I have quickly changed my mind (see my earlier post) and decided to go with President’s Choice Financial Tax-Free Savings Account (TFSA) instead of ETrade for short-term savings. I will keep my ETrade TFSA though and use it once I have money available for longer term savings.
I compared PC’s Tax-Free Interest Plus Savings Account with ING’s Tax Free Investment Savings Accounts and PC’s interest rate is 1.05% higher. We also have all our daily banking and high interest savings at PC now so being able to use PC for our TFSA.
My wife and I just opened up Tax Free Savings Accounts (TFSA) at E*Trade. I’m still not sure what I am going to invest in, but my requirements are that the initial capital has to be protected because we will most likely be taking the money out for a down payment in the next few years. We might just buy some shares of iShares’ Short Term Bond Index Fund (XSB). The only other possibility I had considered was to open a Tax-Free GIC with ING or a hight-interest savings account at President’s Choice, but interest rates are so low, I figure I can’t do any worse with short term bonds. The disadvantage with XSB is that I would have to pay commission every time I buy and 0.25% MER on top of that. But I think it’s worth it for the diversification it offers. Building a bond ladder yourself would involve a lot of commissions and a lot of work, so something like XSB is really the cheapest way to invest in the bond market. Real return bonds are also a possibility, and not a bad one, since they virtually guarantee that you’ll at least beat inflation.
A lot has happened recently. My wife is expecting in April, we bought our first new car, and I recently changed teams at work and turned down an interview at another company.
Baby: Our first baby is on the way and everything is healthy and good so far. We’ve received a few gifts so far and the only purchase we’ve made so far is a crib and a change table. The crib and change table we opted for are a bit more expensive than others (see stokke.com), however, they should last a long time and actually transform into chairs and a desk, respectively, when the kids get older, which might save a bit of money later on. The next big purchase is going to be a stroller and a car seat. We’re looking at getting a car seat that can handle up to 30lbs (see Graco SafeSeat), to get more use out of it which may end up saving money later, or maybe not. Our stroller will be something that folds up and that comes with a bassinet attachment so hopefully we can get away with just the one stroller and maybe a compact umbrella stroller and a Baby Bjorn and that’s it. An acquaintance of mine has 8 strollers (2 kids with 1 more on the way) and I still haven’t figured out why. Kids certainly are expensive and with these recent purchases and a 1 week vacation coming up (our last one before kids!) we have certainly found ourselves spending less on other things. We didn’t do any Boxing Day shopping this year and didn’t buy ourselves any big presents.
Car: We bought a new car. Our other car was a 2-door and we figured it would be awkward to take the car seat in and out of that car, not to mention the fact that the trunk is fairly small. So we bought a nice new wagon. We felt that good mileage and low carbon emissions were important so we bought the most efficient wagon possible. We also wanted safety features like airbags, ABS, stability control, which our old car didn’t have. We’re just trying to sell our old car now (we’re selling privately because you can get more money that way, rather than trading it in to the dealership). Speaking of cars, I also did some repairs on my old 4-door Tercel. They were a bit expensive but it’s still cheaper to maintain an old car than it is to buy a new one.
Work: I am in the process of transitioning from one team to another, the first big change since I started at my present company 1.5 years ago. I recently had the opportunity to interview at a large, successful software company but turned it down because I would be missing out on opportunities at my current company. Having been there for 1.5 years already, I’m in a good position right now. I know lots of people there now, I know the business and the technology so I can be productive and possibly get some more promotions eventually. If I switch to a new company I have to start the whole process of meeting people and becoming acquainted with a new business all over again. I enjoy doing that but not every 1.5 years. Not only that, but at my current company I have built up a bit of seniority now and I can take 2 months parental leave and work part time after that, and work from home from time to time in order to spend more time with my wife and baby. Doing something like that would be very difficult just starting out with a new company.