Welcome to the start of the shortest month of the year!
To be completely honest, I have been feeling that my progress towards my financial goals have become a little stagnant as of lately. Perhaps this is just a process that everyone will have to go through in their financial journey.
With that being said, I have done some research in leverage in the last couple of weeks and things are beginning to pick up. Here’s how:
Is the Market in Recovery?
January had been a slow start in terms of the stock market which is often the case. However, in the last couple of days, the Energy and Financial sector had made a slight recovery. My portfolio jumped up nearly 4%. 🙂
Is this a sign of recovery for the low oil prices? Perhaps, I can’t really tell. I guess we’ll all find out soon. Until then, I will continue to hold all my positions and start investing more in low MER index funds.
Leveraging the Home Equity Line of Credit
If you have already had a chance to check out my last month’s net worth update, you may have noticed that I still owe $18,185 in student loan. I am currently paying $300 monthly at an interest rate of 5.5%. This amounts to roughly $80 worth of interest per month.
In an effort to reduce my interest and to start saving more aggressively, I have convinced my parents to use their home equity line of credit to refinance my student loan. The interest rate on their HELOC is at 3.35% which is at a slightly lower rate than the 5.5%. Additionally, the minimum repayment is just the interest that accumulates each month.
With this leverage of my student loan, I am able to contribute an additional $247 to my TFSA and RRSP. This will ensure that I reach my aggressive saving goal on time. I have also promised my parents that I would set up my bank account to transfer $53 monthly to their LOC as that is the minimum required payment.
My plan is to have my TFSA maxed by the end of March and my RRSP by the end of August. From there, I will aggressively repay my student loans in my parent’s HELOC account. I am determined to have my student loan fully repaid by the end of the year.
The reason why I will aggressively pay off my student loans afterwards is because both my non-taxable accounts will be maxed. I will have no other methods of sheltering my money from taxes for the time being and paying off this loan would be the more logical course of action.
This endeavour will not only save me $270 by the end of the year in interest fees (which isn’t really that much) but it will also encourage me to get comfortable with leverage. Hopefully, everything works out as I have outlined. Plus, I will most likely use that money to treat my parents to a nice dinner for letting me use HELOC.
Dealing with Pressure from Work
Finally, it’s that time again where I dedicate a section of talk personal finance for ranting out my frustrations from work!
Last week was one of the worst I have had since I started this job. As someone who works for the city, both management and the public were not happy with my work for some apparent reason. In my line of employment, safety should be the priority over everything else.
I prefer to take my time and ensure that everyone is safe instead of rushing to meet schedule. However, management does not seem to really like that at all. They were up my case the entire work week and even though I try not to let that get to me, it just adds to my stress level. In any case, more reason to why I am so determined to pursue personal finance.
Here are some of the interesting posts that I have came across last month:
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