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Its the most wonderful time of the year!!!!!

11 May

Some people may think of Christmas as the most wonderful time of the year. But that is a season for giving and thus that requires me to spend money. For me, this is the time of the year that I love best. This is the time of the year where we RECIEVE money!!

This is income tax season, which in the past has resulted in a sizeable refunds for us. This year is no exception. This will be our largest refund to date. Which is good timing considering our circumstance this year. In the past, we have used the majority of our refunds to pay down debt. Its so rewarding to be able to put a large chunk of money down and see the balance shrink by a noticeable amount and know that you’ve just cut off months and sometimes years off your payments.

This is also the time of year when we recieve rent money from some farmland that my husband owns. He has only 1 quarter so its not a huge amount by any means, but it certainly is enough to be able to put some money where it is needed.

Our total for this years sources of passive income is roughly $8000.00. Nine months ago, I could have told you exactly where this money was going. Today, Im struggling to find the right place to put it. I have 4 options that i am entertaining.

1. Put it on the mortgage. Enough said. I think we can all agree this is an obvious choice.

2. Pay off almost completely the only other loan we have. This would free up some of our monthly income to give us a little more breathing room in other areas.

3. Put in into the funds for building the basement. Progress has been put on hold for awhile. We don’t want to get in over our heads and having it finished isn’t exactly a high priority right now, was just an added bonus when there was 2 incomes, so this is probably my least favorable option right now.

4. Put it in the emergency fund. This is what i so badly want to do with any extra dollars right now. Given that the next year or two is a complete mystery to me, I just think the more prepared we are for any unexpectedness, the better we will be.

So if I opt for plunking it into the emergency fund for the meantime, i still have 2 options in front of me. Do i put in into my TFSA where it may grow at a higher rate or do I set it aside in my savings account with a not so high interest rate. The reason I falter on this is because any withdrawals out of the TFSA have a $25 fee attached to it as well as it will require approximately 24 hours to get the money into my account. While these two things are not that big of a deal, they still present hassle to get to that money. Its not like I wouldn’t be ok till i could get at it, its just i don’t want the inconvenience.

Over at Wellheeledblog, she suggests a comibination of  save some, spend some and pay off debt. She covers all the bases but does suggest that paying off high interest debt is the best return on your money. I really like the sound of that. I will allow me to get rid of some debts, but still hold on to some of that in the event I need it and transfer some into the TFSA. Im not usually one to put little bits here and there, i like to make a big impact on whatever Im doing so this will be new to me. But actually, even as i have just written that last sentence and made my decision, I feel good about it.

What other recommendations can you think of for me? Investments are out. This money can not have any risks associated with it. It can stay the same, go up teeny amounts, but it can not go down. There will be a time and a place for that, and this is not either.

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