What To Do With Overtime Pay?

This isn't an accurate depiction in the Loonie household.
For the past few months, Wifey was assigned to a special project at work that required her to put in some overtime. As she works for an organization that has a union (and despite not being a member of the union herself), they already have rules in place for how to deal with overtime pay.

Seems her organization pays two times for overtime. So for each hour of overtime you work, you are paid for two.

While wifey isn't a fan of working more than necessary, the allure of twice the pay for each hour of work helped.*

There were set limits to how much overtime she could collect. That was based on the project director's estimates. However, wifey was missing for some weekends as she went to work or worked at home away from Baby Girl's (BG) curious fingers and laptop keyboard mashing skills.

After a while, the paycheques that started to roll in were noticeably larger. So much so, I've currently budgeted some of the extra money for our insurance payment for November 2019 and we'll soon be past our savings mark for 2018.

After the year is complete, I estimate we'll have at least an extra $12,000 sitting in the bank. When we file our taxes in March 2019, I expect a hefty return as wifey's pay was taxed extra for those few months her paycheque was super inflated.

As this money wasn't part of the budget, I haven't allocated it anywhere or done anything with it. So the question becomes, what do we do with the money?

Fortunately, or unfortunately depending on how you view it, it's almost 2019. That means a new year with new contribution room for our TFSAs and BG's RESP. Assuming the TFSA contribution room for 2019 is $6,000, the extra $12,000 will fit in nicely there. Since our Child Benefit money covers the RESP, this means we'll be able to max both types of accounts once the clock strikes midnight on 2019.

Alternatively, we could always put that money into our mortgage. The Bank of Canada just announced another rate hike today, so that money would be earning us (at least) 3.2% each year for the rest of our mortgage. In other words, that'll be $384 a year with a $12,000 lump sum prepayment. Not bad.

Finally, we could always spend the money. We could buy iPads (BG included) for everyone in the house and iPhones. That would cost $12,000 right there. Or we can purchase some 60" or 72" smart TVs to go with the 4 TVs already in our house**. Of course, we can also install some killer surround sounds or sound bars. Wow. Imagine that.

Yikes, that would be a waste.

However, Wifey does need a new phone as hers is starting to crap out. However, she'll be using the money assigned in her budget for that and won't likely need to touch the $12,000 in the bank.

We do plan on taking a short trip by the end of the year. We haven't decided the destination, but somewhere not home and relatively cheap. It definitely won't cost $12,000. Likely less than $1,000.

Either way, no matter what we decide, it's nice to have options.

*That and the chance to work with a new technology and to grow her skill set.

**Yikes! That's a lot. However, unbelievably, no one uses the TVs. One of the TVs I use as a monitor as the old monitor broke. The TV in the living room doesn't get used by the in-laws as they prefer using the computer. The TV in our bedroom doesn't get used as there's no time to watch TV while raising BG. The TV in the basement doesn't get used because we don't hang out in the basement now that we play with BG in her playroom upstairs (where the TV in the basement used to be). IF we had 2 less TVs, we wouldn't even notice. Chalk that up to our pre-FIRE transformation.


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