On why 2014 will be the most frugal year of all!

I start 2014 in a good positive way ever: I was offered a 0% interest credit card transfer at CIBC Visa (but a one time 1% fee applied). I took advantage of the offer to pay off my $2 500 MasterCard balance. I overspend during the months of November and December, I also bought my first 32’ TV (yeah!) and a gadget antenna that give me like 5 great channels. And I also spend on several other things. But the spending time is now over because I had come with this great plan for 2014!

The beginning of a New Year is always a fun time to get a look into asset and debt. And this is how I learn that I had a net worth of over 100k, even while holding 77k in debt. That was the WOW factor on how beautifully end the year 2013 lol. It wasn’t expected at all because I found 2013 an exhausted trading year. A lot of international problems came destroying my little quiet and intimate time with the stock market. At a point, it was a big F to the Euro zone. For a retail investor, to deal with all of those things by our own, I mean, it can easily be over distracting. But no matter what, the 100k asset net worth had been exceeded to be a 106k. I was curious to find out how much was going to be my upcoming dividend income for 2014, and the magic number is now $6 851.17$, excluding the dividend coming from my RRSP.

That’s all nice, but now time had come to pay off some debt. And I plan to seriously do so in 2014, for several reasons. One reason being that I hit on the 100k net worth thing that I didn't see coming, and also, I want to decrease the amount of money I need every months to cover my minimum expenses – and that amount include money that goes on to pay down some debt. This plan will only work if I go through a full-time employment year. 

First of all, very good news, I will have enough money by Friday to completely pay off my balance of $2 355.19 at American Express. It will be clear in a couple of days by mixing up dividend income and cold cash coming from the previous pay check and the upcoming one. Just like that. BANG!

American Express debt: to be paid next Friday

The other priority on my list is my now CIBC Visa at $2 539.75 at 0% for 6 months, which will lead me to about May 2014.

If I only paid off debt without investing anything, I won’t last long. Really soon I hope, maybe by the end of February, some of my Shoppers Drug Mart (SC) shares will get sell for $61.54. I plan to invest at least 1k in LAS.A and leave the remaining on the margin account when I finally get my hands on the money.

Beginning February, I will do a contribution in kind for my TFSA. I have a contribution room of more than $20 000 for my TFSA. So this year, even while my main focus remain debt repayment, I will do my best to also invest inside my TFSA or get some existing non-registered stuff transfer over as a contribution in kind. For now, the list of stocks I want to transfer over my TFSA is: FC, RSI, CFX and SJ. Those stocks currently represent a loan value of $922.39. I will have to add that amount over in cash before proceeding with the transfer. One part of my 2 monthly pay check will be enough to proceed. That’s the story for February 2014.

Beginning March, I plan to make the payment of around $1 500 on my CIBC Visa by including the money of my February dividend and pay. This will leave just a bit more than 1k balance left on the card.

For April, I plan to visit my family in New Brunswick for Easter. With the bus ticket, I plan a $350 expense, not a penny more. April is the time of tax declaration. I guess I will have to pay up an extra 1k in taxes. So no investment and no debt payment plan for April.

Beginning May will be my very last payment in on my CIBC Visa debt – which should be around $900.

So you all know already what’s going to happen until May 2014. Not very exciting stuff, but you may still read on my blog because we never know what could happen in term of investment. And if I get a second job, I could have more money to do stuff. Earning an extra $200 per week could make a huge difference in my finance.

Following the month of May, we’ll have 7 months of 2014 left. That period of time represent an extra $10 612 to play with. So here’s the plan for those 7 extra months:

$1 500 will go on my vacation in New Brunswick (for the summer, October and December)

$300 for Christmas gifts

$1 000 will go on one of my banking account to save the monthly fee

Another $1 000 will go on my second bank account to save on the monthly fee

$4 900 will go to pay of my credit line at 4%

And the rest of the money ($1 912) will go on my margin or for a new investment in my TFSA.

Following what, my minimum monthly budget could be as low as $1 100.

As you can see, I haven’t planned much money to be spent on clothes in 2014 because I find that I have pretty much everything I need. I haven’t planned much on entertainment either because writing this blog should be enough of an entertainment. And not to forget that I now have a TV with almost cable, and also Internet. It will be interesting to see how it goes and if I can stick to this plan. I could pay off about $11 706.94 of debt in 2014 – and if not more. Following what, I could have about $64 774.69 left in debt – certainly better than the 77k I am on now. If I am just very lucky, I could finish the year 2014 with a net worth of MAYBE $150 000 but that’s only speculation...

The plan is pretty much all set up, it will be a very FRUGAL and happy year trying to lower my living expenses. Wish me good luck, I will need some!