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Friday 26 October 2012

Financial Update: October 2012

There have been lots of financial happenings around casa Hutch since I last posted. I've attempted to sum it up a few times but it just felt like things were too unsettled yet to log a post.  It's high time I put metaphorical pen to paper though and laid out where we're at.

First of all, the suite is DONE. Done and rented, yo. In just a few days our tenants will be moving in and monthly rent cheques in the amount of $1100 will start to flow. Awesome.

Second, the renovation has been fully financed with the equity in our home. Our mortgage now stands at $452,000 at 3.29%, bringing our monthly payment including property taxed to just over $2300. Ouch.

Third, we used some of that equity to pay out our car loan, to the tune of $8500. Both vehicles we now own free and clear. That feels pretty good, and we're no longer make the $340 payment every month.

Fourth, we have managed to pay down a big chunk of our line of credit and the balance stands at around $6000. Paying this remaining balance is now priority number one. I'm hoping to do it in about 4-5 months.

That brings me to my fifth point. I made a pretty major executive decision yesterday and shut down our biweekly RRSP contributions. Where previously we had been socking away $867 per month between the two of us, we will now be directing that towards the afore-mentioned line of credit debt. Because we're paying 5.75% interest, I'm willing to take the hit on retirement contributions in the short-term. Once the line of credit is paid off, we'll restart the RRSP contributions, hopefully at a higher amount.

And that is where I'm going next. Now that our financial situation has settled down and Mr. Hutch is back to his regular full-time gig, I can start some serious planning for the future. I have a (free) consultation with a fee-only financial planner in a couple of weeks. I've got a handle on where we stand financially and now I need an idea of where we want to go, and a map of how we're going to get there.

There's going to be lots more to write about in the coming weeks and months.