In the week I got on an introductory webinar about self-directed investing with TD Bank they call theirs “TD direct investing”. My RRSP (Registered Retirement Savings Plan) savings account is there and I know now that my RRSP savings account is not in the market investing. Right now It only got $22.24 and I am saving small amounts of my income into my 3 RRSP accounts I have them at Tangerine, TD and Wealth Simple) I won’t go into full gazelle intense investing until I am out of debt (debt $7,104.55) and have my 3-months of essential living expenses in my buffer account.
Over at TD direct investing they have webinars and video lessons on investing from starting out as a beginner to advance stuff so it will be interesting to see my experience with it once I get to that stage of financial independence.
RRSP money it’s just sitting there as a savings account with a fancy name, and if I take money out I get taxed. So right now I am just doing my automatic method of every commission check I get something goes into the RRSP saving accounts until I am done paying off debt then I will start investing.
Yes, my debt pay off method is not the snowball, with the payday loan right now, they called me sometime in June to thank me for sending in regular on-time payments and attempted to offer an increase. I said “No. I just want this loan paid off, thank you.” but as things are right now the temptation is whispering at me because I’m in need of a window air conditioner for my living room, plus other things I need for the empty space in the living room.
Luckily money came in from my tax credit and moms sent some cash so I was able to work out my “money came in, budget” I tend to work that out with pen and paper but now it’s workout in a blank page in a google sheets. Fans were listed at prices I could afford so I got one for $23.72 last year I got one for like $30, right now two fans in my bedroom, I am actually comfortable and even sometimes cold. That has never happened living here in this low-income neighbourhood apartment where they are now listing a junior one bedroom for $1,600+ (No AC, Hydro is extra, parking about $100 a month)
For the first time ever I am actually financially in charge of what is happening to me. Can we say winning! I’ve beaten Murphy’s Law and the summer heat. With this double fan movement happening in my bedroom. I can actually do my work at home webcam schedule (7:00 AM to 12:00 AM).
My Dave Plan + Automatic Millionaire
So yes I am doing a Dave Ramsey-ish plan to handle my personal finances. I started reading my old copy of “Smart Women Finish Rich” Canadian edition 2003 print. I looked at it this way, both David Bach and Dave Ramsey have helped millions of people take charge of their finances, plus a bunch of other financial experts out there too. So it makes sense I decide what my plan is and follow it. One piece of advice in David Bach’s plan is to save one hour of your income into retirement investing, That piece of advice right there works well for me.
I know that one of my RRSP accounts is just a fancy savings account. I want two out of my three RRSP accounts to be at $1,000 before I set up self-directed investing, the third account is already set up for investing as it is auto-investing (they call it Robo-advisor) so with the third account any money that goes there it’s automatically investing and taking advantage of compound interest at my current age soon to be 35.
Step One: Start saving for emergencies and self employed income gaps
I will save $1,000 of essential living expenses. $500 goes into my 3-month buffer account and $500 goes into my 6 months to 2-year emergency fund.
Step Two: Pay Off Debt FAST
Paying off debt is in the order of ridiculous payday loan first, minimum payments on my credit card second and then minimum payments on my student loan. This could be paid off in the order of the debt snowball smallest to largest, but I do hate how the payday loan company will call me just to offer me an increase.
Step Three: Emergency Fund and Buffer Account
6 months of essential living expenses in a completely different account that gives me more space between bank accounts. I basically have my saving goal account plus my 3 month buffer account at online bank #1, then my 6 months to 2 years emergency fund at online bank #2, the transfer from online bank #2 takes a little longer to transfer to my checking account but having some income gap money at online bank #1 gives me more breathing room.
Step Four: Investing and how my plan is Dave Ramsey ish
This is where my plan goes Dave Ramsey ish. I see it as Dave Ramsey + Automatic Millionaire. I invest a little until I can invest 15% or more of my income into retirement savings and other investing. I am doing the first three steps all at once and I twisted the order of how I am paying off debt based on emotional annoyance. For the first week of July, I am very happy with the balance of my personal finance. I took charge and had some money set aside to step in when I needed to cool down my place from the heat and looked at my low-cost options for investing a little money can be auto-investing now while I pay off debt so I am not missing out on small amounts of money being actively invested and I feel more of a responsible adult.