(I'm hoping this is the right place to post this question.)
For the first time in years, I find myself with an excess of financial options.
Until last year I was a student, so my incomes were tightly budgeted with my expenses, without much room for savings. Now that I'm out of school, I have two seasonal contract jobs lined up back to back (essentially guarenteed employment for the next 12 months) and one is recurring (guaranteed 6 months out of the year). I find myself with money in my bank account again!
One of the first things I've set up is a budget to track and compare my projected and actual expenses to help make sure I stay on track. I'm using the following budgeting amounts:
Housing: 30%
Transportation: 18%
Household: 7%
Food: 14%
Savings: 20%
Debt: 0%
Other: 11%
The original Savings bracket was 10%, but as I came out of school with no debt (due to abovementioned tight budgeting) I added that 10% allocation to my savings bracket until I need to allocate for debt (which I'm hoping to avoid for the forseeable).
After reviewing the last few months' expenses, I find myself using only 35-60% of my take-home (which includes using up my 20% savings allocation). Most of the difference is made up in the housing bracket - my housing expense at the moment is 0% and moves up to 5-8% in 6 months (living at home for the length of this contract and then moving into dirt cheap staff housing in another town for the next one). After that though, the worst case scenario is I work 6 months a year with my current contract, and have to survive the other 6 months off that income.
My question is what to do with the current windfall? My savings budget already contributes to an emergency fund (10%), a pension buy-back payment (4%), a vehicle repair fund (1.7%), travel fund (1.7%) and an retirement TFSA (2.6%). I'm starting to look ahead, so should I reallocate that 20-30% of housing expense to a future house downpayment (which I hope to make in ~5 years), top up an RRSP/TFSA retirement fund (would like to retire in 30-35 years), look at investing in something like dividend stocks (I've been looking at DRIP investing), hold on to it in regular savings 'in case' for next year, or is there another option I'm not seeing? Optimizing RRSP contributions doesn't do much for me tax-wise (annual taxable income is under 45k and I contribute to a employer pension plan at 9.4%).
Any help or suggestions are welcome!
For the first time in years, I find myself with an excess of financial options.
Until last year I was a student, so my incomes were tightly budgeted with my expenses, without much room for savings. Now that I'm out of school, I have two seasonal contract jobs lined up back to back (essentially guarenteed employment for the next 12 months) and one is recurring (guaranteed 6 months out of the year). I find myself with money in my bank account again!
One of the first things I've set up is a budget to track and compare my projected and actual expenses to help make sure I stay on track. I'm using the following budgeting amounts:
Housing: 30%
Transportation: 18%
Household: 7%
Food: 14%
Savings: 20%
Debt: 0%
Other: 11%
The original Savings bracket was 10%, but as I came out of school with no debt (due to abovementioned tight budgeting) I added that 10% allocation to my savings bracket until I need to allocate for debt (which I'm hoping to avoid for the forseeable).
After reviewing the last few months' expenses, I find myself using only 35-60% of my take-home (which includes using up my 20% savings allocation). Most of the difference is made up in the housing bracket - my housing expense at the moment is 0% and moves up to 5-8% in 6 months (living at home for the length of this contract and then moving into dirt cheap staff housing in another town for the next one). After that though, the worst case scenario is I work 6 months a year with my current contract, and have to survive the other 6 months off that income.
My question is what to do with the current windfall? My savings budget already contributes to an emergency fund (10%), a pension buy-back payment (4%), a vehicle repair fund (1.7%), travel fund (1.7%) and an retirement TFSA (2.6%). I'm starting to look ahead, so should I reallocate that 20-30% of housing expense to a future house downpayment (which I hope to make in ~5 years), top up an RRSP/TFSA retirement fund (would like to retire in 30-35 years), look at investing in something like dividend stocks (I've been looking at DRIP investing), hold on to it in regular savings 'in case' for next year, or is there another option I'm not seeing? Optimizing RRSP contributions doesn't do much for me tax-wise (annual taxable income is under 45k and I contribute to a employer pension plan at 9.4%).
Any help or suggestions are welcome!
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