I legitimately know that we are coming at this incredibly late and that we are still making lots of mistakes. I will not flinch if being punched in the face. My question is regarding Canadian income tax and retirement savings, so I am hoping that some Canucks can jump in and help me out. I am starting from knowing zero information.
Husband's 2014 gross income: 132,748
My 2014 gross income: 3,270 *
* I am a stay at home parent. My income is just hobby income from a handful of weekend photography gigs.
I am looking at my husband's final pay stub from 2014, he paid $37,025 in Federal Tax.
We haven't started RRSPs yet. We do both have a TFSA account (just a basic savings account with PC Financial at, I think, 2.5%), but so far we have less than $2,000 combined.
Up until a couple of years ago, we didn't have a very high income and were pretty deeply in debt. Not including the mortgage, we had $61,619 in debt on January 1 2013. We currently have $19,352 (a car loan). We also had $0 savings and now have about $10,000 of "emergency funds" that are not generating income for us or doing anything. I'm ready to shift gears a little bit. While we will continue to pay down our debt as much as possible, I need to know what we should be doing with savings.
Would we be better off focusing on putting money into RRSP or TFSA? I like the availability of the TFSA for emergencies, but now that we are at about $10k, I feel like that is probably good for the TFSA and maybe we should be looking at the RRSP? Am I right that it might benefit us more at tax time to be putting into RRSP instead of TFSA?
Additionally, does anyone have information on income splitting? I think that it might help us this tax year, but I don't really know much about it.
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Posting details in case it helps determine our best course of action.
I am 34.
DH is 30.
We have 4 children.
Household Gross income: $136,318.
Debts:
Mortgage - $1106/month. Current balance is $153,622 at 2.89%.
Car loan: $457/month. Current balance is $19,352 at 3.02%.
Fixed Monthly Expenses *approximate:
Internet/Phone: $150/month (High, I know. We have unlimited data for streaming)
Gas Heating: $85/month
Electric/Water: $150/month
Water Heater: $25/month
Cell Phone: $75/month
Vehicle/Home/Life Insurance: $499/month (Gross, I know! This is 2 vehicles, 1 motorcycle, home, and life for DH and I)
Our grocery bill fluctuates, but is high - maybe $700/month.
Fuel is around $120/month.
DH has a fast food and coffee habit. And we are both a bit spendy on various things. I know it's bad. I know that we need to adjust everything.
Assets:
Value of our home is approximately $175,000
TFSAs: $1,433
Savings: $10,838
RRSP GIC: $591 (was set up by an old employer, can't touch it or change it)
RESP: $2,541
* Not including our vehicles here because they are just depreciating all of the time.
Total LIQUID Assets: $12,271
We have a benefits plan, so don't generally have medical expenses. We have saved up for braces for DH, which will be OOP, and that planned spending amount is not included in our "savings" listed above.
We do have a credit card that we use for the points, but pay off monthly.