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Sunday, January 7, 2024

New Year, New Financial Focus: Tackling Debt and Maximizing Savings

The first days of a new year are always quite precious, full of hopes and projects for the months ahead. 2023 turned out to be a very good year for me, so it's easy to stay motivated in these first days of January. I have been enjoying a couple of days off, just reading, checking on my stocks, sleeping in, going to bed late, etc. Nothing extravagant. These very ordinary vacations have helped me save up some good money. I should be able to reduce my margin debt to $12,280 by the end of this month, but that comes with a great deal of effort. You need to have a great deal of self-motivation to control your spending. I am delaying the moment I will get a haircut. I really have to control myself from buying any new makeup or beauty cream. I don't need anything anyway. I haven't been in this kind of savings mode for a very long time, and it's a bit rough.

For the past couple of years, my investment portfolio has performed very well most of the time, so I didn't feel the need to focus on saving money. I had been saving money as I wanted, without restricting anything. But now, I am working on more defined goals, and it's not an easy task for me. Things are a bit different now. We'll see if I can stand by my goal of paying down my margin debt and building some savings.

I invest in my RRSP through my job, but the amount invested is just a few thousand dollars. This year, I don't plan to make additional contributions to my RRSP portfolio. I normally make extra contributions to my RRSP at the end of December or during the month of January, but not this year. I am tight on money and cannot do it all. For this year, my obsession revolves around my margin debt. I have never been a fan of investing in my RRSP. The fact that I am not making any extra contributions into it does not cause me any pain. For me, it's quite the opposite. It's not something that is enjoyable for me anyway. I really dislike the way the RRSP is built. You cannot withdraw money from there without facing penalties.

A new year comes with... an extra $7,000 contribution room for my TFSA portfolio! I should receive very shortly my dividend for the Bank of Nova Scotia (BNS) stocks that I hold in my non-registered portfolio, and those dividends should DRIP into new shares. I am waiting for that operation to be completed before using all of those shares to make a contribution in kind and have all of those BNS shares switch from my non-registered portfolio to my TFSA portfolio. I have close to 20k in contribution room available, and this move will use the biggest part of it.

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