The changes I made to my RRSP deduction took effect today. As expected, my take home pay is now higher. When I changed up the appropriate cell on my tracking spreadsheet this morning, I learned that I had freed up $250 to apply to my Line of Credit.
I have just reduced the amount owing to $1750, after reminding myself that I had intentionally reduced the RSP deduction for this purpose. I must confess that I was very strongly tempted to indulge in non-budgeted items when I saw the new amount.
Recap on my reasoning:
The RSPs are currently earning 0% interest. Maintaining a credit line debt costs me approximately 6% in interest. I did not eliminate the RSP contribution entirely; rather, I just reduced it to the amount that my employer was prepared to match.
In reviewing my credit line statements this evening, I noticed that my credit line debt also costs me life insurance premiums. If there's no balance, then I don't pay them, but there is.
