Tackling My TFSA


One of my goals for January was to figure out how much contribution room I have in my Tax-Free Savings Account. This shouldn’t be difficult, but despite my love of all things personal finance, I’m not quite as organized with my TFSA as I should be.

First of all, I have two of them: one is a simple savings account with ING, the other is a brokerage account with Questrade. This immediately creates two piles of paperwork I needed to go through. Secondly, I don’t contribute regularly or with any rhyme or reason. I transfer some money from every paycheque to my brokerage TFSA since I opened it in the summer, but my ING savings account one is kind of all over the place. I put money in it some months, and some months I don’t. Lastly, I’ve made withdrawals in the past. Because my emergency fund is my ING TFSA, I’ve pulled cash out to cover my butt when paycheques came up short.

My ING TFSA has been earning interest and my Questrade TFSA collects dividends and profits from stock sales, so their balances don’t reflect my actual contributions (in a good way!). So my only plan of attack was to sit down with the monthly statements from each account and go through every contribution and withdrawal.

Well, it actually wasn’t too bad. The stock account is fairly new and the ING one is a bit inactive so I figured everything out within an hour. I’m happy to report I have less contribution room than I expected — this means I’ve actually contributed more to my TFSA than I previously thought. Win! But I’m still not close to maxing it out.

Since it is now 2012, Canadians have $20,000 worth of contribution room in their Tax Free Savings Account — $5,000 for each year since 2009. For those of you new to TFSAs, they’re registered accounts in which any earnings are NOT taxed. This means any profit you make on money within a TFSA can’t be gouged as income. (For more information about the Tax Free Savings Account visit the Government of Canada TFSA website here). Maxing out my TFSA is a personal goal of mine, though I know I won’t be able to meet it for a couple of years, because not only do I have to catch up on old contribution room, every year you can contribute another $5,000.

But this year I am going to get $5,000 in there. I will! And I’ll worry about the extra contribution room later.

My plan is first to put $250/mo into my brokerage TFSA for a total of $3,000. Starting in March, I’m going to contribute $100 to my ING TFSA for a total of $1,000. This kills two birds with one stone: extra money into the TFSA and getting my emergency fund to 3 months worth of savings ($3,000). I’m not sure where the remaining $1,000 will come from. Probably a combination of things (ie. I add $50 every time I complete a goal on my Day Zero list). Sadly I have earmarked some of the money in my TFSA for a trip to Africa in July (hopefully), but I figure as long as the balance grows more than it decreases in 2012, I’m doing ok.

 Canadians, have you maxed out your TFSA? What is your strategy? Also, US & international readers, does your country have a similar type of account where earnings are not taxed? How does it work?


  1. I prefer TFSAs to RRSPs because of their flexibility in being able to use the money as you wish. It’s just a bit confusing if you are not careful if you switch TFSAs or if you take out some money in one year, and don’t wait until the next year to re-contribute 😐

    • Bridget (Author)

      I hope I can get to the point that I worry about that sort of thing soon! Because right now… yeah no chance I will accidentally over-contribute =( lol

  2. This is great that you are putting aside money in your TFSA, but don’t over-commit yourself. I know sometimes I can get overwhelmed when I have too many savings + debt goals, and I know your student loans are overwhelming you a bit. I’m not saying don’t save, I’m just saying to be gentle with yourself. 🙂

  3. Grammar Nazi

    It’s always interesting to see you complain about spelling and grammar in your tweets, then later read sentences like this:

    For those of you new to TFSA’s, their registered accounts in which any earnings are NOT taxed.

    The apostrophe is unnecessary, and you don’t even know the difference between their/they’re.

    Oh, and learn how to use a semi-colon you dumb-assed bitch.

  4. Kay

    You can look at CRA website to figure out your contribution room for this year. The banks don’t keep a tab on when you withdraw and how much you put in is within limits..but CRA does.

    Also, you can walk to the bank and ask them to print reports on your TFSA since you started. that will help you figure out.