Using AI Legalese Decoder to Navigate Financial Planning When Income Surges
- April 12, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Personal Financial Situation and Goals
In my early 30s and living in Toronto, I have recently become debt-free after years of struggling financially. With a stable income of around $85,000 per year before taxes, I am now in a position to start building my savings. Currently, I have $12,000 in my Tangerine savings account, with an additional $20,000 expected from freelance work.
## Current Expenses and Lifestyle
I share an apartment with one roommate and lead a modest lifestyle, with living expenses totaling approximately $2,100 per month. This includes rent, utilities, phone bills, groceries, occasional entertainment expenses, and cat care. I do not have expensive hobbies or indulgences.
## Long-Term Goals and Challenges
Despite my improved financial situation, I struggle with setting long-term goals due to ongoing depression. I have doubts about my ability to purchase a home in the future. However, I recognize the importance of saving for taxes and am considering a trip to Italy or Japan with my girlfriend next year.
## Seeking Financial Advice
I am uncertain about the best approach to managing my newfound savings and navigating my financial future. I am open to suggestions on how to make the most of my income, build a secure financial foundation, and potentially achieve my long-term goals.
## How AI Legalese Decoder Can Help
AI Legalese Decoder can assist in analyzing your financial situation and providing personalized recommendations for managing your savings. By inputting your income, expenses, and long-term goals, the decoder can generate a comprehensive financial plan tailored to your needs. It can also offer insights on tax planning, savings strategies, and investment opportunities to help you make informed decisions about your finances. With the decoder’s assistance, you can gain clarity on your financial goals and develop a roadmap for achieving financial stability and security in the long run.
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Title: How AI Legalese Decoder Can Simplify Legal Jargon for Everyone
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****** just grabbed a
Save 3-6 months of living expenses.
Then start saving for retirement and invest. If youre not sure how to start investing, consider a financial advisor or managed portfolio.
Being debt free is great, but having an attitude that your income will just be up for the forseeable future is a dangerous way of thinking and may lead to the living beyond your means mindset. Essentially dont plan on future spending based on todays earnings. Dont do the play now pay later. Save for the vacations and large purchases dont fall into payment traps
I love the exact same answers as every other post
I dont even have to look in the comments and i know what theyre all saying 😂😂🤦♂️
Let me guess…
3 to 6 month emergency fund
Max out tfsa
Max out rrsp
etfs
GICs
did i miss anything ?? 😂
Great job in K.O. your debt and started saving! Thats a great achievement considered so many ppl are drown in debt and living pay check to pay check. You should be proud and keep your head high.
Now what to do with the extra money. Thats a good problem to have 🙂 Sounds like you havent had much experience in it and it’s okay.
I’d start with learning the basis of finance and how money works. McGill offers this free online course and I’d recommend invest a few hours on it each week. This will help clearing up any misinformation or misconception you may have picked up.
https://www.mcgillpersonalfinance.com/
After that you can put it to practise: saving and investing in the 3 tax sheltered accounts available to Canadian residence:
1. TFSA – Tax Free Saving Account – You dont get tax in any profit here – look into no-fee ETF purchase that track index fund like S&P500 that has great return
2. FHSA – First Home Saving Account – similiar to TFSA but it’s geared toward first home pirchase plan
3. RRSP – Registered Retirement Saving Plan – since you expect to owe some tax this year, this is a good way to evade that and put them into investment instead
All have contribution limits tied to your tax and SIN.
So your long term and on going goal: max out all 3 accounts every year. Make sure to invest in good profolio (this your need to do more research but please avoid day trading which is basically gambling)
For RRSP look into your employer if they have RRSP matching, which means if you put 2% of your pay toward it, they can put another 1% or 2% for you. It’s free money.
Now how to use the money: invest in improving your quality of life. You can spend money on the following that wont make you regret:
– Good education/career growth
– Good sleep (good quality bed, blanket, bed sheet)
– Good healthy food (eat in or eat out), dont spend too much on drinks
– Good exercise/sport
– Good experience (travel, try out new things, hobby)
You’ll need to keep them under budget. The best way is to determine a fixed amount of money you want to save each month, put that aside and spend the rest. Do not take CC debt to try to live above what you can afford. Pay CC balance in full every month.
Your life is bright ahead so dont feel too bad and just keep on saving. Once you hit 100K saving, then you can think about bigger purchases like a condo. Thats another story.
Time to stop eating cat food!
Travel! Live your life
Just save don’t adjust. This is good but not nearly enough money to up your expenses
If you are working self employed work you will need to save close to 45% of that money for taxes and your 9.9% CPP premiums.
Spend some money on therapy. Perhaps someone who specializes in dialectical behaviour therapy. Game-changer and since you seem able to afford it, it will be worth every penny.
You’ve gotten great advice that I won’t repeat. But I listen to Ramit Sethi’s podcast “I will teach you to be rich” and one of his rules for a rich life is that there is no limit to the money he spends on health.
