A Day at the Races

Yesterday, the Federal Government unveiled the budget for the year ahead. Finance Minister Jim Flaherty revealed a plan to be fiscally responsible, no new big initiatives, no huge tax breaks or cuts. It was all in an effort to knock down the deficit to an enviable amount in the next five years. According to the Globe and Mail, it’s a budget aimed at the middle class. Perhaps that’s why I neither rejoiced nor took offence.

The article, however, notes that the Prime Minister is hedging his bets that the majority of Canadians want one thing from the Government – to get the deficit under control.

All day I’ve been thinking about how I feel a bit of a bond with the Minister of Finance.  No, I’m not a middle-aged, pinch-the-cheeks kinda cute irish guy with the task of balancing the Nation’s books – he can have that job.  But like me, he has choices to make. Unlike me, because he’s in Government, some choices are clouded by politics. I’m thankful that I don’t answer to any shareholders or taxpayers, except for the two kids slurping up ice cream on the sofa as I type.

In my past life, I worked for a local government. I recall a Mayor who was elected many times on a “hold the line” tax policy. As a taxpayer, this sounds pretty good. But think for a minute about what that means. It means no growth in any programs, regardless of the demand. It means no capital repairs for buildings or equipment. It means no salary increases. Some of these things are more important than others. Ignore the infrastructure of a building that is well used by a lot of people, and eventually, you’re going to have to do something drastic to keep it from being a blight on your community, or worse, a health and safety hazzard. Keep telling your workers there’s no money for even a merit raise, and they’ll start looking elsewhere. In some cases that’s okay, in other cases they can be costly loses.

With the new budget, the Minister of Finance has essentially said this – we’re going to keep on trucking, but we’re not doing anything fancy. We have debt to pay off.

Hmmm, sounds familiar. I’ve said the same thing. Focus on the debt. Sure, let’s give ourselves $20 or $30 bucks a month for a cheap meal out or a few bucks for entertainment, but that’s about it.

I’m very mindful that there’s not enough money going toward the ‘infrastructure’ of our lives. Not enough to savings (at least not for my own, I’m taking care of the kids for post-secondary), no money set aside for emergency, nothing going into a retirement fund.

photo credit: oraclesports.net

Makes me think of a day at the races. Big , powerful horses competing against each other, and the gate opens. They all run toward the finish line, but only one can win. I want the debt horse to win. That’s where I put my money, literally. Every extra dollar is going to debt retirement, although I did put $100 in a savings account this week.

Next week the nice man who manages my retirement fund, which I haven’t contributed to in about 4.5 years, is calling me to have a chat.

Debt horse is in the lead, retirement horse is coming around the inside.

I have a problem trying to put money on all the horses I should. While my monthly contribution to debt retirement has been over the amount I need to contribute monthly in order to retire it by the end of 2010 thus far, I absolutely know there are four months this calendar year when I won’t come close to being able to contribute that minimum amount.

Should I be satisfied to retire my debt in the Spring of 2011 and start making modest but regular contributions to retirement savings, regular savings and an emergency fund? Most months in my 2010 budget have about $100 wiggle room. That’s not enough. I knew that when I drafted the budget.

With interest rates sure to go up, although perhaps modestly in the last half of 2010, the debt retirement IS a priority. At 46, can I still tell myself maybe next year I’ll get back to making regular contributions to my retirement savings plan?

How do you manage all your powerful horses? Do you put all your money on one? Or have you found a way to put a chunk of money on the horse you want to win, and some on those you want to show? I’ll be interested in your comments and experiences! I could sure use some advice!


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