It's almost end of the year, if you plan on withdrawing
money out of your TFSA temporarily for a specific purpose, do it in December
otherwise you will end up having to wait another year to get the contribution
room back.
This is especially important for those of you that plan on
paying your December credit card bills in January with money withdrawn from
your TFSA. With all the holiday sales out there right now, it becomes very easy
for us to end up spending more than what we have in the bank. It is little
things like that sometimes that gets you! BUT since I know you are all such
prudent folks, you will probably not need to take out money to cover your bills
in the first place, because you would have kept enough floating cash in the
bank. See, another reason to keep a safety net in your bank accounts.
How easy it is to end up in the above situation you ask? Easy
enough, Johnny enters his nearby electronics store and sees a beautiful LED flat-screen.
MSRP normally is $2,999, now it's on sale for $1,999. With such a great deal he
bought it with his VISA card, it is now January 21st 2014 and his bill is due,
combined with the typical monthly expenses and Christmas gifts he bought his
bill is at $3,300. Although he keeps a $1,000 in the bank at all times and makes
$3,200 a month after taxes, he only has $2,100 available after his car payments,
insurance, and mortgage. Now we are looking at a shortfall of $1,200 ($3,300 –
2,100) that needs to be covered from somewhere.
-TT
P.S. - If you have not taken advantage of TFSAs, do it! It doesn't have to be an actual savings account!