That’s his rule, not yours, you need to decide what works for you. For him, it might mean hiring a personal trainer or buying the healthiest foods. For you it could mean spending money on therapy or counselling or meds to get your depression under control.
Its up to you to decide what your own Rich Life looks like. I think your vacation plans are a great start.
Follow the money steps: !STepsTrigger
Sounds like one of the reasons you have savings is because you don’t have a car.
This is excellent.
Also you have a cat which is also awesome.
Set up a TSFA and start saving for retirement now.
Hookers and blow.
Start investing the money.
There is a Financial Independence subreddit made for frugal people like you. FIRE… keep this big gap between savings and earnings and save like crazy and the benefits will multiply so fast!
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Congratulations on getting debt free! That’s huge!
In terms of savings, should begin to look into TFSA, FHSA, and RRSP. Have the typical 6 months of expense in HISA/redeemable GIC /or CASH.TO /WS Cash account as your safety net then begin looking to set aside money for your trip.
$5-7k should be good for a week in Japan, never been to Italy so can’t give you rough numbers. I spent $3k as a solo traveller last year for a week in Tokyo. Didn’t stayed in anything fancy just business hotels that’s about $100 a night.
Edit: for OP, if you never been to Japan before, level set your hotel expectation. the room are TINY af. The hotel I booked was APA hotel that are close to the train lines.
Travel. And keep doing it. Best thing money can buy. New experiences.
In my opinion, you should keep some emergency funds liquid then put the rest in TFSA and invest in some kind of index fund. For example, I invest in an ETF that tracks the S&P500. Start a habit of saving and investing now that you have the means to.
Start investing with WealthSimple! $0 commission on cdn stocks. And their cash account pays out 4%.
Feel like WS should hire me! I totally be their spokesperson 😅
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Just keep the same lifestyle while saving the rest. The next stages usually, if this is your goal, is to find a partner, travel a bit, and eventually settle down (i.e purchase a place to live in). 85k salary now may seem a lot, but tbh when you live in HCOL and are thinking about the future… you will want more.
Clearing debt and having cash on hand is one of the most reassuring experiences in life. I believe this is an excellent opportunity for you to establish clear goals for the future. It’s not overly complicated; simply automate your savings, preferably through payroll deductions, and allocate funds to accounts such as TFSA, RRSP, Defined Contribution Pension Plan, and consider the FHSA account as well. I highly recommend maintaining a substantial emergency fund. You’d be surprised at the confidence having 10-15k available for emergencies can provide. It seems you’re also prepared to indulge a bit, especially if you’ve maximized your RRSP, TFSA, and FHSA contributions. So, why not consider a trip to Italy? You’ve earned it!!!
With any raise, spend no more than half of the new income if you want to keep lifestyle inflation in check:
* https://ofdollarsanddata.com/lifestyle-creep/
Otherwise follow the generally recommended steps:
* /r/PersonalFinanceCanada/wiki/money-steps
and educate yourself:
* /r/PersonalFinanceCanada/wiki/reading-list
Study the hidden cost of money by seb bunney and come to your own conclusion
It’s easier to be depressed with money than without so enjoy! Congrats to paying off your debt!
>Early 30s, living in TO
>My living expenses at the moment are roughly $2100 a month
Fucking HOW? Guessing no car for starters but still. How low is your rent? I can’t fathom life only costing me $2,100 a month unless I lived off food banks and never had to go anywhere.
Max out as everyone says.
But dude use a bit of it for some experiences. Trip somewhere. Better food? Learn a new language and talk to other culture? You are depressed possibly because you are doing nothing or not having some goals/dreams/purpose. What is the ultimate goal? Having 2 million in the bank when you are 90?
Overall you are in a good position though.
Find a partner making the same amount of money and move out. Otherwise… It’s your life, whatever you do is up to you. $85k/year is plenty for living in an apartment with a roommate in the city. It’s enough for your own 1BR if you wanted to move out and take a big financial hit… But otherwise, once your TFSA and RRSP are full, your home is the third pillar of your investing. You should buy one if you have nowhere else to put your money.
SAVE SAVE SAVE!!! You know as well as most regular people do, our dollar is becoming less valuable every day. In not too long, that kind of wage won’t be enough to pay your room and board. You will appreciate the extra set aside.
gym membership. invest in your wellbeing.
Just be careful about people who will try to befriend you via DMs just to try and scam you. I have heard horror stories so I would just ignore all DMs, if people have advice they can post on here.
Join fatfire and don’t listen to the scrubs in pfc
I need to learn how to be happy with my income. 🙁
That’s the great thing about money, if you save it then you’ll literally have it there any time you need it, plus the interest you make, for forever. It doesn’t spoil, it doesn’t get lost, it doesn’t wear out or break. It is literally the best way to store value until at some point in the future you need it.
This my friend, if what we call a first world problem!!
My advice is to remain HUMBLE above all else. Never forget where you came from and how desperate it felt to have not a cent to your name. If you let the money go to your head, it will ruin you. Money itself will not ruin you, but the love of it will.
Spend it wisely and always remember those who helped you. Do what you can to help in the work. God knows we need it.