Activity 4The fourth, and final, activity in level 1 is to create a networth statement. This was a pretty quick activity for me - but I did make a change to my regular networth statement (and why I missed posting for March 1st). &nbs… Read More
  • My Money, My Choices - Level 1, Activity 3Activity 3 is to make a Balanced budget....balanced. I already have a budget set up (see the 2014 budget tab), but I wanted to go through this process to have the opportunity to really look at everything.  So, I de… Read More

3 comments:

  1. Morgaine5 May 2014 at 11:46

    I have a TFSA and currently its my emergency fund. I'm putting just over $300 per month in there to hopefully have $2500 in there by the end of the year. Once my EF is fully funded (I'm thinking $5K for mid-term goal then $10K eventually) I would like to diversify and buy index funds/ETFs/stocks in my TFSA and my RSP. Since I have a company pension, I want to focus on using my TFSA more than my RSP but I have to repay the first time homebuyer's plan first and build up these accounts over time. You guys are doing great with your savings. Keep up the good work!

    ReplyDelete
  2. Newbie8 May 2014 at 20:56

    Actually, it's more than 5K/year.

    The annual contribution limit for the TFSA was $5,000 for 2009 - 2012. It was increased to $5,500 effective January 2013.

    ReplyDelete
    Replies
    1. Jessie's Money9 May 2014 at 07:10

      Yes! You're right, thanks for reminding me.

      Delete

Hi! Thank you for stopping by and leaving a message.

Subscribe to: Post Comments (Atom)

Links ♥

Followers