Source
r/PersonalFinanceCanada•
Ghune

What to do with monthly extra money for the next 2/3 years?

My situation has changed and I get extra monthly payment (significant enough to almost double my salary). It will stop in a couple years.

I maxed my RSSP and my TFSA account. Is there anything else I can do except paying taxes on this extra money? Paying my mortgage faster? Investing?

Posted Jan 25, 2022, 4:47 PM UTC

02
gooni514•

This is what i would do in your situation.

  1. Pay off all your debts besides the house
  2. Fully fund your emergency fund
  3. Put around 14k aside to cover TFSA limit increase for 2023 and 2024
  4. Put aside X amount to top off RRSP for 2023 and 2024
  5. Talk to your bank and see how much you can throw at the mortgage in one lump sum payment. For my mortgage with RBC it's 10% of the original loan amount. Throw what you can at it.
  6. Put the rest in Double Up Payments on your mortgage - these payments will hit the principal ONLY - i might be wrong on what this is called or might be called something different with your bank, but make sure it's only going to the principal.
  7. Keep a small amount aside for fun, i will leave this amount up to you since my idea of fun isn't necessarily the same as yours.
6
GhuneOPBritish Columbia•

Thank you!

That's exactly what I had in mind, thank you for confirming. You made it clear, now:

  • I have no debt besides the house.
  • Emergency fund is good.
  • I'll put money on the side to top up coming years (TFSA and RSSP)
  • I can throw 20% of the mortgage every year and have put already more than half of it this year. I will do the rest as soon as I can.
  • The double payment thing is something I didn't know, I will check that. I think that I can increase the payments by 20% or something.

Again, thank you.

3