Weeks away from being Debt Free thanks to our Tax Refund!

I don’t usually post updates on non-Pay Days but since my tax refund had finally come in as well, I couldn’t wait until Friday to update! My tax refund was actually quite similar to that of Mr. Unchained’s (which is surprising because I only worked for about 3.5 months last year and didn’t contribute to my RRSPs other than the required Home Buyers’ Program repayment) – $2,097.67 versus his $2,086.29. I immediately transferred the entire lump sum to our HELOC, which was previously sitting at $5,511.12.

Our passive income from our Investment Portfolio dropped this month to $19.22; it was $21.27 last month and $19.16 the month before. This $2.05 drop amounts to a 10.67% decrease which is pretty significant but not surprising given how small the amount of passive income is. Regardless, that $19.22 went straight towards our HELOC balance as well.

This leaves us with a balance of only $3,394.23! We’re soooo close to being debt free! IF (and this is a big if) we somehow manage to pay off $848.56 per week for the next 4 weeks, we’ll be debt free this month! Given that Mother’s Day and our niece’s birthday is coming up and that overtime isn’t readily available at present, it probably won’t be possible but it’s such a nice feeling knowing that we’ll be debt free in a few weeks! This is way ahead of our original goal of being debt free by December 31, 2016 so this is a major accomplishment for us.

HELOC - May 3

So then what?

We celebrate, of course! Then it’s straight back to work. We’ve got a lot of catching up to do in terms of savings and we’ll be starting our Baby Fund. As I had calculated in a previous post, How much do I need to save before going on Maternity Leave?, I had calculated that we would need to have $14,051.52 saved up so we don’t get into debt if I take one year off maternity leave. We will accumulate (almost) that much assuming a 9-month pregnancy and a 12-month leave from Mr. Unchained’s company share program but obviously it’d be best to save this amount separately without having to sell his shares.

For 2016, I will also need to save:

  • $1,451 for the Home Buyers’ Program (required)
  • a maximum of $17,774 for my RRSP (optional)
  • a maximum of $34,899.79 for my Tax Free Savings Account(optional)

For Mr. Unchained, we will need to save:

  • $1,656 for the Home Buyers’ Program (required)
  • a maximum of $2,891 for his RRSP (optional)
  • a maximum of $41,690.42 for his Tax Free Savings Account (optional)

Our plan of attack

Of course, this subject to change, but at this point, I think we will:

  1. Start off by paying off our required amounts for the Home Buyers’ Program since those are mandatory ($3,107).
  2. Then start saving for our Baby Fund ($14,051.52). Our deadline is 9 months from the time I am pregnant (which I am currently not, but keep your fingers crossed! We will need to save $1,561.28/month in order to reach our goal.)
  3. We will also max out Mr. Unchained’s RRSP since he only has $2,891 of contribution room available.
  4. We will then focus on my RRSP, although I am certain I won’t be able to max it out this year. I should probably check with my Financial Advisor and/or Accountant to determine what the optimal contribution amount will be to reduce my income taxes.
  5. Finally, if and when we finish the above, we will put any extra cash towards our TFSAs. Given that we will only have 6 months left of 2016, I highly doubt we will get to this point this year, but just in case we do, this is the plan!

Mrs. Unchained 55


  1. Nice of the government to withhold all of that income from you while you were trying to pay down your debt. ;-). Seriously, congratulations on getting to debt-free – it is a very big deal!

    • I know!! In all fairness, I probably was taxed correctly, I just had a lot of extra deductions last year (mostly education since I was in school full time for 8 months!)

  2. Congrats on being so close to debt free! That is a great goal and a great achievement..nearly there.

    Good luck getting pregnant, that is something we are trying to achieve too..except with IVF – costs a little more than normal 🙂

    Dividendsdownunder recently posted…Saving for the future: AprilMy Profile

    • We’re so close… yet it seems just out of reach!

      Good luck with your IVF! I think Canada has just started covering the first treatment or something – I haven’t looked int it much, but I have heard of it in passing!

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